UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~September~~March 3031, ~~2018~~2019

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ______ to __________

COMMISSION FILE NUMBER: 333-194583

~~LONGBAU~~KAOPU GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	46-5011565
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
(State or other jurisdiction of incorporation or	(IRS Employer Identification No.)
organization)

No.100-11, Sec. 1, Zhongqing Rd.,

North Dist., Taichung City 404,

Taiwan (R.O.C.)

(Address of principal executive offices)

+852 58059452

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes x No ¨

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

Large Accelerated Filer ¨	Non-Accelerated Filer x
Accelerated Filer ¨	Smaller Reporting Company x
	Emerging Growth Company x

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

As of ~~October~~March 3115, ~~2018~~2019, there are a total of 30,500,000 shares of common stock issued and outstanding.

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

Title of each class	Trading symbol(s)	Name of each exchange on which registered

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION		4
ITEM 1.	CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	4
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	5
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	108
ITEM 4.	CONTROLS AND PROCEDURES	109
PART II. OTHER INFORMATION		1110
ITEM 1.	LEGAL PROCEEDINGS	1110
ITEM 1A.	RISK FACTORS	1110
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	1110
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	1110
ITEM 4.	MINE SAFETY DISCLOSURES	1110
ITEM 5.	OTHER INFORMATION	1110
ITEM 6.	EXHIBITS	1110
	SIGNATURES	1211

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This report contains forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievement expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described under Part 1 Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Forward-looking statements represent our estimates and assumptions only as of the date of this report. You should read this report and the documents that we reference in this report, or that we filed as exhibits to this report completely and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

OTHER PERTINENT INFORMATION

References in this report to “we,” “us,” “our” and the “Company” and words of like import refer to Longbau Group, Inc. and its subsidiaries.

Our business is conducted in Hong Kong using the Hong Kong Dollar (HKD), the currency of Hong Kong, in Taiwan using NT$, the currency of Taiwan, and our financial statements are presented in United States dollars (“USD” or “$”). In this report, we refer to assets, obligations, commitments and liabilities in our financial statements in USD. These dollar references are based on the exchange rate of NT$ to USD, determined as of a specific date. Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of USD which may result in an increase or decrease in the amount of our obligations (expressed in USD) and the value of our assets, including accounts receivable (expressed in USD).

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Consolidated Balance Sheets (Unaudited)		F - 1
Contents	Page
Consolidated Statements of Operations and Comprehensive Loss (Unaudited)		F - 2
Consolidated Balance Sheets (Unaudited)	F – 1
Consolidated Statements of Cash Flows (Unaudited)		F - 3
Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	F – 2
Notes to the Consolidated Financial Statements (Unaudited)		F - 4
Consolidated Statements of Stockholder’s Deficit (Unaudited)	F – 3
Consolidated Statements of Cash Flows (Unaudited)	F – 4
Notes to the Consolidated Financial Statements (Unaudited)	F – 5

~~Longbau~~Kaopu Group, Inc.

Consolidated ~~Balance~~Statements ~~Sheets~~of Cash Flows

~~September~~For ~~30,~~the ~~2018~~three ~~and~~months ~~December~~ended March 31, ~~2017~~2019 and 2018

(Unaudited)

	September 30, 2018			December 31, 2017
	March 31, 2019			December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	~~488~~341,~~365~~386		$	~~564~~508,~~561~~988
Accounts receivable, net of allowance		772,179			840,250
Accounts receivable, net of allowance for doubtful accounts		177,479			939,736
Other receivables					44,097
Income tax receivable		-			2,507
Income tax receivable		-			29,373
Inventory		363,817			368,334
Inventory		381,066			358,914
Prepaid expenses and other current assets		26,917			68,521
Prepaid expenses and other current assets		78,624			55,034
Total current assets		909,599			1,888,086
Total current assets		1,720,234			1,892,229
Property and equipment, net of accumulated depreciation		80,393			90,758
Property and equipment, net of accumulated depreciation		323,486			135,833
Deposit on purchase of land		2,030,992			2,049,797
Deposit on purchase of land		1,850,817			1,941,101
Trust investments, restricted		6,575,460			6,556,072
Trust investments, restricted		6,590,562			6,214,890
Deferred commission cost		921,595			942,138
Deferred commission cost		951,793			955,866
Deferred tax assets - noncurrent		175,785			177,413
Deferred tax assets - noncurrent		162,565			153,320
Other assets		92,158			93,871
Other assets		81,928			78,084
Total assets	$	10,785,982		$	11,798,135
Total assets	$	11,681,385		$	11,371,323
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	1727,~~015,754~~210		$	1,~~718~~578,~~968~~865
Accounts payable and accrued expenses - related parties		~~182~~285,~~662~~741			~~155~~266,~~975~~495
Income tax payable		39,~~219~~732			4067,~~636~~695
Deferred revenues - current		~~121~~96,~~483~~876			9297,~~588~~773
Other payable - land purchase		1845,~~021,110~~640			~~963~~853,~~043~~470
Other payable - related party		154,~~341~~953			-10,663
Other payables		4235,~~719~~154			5650,~~623~~099
Total current liabilities		2,~~424~~085,~~288~~306			32,~~027~~925,~~833~~060
Deferred preneed contract revenues		8,~~379~~304,~~040~~471			78,~~942~~385,~~772~~402
Total liabilities		10,~~803~~389,~~328~~777			1011,~~970~~310,~~605~~462
Commitment and contingencies
Stockholders' Equity:
Common stock, $0.0001 par value, 1,000,000,000 shares authorized; 30,500,000 shares issued and outstanding		305			305
Additional paid-in capital		1,326,107			1,326,107
Legal capital reserve		8797,~~342~~608			8797,~~342~~608
Accumulated deficit		(~~487~~1,~~202~~025,898	)		(1943,~~006,595~~235	)
Accumulated other comprehensive loss		(481,~~495~~917	)		(6,~~441~~888	)
Total stockholders' equity		~~878~~396,~~057~~205			~~400~~487,~~718~~673
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1110,~~681~~785,~~385~~982		$	11,~~371~~798,~~323~~135

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

F -– 1

~~Longbau~~Kaopu Group, Inc.

Consolidated Statements of Operations ~~and~~ and Comprehensive ~~Income (~~Loss)

For the three months ended of March 31, 2019 and 2019

(Unaudited)

