(1) For discussion on the restatements, see notes to consolidated financial statements2.

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

HQDA Elderly Life Network Corp. (formerly Hartford Retirement Network Corp.) (the “Company”) was incorporated under the laws of the State of Nevada on January 21, January 2004.

Effective 26 June In September 2017, the Company changed its name to Hartford Retirement Network Corp. and increased its authorized shares of common stock, par value $0.001 per share from 75,000,000 to 200,000,000 and authorized 10,000,000 preferred stock, par value $0.001 per share, with such rights, preferences and limitations as may be set from time to time by resolution ofacquired Shanghai Hongfu Health Management Ltd, a company incorporated in the Board of Directors (Note 6)People’s Republic China (“PRC”). EffectiveFollowing the acquisition, on April 23, 2018, the Company changed its name to HQDA Elderly Life Network Corp.

These consolidated financial statementsThrough its newly acquired and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”).wholly-owned subsidiary, Shanghai Hongfu Health management Ltd., The Company was inpurchased senior living facilities and launched a senior living residences business, which, hosts to mostly men and women over the age of 50. The Company intends to expand its business of acquiringowning, leasing and/or operating senior living residences that will provide seniors with a supportive, home life setting with care and exploring mineral properties. In May 2017, the Company shifted its focus to senior housingservices, including activities of daily living, life enrichment and retirement serviceshealth and products. The Company is devoting all of its present efforts in establishing a new business.

These consolidated interim financial statements do not include all information and footnotes required by GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended 30 June 2018 included in the Company’s Annual Report on Form 10-K, filed with the SEC. The interim unaudited financial statements should be read in conjunction with those financial statements for the year ended 30 June 2018 included in the Company’s Annual Report on Form 10-K. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the six months ended 31 December 2018, are not necessarily indicative of the results that may be expected for the year ending 30 June 2019.wellness.

The Company’s consolidated interim financial statements as at 31 December 2018of September 30, 2019 and for the sixthree months then ended have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company reported a net loss of $27,741,531$150,102 and $112,406 for the sixthree months ended 31 DecemberSeptember 30, 2019 and 2018, and hasrespectively. As of September 30, 2019, it had a negative working deficitcapital deficiency of $7,049,052$2,565,431 while it had a negative working capital deficiency of $1,412,674 at 31 December 2018.June 30, 2019.

Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. Management believes that the Company’s capital resources will not be adequate to continue operating and maintaining its business strategy for the next 12 months. If the Company is unable to raise additional capital in the near future, management expects that the Company will need to curtail operations, seek additional capital on less favorable terms and/or pursue other remedial measures. These consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

At 31 December 2018, the Company had an accumulated deficitPrinciples of $29,271,000 and cash of $986,374. Although management is currently attempting to implement its new business plan, and is seeking additional sources of equity or debt financing, there is no assurance these activities will be successful. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Consolidation

The accompanying consolidated financial statements do not include any adjustments that might result fromhave been prepared in accordance with accounting principles generally accepted in the outcomeUnited States of this uncertainty.

Principles of Consolidation

America (GAAP). The Company’s consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries,wholly owned subsidiary, Shanghai HartfordHongfu Health Management Ltd., a company incorporated in the People’s Republic of China from 9 November 2017. All inter-company balances have been eliminated upon consolidation. The Company’s fiscal year end is June 30.

Foreign currency translation

The United States dollar (“USD”) is the Company’s reporting currency. The Company’s wholly owned subsidiary, Shanghai Hongfu Health Management Ltd. is located in China. The net sales generated and the related expenses directly incurred from the operations are denominated in local currency, Renminbi (“RMB”). The functional currency of the subsidiary is generally the same as the local currency.

Assets and liabilities measured in RMB are translated into USD at the prevailing exchange rates in effect as of the financial statement date and the related gains and losses, net of applicable deferred income taxes, are reflected in accumulated other comprehensive income (loss) in its consolidated balance sheets. Income and expense accounts are translated at the average exchange rate for the period. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Certain amounts in prior periods have been reclassified to conform with current period presentation.

Recently issued accounting pronouncements

In February 2016, the FASBFinancial Accounting Standards Board (the “FASB”) issued ASUAccounting Standards Update (“ASU”) No. 2016-02 (Topic 842) “Leases.” Topic 842 supersedes the lease recognition requirements in Accounting Standards Codification (“ASC”) Topic 840 “Leases.” Under Topic 842, lessees are required to recognize assetsa right-of-use asset and liabilities on the balance sheeta lease liability for most leases and provide enhanced disclosures.substantially all leases. Leases will continue to be classified as either finance or operating. Topic 842 is effective for annual reporting periods and interim periods within those years beginning after December 15, December 2018. Early adoption by public entities is2018 with early adoptions permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into afterThe Company adopted the beginningnew standard July 1, 2019. As part of the earliest comparative period inadoption of ASU 2016-02, the financial statements, and there are certain optional practical expedientsCompany made an accounting policy election that will not recognizing leases with an entity may elect to apply. Full retrospective application is prohibited. The Company does not anticipate this amendment to have a significant impactinitial term of 12 months or less on the consolidated balance sheet. As of September 30, 2019, the Company only has one month-to-month office lease with monthly rent of $1,020. The adoption of this new accounting standard did not have an effect on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years beginning after December 15, December 2019. The Company does not anticipate this amendment to have a significant impact on the consolidated financial statements.

