UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-K

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

FOR THE FISCAL YEAR ENDED May 31, ~~2016~~ 2017

Commission File Number: 333-167804

CN RESOURCES INC.

(Exact name of registrant as specified in its charter)

NEVADA

(State or other jurisdiction of incorporation or organization)

255 Duncan Mill Road

Suite 203

Toronto, Ontario M3B 3H9

(Address of principal executive offices, including zip code)

416-510-2991

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:		Securities registered pursuant to section 12(g) of the Act:
NONE		NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒

Indicate by check mark if the registrant is required to file reports pursuant to Section 13 or Section 15(d) of the Act: YES ☒ NO ☐

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

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

Large ~~Accelerated~~accelerated ~~Filer~~filer ☐ Accelerated ~~Filer~~filer ☐ Non-accelerated ~~Filer~~filer ☐ ~~Smaller Reporting Company ☒~~ (Do not check if a smaller reporting company) Smaller reporting company ☒ Emerging growth company ☐

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 Act). YES ☐ NO ☒

As at November 30, ~~2015~~2016, the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity was $2,500,000.

At September 1213, ~~2016~~2017, 56,100,000 shares of the registrant’s common stock were outstanding.

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business.	1
Item 1A.	Risk Factors.	4
Item 1B.	Unresolved Staff Comments.	7
Item 2.	Properties.
Item 3.	Legal Proceedings.	7
Item 4.	Mine Safety Disclosures	7
PART II
Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	8
Item 6.	Selected Financial Data.	8
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation.	8
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	13
Item 8.	Financial Statements and Supplementary Data.	F-1
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	14
Item 9A.	Controls and Procedures.	14
Item 9B.	Other Information.	15
PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	16
Item 11.	Executive Compensation.	17
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	1819
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	19
Item 14.	Principal Accountant Fees and Services.	1920
PART IV
Item 15.	Exhibits and Financial Statement Schedules.
	Signatures	2021
	Exhibit Index	2122

PART I

ITEMS 1 BUSINESS AND PROPERTY GENERAL

CN Resources Inc. (the "“Company"” or "“CNRR"” or "“we"” or "“us"”) was incorporated in Nevada of the United States of America on May 18, 2010. The Company ~~intends~~currently toowns ~~identify,~~oil ~~acquire~~well ~~and~~properties ~~operate sustainable businesses~~ in Alberta, Canada. At ~~present,~~The ~~the~~ Company ~~operates~~is actively aassessing ~~50%~~business ~~joint~~opportunities ~~venture~~including ~~oil~~opportunities ~~well~~to pursue potential investment in ~~Alberta,~~areas ~~Canada~~other than the oil and gas industry.

CN Resources Inc. carefully evaluates a number of opportunities to build shareholder value. The Company has decided to pursue potential investment opportunities in areas other than the oil and gas industry.

Our principal office is located at 255 Duncan Mill Road, Suite 203, Toronto, Ontario, Canada and our telephone number is (416) 510-2991.

STRATEGY

We are committed to a measured-risk growth strategy and focused on determining the most efficient way to create greatest value and highest returns for our shareholders.

The Controlling shareholder and the Board have evaluated the ~~company~~Company’s growth path and has decided to discontinue to invest in the oil and gas business, as a result, the ~~company~~Company will pursue shareholder value building opportunities in other business areas. The Company will continue to retain its ownership interest in its joint venture producing oil well in Alberta, Canada.

SIGNIFICANT DEVELOPMENTS IN FISCAL YEAR ~~2016~~2017

During fiscal year ~~2016~~2017, the Company adopted a defensive approach and has been watching the oil and gas industry very closely. ~~Unfortunately, it~~The ~~does not appear the Oil and gas industry will get better any time soon, as a result the Controlling shareholder and~~ Board ~~has~~ has decided to pursue investment opportunities in other area.

Our Company is a small but financially sound company, our philosophy is to take a measured risk approach to our growth, As a result, the Company has taken a prudent step by evaluating various alternative growth strategies in the coming year.

Financial Performance

Revenues ~~For~~ For the fiscal year ended May 31, ~~2016~~2017, revenues, net of royalty, totaled $6966,~~286~~526 compared to $~~174~~69,~~336~~286 in the prior year,. The decrease in the Company ~~Revenue~~’s ~~decrease~~revenue is due to the crude price decrease and production decrease in ~~2016~~2017, and the fact that there is no additional capital investment in the oil well.

~~Net loss~~Investment ~~and Earnings per Share.~~ Income For the fiscal year ended May 31, ~~2016~~2017, ~~net~~investment ~~loss~~interest ~~was~~income ~~$37,705~~totaled ($~~0.00 /basic share)~~88,091 compared to ~~net loss of~~ $~~460~~21,~~693~~942 ~~($(0.01)/basic~~in ~~share) for the~~ prior ~~fiscal~~ year ~~ended May 31, 2015~~. The ~~decrease~~increase ~~in loss~~ is ~~primarily~~ due to ~~there~~management’s isdecision noto ~~additional~~enhance ~~asset~~cash ~~impairment~~management ~~recorded~~in the 2nd quarter in ~~2016~~fiscal year ended May 31, 2017.

~~Cash. As~~Net ofIncome and Earnings per Share. For the fiscal year ended May 31, ~~2016~~2017, ~~the~~net ~~Company~~income ~~had~~was $419,~~980,735~~631 in($0.00 ~~cash~~/basic ~~and~~share), ~~cash~~compared to ~~equivalents~~net asloss ~~compared~~of to $~~226~~37,~~786~~705 at($(0.00)/basic ~~the~~share) ~~end~~for of the prior fiscal year ended May 31, 2016. The ~~increase~~net income result is primarily due to ~~the~~interest ~~Company~~income ~~has~~generated ~~recalled~~from ~~and~~the ~~received~~Company’s ~~all~~short-term ~~previously outstanding note receivable~~investment.

~~OUTLOOK~~Cash. ~~FOR~~As ~~FISCAL~~of ~~YEAR~~May 31, 2017, the Company had $2,606,586 in cash and cash equivalents as compared to $4,980,735 at the end of the prior fiscal year. The decrease is primarily due to the Company has used the cash to invest in short-term investment.

During fiscal year 2016, the Crude oil has dropped and stayed at a very low level, and the consensus view is that the crude price probably will stay at the low price for a long period of time. The oil industry is experiencing unprecedented capital spending cut, lay-offs and bankruptcies. The consensus view in the crude oil industry is that the crude price may drop even further, and the low crude price may be for a long period of time. Management is cautious in evaluating all alternatives available to the Company. The Company will monitor the sector and directions carefully and formulate the growth strategy that best suits the company in the long run.

~~The~~OUTLOOK ~~controlling~~FOR ~~shareholder~~FISCAL ~~and~~YEAR ~~the Board have decided to pursue potential investment opportunities in other area(s) rather than in the oil and gas industry uncertainty. The Board is evaluating a number of potential opportunities.~~2018

The Board has decided to pursue potential investment opportunities in other area(s) rather than in the oil and gas industry. The Board is evaluating a number of potential opportunities with a view to effect an acquisition transaction in 2018. The Company will take an active approach to its cash management to generate income.

RESERVES

~~The~~Estimates ~~Company~~of ~~currently~~reserves ~~only~~are ~~has~~inherently ~~one~~imprecise ~~50%~~and ~~ownership~~continually ofsubject ato ~~joint~~revision ~~venture~~based ~~oil~~on ~~well~~production ~~operated in Alberta~~history, ~~Canada.~~results ~~Due~~of toadditional ~~the depressed oil~~exploration ~~price~~ and ~~the~~development, ~~well~~price ~~is not profitable~~changes, ~~Management decided to write off its oil~~ and ~~gas~~other ~~assets and the reserve is reduced to nil~~factors.

	Oil and Gas
Proved developed and producing (PDP)	nil	nil
Proved plus Probable Producing	nil	nil

The Company’s proved developed reserves in Canada consist of only one location at Redwater, Alberta, Canada.

Proved Undeveloped Reserves

As of May 31, ~~2016~~2017, we had no proved undeveloped reserves.

Probable Reserves

Estimates of probable developed and undeveloped reserves are inherently imprecise. When estimating the amount of oil and gas that is recoverable from a particular reservoir, an estimated quantity of probable reserves is an estimate that more likely than not will be achieved. Estimates of probable reserves are continually subject to revision based on production history, results of additional exploration and development, price changes, and other factors.

We use deterministic methods to estimate probable reserve quantities, and when deterministic methods are used, it is as likely as not that actual remaining quantities recovered will exceed the sum of estimated proved plus probable reserves. Probable reserves may be assigned to areas of a reservoir adjacent to proved reserves where data control or interpretations of available data are less certain, even if the interpreted reservoir continuity of structure or productivity does not meet the reasonable certainty criterion. Probable reserves may be assigned to areas that are structurally higher than the proved area if these areas are in communication with the proved reservoir. Probable reserves estimates also include potential incremental quantities associated with a lower percentage recovery of the hydrocarbons in place than assumed for proved reserves.

Internal Controls Over Reserve Estimates

Our internal controls over the recording of proved reserves are structured to objectively and accurately estimate our reserve quantities and values in compliance with regulations established by the SEC. The Company relies upon independent third party consulting arrangements for reserve estimation and review.

The reserve estimate for 2017 and 2016 was not conducted as the impairment was provided in full in prior years.

Third Party Reserve Audit

There is no third party reserve ~~Audit~~audit conducted for ~~2016~~the 2017 and ~~2015~~2016 fiscal ~~year~~years.

VOLUMES AND REALIZED PRICES

The following table summarizes volumes and prices realized from the sale of oil from property in which we owned an interest during the periods stated. The table also summarizes operational costs per barrel of oil equivalent.

	~~Oil volume~~	Oil volume		~~Average realized price~~		Average realized price
For the year ended May 31, 2016	9 bbl/day		$	40.29 per bbl
For the year ended May 31, 2017		9 bbl/day			$	40.00 per bbl
For the year ended May 31, 2015	9 bbl/day		$	67.29 per bbl
For the year ended May 31, 2016		9 bbl/day			$	40.29 per bbl

DRILLING ACTIVITY

The Company at present has no further drilling activities, and management intends to execute its growth strategy by acquiring quality oil producing assets rather than drilling for new exploratory or development wells. Due to the substantial decrease in crude oil price, we may not engage in any drilling activities in the foreseeable future.