	For the three months ended September 30,						For the nine months ended September 30,
	2019			2018
	2018			2017			2018			2017
Revenues	$	1,031,142		$	1,296,850
Revenues	$	$3,294,587		$	1,834,702		$	$5,663,288		$	5,220,386
Operating expenses:
Operating expenses:
Cost of revenues		821,385			883,536
Cost of revenues		2,201,463			1,269,115			3,932,666			3,422,568
General and administrative		329,132			366,402
General and administrative		704,019			524,231			1,112,549			1,522,544
Depreciation and amortization		9,863			22,736
Depreciation and amortization		54,676			22,146			74,236			62,765
Total operating expense		1,160,380			1,272,674
Total operating expense		2,960,158			1,815,492			5,119,451			5,007,877
(Loss) income from operations		(129,238	)		24,176
Income (loss) from operations		334,429			19,210			543,837			212,509
Other income (expense):
Other income (expense):
Realized and unrealized investment income (losses), net		42,400			(67,405	)
Realized and unrealized investment losses, net		(65,926	)		3,384			(19,246	)		(66,703	)
Other income		4,176			40,328
Other income		(50,369	)		(7,604	)		32,773			8,543
Total other income (expense)		46,575			(27,077	)
Total other income (expense)		(116,295	)		(4,220	)		13,527			(58,160	)
Loss before provision for income taxes		(82,663	)		(2,901	)
Income (loss) before provision for income taxes		218,134			14,990			557,364			154,349
Income tax expense		-			8,188
Income tax expense (benefit)		28,730			2,622			37,970			38,562
Net loss	$	(82,663	)	$	(11,089	)
Net income (loss)	$	189,404		$	12,368		$	519,394		$	115,787
Other comprehensive income (loss):
Other comprehensive income (loss):
Foreign currency translation income (loss)		(7,019	)		127,472
Foreign currency translation gain (loss)		106,567			2,830			(8,107	)		113,012
Total other comprehensive income (loss)		(7,019	)		127,472
Total other comprehensive income (loss)		106,567			2,830			(8,107	)		113,012
Comprehensive (loss) income	$	(89,682	)	$	116,383
Comprehensive income (loss)	$	295,971		$	15,198		$	511,287		$	228,799
Net loss per common share:
Net income per common share:
Basic and diluted	$	(0.00	)	$	(0.00	)
Basic and diluted	$	0.01		$	0.00		$	0.02		$	0.01
Weighted average number of common shares outstanding:
Weighted average number of common shares outstanding:
Basic and diluted		30,500,000			30,500,000
Basic and diluted		30,500,000			30,000,000			30,500,000			30,000,000

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

F -– 2

~~Longbau~~Kaopu Group, Inc.

Consolidated Statements of Changes in Stockholders’ Deficit

For the three months ended of March 31, 2019

(Unaudited)

					Additional							Other			Total
	Common Stock				Paid- in		Legal		Accumulated			Comprehensive			Stockholders'
	Shares		Amount		Capital		Reserve		Deficit			Income (Loss)			Equity

Balance, December 31, 2018		30,500,000	$	305	$	1,326,107	$	97,608	$	(943,235	)	$	6,888		$	487,673

Foreign currency translation loss													(8,805	)		(8,805	)
Net loss										(82,663	)					(82,663	)

Balance, March 31, 2019		30,500,000	$	305	$	1,326,107	$	97,608	$	(1,025,898	)	$	(1,917	)	$	396,205

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

F – 3

Kaopu Group, Inc.

Consolidated Statements of Cash Flows

For the ~~Nine~~three ~~Months~~months ~~Ended~~ended ~~September~~March 3031, ~~2018~~ 2019 and ~~2017~~2018

(Unaudited)

	2018			2017
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	519,394		$	115,787
Net loss	$	(82,663	)	$	(11,089	)
Adjustments to reconcile net income to net cash from operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciate and amortization		74,236			62,765
Depreciation and amortization		9,863			22,736
Investment loss		18,950			66,703
Investment (income) loss		(42,400	)		67,405
Deferred income tax		~~(11~~1,~~480~~628	)		38(17,~~402~~102	)
Changes in operating assets and liabilities:
Accounts receivable		68762,~~071~~257			~~755~~604,~~299~~456
Accounts receivable - related party		-			(89,500	)
Income tax		(25,456	)		(19,260	)
Income tax receivable		27,956			24,080
Inventory		4,517			(40,156	)
Inventory		(22,152	)		56,021
Prepaid expenses, other current assets and other assets		43,316			(30,399	)
Prepaid expenses and other current assets		(20,745	)		(51,848	)
Trust investments, restricted		23,012			(761,836	)
Trust investments, restricted		(394,919	)		(505,530	)
Deferred commission cost		20,544			(70,654	)
Deferred commission cost		4,073			1,654
Other assets					1,758
Other assets		39,940			(4,465	)
Accounts payable and accrued expenses		(866,600	)		(874,946	)
Accounts payable and accrued expenses		(703,213	)		(1,311,318	)
Accounts payable and accrued expenses - related parties		19,246			38,154
Accounts payable and accrued expenses - related parties		26,688			126,532
Deferred revenues		(897	)		10,328
Deferred revenue		28,894			6,062
Other payable		-			231,330
Other payable		45,505			96,046
Deferred preneed contract revenues		(80,931	)		822,911
Deferred preneed contract revenues		436,266			549,877
Net cash used in operating activities		(214,564	)		(26,364	)
Net cash used in operating activities		137,464			(63,433	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		~~(171,604~~-	)		(~~159~~240,~~650~~875	)
Net cash used in investing activities		~~(171,604~~-	)		(~~159~~240,~~650~~875	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from capital contribution		-			92,841
Advances from related parties		44,290			-
Net cash provided by financing activities		-			92,841
Proceeds from cash contributions		-			-
Effect of exchange rate changes on cash and cash equivalents		(42,056	)		113,012
Payment on liability for land purchase		(7,830	)		-
Net change in cash and cash equivalents		(76,196	)		(17,230	)
Dividends		-			-
Cash and cash equivalents, beginning of period		564,561			486,352
Net cash provided by financing activities		36,460			-
Cash and cash equivalents, end of period	$	488,365		$	469,122
Effect of exchange rate changes on cash and cash equivalents		10,502			137,754
Net change in cash and cash equivalents		(167,602	)		(129,485	)
Cash and cash equivalents, beginning of year		508,988			564,561
Cash and cash equivalents, end of year	$	341,386		$	435,076
Cash paid for:
Interest	$	-		$	~~66,655~~-
Income tax	$	-		$	~~13,774~~-

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

F -– 34

Longbau Group, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Note 1 – Organization and Operations

Longbau Group, Inc. ~~(the Company)~~ was incorporated in in the State of Delaware on December 23, 2013. On December 21, 2018, Longbau Group, Inc. amended its Certificate of Incorporation to change the name to Kaopu Group, Inc. (the Company).

Business operations include sales of life, property and casualty insurance products underwritten by insurance companies as well as insurance brokerage services and consulting for other providers of deferred preneed funeral and cemetery services, preneed cemetery and funeral activities, sales of burial vaults, urns and other funeral related and consumer products and cemetery property.

Operating subsidiaries include Long Bao Life Technology Co., Ltd. (Long Bao Life) and Ho-Cheng Insurance Brokers Co., Ltd. (Ho-Cheng Insurance).

Long Bao Life provides “pre-need” and “at need” funeral services and sells funeral related products, such as urns, in Taiwan. A pre-need death care contract enables a customer to make his/her own funeral arrangements in advance and prepay for the funeral, which reduces the burden of the family at the time of bereavement as well as avoids the influence of rising costs. In addition, the Company provides consulting services to customers prior to the purchase.

Ho-Cheng Insurance, an insurance intermediary company, focuses on sales of life, property and casualty insurance products underwritten by insurance companies as well as insurance brokerage services. Ho-Cheng Insurance has been cooperating with many insurance companies operating in Taiwan to distribute a wide variety of insurance products to customers.

Note 2 – Summary of Significant Accounting Policies

Interim financial statements

The accompanying Consolidated Balance Sheet as of December 31, ~~2017~~2018, which was derived from audited financial statements, and the unaudited interim financial statements included herein, presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosure are adequate to make the information presented not misleading. The results of operations for the three ~~and six~~ months ended ~~September~~March 3031, ~~2018~~2019 are not necessarily indicative of the results for the full year. Certain information ~~and~~ and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements contained in the Company's ~~2017~~2018 Annual Report on Form 10-K, and it is suggested that these consolidated financial statements be read in conjunction therewith.