On 20 June 2018, the FASB issued ASU No. 2018-07, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Currently, share-based payment arrangements with employees are accounted for under ASC 718, while nonemployee share-based payments issued for goods and services are accounted for under ASC 505-50. ASC 505-50, before the ASU’s amendments, differs significantly from ASC 718. Differences include (but are not limited to) the guidance on (1) the determination of the measurement date (which generally is the date on which the measurement of equity-classified share-based payments becomes fixed), (2) the accounting for performance conditions, (3) the ability of a non-public entity to use certain practical expedients for measurement, and (4) the accounting for (including measurement and classification) share-based payments after vesting. The ASU eliminates most of the differences. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018. The Company does not anticipate this amendment to have a significant impact on the consolidated financial statements.

OnAugust 28, August 2018, the FASB issued ASU No. 2018-13 to improve the effectiveness of disclosures about fair value measurements required under ASC 820 as part of its disclosure framework project, which has an objective and primary focus to improve the effectiveness of disclosures in the notes to financial statements. The ASU amends the disclosure requirements for recurring and nonrecurring fair value measurements by removing, modifying, and adding certain disclosures. The new ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, December 2019. The Company does not anticipate this amendment to have a significant impact on theits consolidated financial statements.

Revenue consist primarily

On September 4, 2018, the Company completed an issuance of hotel rental income. We apply41,731,867 shares at $0.15 per share for total proceeds of $6,259,780 to a Chinese company by a private placement. Following the five-step model outlined in Accounting Standards Codification Topic 606, Revenue from Contracts from Customers (ASC 606). Revenue is recognized when controlcompletion of the promised products or services is transferred totransaction, the Company’s customers, in an amount that reflects the considerationshare price went up to $0.80 per share. At previous auditor’s direction, the Company expects to be entitled to in exchange for those products or services (the transaction price). We Adopted ASC 606 effective July 1, 2018. As a result, we have changed our accounting for revenue recognition. We applied ASC 606 usingrecorded $27,125,714 of stock-based compensation, which was the modified retrospective methoddifference between market price and there was no material impact to our consolidatedissuance price on financial statements relatedissued as of September 30, 2018 and the three month period then ended on Form 10-Q filed on November 19, 2018. However, since the private placement agreement was signed in April 2018 when the share price value was $0.15 and could not be closed until September 2018 when the share price was $0.80, this should not be a stock-based compensation.

The Company also recorded $68,613 in expenses for payments made to a vendor for development of the adoption of ASC 606.Company’s website for the three months ended September 30, 2018. This should have been classified as prepaid asset and not an expense. The Company determined that it would be appropriate to correct those errors.

In addition, the Company restated certain balance sheet items as of June 30, 2018 on Form 10-K filed on October 25, 2019. The restatement resulted in balance sheet item adjustments as of September 30, 2018, further affecting a few income statement line items and statement of cash flows.

Restated Consolidated Statement of Operations (Adjusted Line Items) as follows:

(1): This amount reclassed to other comprehensive loss.

(2): Due to reclassification of fixed assets purchased in April 2018 to deposit, see note4.

DuringReceivable and Payable

Receivable from related parties amounted $75,866 and $168,958 at September 30, 2019 and June 30, 2019, respectively. Payable to related parties amounted to $2,940,481 and $2,207,742 at September 30, 2019 and June 30, 2019, respectively. The related party amounts are mainly are results of normal operations dealing with companies that owned by the year ended 30 JuneCompany’s CEO.

Related party transactions

On July 2018, the Company loaned $1,576,921 (RMB 10,437,800)entered a $172,600 (RMB1,185,000) service agreement with one party that is under the common control of the Company’s CEO to Shanghai Qiao Garden Group (“Shanghai Qiao Garden”). The loan was unsecured, bears interest at 8% per annumdevelop the Company’s website and due on demand. Duringa BBC shopping App. As of September 30, 2019, the year ended 30 June 2018,project has not yet finished, the Company received $1,524,044 (RMB 10,087,800).capitalized the development cost of the website and App in the amount of $141,434 based on the completion percentage method. The entire project is expecting to finish by the end of 2019.