ACREAGE

The Company at present is only have one joint venture well pumping oil and does not own any other acreage of oil and gas land. The Company intends to acquire proved-developed-and-developed light oil assets in Western Canada, if successful, will own oil and gas mineral rights on the acreage of land.

TITLES TO PROPERTY, PERMITS, AND LICENSES

CN Resources Inc. maintains interests in its oil and gas properties directly or through contractual arrangements with its Joint Venture partner, customary to the oil and gas industry and relevant to the local jurisdictions of its assets in Alberta, Canada.

MARKETING ACTIVITIES AND CUSTOMERS

Customers

The Company operates in Canada and has a sole arm’s length customer who purchased all light oil produced from the joint venture well in the fiscal year ended May 31, ~~2016~~2017 and ~~2015~~2016.

CURRENT MARKET CONDITIONS AND COMPETITION

Cyclical Seasonality of Business

There are many factors directly impact the crude oil price, such as but not limited to, world economic growth, geopolitical stabilities, technological advancements in exploration and development in energy sectors, government regulations. In the past year, crude oil price as plunged to below $40 a barrel. No consensus exists as to when and how the crude oil price will recover.

Demand and prices for oil and gas can also be impacted by seasonal factors. Increased demand for heating oil in the winter and gasoline during the summer driving season can positively impact the price of oil during those times. Unusual weather patterns can increase or dampen normal price levels. Our ability to carry out drilling activities can be adversely affected by weather conditions during winter months in Alberta, Canada. In general, the Company'’s working capital balances are not materially impacted by seasonal factors.

The Company faces enormous uncertainties in the oil industry and at present we do not foresee the oil price recover any time soon. The Company will proceed with caution in the oil development space.

Competitive Conditions in the Business

The Company will no longer pursue additional business in Oil and gas Industry.

EMPLOYEES AND OFFICE SPACE

As of May 31, ~~2016~~2017, the Company had no full time employee. All work is completed through subcontracts. We use office space provided by our President and CEO ~~and~~ on a rent free and month-to-month basis.

GOVERNMENT REGULATIONS

Our business is extensively regulated by numerous federal, provincial and local laws and governmental regulations in the United States and in Canada. These laws and regulations may be changed from time to time in response to economic or political conditions, or other developments, and our regulatory burden may increase in the future. Laws and regulations have the potential of increasing our cost of doing business and, consequently, could affect our results of operations.

ITEM 1A: RISK FACTORS

In addition to the other information included in this report, the following risk factors should be carefully considered when evaluating an investment in us. These risk factors and other uncertainties may cause our actual future results or performance to differ materially from any future results or performance expressed or implied in the forward-looking statements contained in this report and in other public statements we make. In addition, because of these risks and uncertainties, as well as other variables affecting our operating results, our past financial performance is not necessarily indicative of future performance.

RISKS RELATING TO OUR BUSINESS

Our growth strategy will no longer in oil and gas industry

Our strategy is to discontinue investment in oil and gas area and will seek and evaluate other business opportunities.

Our growth strategy may not be successful.

Our strategy as described may not be successful because our strategy is not unique. For our strategies to be successful, we will need financing and available and reasonable ~~acquision~~acquisition opportunities. Even the opportunity is there, competition for quality assets may increase the acquisition cost to a level that we may not be interest to acquire the assets.

We currently only have one joint venture producing well in Alberta, Canada, making us vulnerable to ricks associated with high concentration and single asset.

Because our current revenue-producing operation is only one joint venture well and is geographically concentrated in the Redwater area in Alberta, Canada, the success and profitability of our operations are disproportionally exposed to risks associated with such high concentration and single asset operation. If the joint venture well stopped production, we will have no revenue to cover expenses.

The loss of key personnel could adversely affect our ability to operate.

We depend, and will continue to depend in the foreseeable future, on the services of our executive management team. The ability to retain officers is important to our success and growth. The unexpected loss of the services of one or more of these individuals could have a detrimental effect on our business. Competition for many of these professionals is intense. If we cannot retain our technical personnel or attract additional experienced technical personnel and professionals, our ability to compete could be harmed.

There are risks inherent in foreign operations, such as adverse changes in currency values and foreign regulations relating to our business operations.

Our well and operations are located outside the US and are subject to certain risks related to the indirect ownership and development of foreign properties, including adverse changes in currency values, foreign taxes, US taxes on the repatriation of funds to the US, and other laws and regulations, any of which may have a material adverse effect on our properties, financial condition, results of operations, or cash flows.

We have limited management and staff and will be dependent upon contract arrangements.

We have no full time employee as of May 31, ~~2016~~2017. We expect that we will continue to require the services of independent consultants and contractors to perform various professional services. Our dependence on third party consultants and service providers creates a number of risks, including but not limited to:

●	the possibility that such third parties may not be available to us as and when needed; and

●	the risk that we may not be able to properly control the timing and quality of work conducted with respect to our projects.

If we experience significant delays in obtaining the services of such third parties or poor performance by such parties, our results of operations may be materially adversely affected.

Our current operations are subject to complex laws and regulations, including environmental regulations that result in substantial costs and other risks.

Legislation and regulations affecting the industry are under constant review for amendment or expansion, raising the possibility of changes that may become more stringent and, as a result, may affect, among other things, the pricing or marketing of crude oil and natural gas production. Noncompliance with statutes and regulations and more vigorous enforcement of such statutes and regulations by regulatory agencies may lead to substantial administrative, civil, and criminal penalties, including the assessment of natural resource damages, the imposition of significant investigatory and remedial obligations, and may also result in the suspension or termination of our operations. The overall regulatory burden on the industry increases the cost to place, design, drill, complete, install, operate, and abandon wells and related facilities and, in turn, decreases profitability.

Governmental authorities regulate various aspects of drilling for and the production of crude oil and natural gas, including the permit and bonding requirements of drilling wells, the spacing of wells, the unitization or pooling of interests in crude oil and natural gas properties, rights-of-way and easements, environmental matters, occupational health and safety, the sharing of markets, production limitations, plugging, abandonment, and restoration standards, and oil and gas operations. Public interest in environmental protection has increased in recent years, and environmental organizations have opposed, with some success, certain projects. Under certain circumstances, regulatory authorities may deny a proposed permit or right-of-way grant or impose conditions of approval to mitigate potential environmental impacts, which could, in either case, negatively affect our ability to explore or develop certain properties. Governmental authorities also may require any of our ongoing or planned operations on their leases or licenses to be delayed, suspended, or terminated. Any such delay, suspension, or termination could have a material adverse effect on our operations.

Our operations are also subject to complex and constantly changing environmental laws and regulations adopted by federal, state, tribal, and local governmental authorities in jurisdictions where we are engaged in exploration or production operations. New laws or regulations, or changes to current requirements, could result in material costs or claims with respect to properties we own or have owned. We will continue to be subject to uncertainty associated with new regulatory interpretations and inconsistent interpretations between various regulatory agencies. Under existing or future environmental laws and regulations, we could incur significant liability, including joint and several liability or strict liability under federal, state, and tribal environmental laws for noise emissions and for discharges of crude oil, natural gas, and associated liquids or other pollutants into the air, soil, surface water, or groundwater. We could be required to spend substantial amounts on investigations, litigation, and remediation for these discharges and other compliance issues. Any unpermitted release of petroleum or other pollutants from our operations could result not only in cleanup costs but also natural resources, real or personal property, and other compensatory damages and civil and criminal liability. Existing environmental laws or regulations, as currently interpreted or enforced, or as they may be interpreted, enforced, or altered in the future, may have a material adverse effect on us.

Legislative and regulatory initiatives related to global warming and climate change could have an adverse effect on our operations and the demand for crude oil and natural gas.

Due to concerns about the risks of global warming and climate change, a number of various national and regional legislative and regulatory initiatives to limit greenhouse gas emissions are currently in various stages of discussion or implementation. For example, the US Environmental Protection Agency has been adopting and implementing various rules regulating greenhouse gas emissions under the US Clean Air Act, the US Congress has from time to time considered other legislative initiatives to reduce emissions of greenhouse gases, and almost one-half of the states have already taken legal measures to reduce emissions of greenhouse gases, primarily through the planned development of greenhouse gas emission inventories and/or regional greenhouse gas cap and trade programs. Most of these cap and trade programs work by requiring major sources of emissions, such as electric power plants, or major producers of fuels, such as refineries and gas processing plants, to acquire and surrender emission allowances. The number of allowances available for purchase is reduced each year in an effort to achieve the overall greenhouse gas emission reduction goal.

Legislative and regulatory programs to reduce emissions of greenhouse gases could require us to incur substantially increased capital, operating, maintenance, and compliance costs, such as costs to purchase and operate emissions control systems, costs to acquire emissions allowances, and costs to comply with new regulatory or reporting requirements. Any such legislative or regulatory programs could also increase the cost of consuming, and thereby reduce demand for, the oil and natural gas we produce. Consequently, legislative and regulatory programs to reduce emissions of greenhouse gases could have an adverse effect on our business, financial condition, results of operations, and cash flows.

In addition, there has been public discussion that climate change may be associated with more extreme weather conditions, such as increased frequency and severity of storms, droughts, and floods. Extreme weather conditions can interfere with our development and production activities, increase our costs of operations or reduce the efficiency of our operations, and potentially increase costs for insurance coverage in the aftermath of such conditions. Significant physical effects of climate change could also have an indirect effect on our financing and operations by disrupting the transportation or process related services provided by midstream companies, service companies, or suppliers with whom we have a business relationship. We may not be able to recover through insurance some or any of the damages, losses, or costs that may result from potential physical effects of climate change.

Weakness in economic conditions or uncertainty in financial markets may have material adverse impacts on our business.

US, Canadian and global economies and financial systems have recently experienced turmoil and upheaval characterized by extreme volatility and declines in prices of securities, diminished liquidity and credit availability, inability to access capital markets, the bankruptcy, failure, collapse, or sale of financial institutions, increased levels of unemployment, and an unprecedented level of government intervention. Although some economies appear to have stabilized and begun to recover, the extent and timing of recovery, and whether it can be sustained, are uncertain. Continued weakness in the US, Canadian or other large economies could materially adversely affect our business, financial condition, results of operations, and cash flows.

Currency exchange rate fluctuations may negatively affect our operating results.

The exchange rates between the Canadian dollar and the US dollar have changed in recent periods and may fluctuate substantially in the future. We expect that a majority of our revenues will be denominated in Canadian dollars in the future. However, the US dollar has strengthened against the Canadian dollar, which has had, and may continue to have, a negative impact on our revenues generated in the Canadian dollar, as well as our operating income and net income. Any appreciation of the US dollar against the Canadian dollar is likely to have a negative impact on our revenue, operating income, and net income.