Basis of Presentation

The accompanying consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s functional currency is the Taiwanese Dollar (“Taiwanese $” or “NT$”); however, the accompanying consolidated financial statements were translated and presented in United States Dollars (“$” or “USD”).

~~The~~Principles ~~following~~of ~~table details the exchange rates used for the respective periods:~~Consolidation

	September 30, 2018		September 30, 2017		December 31, 2017
Period end: Taiwanese $ to US $	$	0.0328	$	0.0330	$	0.0310
Average for the period: Taiwanese $ to US $	$	0.0326	$	0.0330	$	0.0310

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances were eliminated in consolidation.

F - 4

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to allowance for sales return and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

F – 5

Reclassification

To conform to the current-year presentation, certain amounts have been reclassified in the presentation of the prior-year financial statements. These reclassifications had no impact on the previously reported Consolidated Balance Sheet, Consolidated Statement of Operations or Consolidated Statement of Cash Flows.

Foreign Currency Translation

The accounts of the Company are maintained in the Taiwanese $. The accounts of the Company are translated into US $ with the Taiwanese $ as the functional currency. All assets and liabilities are translated at the exchange rate on the balance sheet date, stockholders’ equity transactions are translated at the historical rates, and statement of operations items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the statement of operations and comprehensive gain (loss).

The following table details the exchange rates used for the respective periods:

	March 31, 2019		March 31, 2018		December 31, 2018

Period End: Taiwanese NTD to US $		0.0324		0.0340		0.0327
Average for the period: Taiwanese NTD to US $		0.0325		0.0320

Cash and Cash Equivalents

For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less.

Accounts Receivable

Accounts receivable are recorded, net of allowance for doubtful accounts and sales returns. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentration, customer credit worthiness, current economic trends and changes in customer payment patterns to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable and known bad debts are written off against the allowance for doubtful accounts when identified.

The Company provides merchandise return policy where customers who return the merchandises or cancel the contracts can receive full refund or partial refund of the amount paid within 180 days from date of purchase and contracts. Allowance for sales return is established based on management’s estimates of expected returns and historical experiences. As of March 31, 2019 and December 31, 2018, there were no allowance for uncollectible accounts receivable.

Inventory

Inventory consists of funeral related products such as burial urns and other consumer products and is valued at the lower of cost as determined on a first-in first-out basis or net realizable value. Burial urns are processed for the Company by third party contractors to add paint and other decorative finishes. Unprocessed urns are carried as raw materials, processed urns are carried as finished goods. The cost of processing is added to the carrying value of finished goods. Management compares the cost of inventory with its market value and an allowance is made to write down inventory to the net realizable value if required.

Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash and equivalents, accounts receivable, accounts payable, accrued expenses, accounts payable and accrued expenses – related parties, the carrying amounts approximate their fair values due to their short maturities.

F – 6

ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, Financial Instruments, defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the FV measurement.

Trust Investments

Pursuant to Taiwanese law, 75% of the proceeds from preneed sales of merchandise and services are put into trust until such time that the Company meets the requirements for releasing trust amount, which is generally when the service and merchandise are delivered, when the preneed contract is canceled and when the balance of the trust fund exceeds 75% of the proceeds from sales of preneed contracts. The legal beneficiary of the trust is the Company and the trust is managed by the Company. The investments of such trust funds are classified as trading securities and are reported at fair market value; therefore, the unrealized gains and losses are included in

the statement of operations. Targets that the trust fund can invest in are regulated by the authorities. On an annual basis, the Company is obligated to fund any shortfall if the amounts deposited by the customer exceed the funds in trust, including all investment income.

Property and Equipment, net

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

Description		Years

Office equipment		3 - 5 years
Lease improvements		3 - 5 years

Patent

The Company capitalizes the acquisition cost of its patent and amortizes the capitalized patent costs over 14 years.

Long-Lived Assets

Impairment losses are recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced to recognize the cost of disposal. Based on its review, the Company believes that as of March 31, 2019 and December 31, 2018, there was no significant impairment of its long-lived assets.

Deferred Commission Costs

The Company defers certain direct costs related to the acquisition of new preneed contracts. Such costs are expensed as the revenues are recognized. As of March 31, 2019 and December 31, 2018, the Company had $921,595 and $942,138 of deferred commission costs, respectively.

F – 7

Deferred Preneed Contract Revenues and Deferred Revenues

The Company sells preneed contracts whereby the customer enters into arrangements for future merchandise and services prior to the time of need. As these contracts are entered into prior to the delivery of the related merchandise and services, the amount collected in advance is recorded in deferred preneed contract revenues. If a preneed contract is terminated upon a customer’s request, a refund equal to total amount collected by the Company minus 20% of the contract price will be made when the termination is not made within 14 days from the contract initiation date. Full refund will be made when the termination is made within 14 days. We do not record accounts receivable in accordance with the contractual payment date given the nature of our merchandise and services, the nature of our contracts with customers, and the timing of the delivery of our services.

The Company also offers its merchandise and provides funeral hosting services on a stand-alone at need basis. The amount collected from customer before the merchandises and services are delivered is recorded in deferred revenues on the balance sheet.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no uncertain tax positions as of March 31, 2019 and December 31, 2018.

Revenue Recognition

Long Bao Life sells its merchandise and services on both a preneed and at need basis.

Revenue is recognized when control of the performance obligation is transferred to the customer. Our performance obligations include funeral and cemetery merchandise and services. Control transfers when merchandise is delivered, or services are performed.

We sell price-guaranteed preneed contracts through various programs providing for future merchandise and services at prices prevailing when the agreements are signed. Revenue associated with sales of preneed contracts is deferred until merchandise is delivered or the services are performed, generally at the time of need. In situations in which we have no further obligation or involvement related to the merchandise, we recognize revenue and record the cost of sales upon the earlier of vendor storage of these items or delivery in the cemetery. There is no general right of return for delivered items.

The total consideration received for contracts with customers is allocated to each performance obligation based on relative selling price. Relative selling prices are determined by either the amount we sell the performance obligation for on a stand-alone basis or our best estimate of the amount we would sell it for based on an adjusted market assessment approach that is consistent with our historical pricing practices.

Payment on at need contracts is generally due at the time the merchandise is delivered or the services are performed. For preneed contracts, payment generally occurs prior to our fulfillment of the performance obligations. Pursuant to the Taiwanese law, all or a portion of the proceeds from merchandise or services sold on a preneed basis may be required to be deposited into trust funds. When we receive payments from the customer, we deposit the amount required by law into the merchandise and service trusts and reclassify the corresponding amount from Deferred revenue, net into Deferred receipts held in trust. Amounts are withdrawn from the merchandise and service trusts when we fulfill the performance obligations. We defer investment earnings related to these merchandise and service trusts until the associated merchandise is delivered or services are performed. In addition, we are entitled to retain a portion of collected customer payments when a customer cancels a preneed contract; these amounts are also recognized in revenue.