During the yearthree months ended September 30, June 2018, the Company waived $51,299, the fulladvanced a loan amount of accrued interest as the Company demanded the payment prematurely (2017 - $Nil).

During the six-month period ended 31 December 2018, the Company loaned $4,360,971(RMB 30,000,000) to Zhonghuaai Wufu (Shanghai) Hotel Management Ltd, which is under common control with the Company.Ltd. The loan was unsecured, bears interest at 4.35% per annum and due in one year (Note 7). year.

Other

During the sixthree months ended 31 DecemberSeptember 30, 2019 and 2018, the Company accrued interest incomepaid management fees of $73,774 (RMB 506,030).

On November 2018, HQDA Guangzhou Company, an entity under common control, borrowed $1,260,613 from$31,440 and $24,000, respectively, to the Company’s Chief Financial Officer. As of September 30, 2019, and June 30, 2019, the Company for their business operation.owed to its Chief Financial Officer the amounts of $4,722 and $11,958, respectively, included in accrued liabilities. The loan receivable was unsecured, bear no interest and dueamounts represent expenses paid by the Company’s CFO on demand. Subsequentlybehalf of the loan was paid back at its entirety on January 29, 2019.Company.

On April 2, April 2018, the Company entered into an Asset Purchase Agreement (the “APA”) whereby the Company will purchase land use rights, buildings, and right to use, construction use rights and other property rights located in Shanghai from Shanghai Qiao Garden. Properties are split into two groups:

The Company has agreed to pay thea third party for a total purchase price totalling of $36,991,173 (RMB 233,000,000) in instalments over233,000,0000 at exchange rate of 0.1587), which was its approximate fair value as estimated by a third party appraisal firm. A summary of fair value of the next 20 monthsasset as follows:following:

(1) The exchange rate of 0.1587 was used to translate the RMB amounts at purchase date.

As atof September 30, June2019, the Company has paid total of $24,011,121 (RMB 171,000,000). On September 1, 2018, the Company had paid $18,233,403 (RMB 115,682,000) as deposits. During the six months ended 31 December 2018, the Company paid a further $6,564,692 (RMB 44,953,140).

On 1 September 2018, the Company has obtained the full management and operation rights of the senior hotel property and all other assets of Property A. The cost of $34,625,790 including(Property A) located at Shanghai Pudong New Area pursuant to the remaining balance ofOperation Rights Transferring Agreement entered on August 31, 2018 with the purchase prices has been transferred to properties and equipment.

On 8 August 2018,seller. Although the Company has entered intothe rights to operate the senior living services of Asset A purchased under this agreement, and is currently generating revenues, the Company has not received a deed because the seller is involved in several lawsuits that have resulted in rulings to restrict transferring it by Shanghai local district courts. Therefore, The Company has decided not to make any further payments until the asset is free of the restrictions. As of September 30, 2019, $18,516,646 payments made for Asset A was recorded as deposit. Further, the Company consummated the share purchase agreement to acquire the entity – Shanghai Qiaoyuan Information Technology Co., Ltd (“SH QYIT”) in November 2018 who holds the land use rights of Property B by acquiring 100% outstanding shareslocated on Shanghai Chongming. Asset B has been transferred toProperties and equipment, net in November 2018. The two acquisitions were accounted for assets acquisition. As of September 30. 2018, the Company had transferred Asset A toProperties and equipment, net and reminder payments in payable on the 10-Q filed on November 19, 2018. The Company corrected this error accordingly and the adjustments are reflected on the statement of operations (depreciation of the TransferorAsset A, $47,457) and cash flows for $731,968 (RMB 5,000,000).three months ended September 30, 2018 in this report.

On April 16, 2019 the Company entered into a Business Project Investment Agreement (the “Acquisition Agreement”) with Palau Asia-Pacific International Aviation and Travel Agency consisting of Palau Asia Pacific Air Management Limited, Global Tourism Management Limited and Global (Guangzhou) Tourism Service Co., Ltd. (collectively the “Project Company”) pursuant to which it will acquire 51% of the issued and outstanding capital stock of Project Company for $8,000,000, representing 49% of the Project Company’s dividend distribution, voting rights and liquidation interest of assets. The totalProject Company will remain the main operator of the existing business. The $8,000,000 will be paid as follows: $3,000,000 on or before April 27, 2019; $2,000,000 on or before June 30, 2019 and $3,000,000 on or before September 30, 2019. As of September 30, 2019, the Company made a $3,000,000 payment. However, the acquisition was subject to continuing due diligence, negotiation and customary closing conditions, including completion of an audit. The process of due diligence and audit are still on going. Therefore, additional payments have been included inpostponed until a satisfactory audit can be delivered and other due diligence has been completed. We cannot be assured that the deposits paid by the Company and sharestransaction will be transferred to the Company when all current and potential liabilities are settled by the Transferor.completed as intended.