RISKS RELATED TO OUR COMMON STOCK

The market price of our common stock may fluctuate significantly, which may result in losses for investors.

During the past several years, the stock markets in general and for oil and gas exploration and production companies in particular have experienced significant price and volume fluctuations that have often been unrelated or disproportionate to the operating results and asset values of the underlying companies. In addition, due to relatively low trading volumes for our common stock, the market price for our common stock may fluctuate significantly more than the markets as a whole. The market price of our common stock could fluctuate widely in response to a variety of factors, including factors beyond our control. These factors include:

●	changes in crude oil or natural gas commodity prices;

●	our quarterly or annual operating results;

●	any investment recommendations by securities analysts following our business or our industry;

●	additions or departures of key personnel;

●	changes in the business, earnings estimates, or market perceptions of comparable companies;

●	changes in industry, general market, or regional or global economic conditions; and

●	announcements of legislative or regulatory changes affecting our business or our industry.

Fluctuations in the market price of our common stock may be significant, and may result in declines in the market price and losses for investors.

We may establish a stock option plan in the future and issue a significant number of shares of common stock under the stock options, and common stockholders may be adversely affected by the issuance and sale of those shares.

As of May 31, ~~2016~~2017 we do not have a stock option plan. However, in the future we may establish a Stock Option Plan to align key management interest with that of our common stockholders. Sales of the shares under the stock option plan, if established, could adversely affect the market price of our common stock, even if our business is doing well.

Our common stock is illiquid, its liquidity and value could be reduced.

Our common stocks are quoted for trading on the OTCQB, however, our stock is very thinly traded. The value of our common stocks may be significantly adversely affected.

We do not intend to pay cash dividends on our common stock in the foreseeable future, and therefore only appreciation of the price of our common stock will provide a return to our common stockholders.

We do not intend to pay cash dividends on our common stock in the foreseeable future. Any future determination as to the declaration and payment of cash dividends on our common stock will be at the discretion of our board of directors and will depend upon our financial condition, results of operations, contractual restrictions, capital requirements, business prospects, and any other factors that our board determines to be relevant. As a result, only appreciation of the price of our common stock, which may not occur, will provide a return to our common stockholders.

Our largest stockholder beneficially owns a significant percentage of our common stock, and its interests may conflict with those of our other stockholders.

Shanghai Yuankai Group Co., Ltd. owns 39,000,000 shares of our common ~~stocks~~stock. The concentration of ownership and voting power with Shanghai Yuankai makes it difficult for any other holder or group of holders of our common stock to be able to affect the way we are managed or the direction of our business. The interests of Shanghai Yuankai with respect to matters potentially or actually involving or affecting us, such as future acquisitions, financings, and other corporate opportunities, and attempts to acquire us, may conflict with the interests of our other stockholders. This continued concentration of ownership will make it difficult for another company to acquire us and for stockholders to receive any related takeover premium unless Shanghai Yuankai approves the acquisition.

ITEM 1B: UNRESOLVED STAFF COMMENTS

None.

ITEM 3: LEGAL PROCEEDINGS

As of the filing date of this report, there are no pending legal proceedings against the Company.

ITEM 4: MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5: MARKET FOR REGISTRANT'’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

PRINCIPAL MARKET

Our common stock is traded on OTCQB under the symbol CNRR. Our stocks are very thinly traded and did not change over time in the past year.

HOLDERS

As of May 31, ~~2016~~2017, the number of record holders of our common stock was approximately 52.

FREQUENCY AND AMOUNT OF DIVIDENDS

The Company has not paid any dividend on common stock in the past. The Company does not intend to pay cash dividends on its common stock in the foreseeable future.

ISSUER PURCHASES OF EQUITY SECURITIES

The Company did not purchase its own common stocks in the past for cancellation or placed into inventory.

ITEM 6: SELECTED FINANCIAL DATA

The Company is a smaller reporting company, as defined by 17 CFR § 229.10(f)(1), and therefore is not required to provide the information otherwise required by this Item.

ITEM 7: MANAGEMENT'’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION

The following discussion and analysis presents management'’s perspective of our business, financial condition, and overall performance. This information is intended to provide investors with an understanding of our past performance, current financial condition, and outlook for the future, and should be read in conjunction with Item 8: Financial Statements and Supplementary Data of this Form 10-K.

Forward looking statements are not guarantees of future performance, and our actual results may differ significantly from the results expressed or implied in the forward looking statements. See "“Forward Looking Statements"” at the end of this section. Factors that might cause such differences include, but are not limited to, those discussed in Item 1A: Risk Factors of this Form 10-K. We assume no obligation to revise or update any forward looking statements for any reason, except as required by law.

OVERVIEW OF THE COMPANY

CN Resources Inc. is an independent energy company engaged in the exploration, development, production, and sale of crude oil. Our operations are conducted through a 100% wholly owned Ontario Corporation (also named CN Resources Inc.) which owns a producing joint venture oil well in the Redwater area in Alberta, Canada. The Parent Company has no business or financial transactions or any commercial activities.

8SIGNIFICANT DEVELOPMENTS IN FISCAL YEAR 2017

~~SIGNIFICANT~~During ~~DEVELOPMENTS~~fiscal INyear ~~FISCAL~~ended ~~YEAR~~May ~~2016~~31, 2017, the Company has taken a cautious approach to its development. In the fiscal year 2017, the Company has focused on preserve cash and managed risks rather than venturing into additional acquisition or drilling activities. The Company will monitor the situation carefully and act prudently and accordingly.

~~During~~SUMMARY ~~fiscal~~RESULTS ~~year~~OF ~~ended~~OPERATIONS ~~May~~FOR ~~31,~~THE ~~2016,~~YEAR ~~the~~ENDED ~~Company~~MAY ~~has taken a cautious approach to its development. In the fiscal year 2016~~31, the Company has focused on preserve cash and managed risks rather than venturing into additional acquisition or drilling activities. The Company will monitor the situation carefully and act prudently and accordingly.2017

~~SUMMARY~~For ~~RESULTS~~the OFyear ~~OPERATIONS~~ended ~~FOR~~May ~~THE~~31, ~~YEAR~~2017, ~~ENDED~~revenues ~~MAY~~totaled 31$66,526 ~~2016~~compared to $69,286 in the prior year. Operating income was $19,631 compared to operating loss of $37,705 in the prior year. The changes are due to interest income generated from investment.

For the year ended May 31, 2016, revenue (net of royalty expense) totaled $69,286 compared to $174,336 in the prior year. Operating loss was $37,705 compared to operating loss of $460,693 in the prior year. The changes are due to the fact that the crude oil price has dropped substantially and production decreased as well.

LIQUIDITY AND CAPITAL RESOURCES

Historically, we have funded our activities from loans and our existing cash balance. The Company has limited capital expenditure obligations pertaining to its current operations, which allow for significant flexibility in the use of its capital resources to grow the Company in the future. Based on our existing cash position, the Company believes, for the fiscal year ~~2017~~2018, it has sufficient financial resources to fund its ongoing operations and to finance its core project acquisition in accordance with our growth strategies if opportunity presents itself

Uses of Funds

Capital Expenditures Plans. The Company does not face significant mandatory capital expenditure requirements to maintain its operation.

The Company’s capital expenditure is discretionary for ~~2017~~2018 fiscal year. Management will only commit significant capital expenditure when the right acquisition opportunity can be captured. The acquisition must be for immediate appreciation of shareholders value and with excellent cash flow, the assets must be adequate and capable to produce predictable steady cash flow in the future years.

Sources of Funds

Cash and Cash Equivalents. As at May 31, ~~2016~~2017, the Company had approximately $42,~~980~~606,~~735~~586 of cash and cash equivalents compared to $~~226~~4,~~786~~980,735 in ~~2015~~2016. As of May 31, ~~2016~~2017, we have $2631,~~350~~315 trade accounts receivable from our Joint Venture partner for oil sale. We normally receive full payment in arrear when joint venture billing is completed. We have no reason to believe there would be any bad debt.

The Company considers cash equivalents to be short term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.

Other Sources of Financing. In addition to its existing liquid capital resources the Company has various alternatives to fund the development of its assets. These alternatives could potentially include project finance loan facility, mezzanine financing from a bank and the alternative investment markets, equity issuances or secondary offering, and potential shareholder loan from the Company’s controlling shareholder. However, there can be no guarantee that such financing opportunities will be available at the time of need or at reasonable cost to the Company.

Cash Flows

The following table presents the Company's cash flow information for the fiscal years ended:

	May 31
Cash (used in) provided by:	2016			2015
Operating activities	$	(36,106	)	$	69,694
Investing activities		4,718,126			(5,384,136	)
Financing activities		54,406			47,980
Effect of foreign currency exchange rates		17,523			(559,076	)
Net (decrease) increase in cash and cash equivalents	$	4,753,949		$	(5,825,538	)

Cash used in operating activities during the year ended May 31, 2016 was $36,106 compared to cash generated of $69,694 in 2015. The increase in cash used in operating activities primarily resulted from reduced productions and drop in crude oil price resulted in less revenue in the fiscal year.Flows

~~Cash~~The ~~generated~~following intable ~~investing~~presents ~~activities during~~ the ~~year~~Company’s ~~ended May 31, 2016 was $4,718,126, compared to~~ cash ~~used~~flow ininformation ~~investing~~for ~~activities of~~the ~~$5,384,136 in 2015~~ fiscal ~~year. The~~years ~~cash generated in investing activities included the note receivable received in the year 2016.~~ended:

Cash generated in financing activities during the year ended May 31, 2016 was $54,406 compared to $47,980 in 2015. The decrease in cash provided by financing activities primarily due to the fact that we have paid the director loan by off-setting Note Receivable from third party, and that fact that we did not go to market to raise any additional funds other than the funds provided by the president from time to time.

	May 31
Cash (used in) provided by:	2017			2016
Operating activities	$	76,293		$	(36,106	)
Investing activities		(2,285,160	)		4,718,126
Financing activities		-			54,406
Effect of foreign currency exchange rates		(165,282	)		17,523
Net (decrease) increase in cash and cash equivalents	$	(2,374,149	)	$	4,753,949

~~COMPARISON OF FINANCIAL RESULTS AND TRENDS BETWEEN~~Cash ~~FISCAL~~generated in operating activities during the year ended May 31, 2017 was $76,293, compared to cash used of $36,106 in 2016. ~~AND~~The increase ~~2015~~in cash generated in operating activities primarily resulted from interest income generated from short-term investment.