Costs related to delivery or performance of merchandise and services are charged to expense when merchandise is delivered, or services are performed. Incremental direct selling costs are deferred and recognized when the associated performance obligation is fulfilled based on specific identification in the fulfillment of a contract. All other selling costs are expensed as incurred.

~~Ho-Cheng~~F ~~Insurance’s~~– revenue is from insurance agency and brokerage services. The Company sells insurance products to customers and obtains commissions from the respective insurance carriers according to the terms of each insurance company service agreement. The Company recognizes revenue when the following have occurred: persuasive evidence of an agreement between the insurance company and insured exists, services were provided, the fee for such services is fixed or determinable and collectability of the fee is reasonably assured. Insurance agency services are considered complete, and revenue is recognized, when an insurance policy becomes effective. The Company recognizes revenue from insurance carriers on a gross basis. The commission paid by the Company to its agents are recorded as cost of revenues.8

Ho-Cheng Insurance’s revenue is from insurance agency and brokerage services. The Company sells insurance products to customers and obtains commissions from the respective insurance carriers according to the terms of each insurance company service agreement.

The Company recognizes revenue when the following have occurred: persuasive evidence of an agreement between the insurance company and insured exists, services were provided, the fee for such services is fixed or determinable and collectability of the fee is reasonably assured. Insurance agency services are considered complete, and revenue is recognized, when an insurance policy becomes effective. The Company recognizes revenue from insurance carriers on a gross basis. The commission paid by the Company to its agents are recorded as cost of revenues.

Basic and Diluted Earnings Per Share

Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive securities are converted. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were no potentially dilutive securities outstanding during the periods presented.

~~Accounting~~Foreign ~~Standards~~Currency ~~Adopted~~Transactions inand ~~2018~~Comprehensive Income

WeUS ~~have~~GAAP ~~adopted~~generally ~~the~~requires ~~following~~recognized ~~recent~~revenue, expenses, ~~accounting~~gains ~~pronouncements~~ and losses be included in ~~these~~net ~~financial~~income. Certain statements, ~~with~~however, norequire ~~significant~~entities ~~impact~~to report specific changes in assets and liabilities, such as gain or loss on ~~reported~~foreign ~~financial~~currency ~~position~~translation, ~~results~~as a separate component of ~~operations~~the orequity ~~cash~~section of ~~flow:~~the balance sheet. Such items, along with net income, are components of comprehensive income. The functional currency of the Company is the Taiwanese $. Accumulated translation income (loss) of $(1,917) and $6,888 at March31, 2019 and December 31, 2018, respectively, are classified as an item of other comprehensive income in the stockholders’ equity section of the consolidated balance sheets.

FSegment ~~- 5~~Reporting

~~Revenue~~The ~~Recognition~~Company uses the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance.

InStatement ~~May~~of ~~2014,~~Cash the FASB issued "Revenue from Contracts with Customers", which replaced existing revenue recognition guidance. During 2016, the FASB made several amendments to the new standard that clarified guidance on several matters, including principal vs. agent considerations, identifying performance obligations, sales taxes, and licensing.Flows

~~The~~Cash ~~new~~flows ~~standard,~~from asthe ~~amended,~~Company’s ~~requires~~operations ~~that~~are wecalculated ~~recognize~~based ~~revenue~~upon in the ~~amount~~local tocurrencies ~~which~~using wethe ~~expect~~average totranslation berates. ~~entitled~~As ~~for~~a ~~delivery~~result, ofamounts ~~promised~~related ~~goods and services~~ to ~~our~~assets ~~customers.~~and ~~The~~liabilities ~~new~~reported ~~standard~~on ~~also~~the ~~resulted~~statements inof ~~enhanced~~cash ~~revenue-related~~flows ~~disclosures,~~will ~~including~~not ~~any~~necessarily ~~significant~~agree ~~judgments~~with ~~and~~ changes in ~~judgments. Additionally,~~ the ~~new~~corresponding ~~standard~~balances ~~requires~~on the ~~deferral of incremental direct selling costs to the period in which the related revenue~~ isbalance ~~recognized~~sheets.

WeAccounting ~~adopted~~Standards ~~the~~Recently new standards on January 1, 2018 using the modified retrospective method. The timing of revenue recognition for our preneed contracts remained consistent between the new and previous standards. There was no material impact on our consolidated financial statements from adopting the new standard but we have expanded disclosure about our revenues in Footnote 2.Adopted

~~The~~In ~~following~~February ~~recent~~2016, ~~accounting~~FASB ~~pronouncements~~issued ~~are~~ASU ~~currently~~No. 2016-02 Leases (Topic ~~being~~842), ~~evaluated~~which ~~for~~created ~~implementation~~new accounting and ~~could~~reporting ~~potentially~~guidelines ~~have~~for leasing arrangements. The standard requires that a ~~significant~~lessee ~~impact~~recognize the assets and liabilities that arise from operating leases. A lessee should recognize on ~~future~~its ~~financial~~balance ~~position~~sheet ~~results~~a liability to make lease payments (the lease liability) and a right-of-use ~~operations~~asset representing its right to use the underlying asset for the lease orterm. ~~cash~~The ~~flow:~~guidance in ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018. In July 2018, FASB issued ASU No. 2018-11, Leases (Topic 842) -Targeted Improvements, providing an optional transition method that allows entities to initially apply the new leases standard at the adoption date. The Company adopted this Standard effective January 1, 2019; there was no material impact on its financial statements..

In ~~February~~ ~~2016~~June 2018, ~~the~~ FASB issued ASU ~~2016~~ 2018-~~02, Leases,~~07 ~~which aims~~ to ~~make~~expand ~~leasing~~the ~~activities~~scope ~~more transparent and comparable~~of ~~and~~ASC ~~requires~~Topic ~~substantially~~718, Compensation ~~all~~- ~~leases~~Stock beCompensation, ~~recognized~~to byinclude ~~lessees~~share-based onpayment ~~their~~transactions ~~balance~~for ~~sheet~~acquiring asgoods ~~a right-of-use asset~~ and ~~corresponding~~ ~~lease~~services ~~liability,~~from ~~including leases currently accounted for as operating leases~~nonemployees. ~~This~~The ~~ASU~~standard is effective for ~~all~~fiscal ~~interim~~years, and ~~annual reporting~~for interim periods ~~beginning~~within those fiscal years, beginning after December 15, ~~2019~~2018, with early adoption permitted. WeThe ~~expect~~Company toadopted ~~adopt~~this ~~ASU 2016-02 beginning~~ Standard effective January 1, 2019 ~~and~~; ~~are~~there inwas no ~~the~~material ~~process of assessing the~~ impact ~~that this new guidance is expected to have~~ on ~~our~~its financial statements ~~and related disclosures~~.

~~In May~~Recent ~~2017, the FASB issued ASU 2017-09, Modification~~ Accounting for Share-Based Payment Arrangements. The standard amends the scope of modification accounting for share-based payment arrangements and provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. The new standard is effective for fiscal years beginning after December 15, 2017. There was no impact on the financial statements of adopting this new standard on January 1, 2018.Standards

In August 2018, FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820). The updated guidance improves the disclosure requirements on fair value measurements and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of the standard for disclosures modified or removed with a delay of adoption of the additional disclosures until their effective date. The Company is in the process of evaluating the provisions of the ASU but does not expect it to have a material effect on its consolidated financial statements.