Authorized

The total authorized capital is 200,000,000 common shares with a par value of $0.001 and 10,000,000 preferred shares with a par value of $0.001. As of 31 December 2018,September 30, 2019, and June 30, June 2018, no preferred shares are issued and outstanding.

On 26 June 2017, the Company increased the authorized shares of common stock of the Company from 75,000,000 shares to 200,000,000 shares and authorized the issuance of up to 10,000,000 shares of preferred stock, with such rights, preferences and limitations as may be set from time to time by resolution of the Board of Directors (Note 1).

Issued and outstanding

At 31 December 2018,2019, the total issued and outstanding capital stocks iswas 139,314,416 common shares with a par value of $0.001 per common share (30 June 2018 – 79,925,000).

During the sixshare. No additional stock issued during three months ended 31 December 2018, the Company cancelled 2,478,639 of its common stock due to no payments were received from subscribers.

On 9 November 2018, the Company completed a private placement of 3,441,237 common shares for total proceeds of $2,652,493 (RMB18,417,446).

On 12 December 2018, the Company completed a private placement of 1,223,805 common shares for total proceeds of $1,004,935 (RMB6,977,714).

On 4 September 2018, the Company completed a private placement of 41,731,867 common shares for total proceeds of $6,259,780. A stock-based compensation of $27,125,714 has been recognized during the issuance of shares (Note 6), being the difference between the proceeds received and the fair value of the shares issued. The fair value of the shares issued was determined to be $0.80 per share based on the issue price of shares issued to third parties in recent private placements.

On 11 July 2018, the Company completed a private placement of 15,471,146 common shares for total proceeds of $12,413,618.

On 7 April 2018, the Company completed a private placement of 47,500,000 common shares for total proceeds of $7,124,109.

On 2 March 2018, the Company completed a private placement of 2,920,000 common shares for total proceeds of $146,000.

On 5 October 2017, the Company completed a private placement of 5,000,000 common shares for total proceeds of $250,000.

On 8 September 2017, the Company completed a private placement of 1,950,000 common shares for total proceeds of $97,500.

On 8 August 2017, the Company completed a private placement of 19,910,000 common shares for total proceeds of $995,500

On 4 August 2017, the Company completed a private placement of 5,750,000 common shares for total proceeds of $287,500.

During the year ended 30, June 2018, the Company cancelled 13,050,000 common shares for total proceeds of $652,500 which was not received.

As at 31 December 2018, the Company received $1,982,911 in subscription funds that will be returned to investors due to overpayments in subscription.2019.

DuringThe Company operates in one industry segment, being the sixsenior housing and retirement services through its wholly owned subsidiary in China. As of September 30, 2019, the subsidiary had an amount of $24,448,896 in total assets, excluding inter-company balances, and it generated $172,176 and $41,782 for the three months ended 31 DecemberSeptember 30, 2019 and 2018, the Company paid management fee of $50,000 to the Company’s Chief Financial Officer (2017 - $50,000).

During the six months ended 31 December 2018, the Company issued 41,731,867 shares with total proceeds of $6,259,780. A stock-based compensation of $27,125,714 has been recognized during the issuance of shares (Note 6).

Includedrespectively, in accounts payable and accrued liabilitiesrevenue. There was $14,115 (30 June 2018 - $3,160) due to the Company’s Chief Financial Officer. The amount is non-interest bearing, unsecured and due on demand.

During the six-month period ended 31 December 2018, the Company loaned $4,360,971 (RMB 30,000,000) to Zhonghuaai Wufu (Shanghai) Hotel Management Ltd., which is under common control with the Company. The loan was unsecured, bears interest at 4.35% per annum, unsecured and due in one year (Note 3). During the six months ended 31 December 2018, the Company accrued interest income of $73,774 (RMB 506,030).

On November 2018, HQDA Guangzhou Company, an entity under common control, borrowed $1,260,613no revenue generated from the Company for their business operation. The loan receivable was unsecured, bear no interest and due on demand. Subsequently the loan was paid back at its entirety on January 29, 2019.inter-company transactions.

The Company entered into the APA to purchaseacquire two properties in Shanghai totaling RMB 233,000,000. Payments of $24,798,095$24,393,723 (RMB 160,635,140) has171,000,000) have been made and remainderthrough September 30, 2019. The remaining of $10,518,515$8,844,508 (RMB 72,364,860) are62,000,000) is due on or before December 31, 2019. Due to the seller of the asset is involved in 18 months (Note 4).several lawsuits that have resulted in rulings to restrict transfer of certain assets under this purchase agreement by Shanghai local district courts, the Company has decided not to make any further payments until the asset is free of the restrictions. The Company has no knowledge of when the restrictions will be lifted by the courts.