Cash used in investing activities during the year ended May 31, 2017 was $2,285,160, compared to cash generated in investing activities of $4,718,126 in 2016 fiscal year.

Cash generated in financing activities during the year ended May 31, 2017 was $nil compared to $54,406 in 2016. The increase in cash provided by financing activities primarily due to the fact that funds provided by the president from time to time increased in 2017.

COMPARISON OF FINANCIAL RESULTS AND TRENDS BETWEEN FISCAL 2017 AND 2016

Oil Sales Volumes

The following table presents oil sales volumes for the fiscal years ended:

	May 31,							Percent
	2016		2015		Difference			change
	2017		2016		Difference			change
Net sales:
Oil (Mbbls)		2.87		32.38		(0.510	)		15(3.1557	%)

Sales volumes for the year ended May 31, ~~2016~~2017, totaled 2.87 Mboe, compared to 32.38 Mboe sold in the prior year period. The decrease is a result of normal production differentiation and not attributable to any other significant factors.

Oil and Gas Prices

The following table presents the average realized oil and gas prices for the fiscal years ended:

	May 31,							Percent
	2016		2015		Difference			change
	2017		2016		Difference			change
Average realized price
Company (USD/bbl)	$	31.6660		6731.2966		(350.6306	)		(520.952	)%

Price per bbl is converted into the USD based on average exchange rate in the year for CAD to USD as per Bank of Canada published exchange rate.

Revenues

Revenues, excluding royalty expenses, for the year ended May 31, 2016 totaled $88,640, compared to $222,380 in the prior year period, the decrease is due to the Company price drop in crude oil as well as production drop.

Revenues

Revenues, excluding royalty expenses, for the year ended May 31, 2017 totaled $87,038, compared to $88,640 in the prior year period, the decrease is due to the Company price drop in crude oil as well as production drop.

Operating and Other Expenses

The following table presents selected operating expenses for the fiscal years ended:

	May 31,							Percent
	2016		2015		Difference			change
	2017		2016		Difference			change
Selected operating expenses:
Depletion, depreciation, amortization, and accretion	$	1,~~092~~091	$	861,~~994~~092	$	(~~85,902~~0	)		(~~98.74~~0	)%
General and administrative	$	3836,~~960~~184	$	4037,~~566~~178	$	(~~3,606~~994	)		(82.8967	)%
Selected operating expenses: ($/bbl):
Depletion, depreciation, amortization, and accretion	$	0.39	$	260.3239	$	(~~25.93~~0	)		(~~98.52~~0	)%

OFF-BALANCE SHEET ARRANGEMENTS

The Company does not use off-balance sheet arrangements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion of financial condition and results of operations is based upon the information reported in our financial statements. The preparation of these statements requires us to make certain assumptions and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses as well as the disclosure of contingent assets and liabilities at the date of our financial statements. We base our assumptions and estimates on historical experience and other sources that we believe to be reasonable at the time. Actual results may differ from these estimates and assumptions used in preparation of our financial statements.

Oil and Gas Properties

Successful Efforts Accounting. We account for our oil operations using the successful efforts method of accounting. Under this method, all property acquisition costs and costs of exploratory and development wells are capitalized when incurred, pending determination of whether proved reserves have been discovered. If an exploratory well does not find proved reserves, the costs of drilling the well are charged to expense and included within the statement of cash flows and reported as capital expenditures under investing activities when initially incurred. The costs of development wells are capitalized whether those wells are successful or unsuccessful. The application of the successful efforts method of accounting requires managerial judgment to determine the proper classification of wells designated as developmental or exploratory, which classification will ultimately determine the proper accounting treatment of the costs incurred.

Oil and Gas Reserve Quantities. Reserve quantities and the related estimates of future net cash flows affect our periodic calculations of depletion and the assessment of impairment. As a result, adjustments to depletion and evaluation of impairment are made concurrently with changes to reserves estimates. Reserve quantities and future cash flows included in this report are prepared in accordance with guidelines established by the SEC and the Financial Accounting Standards Board (the "“FASB"”). Our independent third party engineering firms adhere to the same guidelines when auditing our reserve reports. The accuracy of our reserve estimates is a function of many factors including the following: the quality and quantity of available data, the interpretation of that data, the accuracy of various mandated economic assumptions, and the judgments of the individuals preparing the reserves estimates. Estimates prepared by others may be higher or lower than our estimates. Because these estimates depend on many assumptions, all of which may differ substantially from actual results, reserve estimates may be different from the quantities of oil and gas that are ultimately recovered. As a result, material revisions to existing reserves estimates may occur from time to time. Although every reasonable effort is made to ensure that the reported reserves estimates represent the most accurate assessments possible, the subjective decisions and variances in available data for various fields make these estimates generally less precise than other estimates included in our ~~financial~~ financial statements.

Depreciation, Depletion, and Amortization. The provision for depletion of oil and gas properties is calculated on a field-by-field basis using the unit-of-production method and is dependent upon our estimates of total proved and proved developed reserves, which estimates incorporate various assumptions regarding future development and abandonment costs as well as our level of capital spending. If the estimates of total proved or proved developed reserves decline, the rate at which we record depreciation, depletion and amortization ("DD&A") expense increases, which in turn, increases DD&A expense. This decline may result from lower market prices, which may make it uneconomic to drill for and produce higher cost fields. We are unable to predict changes in reserve quantity estimates with a high level of precision as such quantities are dependent on the success of our exploitation and development program, as well as future economic conditions.

~~Impairment of Oil and Gas Properties. Oil~~Depreciation, Depletion, and ~~gas~~Amortization. ~~properties~~The ~~are~~provision ~~assessed~~for ~~quarterly,~~depletion orof ~~more~~oil ~~frequently~~and asgas ~~economic~~properties ~~events~~is ~~dictate,~~calculated ~~for~~on ~~potential~~a ~~impairment. Any impairment~~field-by-field ~~loss~~basis isusing the ~~difference~~unit-of-production ~~between~~method ~~the~~and ~~carrying~~is ~~value~~dependent upon our estimates of ~~the~~total ~~asset~~proved and ~~its~~proved ~~fair~~developed ~~value.~~reserves, which Weestimates ~~estimate~~incorporate ~~the~~various ~~fair~~assumptions ~~value~~regarding ~~using~~future ~~expected~~development ~~future cash~~and ~~flows~~abandonment ofcosts as well as our ~~oil~~level ~~and~~of capital ~~gas~~spending. ~~properties~~If ~~and~~the ~~compare~~estimates ~~these~~of ~~undiscounted~~total ~~future~~proved ~~cash~~or ~~flows~~proved todeveloped reserves decline, the ~~carrying~~rate ~~amount~~at ofwhich ~~the~~we ~~oil~~record depreciation, depletion and ~~gas~~ ~~properties~~amortization to(“DD&A”) ~~determine~~expense ifincreases, ~~the~~which ~~carrying~~in ~~amount~~turn, isincreases ~~recoverable~~DD&A expense. IfThis ~~the~~decline ~~carrying~~may ~~amount~~result ~~exceeds~~from ~~the~~lower ~~estimated~~market ~~undiscounted~~prices, ~~future cash~~which ~~flows,~~may ~~the~~make ~~cost~~it ofuneconomic ~~the~~to ~~property~~drill isfor ~~written~~and ~~down~~produce higher cost fields. We are unable to ~~fair~~predict ~~value,~~changes ~~which~~in isreserve ~~determined~~quantity ~~using~~estimates ~~net~~with ~~discounted~~a ~~future~~high ~~cash~~level ~~flows from~~of ~~the~~precision ~~producing~~as ~~property.~~such ~~Different~~quantities ~~pricing~~are dependent ~~assumptions~~on orthe ~~discount~~success ~~rates~~of ~~could~~our ~~result~~exploitation inand adevelopment ~~different~~program, ~~calculated~~as ~~impairment~~well as future economic conditions.

~~Asset Retirement Obligation. Our~~Impairment ~~asset retirement obligations ("AROs") consist primarily~~ of ~~estimated~~Oil ~~future~~and ~~costs~~Gas ~~associated~~Properties. ~~with~~Oil ~~the plugging~~ and ~~abandonment of oil and~~ gas properties. ~~The~~are ~~discounted~~assessed ~~fair~~quarterly, ~~value~~or ofmore anfrequently ~~ARO~~as ~~liability~~economic isevents dictate, ~~required~~for topotential beimpairment. ~~recognized~~Any inimpairment ~~the~~loss ~~period in which it~~ is ~~incurred, with~~ the ~~associated~~difference ~~asset~~between ~~retirement cost capitalized as part of~~ the carrying ~~cost~~value of the ~~oil~~asset and ~~gas~~its ~~asset~~fair value. ~~The recognition~~We ofestimate anthe ~~ARO~~fair ~~requires~~value ~~that~~using ~~management~~expected ~~make~~future ~~numerous~~cash ~~estimates,~~flows ~~assumptions,~~of ~~and~~our ~~judgments~~oil ~~regarding~~and ~~such~~gas ~~factors~~properties ~~as costs to satisfy plugging~~ and ~~abandonment~~compare ~~and~~these undiscounted ~~other~~future ~~obligations,~~cash ~~future~~flows ~~advances~~to inthe ~~technology,~~carrying ~~timing~~amount of ~~settlements,~~ the ~~credit-adjusted risk-free~~oil ~~rate,~~ and ~~inflation~~gas ~~rates.~~properties ~~In periods subsequent~~ to ~~the~~determine ~~initial~~if ~~measurement of~~ the ~~ARO,~~carrying weamount ~~must recognize period-to-period~~is ~~changes~~recoverable. inIf the ~~liability~~carrying ~~resulting~~amount ~~from~~exceeds the ~~passage~~estimated ofundiscounted ~~time~~future ~~and~~cash ~~revisions~~flows, ~~to either~~ the ~~timing~~cost ~~or the amount~~ of the ~~original~~property ~~estimate~~is written ofdown ~~undiscounted~~to ~~cash~~fair ~~flows.~~value, ~~Increases~~which inis ~~the~~determined ~~ARO~~using ~~liability~~net ~~due~~discounted tofuture ~~the~~cash ~~passage~~flows offrom ~~time~~the ~~impact~~producing ~~operating~~property. ~~results~~Different ~~as accretion expense.~~pricing ~~The~~assumptions ~~related~~or ~~capitalized~~discount ~~cost,~~rates ~~net~~could ofresult ~~estimated~~in ~~salvage~~a ~~values,~~different ~~including~~calculated ~~revisions~~impairment. ~~thereto,~~Our isoil ~~charged~~and togas ~~expense~~properties ~~through~~were ~~DD&A~~fully ~~over~~impaired ~~the~~in ~~life~~prior ~~of the oil and gas property~~years’.