F – 9

In November 2018, FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606, which, among other things, provides guidance on how to assess whether certain collaborative arrangement transactions should be accounted for under Topic 606. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company is in the process of evaluating the impact the standard will have on its financial statements.

Subsequent Events

The Company’s ~~policy~~management isreviewed toall ~~evaluate events~~material ~~and transactions~~ events through the date the consolidated financial statements ~~are~~were ~~available~~issued for ~~release~~subsequent ~~for~~event ~~potential~~ disclosure ~~as subsequent events~~consideration.

Note 3 – Going Concern Considerations

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses from operations, has a substantial working capital deficiency and substantial accumulated deficits and comprehensive loss that raise substantial doubt about its ability to continue as a going concern. Management's plans to address these issues are to achieve and maintain profitability which depends on the growth of our market share, the acceptance of our services by our customers, the competitiveness of our death care management consultant services, and our ability to control our costs and expenses. Additionally, our controlling shareholders will continue to contribute capital if required as they did in ~~2017~~2018 and ~~2016~~2017. Our plans also include raising substantial capital from share purchase agreement from outside entities.

Note 4 – Trust Investments

The cost and market values associated with preneed contract trust investments at ~~September~~March 3031, ~~2018~~2019 are detailed below:

Fair Value

Fair Market

Hierarchy

Cost at

Unrealized

Value at

Level

~~September~~March 3031, ~~2018~~2019

~~Losses~~Gain

~~September~~March ~~30,~~31. ~~2018~~2019

Cash and money market account

Level 1

52,~~282~~039,~~994~~351

Mutual funds:

Debt securities

Level 1

14,~~372~~536,~~922~~000

~~(65,354~~109

)

14,~~307~~536,~~568~~109

Total

6,~~655~~575,~~917~~351

~~(65,354~~109

)

6,~~590~~575,~~562~~460

FWhere quoted prices are available in an active market, investments held by the trust are classified as Level 1 investments pursuant to the three-level 6valuation hierarchy. The Company’s Level 1 investments include cash and money market accounts and mutual funds. There are no Level 2 and Level 3 investments in the Company’s trust portfolio as of March 31, 2019 and December 31, 2018.

Where quoted prices are available in an active market, investments held by the trust are classified as Level 1 investments pursuant to the three-level valuation hierarchy. The Company’s Level 1 investments include cash and money market accounts and mutual funds. There are no Level 2 and Level 3 investments in the Company’s trust portfolio as of September 30, 2018.

Note 5 – Related Party Transactions

Sales

During the ~~nine~~three months ended ~~September 30~~March 31, 2019 ~~2018~~ and ~~2017~~2018, the Company’s Chief Executive Officer, affiliated and family members purchased certain products from the ~~Company~~ Company for $143,~~754~~349 and $02,602, respectively.

Other payable

As of ~~September~~March 3031, ~~2018~~2019 and December 31, ~~2017,~~ 2018, the Company had a liability of $154,~~341~~953 and $010,663, respectively, to its Chief Executive Officer for short-term borrowings. The liability is non-interest bearing and are payable on demand.

F – 10

Lease

During the ~~nine~~three months ended ~~September 30~~March 31, 2019 ~~2018~~ and ~~2017~~2018, the Company leased offices from the Company’s Chief Executive Officer ~~and two directors~~. Total lease expense to the related parties during the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019 and ~~2017~~2018 were $5916,~~625~~135 and $4915,~~365~~936, respectively.

Commission cost

During the ~~nine~~three months ended ~~September 30~~March 31, 2019 ~~2018~~ and ~~2017~~2018, the Company incurred $~~5,432~~833 and $~~4,557~~140 of commission costs to a company controlled by a family member of the Company’s Chief Executive Officer. As of ~~September~~March 3031, ~~2018~~2019 and December 31, ~~2017~~2018, amount payable to the affiliated company for commissions were $0 and $0, respectively.

Note 6 – Commitments and Contingencies

Pursuant to the preneed contracts with the customers, the Company agreed to pay interest starting from the date that the full contract price is collected by the Company. The interest is calculated based on 80% of the contract price at a rate of 5% per annum for contracts entered in or prior to February 2009 and based on 100% of the contract price at a rate of 2.37% per annum for contracts entered after February 2009 but before February 2011. Starting from March 2011, interest is calculated based on 100% of the contract price at the one-year certified deposit rate of postal service announced by the Chunghwa Post Co., Ltd. in Taiwan (Currently 1.04% per annum). The interest is paid annually and included in cost of revenues in the statement of operations. Interest expense related to the preneed contracts were $4722,~~180~~ 057 and $1920,~~318~~057 for the ~~nine~~ three months ended ~~September~~March 3031, ~~2018~~2019 and ~~2017~~2018, respectively.

Note 7 – Segment Reporting

The Company uses the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company has three reportable segments: Long Bao Life that mainly sells funeral services products; Ho-Cheng Insurance that is an insurance broker; and Longbau Taiwan and Long Group, Inc. that provides consulting services. The following tables summarize the Company’s segment information for the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019 and ~~2017~~2018 and as of ~~September~~March 3031, ~~2018~~2019 and December 31, ~~2017~~2018:

F - 7

	For the three months ended March 31,
	2019			2018
Revenues
Funeral services	$	138,880		$	328,806
Insurance		892,262			968,044
Consulting		-			-

Total revenues	$	1,031,142		$	1,296,850

Income (loss) from operations
Funeral services	$	(65,758	)	$	2,200
Insurance		(63,480	)		45,297
Consulting		-			(23,322	)

Total (loss) income from operations	$	(129,238	)	$	24,175

Net income (loss)
Funeral services	$	(19,183	)	$	(29,941	)
Insurance		(63,480	)		37,173
Consulting		-			(18,321	)

Total net loss	$	(82,663	)	$	(11,089	)

	For the nine months ended September 30,
	2018			2017
Revenues
Funeral services	$	1,006,048		$	1,094,118
Insurance		4,657,240			4,126,268
Total revenues	$	5,663,288		$	5,220,386
Income (loss) from operations
Funeral services	$	65,071		$	63,687
Insurance		510,199			236,137
Consulting		(31,433	)		(87,315	)
Total income (loss) from operations	$	543,837		$	212,509
Net income (loss)
Funeral services	$	90,279		$	17,862
Insurance		459,944			185,240
Consulting		(30,830	)		(87,315	)
Total net income	$	519,393		$	115,787

F – 11

	As of		As of
	September 30, 2018		December 31, 2017
	March 31, 2019		December 31, 2018
Total assets
Funeral services	$	10,~~433~~127,~~561~~700	$	10,~~605~~215,~~049~~481
Insurance		1558,~~225,388~~210		~~641~~1,~~363~~482,862
Consulting		22110,~~436~~072		~~101~~99,~~592~~792
Total assets	$	1110,~~681~~785,~~385~~982	$	11,~~348~~798,~~004~~135

Note 8 – Subsequent Events

The Company has evaluated transactions and events form the balance sheet date through the date these financial statements are available for release and has determined there are no events and or transactions require disclosure as subsequent events.

F -– 812

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

You should read this Management’s Discussion and Analysis in conjunction with the Consolidated Financial Statements and Related Notes. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipated in these forward-looking statements.

Overview

We sell death care management consultant services through Longbau Hong Kong, our operating company in Hong Kong, to public consumers across Taiwan. In September 2014, we established another subsidiary in Taiwan, Longbau Taiwan, to provide death care consulting service and sell death care products across Taiwan. Longbau Taiwan is 100% owned by Longbau Hong Kong.