On 15 June 2018, the Company entered into a conference consultancy service agreement whereas the consultant will provide consulting service and assistance to the Company to hold 30 conferences in China within a two-year period for a total purchase price of $794,000 (RMB 5,250,000).

None.

ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The terms “HQDA”, “Company”, “we”, “our”, and “us” refer to HQDA Elderly Life Network Corp. (formerly Hartford Retirement Network Corp.) unless the context suggests otherwise.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes “forward-looking statements” as defined by the Securities and Exchange Commission, or SEC. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this Form 10-Q that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, including without limitation the Risk Factors set forth in our Annual Report on Form 10-K for the year ended June 30, 2018 including the following:

General

We were an exploration stage company until May 2017,HQDA Elderly Life Network Corp. (formerly Hartford Retirement Network Corp.) (“HQDA” or the “Company”) was incorporated in the State of Nevada on January 21, 2004. Our principal offices are located at which time we transitioned to a senior retirement solutions company focusing on senior housing and retirement services and products.Suite J, 8780 Valley Blvd., Rosemead, California 91770. Our telephone number is (626) 877-8187.

On January 20, 2008, theThe Company allowed its interest in the Sobeski Lake Gold Property Claims to expire. The Sobeski Lake Gold property consisted of three mineral claims located in the Red Lake Mining District, in the province of Ontario, Canada. Wehas not had originally acquired our interest in the property by making a cash payment of $3,500 on June 16, 2004 to Dan Patrie Exploration Ltd. the registered owners of the property.any bankruptcy, receivership or similar proceeding since incorporation.

On January 8, 2008, we acquired, through our wholly owned subsidiary, Dynamic Gravel Holdings Ltd.,Our business plan is owning, leasing and/or operating senior living residences that provide seniors with a 100% interestsupportive, home life setting with care and services, including activities of daily living, life enrichment and health and wellness in two gravel claims called the Northern Gravel Claims and Super Mammoth Gravel Claims (together the “Super Mammoth Gravel Project”) situated on tidewater for $25,000. The Super Mammoth Gravel Project was acquired by way ofcertain cities in China. We also plan to operate a purchase agreement. Mr. Farshad Shirvani has been paid CDN$25,000.network carrier, providing scheduled air transportation to passengers, travel destination services to leisure travelers.

On April 27, 2017, the Company dissolved its wholly owned subsidiary, Dynamic Gravel Holdings Ltd. as part of the Stock Purchase Agreement (the “Agreement”) dated April 4, 2017, between Tim Coupland and Brian Game, the Company’s former principal stockholders (the “Sellers”) and Hartford International Retirement Network, Inc. (the “Buyer”), pursuant to which, among other things, the Sellers agreed to sell to the Buyer, and the Buyer agreed to purchase from Sellers, a total of 5,185,000 shares of Common Stock beneficially owned by the Sellers (the “Purchase Shares”). The Purchase Shares represented approximately 52.1% of the Company’s issued and outstanding shares of Common Stock.

In connection with the transactions contemplated by the Agreement, the Board appointed Lianyue Song, Aaron Schottelkorb and Fuming Lin to fill vacancies on the Company’s Board of Directors caused by resignations of Messer’s’ Coupland, Game and Burylo.

On May 11, 2017, the Company entered into a Memorandum of Understanding for Senior Holiday Service Cooperation with Shanghai Qiao Garden International Travel Agency (“Travel Agent”), superseded by a Retirement Vacation Services Agreement executed by the parties on August 25, 2017 (collectively referred to as the “Agreement”). The Company is engaged in the business of providing hotel rooms at favorable rates to travelers to Los Angeles from China.

On May 18, 2017, the Company sold its Northern Gravel Claims and the Super Mammoth Gravel Claims for $1 to the Company’s former officer and a former director to focus its efforts on new business venture in senior retirement services and products in China.

The Senior Living Industry

On August 31, 2018, the Company’sThrough our newly acquired and wholly-owned subsidiary, entered into an agreement with Shanghai Qiao Hong Real Estate,Hongfu Health management Ltd. (“SQHR”) to manage an apartment building owned by SQHR located, we purchased senior living facilities in Pudong New Area District Shanghai, China. The apartment building has 130 one-bedroom apartments and catersApril 2018, launched a senior living residences business, which, hosts to mostly men and women over the age of 50.

The Company intends We intend to enterexpand the business of owning, leasing and/or operating senior living residences that will provide seniors with supportive, home life setting with care and services, including activities of daily living, life enrichment and health and wellness.wellness in China.

The senior living industry encompasses a broad spectrum of senior living service and care options, which include independent living, assisted living and skilled nursing care. We intend to concentrateOur primary focus will be on the independent living services. Independent living is designed to meet the needs of seniors who choose to live in an environment surrounded by their peers where they receive services such as housekeeping, meals and activities, but are not reliant on assistance with activities of daily living (for example, bathing, eating and dressing), although we may offer these services through contracts with third parties.