Asset Retirement Obligation. Our asset retirement obligations (“AROs”) consist primarily of estimated future costs associated with the plugging and abandonment of oil and gas properties. The discounted fair value of an ARO liability is required to be recognized in the period in which it is incurred, with the associated asset retirement cost capitalized as part of the carrying cost of the oil and gas asset. The recognition of an ARO requires that management make numerous estimates, assumptions, and judgments regarding such factors as costs to satisfy plugging and abandonment and other obligations, future advances in technology, timing of settlements, the credit-adjusted risk-free rate, and inflation rates. In periods subsequent to the initial measurement of the ARO, we must recognize period-to-period changes in the liability resulting from the passage of time and revisions to either the timing or the amount of the original estimate of undiscounted cash flows. Increases in the ARO liability due to the passage of time impact operating results as accretion expense. The related capitalized cost, net of estimated salvage values, including revisions thereto, is charged to expense through DD&A over the life of the oil and gas property.

Revenue Recognition

We record revenues from the sale of oil and gas in the month in which the delivery to the purchaser occurred and title transferred. We receive payment one to three months after delivery. At the end of each month, we estimate the amount of production delivered to purchasers and the price we will receive. Variances between our estimated revenue and actual payment are recorded in the month the payment is received. Historically, any differences have been insignificant.

Stock Based Compensation

We have not established a stock based Compensation arrangement with our officers and directors of the Company or anyone else. However, we may establish such a system in the future.

If we establish such a system, we will recognize compensation expense for all share-based payment awards made to employees and directors. Stock based compensation expense will be measured at the grant date based on the fair value of the award. Judgments and estimates are made regarding, among other things, the appropriate valuation methodology to follow in valuing stock compensation awards and the related inputs required by those valuation methodologies. The Black-Scholes-Merton pricing model is used to value time based and performance based awards that do not contain performance or market conditions which impact the valuation of the award. This pricing model uses assumptions regarding expected volatility of our common stock, the risk-free interest rates, expected term of the awards, and other valuation inputs, which are subject to change. Any such changes could result in different valuations and thus impact the amount of stock based compensation expense recognized.

Costs related to time based stock options are recognized as an expense on a straight-line basis over the requisite service period, which is generally the vesting period. Performance based options are recognized over the performance period when the achievement of the performance conditions is considered probable. Management re-assesses whether satisfaction of performance conditions are probable at the end of each reporting period. As of May 31, 2016, there were no performance based options outstanding.

Costs related to time based stock options are recognized as an expense on a straight-line basis over the requisite service period, which is generally the vesting period. Performance based options are recognized over the performance period when the achievement of the performance conditions is considered probable. Management re-assesses whether satisfaction of performance conditions are probable at the end of each reporting period. As of May 31, 2017, there were no performance based options outstanding.

Income Taxes and Uncertain Tax Positions

We record deferred tax assets and liabilities to account for the expected future tax consequences of events that have been recognized in our financial statements and our tax returns. We routinely assess the realizability of our deferred tax assets. If we conclude that it is more likely than not that some portion or all of our deferred tax assets will not be realized, the tax asset is reduced by a valuation allowance. We consider future taxable income in making such assessments. Numerous judgments and assumptions are inherent in the determination of future taxable income, including factors such as future operating conditions.

Accounting guidance for recognizing and measuring uncertain tax positions prescribes a more likely than not recognition threshold that a tax position must meet for any of the benefit of the uncertain tax position to be recognized in the financial statements. Previously recognized uncertain tax positions that no longer meet the more-likely-than-not threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. There are no uncertain tax positions that would meet the more-likely-than-not recognition threshold for the fiscal year ended May 31, ~~2016~~2017 and ~~2015~~2016.

Foreign Currencies and Foreign Currency Adjustment of Intercompany Loans

WeWhen ~~account for~~ foreign currency ~~translation~~transactions inare ~~accordance with ASC 830, Foreign Currency Translation. The functional currency~~ of ~~the~~a ~~Company’s~~long ~~foreign~~term ~~operation~~investment isnature ~~the Canadian dollar~~(i. ~~Translation adjustments result from translating our foreign subsidiary’s financial statements into United States dollars~~e., ~~The~~those ~~balance~~for ~~sheet~~which ~~accounts~~settlement ~~of our foreign subsidiary~~ is ~~translated~~not ~~into~~planned ~~United~~or ~~States dollars using the exchange rate~~ anticipated in ~~effect at~~ the ~~balance~~foreseeable ~~sheet~~future) ~~date.~~foreign ~~Revenue~~currency ~~and~~translation ~~expenses~~adjustments ~~are translated using average exchange rates for each month during the fiscal year. The~~ resulting ~~translation~~from ~~gains~~those ortransactions ~~losses~~ are ~~recorded as~~included ~~a component of accumulated other comprehensive income (loss)~~ in stockholders’ equity, ~~for~~as ~~the year ended May 31, 0216, the~~ accumulated other comprehensive (loss) ~~was~~income. ~~$790~~However,~~882~~ ~~(May~~when ~~31,~~transactions ~~2015~~are -deemed ~~$559,076)~~to .be ~~Business~~of isa ~~generally~~short ~~transacted~~term innature, ~~a single~~translation ~~currency~~adjustments ~~not~~are ~~requiring~~required ~~meaningful~~to ~~currency~~be ~~transaction~~included ~~costs.~~in ~~We do not practice hedging as~~ the ~~risks~~statement doof ~~not warrant the costs~~operations.

Accounting for Business Combinations

The Company intends to pursue acquisitions as opportunities arise in order to grow our business. We will account for all of our business combinations in accordance with guidelines established by the Financial Accounting Standards Board, using the acquisition method of accounting, which involves the use of significant judgment.

In estimating the fair values of assets acquired and liabilities assumed in a business combination, we make various assumptions. The most significant assumptions relate to the estimated fair values assigned to proved and unproved crude oil and natural gas properties. We estimate future prices to apply to the estimated reserves quantities acquired, and estimate future operating and development costs, to arrive at estimates of future net cash flows. For estimated proved reserves, the future net cash flows are discounted using a market based weighted average cost of capital rate, adjusted for risk, determined to be appropriate at the time of the acquisition.

The calculation of the contingent consideration payable is a significant management estimate and is calculated using production projections and the estimated timing of production payouts. The Company also utilized a discount which is consistent with the Company’s credit adjusted incremental borrowing rate.

MANAGEMENT ANALYSIS OF CERTAIN MARKET RISK ISSUES

The Company'’s exposure to market risk relates to fluctuations in foreign currency and world prices for crude oil, as well as market risk related to investment in marketable securities. The exchange rates between the Canadian dollar and the US dollar have changed in recent periods and may fluctuate substantially in the future. Any appreciation of the US dollar against the Canadian dollar is likely to have a negative impact on our revenue, operating income, and net income.

At May 31, ~~2016~~2017, the carrying value of cash and cash equivalents was approximately $42,~~980~~606,~~735~~586, which approximates the fair value.

ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is a smaller reporting company, as defined by 17 CFR § 229.10(f)(1), and therefore is not required to provide the information otherwise required by this Item.

ITEM 8.: FINANCIAL STATEMENTS.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

CN Resources, Inc.

Toronto, Canada

We have audited the accompanying consolidated balance sheets of CN Resources, Inc. and its subsidiary, (collectively, the “Company”) as of May 31, ~~2016~~ 2017 and ~~2015~~2016, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of CN Resources, Inc. and its subsidiary as of May 31, ~~2016~~2017 and ~~2015,~~ 2016, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles ~~generally~~ generally accepted in the United States of America.

/s/ MaloneBailey, LLP

www.malonebailey.com

Houston, Texas

September 12 13, ~~2016~~2017

F-1

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

CN RESOURCES INC.

Consolidated Balance Sheets

	May 31, 2016			May 31, 2015
	May 31, 2017			May 31, 2016
Assets
Current assets
Cash and cash equivalents	$	42,~~980~~606,~~735~~586		$	~~226~~4,~~786~~980,735
Accounts receivable - Oil and Gas		2631,~~351~~315			3026,~~229~~351
Other receivable		14,~~584~~561			71,~~301~~584
Note receivable		-			5,343,704
Investment in available-for-sale securities		2,285,160			-
Total current assets	$	54,~~008~~927,~~670~~622		$	5,~~608~~008,~~020~~670
Total assets	$	54,~~008~~927,~~670~~622		$	5,~~608~~008,~~020~~670
Liabilities and Stockholders' Equity
Liabilities
Current Liabilities
Accounts payable		74,~~448~~480			167,~~536~~448
Due to director		45112,~~629~~109			~~367~~45,~~472~~629
Total current liabilities		53116,~~077~~589			~~384~~53,~~008~~077
Asset retirement obligation		78,~~282~~373			67,~~190~~282
Total liabilities		60124,~~359~~962			~~390~~60,~~198~~359
Stockholders' equity
Common stock,100,000,000 of shares authorized with $0.00001 par value, 56,100,000 issued and outstanding		561			561
Preferred stock,100,000,000 shares authorized with $0.00001 par value, none issued		-			-
Additional paid-in capital		6,514,639			6,514,639
Accumulated Other Comprehensive loss		(~~790~~956,~~882~~164	)		(~~559~~790,~~076~~882	)
Accumulated deficits		(776,007	)		(738,302	)
Accumulated deficit		(756,376	)		(776,007	)
Total stockholders' equity		4,~~948~~802,~~311~~660			54,~~217~~948,~~822~~311
Total liabilities and stockholders' equity	$	54,~~008~~927,~~670~~622		$	5,~~608~~008,~~020~~670

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

F-2

CN RESOURCES INC.