We will be providing a variety of death care management consultancy services. We consult on the purchase of cemetery property and funeral and cemetery merchandise and services at the time of need and on a preneed basis. In addition, the Company specializes in the consultancy for deferred preneed funeral and cemetery receipts held in trust, preneed cemetery activities, preneed funeral activities, preneed funeral and cemetery, burial vaults, cemetery property, and cemetery property revenue.

On December 29, 2016, we, Long Bao Life Technology Co., Ltd (“Long Bao Life”), the shareholders of Long Bao Life, and Tsai Ko, our CEO, entered into a share exchange agreement whereby we issued 250,000 shares of our common stock to Long Bao Life shareholders in exchange for 100% of Long Bao Life's issued and outstanding ownership interests. Upon completion of the foregoing transaction, Long Bao Life became our wholly-owned subsidiary. Long Bao Life was a private company incorporated in Taiwan in 2007.

Long Bao Life provides pre-need and at need funeral services and sells funeral related products, such as urns, in Taiwan. A pre-need death care contract enables a customer to make his/her own funeral arrangements in advance and prepay for the funeral, which reduces the burden of the family at the time of bereavement as well as avoids the influence of rising costs. In addition, the company provides consulting services to customer prior to the purchase. Long Bao Life utilizes various systems, including multi-level marketing ("MLM") system, to sell the preneed contracts and other products. Under the MLM system, the salespeople are compensated not only for sales they generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant's "downline", and can provide multiple levels of compensation. MLM is one type of direct selling. The salespeople are expected to sell products directly to consumers by means of relationship referrals and word of mouth marketing. MLM salespeople not only sell the Long Bao Life products but also encourage others to join the Long Bao Life as a distributor. Long Bao Life also sales its preneed contracts and other products through agents where it pays a fixed amount of commission.

On December 29, 2016, we, Ho-Cheng Insurance Brokers Co., Ltd. (“Ho-Cheng Insurance”), the shareholders of Ho-Cheng Insurance and Tsai Ko entered into a share exchange agreement whereby we issued 250,000 shares of our common stock to Ho-Cheng Insurance shareholders in exchange for 100% of Ho-Cheng Insurance’s issued and outstanding ownership interests. Upon completion of the foregoing transaction, Ho-Cheng Insurance became our wholly-owned subsidiary. Ho-Cheng Insurance was a private company incorporated in Taiwan in 2001.

Ho-Cheng Insurance, a Taiwan based insurance intermediary company focuses on sales of life, property and casualty insurance products underwritten by insurance companies as well as insurance brokerage services. The company has been cooperating with many insurance companies operating in Taiwan to distribute a wide variety of insurance products to customers.

~~Tsai~~On ~~Ko,~~December ~~our Chief~~21, ~~Executive~~2018 ~~Officer,~~the ~~Director~~Company ~~and~~amended ~~owner~~its ofCertificate ~~30%~~ of ~~our~~Incorporation ~~outstanding~~to ~~common~~change ~~stock was (i)~~ the ~~Chief Executive Officer of Long Bao Life and owner of 12% of Long Bao Life~~Company’s ~~ownership~~name ~~interests;~~from ~~and~~“Longbau ~~(ii)~~Group, ~~owner~~Inc.” to of“Kaopu ~~25%~~Group, ~~of Ho-Cheng Insurance’s ownership interests~~Inc.”

Yueh-Kuei Ko, our Chief Financial Officer, Director, and owner of 5% of our outstanding common stock was (i) a Long Bao Life Director and 18% owner of Long Bao Life’s ownership’s interests and (ii) the Chief Executive Officer of Ho-Cheng Insurance and a 25% owner of Ho-Cheng Insurance’s ownership interests.

Tsai Ko, Yueh-Kuei Ko and relatives of each collectively owned a majority interest in both Long Bao Life and Ho-Cheng Insurance.

Long Bao Life, Ho-Cheng and us were entities under common control and had been since the earliest period presented in these consolidated financial statements included elsewhere in this Form 10-Q; therefore, the consolidated financial statements have been presented as if the acquisitions of Long Bao Life and Ho-Cheng Insurance had occurred at the beginning of the period for which consolidated financial statements are presented.

Results of Operations

For the three months ended ~~September~~March 3031, ~~2018~~2019 and ~~2017~~2018

Revenues. For the three months ended ~~September~~March 3031, ~~2018~~2019, we generated revenues of $31,~~294~~031,~~587~~142 as compared to $1,~~834~~296,~~702~~850 for three months ended ~~September~~March 3031, ~~2017~~2018, ana ~~increase~~decrease of $1265,~~459,855~~708 or 8020%. The ~~increase~~decrease is principally due tous ~~the~~generating ~~hiring~~less ofrevenues ~~more insurance agents and more sales derived~~ from ~~these~~our ~~agents~~insurance business.

Cost of revenues. For the three months ended September 30, 2018, our cost of revenues was $2,201,463 as compared to $1,269,115 for the three months ended September 30, 2017, an increase of $932,348 or 73%. The increase is principally due to more personnel costs incurred in 2018. As a percentage of revenues, our cost of revenue for the three months ended September 30, 2018 and 2017 were 66% and 69%, respectively.5

~~General and~~Cost ~~administrative~~of ~~expenses~~revenues. For the three months ended ~~September~~March 3031, ~~2018~~2019, weour ~~had~~cost ~~general~~of ~~and~~revenues ~~administrative~~was ~~expenses of~~ $~~704~~821,~~019~~385 as compared to $~~524~~883,~~231~~536 for the three months ended ~~September 30~~March 31, ~~2017~~2018, ana ~~increase~~decrease of $~~179~~612,~~788,~~151 or 347%. The decrease is principally due to less commissions paid because of less revenues from our insurance business. As a percentage of revenues, our ~~general~~cost ~~and~~of ~~administrative~~revenue ~~expenses~~ for the three months ended ~~September~~March 3031, ~~2018~~2019 and ~~2017~~2018 were 26 80% and 2968%, respectively.

~~Other~~General ~~income~~and ~~(expense)~~administrative expenses. For the three months ended ~~September~~March 3031, ~~2018~~2019, we had ~~net~~general ~~other~~and ~~expense~~administrative expenses of $~~116~~329,~~295~~132 as compared to ~~net other loss of~~ $4366,~~220~~402 for the ~~three~~ three months ended ~~September~~March 3031, ~~2017~~2018, ana ~~increase~~decrease of $~~112~~37,~~075~~270, or 10%. ~~The~~As ~~difference~~a ispercentage ~~principally~~of ~~due~~revenues, ~~the~~our ~~investment~~general ~~loss~~and ofadministrative ~~$65,926~~expenses ~~recognized~~for inthe ~~2018~~three ~~versus~~months inended ~~2017~~March ~~there~~31, ~~was~~2019 aand ~~small~~2018 ~~investment~~were ~~income~~32% ~~realized~~and 28%, respectively.