The Company’sOur operating philosophy is to provide services and care which meet the individual needs of its residents, and to enhance their physical and mental well-being, thereby allowing them to live longer and to “age in place.” These facilities will offer, on a 24-hour basis, personal, supportive and home health care services appropriate for their residents in a home-like setting, which allow residents to maintain their independence and quality of life. We predict that the average of the residents at the Company’sour facilities will be between 55 and 70.

The Company’sOur primary focus will be in China, where is intendswe intend to grow and become a leader in assistedsenior living facilities. The CompanyWe also will seek to develop or acquire facilities in other Southeast Asian countries. The Company believesand manage or cooperate with existing facilities as well. We believe that by concentrating or “clustering” itsour facilities in target areas with desirable demographics, it can increase the efficiency of itsour management resources and achieve broad economies of scale.

The long-term care industry encompasses a wide continuum of services and residential arrangements for elderly senior citizens. Skilled nursing facilities provide the highest level of care and are designed for elderly senior citizens who need chronic nursing and medical attention and are not able to live on their own. Further, skilled nursing facilities tend to be one of the most expensive alternatives while providing elderly senior citizens with limited independence and a diminished quality of life. On the other end of the continuum is home-based care, which typically is provided in an individual’s private residence. While this alternative allows the elderly individual to “age in place” in his or her home and, in certain instances, can provide most of the services available at a skilled nursing facility, it does not foster any sense of community or the ability to participate in group activities.

Assisted living facilities generally are designed to fill the gap in the middle of this continuum. Assisted living facilities have been described by the Assisted Living Federation of America (“ALFA”) as providing a special combination of housing and personal, supportive and home health care services designed to respond to the individual needs of those who need, or desire help with their activities of daily living, including personal care and household management. Services in an assisted living facility are generally available 24 hours a day to meet the scheduled and unscheduled needs of residents, thereby promoting maximum dignity and independence.

The assisted living industry is highly fragmented. However, the Company believes that substantial industry consolidation is underway.fragmented in China. At present, the industry is characterized by participants who operate only a limited number of facilities and who frequently can offer only basic assistance with a limited number of activities of daily living. The Company intendsWe intend to be characterized by the following: (i) the ability to offer premium accommodations and a comprehensive bundle of standard services for a single inclusive monthly fee; (ii) sophisticated, professional management structures and highly trained employees; (iii) a cost-efficient, user-specific prototype facility; and (iv) experience in providing home health care services.

The Company’sOur facilities will provide services and care which are designed to meet the individual needs of its residents, enhance their physical and mental well-being and promote a supportive, independent and home-like setting. Most of the Company’sour facilities will be primarily designed as premium facilities at which residents receive a comprehensive, bundled package of standard services for a single monthly fee.

The CompanyWe will strive to combine in itsour facilities the best aspects of independent living with the protection and safety of assisted living, with trained staff members who provide 24-hour care and monitoring of every resident. The assistedsenior living facilities will be designed and decorated to have a home-like atmosphere. Residents will be encouraged to furnish their rooms with personal items they have collected during their lifetime.

Our assistedsenior living facilities differ from skilled nursing facilities in that our assistedsenior living facilities will not provide the more extensive, and costly, nursing and medical care found in nursing homes. Assisted living facilities differ

Aviation and Travel

In less than two decades China has grown from travel minnows to the world’s more powerful outbound market. According to China Tourism Academy, Chinese travelers made a total of 140 million outbound trips in 2018, up 13.5 percent from the previous year’s 129 million. They have spent more than $120 billion, compared to $100 billion in 2017. China has become a main contributor to the global tourism industry. The China outbound Tourism Research Institute predicts that overseas trips by the Chinese residents will reach more than 400 million by 2030.

In April 2019, we entered into a Business Project Investment Agreement (the “Acquisition Agreement”) through our wholly owned subsidiary with Palau Asia-Pacific International Aviation and Travel Agency consisting of Palau Asia Pacific Air Management Limited, Global Tourism Management Limited and Global (Guangzhou) Tourism Service Co., Ltd. (collectively the “Project Company”) pursuant to which we will acquire 51% of the issued and outstanding capital stock of Project Company for $8,000,000, representing 49% of the Project Company’s dividend distribution, voting rights and liquidation interest of assets. The Project Company currently has 2 scheduled air lines from Macao to Palau, where there is a series of islands in West Pacific Rim and Macao to Cambodia. Palau is relatively unknown destination for Chinese travelers.