Consolidated Statements of Operations and Comprehensive Loss

	For the year			For the year
	ended			ended
	May 31, 2016			May 31, 2015
	May 31, 2017			May 31, 2016
Revenue
Oil production (net of royalty)	$	6966,~~286~~526		$	~~174~~69,~~336~~286
Operating expenses
Depreciation, depletion and accretion		1,092			86,994
Accretion expense		1,091			1,092
General and administrative expenses		3736,~~178~~184			4037,~~751~~178
Impairment		-			404,024
Management expense		24,000			24,000
Management fee		24,000			24,000
Production costs		33,401			24,500
Production costs		24,500			37,893
Professional fees		26,084			29,510
Professional fees		29,510			67,156
Regulatory filing		14,226			12,653
Regulatory filing		12,653			18,269
Total operating expenses	$	134,986		$	128,933
Total operating expenses	$	128,933		$	679,087
Interest income		88,091			21,942
Interest income		21,942			44,058
Net income (loss)	$	19,631		$	(37,705	)
Net loss	$	(37,705	)	$	(460,693	)
Income (loss) per common share - basic and diluted	$	0.00		$	(0.00	)
Loss per common share - basic and diluted	$	(0.00	)	$	(0.01	)
Weighted average common shares outstanding - basic and diluted		56,100,000			56,100,000
Comprehensive loss
Net loss	$	(37,705	)	$	(460,693	)
Net income (loss)	$	19,631		$	(37,705	)
Foreign currency translation adjustment		(~~231~~165,~~806~~282	)		(~~559~~231,~~076~~806	)
Total comprehensive loss	$	(~~269~~145,~~511~~651	)	$	(1269,~~019,769~~511	)

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

F-3

CN Resources, Inc

Consolidated Statement of Changes in Stockholders' Equity

For the years ended May 31, ~~2016~~2017 and ~~2015~~2016

					Additional		Other
	Common Stock				Paid In		Comprehensive			Accumulated
	Shares		Amount		Capital		Income (Loss)			Deficit			Total
Balance at May 31, 2014		56,100,000	$	561	$	6,514,639		-		$	(277,609	)	$	6,237,591
Net loss		-		-		-		-			(460,693	)		(460,693	)
Foreign currency translation adjustment		-		-		-		(559,076	)		-			(559,076	)
Balance at May 31, 2015		56,100,000	$	561	$	6,514,639	$	(559,076	)	$	(738,302	)	$	5,217,822
Net loss		-		-		-					(37,705	)		(37,705	)
Foreign currency translation adjustment		-		-		-		(231,806	)		-			(231,806	)
Balance at May 31, 2015	$	56,100,000	$	561	$	6,514,639	$	(790,882	)	$	(776,007	)	$	4,948,311
Balance at May 31, 2016	$	56,100,000	$	561	$	6,514,639	$	(790,882	)	$	(776,007	)	$	4,948,311
Net Income		-		-		-					19,631			19,631
Foreign currency translation adjustment		-		-		-		(165,282	)		-			(165,282	)
Balance at May 31, 2017	$	56,100,000	$	561	$	6,514,639	$	(956,164	)	$	(756,376	)	$	4,802,660

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

F-4

CN RESOURCES INC.

Consolidated Statements of Cash Flows

	For the year			For the year
	ended			ended
	May 31, 2016			May 31, 2015
	May 31, 2017			May 31, 2016
Cash Flows From Operating Activities
Net (Loss) for the period	$	(37,705	)	$	(460,693	)
Net Income (Loss) for the period	$	19,631		$	(37,705	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation, depletion and accretion		1,~~092~~091			861,~~994~~092
Impairment		-			404,024
Changes in operating assets and liabilities
Accounts receivable		3(4,~~878~~964	)		313,~~103~~878
Other receivable		5(2,~~717~~977	)		(25,~~318~~717	)
Accounts payable		(92,~~088~~968	)		10(9,~~584~~088	)
Net cash used in operating activities		(36,106	)		69,694
Due to Director		66,480			-
Net cash provided (used) in operating activities		76,293			(36,106	)
Cash Flows From Investing Activities
Notes receivable		4,718,126			(5,344,391	)
Investment in available-for-sale securities		(2,285,160	)		4,718,126
Investment in oil & gas properties		-			(39,745	)
Net cash provided (used) in investing activities		(2,285,160	)		4,718,126
Net cash used in investing activities		4,718,126			(5,384,136	)
Cash Flows from Financing Activities
Proceeds from director advances		~~54,406~~-			7954,~~478~~406
Payments to director for advances		-			(31,498	)
Net cash provided by financing activities		-			54,406
Net cash provided (used) by financing activities		54,406			47,980
Effect of foreign currency exchange rates		(165,282	)		17,523
Effect of foreign currency exchange rates		17,523			(559,076	)
Net increase (decrease) in cash and cash equivalents		(2,374,149	)		4,753,949
Net increase (decrease) in cash and cash equivalents		4,753,949			(5,825,538	)
Cash and cash equivalents, beginning of the period		4,980,735			226,786
Cash and cash equivalents, beginning of the period		226,786			6,052,324
Cash and cash equivalents, end of the period	$	2,606,586		$	4,980,735
Cash and cash equivalents, end of the period	$	4,980,735		$	226,786
Supplemental cash disclosure
Cash paid for interest payments	$	-		$	-
Cash paid for taxes	$	-		$	-
Non-cash financing activity
Proceeds paid directly to Oliver Xing for payable	$	~~376,249~~-		$	-376,249

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

F-5

CN RESOURCES INC.

Notes to the Consolidated Financial Statements

May 31, ~~2016~~2017 and ~~2015~~2016

1. ORGANIZATION ~~BUSINESS OPERATIONS~~ AND ~~GOING~~BUSINESS ~~CONCERN~~OPERATIONS

CN RESOURCES INC. (“we”, “our”, the “Company”) was incorporated in Nevada of the United States of America on May 18, 2010. The Company has a 50% ownership of a joint venture oil well located in Alberta, Canada and generates oil revenue entirely from this well. The Company is evaluating other business opportunities at present to build shareholder value.

The going concern note was removed in 2016 due to the fact that management believes the Company has enough cash in hand to execute its planned corporate strategies for the next fiscal year. The Company has commercial production of oil and generates revenue to help funding its daily operations. The combined cash on hand and cash flow from oil revenue warrant us to remove the going concern note.

2. SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned Canadian subsidiary (also named CN Resources Inc.). All inter-company amounts and transactions are eliminated,

Allowance for Doubtful Accounts Policy

The Company periodically, on a quarterly basis, evaluates the collectability and timing of its accounts receivables, and if evidences suggest that collection of receivables is in doubt, management will provide an allowance based on the circumstances and the customers past payment histories.

Foreign currency translation

We account for foreign currency translation in accordance with ASC 830, Foreign Currency Translation. The functional currency of the Company’s foreign operation is the Canadian dollar. Translation adjustments result from translating our foreign subsidiary’s financial statements into United States dollars. The balance sheet accounts of our foreign subsidiary isare translated into United States dollars using the exchange rate in effect at the balance sheet date. Revenue and expenses are translated using average exchange rates for each month during the fiscal year. The resulting translation gains or losses are recorded as a component of accumulated other comprehensive ~~income (~~loss) in stockholders’ equity, for the year ended May 31, ~~0216,~~2017. As of May 31, 2017, the accumulated other comprehensive loss was $~~790~~956,~~882~~164 (May 31, ~~2015~~2016 - $~~559~~790,~~076~~882) . Business is generally transacted in a single currency not requiring meaningful currency transaction costs. We do not practice hedging as the risks do not warrant the costs.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States necessarily requires management to make estimates and assumption that affect the amounts reported in the financial statements. We regularly evaluate estimates and judgments based on historical experiences and other relevant facts and circumstance. Actual results could differ from those estimates.

Cash and Cash equivalents

Cash equivalents are highly liquid investments with an original maturity of three months or less.

F-6

Income taxes

The Company files all its corporate taxes on time and is in full compliance with applicable tax acts and regulations. For taxation years ended May 31, ~~2014~~2015, ~~2015~~2016 and ~~2016~~2017, the tax returns will be statutory barred after August 31, ~~2017~~2018, ~~2018~~2019 and ~~2019~~2020 respectively.

F-6

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company follows ASC 740 “Accounting for Income Taxes,” under which the Company computes tax assets benefits for net operating losses carried forward. Potential benefits of net operating losses have not been recognized in these consolidated financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in the future years.

Deferred Income taxes

	2016			2015
	2017			2016
Loss before income tax	$	502,180		$	460,693
Cumulative net operating losses (NOLs)	$	482,549		$	502,180
Statutory Federal and Provincial tax rate		34	%		34	%
Deferred Income Tax benefits		~~133~~127,~~078~~875			~~123~~133,~~086~~078
Valuation allowance		(~~133~~127,~~078~~875	)		(~~123~~133,~~086~~078	)
Deferred Income Tax Benefit	$	$ nil		$	$ nil

~~Loss~~The ~~carry~~losses can be carried forward ~~expiry~~20 ~~date~~years from the fiscal year the loss incurred. The NOLs start to expire on May 31, 2031 to 2037.

Expiry date	Expiry amount
May 31, 2031	$	21,433
May 31, 2032	$	124,514
May 31, 2033	$	92,510
May 31, 2034	$	3,782
May 31, 2035	$	460,693
May 31, 2036	$	37,705

At May 31, 2017, the Company had no unrecognized tax benefits. Management does not believe unrecognized tax benefits will significantly change within twelve months of the reporting date. Interest and penalties related to income tax matters are recognized in income tax expenses. As of May 31, 2017 there are no liabilities related to uncertain tax positions.

AtBasic ~~May 31, 2016, the Company had no unrecognized tax benefits. Management does not believe unrecognized tax benefits will significantly change within twelve months of the reporting date. Interest~~ and ~~penalties~~Diluted ~~related~~Net toIncome ~~income~~(Loss) ~~tax~~per ~~matters~~Common ~~are recognized in income tax expenses. As of May 31, 2016 there are no liabilities related to uncertain tax positions.~~Share

Basic ~~and~~net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the year. Diluted ~~Net~~net ~~Loss~~income (loss) per ~~Common~~common ~~Share~~share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. For the year ended May 31, 2017, basic and diluted income per common share is the same because there were no common stock equivalents outstanding.

Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

Revenue Recognition

We recognize oil and gas revenue from interests in producing well as the oil and gas is sold. Revenue from the purchase, transportation, and sale of oil and natural gas is recognized upon completion of the sale and when transported volumes are delivered. The Company’s oil revenue is entirely from one well and from one customer in Alberta, Canada.

~~F-7~~Investment Securities

The Company has investments in securities consisting of redeemable preferred shares. These investments are classified and accounted for as “available-for-sale” securities and are carried at fair value using the net asset value per share under the practical expedient methodology. Interest income on such securities is included in interest income.