~~Net~~Other income (~~loss~~expense). For the three months ended ~~September~~March 3031, ~~2018~~2019, we had net other income of $~~189~~46,~~404~~575 as compared to a net ~~income~~other loss of $1227,~~368~~077 for the three ~~months~~ months ended ~~September~~March 3031, ~~2017~~2018, an increase inof ~~net~~$73,652. The difference is principally due the investment income of $ ~~177~~42,~~036.~~400 ~~The~~recognized in ~~increase~~2019 versus in ~~net~~2018 ~~income~~there iswas ~~mainly~~an ~~due~~investment toloss ~~the~~of ~~increase~~$67,405 ~~in revenue~~realized.

~~For~~Net loss. For the ~~nine~~three months ended ~~September~~March 31, 2019, we had net loss of $82,663 as compared to a net loss of $11,089 for the three months ended 30March 31, 2018, ~~and~~an ~~2017~~increase in net loss of $71,574. The decrease is principally due us generating less revenues from our insurance business.

Revenues. For the nine months ended September 30, 2018, we generated revenues of $5,663,288 as compared to $5,220,386 for nine months ended September 30, 2017, an increase of $442,902 or 8%. Revenues from our funeral services segment decreased by $88,070 or 8% from $1,094,118 in 2017 to $1,006,048 in 2018. The decrease is principally due to the net decrease of revenues from preneed contract deliveries and funeral hosting fees earned. Revenues from our insurance segment increased by $530,972 or 13% from $4,126,268 in 2017 to $4,657,240 in 2018. The increase is principally due to the hiring of more insurance agents and more sales derived from these agents. We had no revenues from our consulting services segment during the nine months ended September 30, 2018 and 2017.

Cost of revenues. For the nine months ended September 30, 2018, our cost of revenues was $3,932,666 as compared to $3,422,568 for the nine months ended September 30, 2017, an increase of 510,098 or 15%. The increase is principally due to more personnel costs incurred in 2018. As a percentage of revenues, our cost of revenue for the nine months ended September 30, 2018 and 2017 were 69% and 66%, respectively.

General and administrative expenses. For the nine months ended September 30, 2018, we had general and administrative expenses of $1,112,549 as compared to $1,522,544 for the nine months ended September 30, 2017, a decrease of $409,995 or 27%. As a percentage of revenues, our general and administrative expenses for the nine months ended September 30, 2018 and 2017 were 22% and 29%, respectively. The decrease in dollars is principally due to decreases in professional fees.

Other income (expense). For the nine months ended September 30, 2018, we had net other income of $13,527 as compared to net other expense of $58,160 for the nine months ended September 30, 2017, an increase of $71,687 or 123%. The increase is principally more realized investment income in 2018 and the dividend income receipted in 2018.

Net loss. For the nine months ended September 30, 2018, we had net income of $519,393 as compared to a net income of $115,787 for the nine months ended September 30, 2017, an increase in net income of $403,606. The increase in net income is mainly due to the increase in revenue.

Liquidity and Capital Resources Operations

As of ~~September~~March 3031, ~~2018~~2019, we had cash on ~~hand~~ hand of $~~488~~341,~~365~~386.

Operating activities. ~~For~~ For the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019, we ~~have~~used ~~cash~~$214,564 ~~provided~~in byour operating activities ~~of $137,464~~ as compared to cash used in operating activities of $6326,~~433~~364 for the ~~nine~~three months ended ~~September~~March 3031, ~~2017~~2018. The ~~increase~~decrease is principally due to ~~changes~~ decreases in ~~accounts receivable and~~ deferred ~~contract~~preneed contract revenues.

Investing activities. For the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019, we ~~used~~did ~~cash~~not inhave any investing activities ~~of $171,604~~ as compared to cash used in investing ~~activities~~ activities of $~~159~~240,~~650~~875 for the ~~nine~~three months ended ~~September~~March 3031, ~~2017.~~2018 Weto ~~purchased~~purchase more property and equipment ~~in 2018~~.

Financing activities. For the ~~nine~~three months ended ~~September~~March 3031, 2018, we did not have any cash inflow or outflow from the financing activities. asFor ~~compared to $92,841 for~~ the ~~nine~~ three months ended ~~September~~March 3031, ~~2017.~~2019, ~~During~~we ~~the~~received ~~nine~~advances ~~months~~form ~~ended~~related ~~September~~parties ~~30,~~in ~~2017~~the amount of $44,290 and we ~~received~~paid ~~capital~~$7,830 ~~contribution~~for the land ofpurchase ~~$92,841~~liability.

We plan to fund our operations from loans from our major shareholders and we may raise equity capital by offering shares of our common stock to investors as well as from our operations.

Although the Company believes its revenues from operations will eliminate the need to raise additional funding to expand its business operations over the next 12 months, there is no guarantee additional funding will not be required. If financing is needed and we are not able to raise the capital necessary to fund our business expansion objectives, we may have to delay the implementation of our business plan.

We do not currently have any arrangements for financing. Obtaining additional funding will be subject to a number of factors, including general market conditions, investor acceptance of our business plan and initial results from our business operations. These factors may impact the timing, amount, terms or conditions of additional financing available to us. The most likely source of future funds available to us is through the sale of additional shares of common stock or advances from our major shareholders or directors and, if we are able to obtain equity financing, it will likely result in significant additional dilution to the interests of our current stockholders and may include liquidation or other preferences that adversely affect your right as a stockholder. The Company may obtain financing by issuing debt which may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. There can be no assurance that we will be able to obtain such additional financing is needed and if we cannot receive such financing we may be forced to suspend or cease operations.

Critical Accounting Policies

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States ("US GAAP"). US GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expenses amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

We believe the following is among the most critical accounting policies that impact our consolidated financial statements. We suggest that our significant accounting policies, as described in our financial statements in the Summary of Significant Accounting Policies, be read in conjunction with this Management's Discussion and Analysis of Financial Condition and Results of Operations.

Use of Estimates

Inventory

Inventory is valued at the lower of the inventory’s cost or net realizable value. Management compares the cost of inventory with its market value and an allowance is made to write down inventory to the net realizable value, if lower.

Trust Investments

Deferred Commission Costs

The Company defers certain direct costs related to the acquisition of new preneed contracts. Such costs are expensed as the revenues are recognized.

Deferred Preneed Contract Revenues and Deferred Revenues

Income Taxes

Revenue Recognition

WeLong ~~sell~~Bao ~~our~~Life sells its merchandise and services on both a preneed and at need basis.

Ho-Cheng Insurance’s revenue is from insurance agency and brokerage services. The Company sells insurance products to customers, and obtains commissions from the respective insurance carriers according to the terms of each insurance company service agreement. The Company recognizes revenue when the following have occurred: persuasive evidence of an agreement between the insurance company and insured exists, services were provided, the fee for such services is fixed or determinable and collectability of the fee is reasonably assured. Insurance agency services are considered complete, and revenue is recognized, when an insurance policy becomes effective. The Company recognizes revenue from insurance carriers on a gross basis. The commission paid by the Company to its agents are recorded as cost of revenues.

~~Accounting~~The ~~Standards~~Company ~~Adopted~~recognizes inrevenue ~~2018~~when the following have occurred: persuasive evidence of an agreement between the insurance company and insured exists, services were provided, the fee for such services is fixed or determinable and collectability of the fee is reasonably assured. Insurance agency services are considered complete, and revenue is recognized, when an insurance policy becomes effective. The Company recognizes revenue from insurance carriers on a gross basis. The commission paid by the Company to its agents are recorded as cost of revenues.