We control marketing, scheduling, ticketing, pricing and seat inventories. Our mission is to help Chinese leisure travelers experience Palau and to became a travel company that will provide one stop for all by providing passenger airlines, hotel reservations services and other excursion activity booking services on Palau. We have completed an initial payment of $3,000,000 of the total $8,000,000 purchase price with remaining payments of $2,000,000 and $3,000,00 due on June 30, 2019 and September 30, 2019, respectively. However, the acquisition was subject to continuing care retirement communities in that, amongdue diligence, negotiation and customary closing conditions, including completion of an audit. The process of due diligence and audit are still on going. Therefore, additional payments have been postponed until a satisfactory audit can be delivered and other things, residents of assisted living facilities are not obligated to purchase frequently expensive lifetime contracts for residential living and care.

The long-term care industry is highly competitive, and the Company expectsdue diligence has been completed. We cannot be assured that the assisted living business in particular will become more competitive in the future. The Company will compete with numerous other companies providing similar long-term care alternatives such as home health agencies, life care at home, community-based service programs, retirement communities and convalescent facilities. Nursing facilities that provide long-term care services are also a potential source of competition for the Company. Providers of assisted living communities compete for residents primarily on the basis of quality of care, price, reputation, physical appearance of the facilities, services offered, family preferences, physical referrals, and locations. Almost all of the Company’s competitorstransaction will be significantly larger than the Company and have, or may obtain, greater financial resources than those currently available to the Company.completed as intended.

Results of Operations for the Six Months Ended December 31,

Three months ended September 30, 2019 compared to three months ended September 30, 2018

The Company reported a netOperating loss fordecreased $33,896 in the sixthree months period ended December 31, 2018 of $27,741,531September 30, 2019 as compared to a net lossthe same period ended in 2018. The increase was primarily due to an increase of $160,660 for$130,394 in revenue, partially offset by an increase of $164,290 in total operating cost. The increase in revenue is due to the six months ended December 31, 2017, which includes foreign exchange loss of $310,726 on the translationgradual ramping up of operations at the senior residence since launching in China.first quarter of 2019.

The Company reported revenues of $222,464 for the six months ended December 31, 2018 from the property that was recently acquiredincreases in Shanghai Pudong New Area.

Legalgeneral and accounting fees increased by $63,127 to $101,212 for the six months ended December 31, 2018 from $38,085 for the six months ended December 31, 2017 as a result of finalizing the asset purchase agreement. Consulting fees increased by $32,250 to $73,250 for the six months ended December 31, 2018 from $41,000 for the six months ended December 31, 2017administrative cost and officedepreciation and miscellaneousamortization expenses increased by $151,196 to $152,590 for the six months ended December 31, 2018 from $1,394 for the six months ended December 31, 2017are due to the increased operating activities.launching of senior living residence operations beginning of fiscal year 2019 in Shanghai and increase in fixed assets.

The Company recorded a non-cash depreciation expense of $110,973 on its properties and equipment. A major component ofExcluding the Company’s properties and equipment was its property located in Shanghai Pudong New Area.

The Company also recorded a non-cash stock based compensation of $27,125,714 related to 41,731,867 common shares issued on September 4, 2018 to a related party.

Removing the two non-cash expenses as described aboveof depreciation and amortization, the foreign exchangeoperating loss for the period, the net loss for the six months ended December 31, 2018 would have been $194,118.

Results of Operations for the Three Months Ended December 31, 2018

The Company reported a net loss$112,166 and $115,524, for the three months ended December 31,September 30, 2019 and 2018, of $104,859 compared to a net loss of $60,049 for the three months ended December 31, 2017, which includes foreign exchange loss of $28,244 on the translation of operations in China.

The Company reported revenues of $180,682 for the quarter ended December 31, 2018 from the property that was recently acquired in Shanghai Pudong New Area.

Legal and accounting fees increased by $51,924 to $65,600 for the three months ended December 31, 2018 from $13,676 for the three months ended December 31, 2017 as a result of finalizing the asset purchase agreement. Office and miscellaneous expenses increased by $141,525 to $141,709 for the three months ended December 31, 2018 from $184 for the three months ended December 31, 2017 due to the increased operating activities.

The Company recorded a non-cash depreciation expense of $63,176 on its properties and equipment. A major component of the Company’s properties and equipment was its property located in Shanghai Pudong New Area.

Removing the one non-cash expenses as described above and the foreign exchange loss for the period, the net loss for the three months ended December 31, 2018 would have been $13,439.respectively.

Liquidity and Capital Resources

At December 31, 2018, the CompanySeptember 30, 2019, we had cash on hand of $986,374$102,936 and liabilities of $12,573,683 consisting of accounts payable and accrued liabilities, which includes $14,115 due to an officer and a director of the Company, share subscription funds to be returned of $1,982,911, unearned revenue of $9,822 and payables for purchase of properties of $10,518,515.