Oil and Gas Property and impairment of Long lived Assets

Oil and gas exploration and development costs are accounted for using the successful efforts method of accounting.

Oil and gas leasehold acquisition costs are capitalized leasehold impairment is recognized based on exploratory experience and management’s judgment. Upon achievement of all conditions necessary for the classification of reserves as proved, the associated leasehold costs are reclassified to proved properties.

Oil and gas exploration costs and the costs of carrying and retaining undeveloped properties are expensed as incurred. Exploratory well costs are capitalized, or “suspended,” on the balance sheet pending further evaluation of whether economically recoverable reserves have been found. If economically recoverable reserves are not found, exploratory well costs are expensed as dry holes. If exploratory wells encounter potentially economic quantities of oil and gas, the well costs remain capitalized on the balance sheet as long as sufficient progress assessing the reserves and the economic and operating viability of the project is being made. For complex exploratory discoveries, it is not unusual to have exploratory wells remain suspended on the balance sheet for several years while we perform additional appraisal drilling and seismic work on the potential oil and gas field, or while we seek government or co-venture approval of development plans or seek environmental permitting. Once all required approvals and permits have been obtained, the projects are moved into the development phase, and the oil and gas reserves are designated as proved reserves.

F-7

Oil and gas development costs incurred to drill and equip development wells, including unsuccessful development wells, are capitalized.

Depreciation, depletion and amortization of the cost of proved oil and gas properties is calculated using the unit-of-production method. The reserve base used to calculate depreciation, depletion and amortization for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. With respect to lease and well equipment costs, which include development costs and successful exploration drilling costs, the reserve base includes only proved developed reserves. Estimated future dismantlement, restoration and abandonment costs, net of salvage values, are taken into account.

Assets are grouped in accordance with the Extractive Industries - Oil and Gas Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). The basis for grouping is a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a reservoir or field.

Amortization rates are updated quarterly to reflect: 1) the addition of capital costs, 2) reserve revisions (upwards or downwards) and additions, 3) property acquisitions and/or property dispositions and 4) impairments.

When circumstances indicate that an asset may be impaired, CN Resources compares expected undiscounted future cash flows at a producing field level to the unamortized capitalized cost of the asset. If the future undiscounted cash flows, based on CN Resources’ estimate of future natural gas and crude oil prices, operating costs, anticipated production from proved reserves and other relevant data, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is calculated by discounting the future cash flows at an appropriate risk-adjusted discount rate. ~~During the years ended May 31, 2016 and 2015, CN Resources recorded impairment expense of $0 and $404,024, respectively. The impairment was fully recognized in the fiscal year ended may 31, 2015.~~

Asset Retirement Obligation

The Company follows ASC 410 of the FASB Accounting Standards Codification which requires entities to record the fair value of a liability for legal obligations associated with the retirement obligations of tangible long-lived assets in the period in which it is incurred. This standard requires the Company to record a liability for the fair value of the dismantlement and plugging and abandonment costs excluding salvage values. When the liability is initially recorded, the entity increases the carrying amount of the related long-lived-asset. Over time, accretion of the liability is recognized each period and the capitalized cost is amortized over the useful life of the related asset. Upon settlement of the liability, an entity either settles the obligation for its recorded amount or incurs a gain or loss upon settlement.

~~F-8~~Fair value of financial instruments

The carrying value of cash and cash equivalents, receivables, accounts payable and due to director approximate their fair values because of the short-term nature of these instruments. Management believes the Company is not exposed to significant interest or credit risks arising from these financial instruments.

Recent accounting pronouncements

The Company has considered all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any new pronouncements that have been issued that might have a material impact on its financial position or results of operations.

3. BASIS OF PRESENTATION

The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission.

F-8

4. OIL AND GAS PROPERTIES

There iswas no additional capital spending induring the fiscal year ~~ending~~ended May 31, 2017 and 2016 for the joint venture well in operation primarily due to continued depressed crude price and the prolonged supply glut. The joint venture well is currently in commercial production but no aggressive spending was initiated. The Company has accounted for the cost of this oil and gas property as proved properties. The oil and gas properties were fully impaired in prior years.

5. ASSETS RETIREMENT OBLIGATION

Our asset retirement obligations ("AROs") consist primarily of estimated future costs associated with the plugging and abandonment of oil and gas properties. The discounted fair value of an ARO liability is required to be recognized in the period in which it is incurred, with the associated asset retirement cost capitalized as part of the carrying cost of the oil and gas asset. The recognition of an ARO requires that management make numerous estimates, assumptions, and judgments regarding such factors as costs to satisfy plugging and abandonment and other obligations, future advances in technology, timing of settlements, the credit-adjusted risk-free rate, and inflation rates. In periods subsequent to the initial measurement of the ARO, we must recognize period-to-period changes in the liability resulting from the passage of time and revisions to either the timing or the amount of the original estimate of undiscounted cash flows. Increase in the ARO liability due to the passage of time impacts operating results as accretion expense. The related capitalized cost, net of estimated salvage values, including revisions thereto, is charged to expense over the life of the oil and gas property. For the years ended May 31, 2017 and 2016, the Company recognized accretion expense of $1,091 and $1,092, respectively.

6. DUE TO DIRECTOR

The director loans the ~~company~~Company money from time to time on an interest-free due-on-demand basis. The Company also pays a monthly fee of $5,000 to the director to cover general expenses and management fees. As of May 31, ~~2016~~2017 and ~~2015~~2016, the ~~total amount~~balance ~~advanced~~owed ~~and~~to ~~unpaid~~the director isamounted to $~~45.629~~112,109 and $~~367~~45,~~472~~629, respectively.

The Company is currently using the office space from its President and CEO ~~and~~ on a rent free basis,. ~~the~~The President is also ~~provided telephone~~provides telephone and administrative services for the Company onfor free ~~basis~~, however, there is no agreement or guarantee that the President will provide the free services for any specific period of time. The president has advanced large sum of money in the past fiscal year and the President agreed to be paid by the Note receivable from 3rd party. As a result, the $376,249 was paid through the Note Receivable for the year ended May 31, 2016.

7. ~~NOTE~~INVESTMENT ~~RECEIVABLE~~SECURITIES

OnThe ~~November~~Company ~~13,~~made ~~2014,~~investments ~~the~~into ~~Company~~Cornerstone ~~provided~~Mortgage aInvestment ~~loan~~Fund (the “Investment Fund”) in which the ~~amount~~President is also a Director and Officer of $1the Investment Fund. The Investment Fund is eligible for registered plan investments,~~412~~ such as pension plan,~~000~~ ~~(CAD~~registered $1retirement savings plan,~~600,000)~~ toregistered aneducation ~~arm’s~~savings ~~length~~plan ~~party~~and ~~with an~~Tax ~~interest~~Free ofSaving 7%Accounts, ~~per~~as ~~annum.~~regulated by Onthe ~~January~~Government ~~12,~~of ~~2015~~Canada. ~~and~~As ~~January~~of 21May 31, ~~2015~~2017, the Company ~~provided~~made a ~~further~~total investment in the amount of CAD $43,~~329~~100,~~730~~000 (~~CAD~~USD $52,~~100~~285,~~000~~160) to. ~~the~~The ~~same~~investment ~~third~~is ~~party~~in ~~with~~the anform ~~interest~~ of redeemable 7%preferred ~~per~~shares ~~annum.~~which ~~These~~the ~~loans~~Company ~~are~~can ~~unsecured~~redeem ~~and~~at ~~due~~any ontime ~~demand.~~with Asthree-month’s ofwritten ~~November~~notice. ~~30,~~The ~~2015,~~investment earned weinterest ~~have~~income ~~received~~interest ~~complete~~income ~~payment~~of ~~for~~CAD ~~the~~$40,500 ~~Note~~(USD ~~receivable~~$29,970) ~~and~~for nothe ~~amount~~year isended ~~outstanding.~~May ~~In the note receivable~~31, ~~$376~~2017,~~249~~ ~~was used~~representing toan ~~pay~~annualized ~~off~~rate ~~the~~of return ~~outstanding~~of ~~director~~6% ~~loan~~per annum.

During the year ended May 31, 2017, the Company also made an investment in DX Mortgage Income Fund, an unrelated party, in the amount of CAD$2,700,000 which were also in the form of redeemable preferred stock. The investment earned interest income of CAD$67,500 (USD48,600), representing an annualized rate of 6% per annum. The investment was fully redeemed by the Company in April 2017.

8. SUBSEQUENT EVENTS

Subsequent to the year end on May 31, 2017, the Company made additional investments in the Investment Fund, on June 1, 2017, in the amount of CAD $900,000 (USD $676,710) and on June 21, 2017, in the amount of CAD $550,000 (USD $413,600) in the same securities disclosed above. The investments are redeemable at any time with three-month’s written notice.

F-9

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

There have been no disagreements on accounting and financial disclosures from the inception of our company through the date of this Form 10-K. Our financial statements for the period from inception to May 31, ~~2016~~2017, included in this report have been audited by MaloneBailey, LLP, as set forth in this annual report.

ITEM 9A. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation (the “Evaluation”), under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our CEO and CFO concluded that our Disclosure Controls were not effective because of the identification of a material ~~weakness~~weaknesses in our internal control over financial reporting which isare identified below, which we view as an integral part of our disclosure controls and procedures.

The material weakness relates to the monitoring and review of work performed by our limited accounting staff in the preparation of financial statements, footnotes and financial data provided to our independent registered public accounting firm in connection with the annual audit. More specifically, the material weakness in our internal control over financial reporting is due to the fact that:

In the light of management’s review of internal control procedures as they relate to COSO and the SEC the following were identified:

● Our audit committee does not function as an audit committee should since there is a lack of independent directors on the committee and the board of directors has not identified an “expert”, one who is knowledgeable about reporting and financial statements requirements, to serve on the audit committee. ● We have limited segregation of duties which is not consistent with good internal control procedures. ● We do not have a written internal control procedurals manual which outlines the duties and reporting requirements of the directors and any staff to be hired in the future. This lack of a written internal control procedurals manual does not meet the requirements of the SEC or good internal control. ● There are no effective controls instituted over financial disclosure and the reporting processes.