WeAccounting ~~have~~Standards ~~adopted~~Recently ~~the following recent accounting pronouncements in these financial statements with no significant impact on reported financial position, results of operations or cash flow:~~Adopted

In ~~May~~February ~~2014~~2016, ~~the~~ FASB issued ~~"Revenue from~~ASU ~~Contracts~~No. ~~with Customers"~~2016-02 Leases (Topic 842), which ~~replaced~~created ~~existing~~new ~~revenue~~accounting ~~recognition~~and ~~guidance~~reporting guidelines for leasing arrangements. ~~During~~The ~~2016,~~standard requires that a lessee recognize the ~~FASB~~assets ~~made~~and ~~several~~liabilities ~~amendments~~that arise from operating leases. A lessee should recognize on its balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the ~~new~~underlying ~~standard~~asset ~~that~~for ~~clarified~~the lease term. The guidance onin ~~several~~ASU ~~matters,~~2016-02 ~~including~~is ~~principal~~effective ~~vs.~~for ~~agent~~annual ~~considerations~~and interim reporting periods beginning after December 15, ~~identifying~~2018. ~~performance~~In July ~~obligations~~2018, ~~sales~~FASB ~~taxes~~issued ASU No. 2018-11, ~~and~~Leases ~~licensing~~(Topic 842) -Targeted Improvements, providing an optional transition method that allows entities to initially apply the new leases standard at the adoption date. The Company adopted this Standard effective January 1, 2019.

~~The~~In ~~new~~June ~~standard~~2018, asFASB ~~amended,~~issued ~~requires that~~ASU we2018-07 ~~recognize~~to ~~revenue~~expand in the ~~amount~~scope toof ASC ~~which~~Topic we718, Compensation ~~expect~~- Stock Compensation, to beinclude ~~entitled~~share-based ~~for~~payment ~~delivery~~transactions offor ~~promised~~acquiring goods and services tofrom ~~our customers~~nonemployees. The ~~new~~ standard ~~also~~is ~~resulted~~effective infor ~~enhanced~~fiscal ~~revenue-related disclosures~~years, ~~including~~and ~~any~~for ~~significant~~interim ~~judgments~~periods ~~and~~within ~~changes~~those infiscal ~~judgments. Additionally~~years, ~~the~~beginning after ~~new~~December ~~standard~~15, ~~requires~~2018, ~~the~~with ~~deferral~~early ofadoption ~~incremental~~permitted. ~~direct~~The ~~selling~~Company ~~costs~~adopted tothis ~~the~~Standard ~~period~~effective inJanuary ~~which~~1, ~~the~~2019; ~~related~~there ~~revenue~~was isno ~~recognized~~material impact on its financial statements.

WeRecent ~~adopted~~Accounting the new standards on January 1, 2018 using the modified retrospective method. The timing of revenue recognition for our preneed contracts remained consistent between the new and previous standards. There was no material impact on our consolidated financial statements from adopting the new standard but we have expanded disclosure about our revenues in the notes to our financial statements.Standards

In August 2018, FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820). The ~~following~~updated ~~recent~~guidance ~~accounting~~improves ~~pronouncements~~the disclosure requirements on fair ~~are~~value ~~currently~~measurements ~~being~~and ~~evaluated~~is effective for ~~implementation~~fiscal years, and ~~could~~interim ~~potentially~~periods ~~have~~within athose ~~significant~~fiscal ~~impact~~years, onbeginning ~~future~~after ~~financial~~December ~~position results~~15, 2019. Early adoption is permitted upon issuance of ~~operations~~the standard for disclosures modified or ~~cash~~removed ~~flow:~~with a delay of adoption of the additional disclosures until their effective date. The Company is in the process of evaluating the provisions of the ASU but does not expect it to have a material effect on its consolidated financial statements.

In ~~February~~ ~~2016~~November 2018, ~~the~~ FASB issued ASU ~~2016~~ 2018-0218, ~~Leases,~~ Collaborative ~~which~~Arrangements ~~aims~~(Topic to808): ~~make~~Clarifying ~~leasing~~the ~~activities~~Interaction ~~more~~Between ~~transparent~~Topic 808 and ~~comparable~~Topic ~~and~~606, which, ~~requires~~among ~~substantially~~other ~~all~~things, ~~leases~~provides beguidance ~~recognized by lessees~~ on ~~their~~how ~~balance~~to ~~sheet~~assess aswhether acertain ~~right-of-use~~collaborative ~~asset~~arrangement ~~and~~transactions ~~corresponding~~should ~~lease~~be ~~liability, including leases currently~~ accounted for asunder Topic ~~operating leases~~606. ~~This~~The amendments in this ASU isare effective for ~~all~~fiscal ~~interim~~years, and ~~annual~~interim ~~reporting~~ periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. WeThe ~~expect~~Company tois ~~adopt ASU 2016-02 beginning January 1, 2019 and are~~ in the process of ~~assessing~~evaluating the impact ~~that~~the ~~this~~standard ~~new guidance is expected to~~ will have on ~~our~~its financial statements ~~and related disclosures~~.

In May 2017, the FASB issued ASU 2017-09, Modification Accounting for Share-Based Payment Arrangements. The standard amends the scope of modification accounting for share-based payment arrangements and provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. The new standard is effective for fiscal years beginning after December 15, 2017. There was no impact on the financial statements of adopting this new standard on January 1, 2018.

Off-Balance Sheet Arrangements

None.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

Not Applicable.

ITEM 4. INTERNAL CONTROLS OVER FINANCIAL REPORTING.

Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, Tsai Ko, our Chief Executive Officer and Yueh-Kuei Ko, the Company’s Chief Financial Officer, concluded that as of ~~September~~March 3031, ~~2018~~2019, our disclosure controls and procedures were not effective due to the ~~following~~ following material weaknesses in our control environment and financial reporting process consisting of the following as of ~~September 30~~March 31, ~~2018~~2019:

lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal control and procedures;

inadequate segregation of duties consistent with control objectives;

ineffective controls over period end financial disclosure and reporting processes; and

lack of accounting personnel with adequate experience and training.

Management plans to:

1. hire additional personnel with US GAAP and SEC financial reporting experience;

2. engage third-party consultants to implement policies and procedures on internal control over financials reporting;

3. search for a qualified individual to join the board and establish an audit committee to establish and monitor the internal controls.

Changes in Internal Control over Financial Reporting.

During the three months ended ~~September~~March 31, 302019, ~~2018,~~ there were no changes in our internal control over financial reporting identified in connection with the evaluation performed during the quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 1A. RISK FACTORS.

Not applicable.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS

(a) Exhibits:

Exhibit
Number		Description of Exhibit
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
32.1*		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document.

101.SCH		XBRL Taxonomy Extension Schema Document.

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

*The certification attached as Exhibits 32.1 and 32.2 accompany this quarterly report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Quarterly Report on Form 10-Q report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 19, 2018	By:	/s/ Tsai Ko
Date: May 20, 2019	By:	/s/ Tsai Ko
	Name:	Tsai Ko
	Its:	Chief Executive Officer
		(Principal Executive Officer)
Date: November 19, 2018	By:	/s/ Yueh-Kuei Ko
Date: May 20, 2019	By:	/s/ Yueh-Kuei Ko
	Name:	Yueh-Kuei Ko
	Its:	Chief Financial Officer
		(Principal Financial Officer)

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