$3,048,962. We will require additional funding in order to cover all anticipated administration costs and to proceed with the Retirement Vacation Services Agreement executed on August 25, 2017 and the Asset Purchase Agreement executed on April 2, 2018 and to seek out additional travel agents for similar contracts. The CompanyWe also intendsintend to provide management services to retirement homes, commercial properties and apartment buildings in China, which will result in higher administrative costs in the future.

Capital Expenditures

On April 2, 2018, the Companywe entered into an Asset Purchase Agreement (the “APA”) whereby the Company will purchasewe purchased land, buildings, and right to use, construction use rights and other property rights located in Shanghai from Shanghai Qiao Garden.a third party. Properties are split into two groups:

The Company hasWe have agreed to pay the purchase price totaling of RMB 233,000,000 in instalments overinstalments. Payments of $24,393,723 (RMB 171,000,000) have been made through September 30, 2019 and the next 20 months as follows:

As at June 30, 2018,remainder of $8,844,508 (RMB62,000,000) is due on or before December 31, 2019. Although we have the Company has paid $18,233,403 (RMB 115,682,000) as deposits. Duringrights to operate the six months ended 31 December 2018,senior living facilities purchased under this agreement, we have not yet received a deed for Property A because the Company has paid $6,564,692 (RMB 44,953,140).

On September 1, 2018, the Company has obtained the full management and operation rightsseller is involved in several lawsuits that have already resulted in rulings to restrict transfer of this asset by Shanghai local district courts. Therefore, we are not going to make any further payments until this asset is free of the hotel property and all other assets of Property A. The cost of $34,625,790 including the remaining balances of the purchase prices has been transferred to properties and equipment.

On August 8, 2018, the Company has entered into a share purchase agreement to acquire Property B by acquiring 100% outstanding shares of the Transferor for $731,968 (RMB 5,000,000). The total proceeds have been included in the deposits paid by the Company and shares will be transferred when all current and potential liabilities are settled by the Transferor.restrictions.

Employees

At present, we have 14 employees, other than our current officers and directors, who devote their time as required to our business operations.

Off-balance Sheet Arrangements

The Company hasAs of September 30, 2019, we have no off-balance sheet arrangements that would require disclosure.

Critical Accounting Policies

Our interim financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Preparing financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the balance sheet dates, and the recognition of revenues and expenses for the reporting periods. These estimates and assumptions are affected by management’s application of accounting policies.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company doesWe do not issue or invest in financial instruments or their derivatives for trading or speculative purposes. TheOur limited operations of the Company wereare conducted primarily in China, and California, USA, and, are not subject to material foreign currency exchange risk. Although the Company haswe have immaterial outstanding debtdebts and related interest expense, market risk of interest rate exposure in the United States is currently not material.

ITEM 4 – CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Based on theour management’s evaluation (with the participation of our President and Chief Financial Officer), our President and Chief Financial Officer have concluded that as of December 31, 2018, the Company’send of the period covered by this report, our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange of 1934 (the “Exchange Act”)) are not effective to provide reasonable assurance that the information required to be disclosed in this quarterly report on Form 10-Q is recorded, processed, summarized and reported within the time period specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to the Company’sour management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

(b) Internal control over financial reporting

Management’s annual report on internal control over financial reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is intended to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting should include those policies and procedures that: pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with applicable GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Changes in internal control over financial reporting

Based upon their evaluation of our controls, Ms. Ziyun Xu, our Chief Executive Officer, and Mr. Jimmy Zhou, our Interim Chief Financial Officer, has concluded that, there were no significant changes in our internal control over financial reporting or in other factors during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Attestation report of the registered public accounting firm

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

There were no changes in our internal controls that occurred during the quarter covered by this report that have materially affected or are reasonably likely to materially affect our internal controls.

PART II – OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

The Company is not a party to any pending legal proceeding. ManagementOur management is not aware of any threatened litigation, claims or assessments.

ITEM 1A. RISK FACTORS

Not Applicable

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Between November 7,2018 and December 12, 2018, the Company sold 4,665,042 shares of its common stock (the “Shares”) to 16 Chinese investors for 3,657,428. No shares were sold to USA residents nor were shares offered for sale in the USA.None.

The Shares were sold by the officers and directors of the Company and no commissions were paid for such sales. All the investors are residents of China and all offers, and sales were conducted in China. The Shares were sold in a private placement pursuant to an exemption under the Securities Act of 1933, as amended (the “Act), in accordance with Regulation S of the Act. All stock certificates will be affixed with the appropriate Regulation S legend restricting sales and transfers.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4 – SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5 – OTHER INFORMATION

None

ITEM 6 – EXHIBITS

The following exhibits are furnished as required by Item 601 of Regulation S-B.

SIGNATURE

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.