Limitations on the Effectiveness of Controls

Our management, including our CEO and CFO, does not expect that our disclosure controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

CEO and CFO Certifications

Appearing immediately following the Signatures section of this report there are Certifications of the CEO and the CFO. The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This Item of this report, which you are currently reading is the information concerning the Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of May 31, ~~2016~~2017. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on our assessment, as of ~~August~~May 2931, ~~2016~~2017, the Company’s internal control over financial reporting were ineffective. due to the following material weaknesses:

●	Our board of directors does not function as an audit committee should function since there is a lack of independent directors on the committee and the board of directors has not identified an “expert”, one who is knowledgeable about reporting and financial statements requirements.

●	We have limited segregation of duties which is not consistent with good internal control procedures.

●	We do not have a written internal control procedures manual which outlines the duties and reporting requirements of the directors and any staff to be hired in the future. The lack of written internal control procedures does not meet the requirements of the SEC or good internal control.

●	There are no effective controls instituted over the financial reporting process which includes multiple levels of review.

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

Changes in Internal Controls

There were no changes in our internal control over financial reporting during the year ended May 31, ~~2016~~2017, that have affected, or are reasonably likely to affect, our internal control over financial reporting.

ITEM 9B: OTHER INFORMATION

Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Each of our directors serves until his or her successor is elected and qualified. Each of our officers is elected by the board of directors to a term of one (1) year and serves until his or her successor is duly elected and qualified, or until he or she is removed from office. The board of directors has no nominating, auditing or compensation committees.

The name, address, age and position of our present officer and director is set forth below:

Name	Age		Office Held	Length of Service as Officer
Ruzhen Wang		5657	Chairman and Director	Since May 1, 2014	~~Since May 1, 2014~~
Rose Huang		5859	Director	Since May 1, 2014	~~Since May 1, 2014~~
Oliver Xing		5253	Director, President and Chief Executive Officer	Since May 18, 2010 inception of the Company	~~Since May 18, 2010 inception of the Company~~

Conflicts of Interest

We believe that Mr. Xing will not be subject to conflicts of interest. No policy has been implemented or will be implemented to address conflicts of interest.

In the event Mr. Xing resigns as Director or Mr. Xing resigns as an Officer, we will have to evaluate and recruit additional director and officer, if a suitable officer cannot be identified and recruited, our operations could be suspended or cease entirely.

Audit Committee Financial Expert

We do not have an audit committee financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we have no operations, at the present time, we believe the services of a financial expert are not warranted.

Audit Committee and Charter

We have a separately-designated audit committee of the board. Audit committee functions are performed by our board of directors. None of our directors are deemed independent. All directors also hold positions as our officers. Our audit committee is responsible for: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and, (5) funding for the outside auditory and any outside advisors engagement by the audit committee. A copy of the audit committee charter is filed as Exhibit 99.2 to this report.

Code of Ethics

We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code. A copy of the code of ethics is filed as Exhibit 14.1 to this report.

Disclosure Committee and Charter

We have a disclosure committee and disclosure committee charter. Our disclosure committee is comprised of all of our officers and directors. The purpose of the committee is to provide assistance to the Chief Executive Officer and the Chief Financial Officer in fulfilling their responsibilities regarding the identification and disclosure of material information about us and the accuracy, completeness and timeliness of our financial reports. A copy of the disclosure committee charter is filed as Exhibit 99.3 to this report.

Section 16(a) of the Securities Exchange Act of 1934

As of the date of this report, we are not subject to section 16(a) of the Securities Exchange Act of 1934.

Certain information concerning the executive officers of the Company is included under Item 10: Directors, Executive Officers, and Corporate Governance of this report.

ITEM 11: EXECUTIVE COMPENSATION

The following table sets forth the compensation paid by us for the last three fiscal years ending May 31, ~~2016~~2017 for our officer. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid or named executive officers.

Executive Officer Compensation Table

											Non-
											Equity		Nonqualified
											Incentive		Deferred		All
Name and							Stock		Option		Plan		Compensation		Other
Principal			Salary		Bonus		Awards		Awards		Compensation		Earnings		Compensation		Total
Position	Year		(US$)		(US$)		(US$)		(US$)		(US$)		(US$)		(US$)		(US$)
(a)	(b)		(c)		(d)		(e)		(f)		(g)		(h)		(i)		(j)
Oliver Xing		~~2016~~2017		0		0		0		0		0		0		60,000		60,000
President & CEO		~~2015~~2016		0		0		0		0		0		0		60,000		60,000
		2014		0		0		0		0		0		0		60,000		60,000
		2015		0		0		0		0		0		0		60,000		60,000

The $60,000 was payable to Mr. Xing in ~~2016~~2017 and ~~2015~~2016 was for overall responsibility in administering the Company operations and for sourcing and evaluating mineral properties and general and administrative duties.

We have no employment agreements with any of our officers. We do not contemplate entering into any employment agreements until such time as we begin profitable operations.

The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our named executive officers.

There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and directors other than as described herein.

Compensation of Directors

The members of our board of directors are not compensated for their services as directors. The board has not implemented a plan to award options to any directors. There are no contractual arrangements with any member of the board of directors. We have no director’s service contracts. The following table sets forth compensation paid to our directors from inception on May 17, 2010 to May 31, ~~2016~~ 2017. Since that time, we have not paid any compensation to Mr. Xing or any director any fee in the capacity as a director.

Director Compensation

	Fees
	Earned						Non-Equity		Nonqualified
	or						~~Non-Equity~~Incentive		Deferred
	Paid in		Stock		Option		~~Incentive~~ Plan		Compensation		All Other
	Cash		Awards		Awards		Compensation		Earnings		Compensation		~~Total~~		Total
Name	(US$)		(US$)		(US$)		(US$)		(US$)		(US$)		~~(US$)~~		(US$)
(a)	~~(b)~~	(b)	~~(c)~~	(c)	~~(d)~~	(d)	~~(e)~~	(e)	~~(f)~~	(f)	~~(g)~~	(g)	~~(h)~~			(h)
Oliver Xing		~~2016~~2017		0		0		0		0	0	0		0		0
		2015		0		0		0		0	0			0
		2016		0		0		0		0		0				0
		2014		0		0		0		0	0			0
		2015		0		0		0		0		0				0
Ruzhen Wang		~~2016~~2017		0		0		0		0	0	0		0		0
		2015		0		0		0		0	0			0
		2016		0		0		0		0		0				0
		2014		0		0		0		0	0			0
		2015		0		0		0		0		0				0
Rose Huang		~~2016~~2017		0		0		0		0	0	0		0		0
		2015		0		0		0		0	0			0
		2016		0		0		0		0		0				0
		2014		0		0		0		0	0			0
		2015		0		0		0		0		0				0

Long-Term Incentive Plan Awards

We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance.

Indemnification

Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.

Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.

ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth, the total number of shares of common stock beneficially by each of our directors, officers and key employees, individually and as a group, and the present owners of 5% or more of our total outstanding shares. The stockholders listed below has or indirect ownership of his shares or possesses voting and dispositive power with respect to the shares.

	Number of		Percentage of
Name and Address Beneficial Ownership	Restricted Shares		Restricted Shares
	Restricted Shares		Restricted Shares
	Owned beneficially		Owned beneficially
Name and Address Beneficial Ownership [1]	Owned beneficially		Owned beneficially
Oliver Xing		9,500,000		16.93	%
Toronto, Ontario
Ruzhen (Jenny) Wang		39,000,000		69.52	%
Markham, Ontario
Rose Huang		-		-
Toronto, Ontario
Total common stocks issued and outstanding		56,100,000
All Officers and Director-as a Group (3 people)		48,500,000		86.45	%

Mr. Xing’s beneficial ownership includes 2,000,000 restricted common shares held through 1547698 Ontario Limited, representing 11.14% of total issued and outstanding capital stocks of the Company.

Future sales by existing stockholders

Ms. Wang and Mr. Xing’s shares of common stock may only be resold under Rule 144 subject to volume restrictions and restrictions on the manner of sale, commencing six months after their acquisition. Accordingly, ~~The~~the restricted shares may not be resold ~~under~~ under Rule 144 of the Act for a period on one year from the date we are no longer a shell company and we have filed a Form 8-K ~~with~~ with the SEC and disclosed the information required by Item 5.06 thereof.

There are no outstanding options or warrants to purchase, or securities convertible into, our common stock.

ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item is incorporated by reference to the information provided in the Company'’s filing with the United States Securities Commission on form 8-K.

Further, Mr. Xing has advanced funds to us for some of our needs. As of May 31, ~~2016~~2017, Mr. Xing has outstanding advances to us in the amount of $45112,~~629~~109 (May 31, ~~2015~~2016 - $~~367~~45,~~472~~629). There is no due date for the repayment of the funds advanced by Mr. Xing. Mr. Xing will be repaid from revenues or operations if and when we generate revenues to pay the obligation. The obligation to Mr. Xing does not bear interest. Money advanced by Mr. Xing will be repaid from the proceeds of any financing or from working capital when available and on demand.

ITEM 14: PRINCIPAL ACCOUNTING FEES AND SERVICES

(1) Audit Fees

The aggregate fees billed for each of the last three fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included in our Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:

2016	$	26,000	MaloneBailey, LLP
2017	$	25,250	MaloneBailey, LLP
2015	$	28,400	MaloneBailey, LLP
2016	$	24,900	MaloneBailey, LLP

(2) Audit-Related Fees

The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:

2017	$	MaloneBailey, LLP
2016	$	MaloneBailey, LLP
2015	$	MaloneBailey, LLP

(3) Tax Fees

The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:

2017	$	MaloneBailey, LLP
2016	$	MaloneBailey, LLP
2015	$	MaloneBailey, LLP

(4) All Other Fees

The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:

2017	$	MaloneBailey, LLP
2016	$	MaloneBailey, LLP
2015	$	MaloneBailey, LLP

(5) Our audit committee’s pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approves all accounting related activities prior to the performance of any services by any accountant or auditor.

(6) The percentage of hours expended on the principal accountant’s engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full time, permanent employees was 0%.

1920

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing of this Form 10-K and has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this ~~12th~~13th day of September, ~~2016.~~2017

	CN RESOURCES INC.
	(the “Registrant”)

	BY:	/s/ OLIVER XING
		Oliver Xing, President, Principal Executive Officer,
		Principal Financial Officer and Principal
		Accounting Officer, Secretary and Treasurer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities.

Signature	Title	Date
/s/ OLIVER XING	President, Principal Executive Officer, Secretary,	September 1213, ~~2016~~2017
Oliver Xing	Treasurer, Principal Financial Officer, Principal
	Accounting Officer and member of the Board
	of Directors

2021

EXHIBIT INDEX

31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Chief Executive Officer and 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

2122

Filing Compare · CN Resources Inc.