UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

FORM 10-K

(Mark One)

	[X]	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017
		FOR THE FISCAL YEAR ENDED DECEMBER 31, 2018
	[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from _____ to _____

Commission File No. 0-54112

	DONGXING INTERNATIONAL INC.
	(Exact Name of Registrant in its Charter)
Delaware		16-1783194
(State or Other Jurisdiction of incorporation or organization)		(I.R.S. Employer I.D. No.)
3F, No. 26, Hengshan Road, Nangang District, Harbin, Heilongjiang Province, P.R. China 150001
Room 1001, International Finance Building, 633 Keji'er Street, Songbei District, Harbin, Heilongjiang Province, P.R. China 150028
	(Address of Principal Executive Offices)
	(Address of principal executive offices)
	Issuer’s Telephone Number: 86-1394-000887
	(Registrant's telephone number, including area code)

Issuer's Telephone Number, including Area Code: 86-1394-6000887

Securities Registered Pursuant to Section 12(b) of the Act: None

Securities Registered Pursuant to Section 12(g) of the Act:

Common Stock, $.0001 par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 406 of the Securities Act. Yes [__ ] No ~~[X]~~√_

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [__ ] No ~~[X]~~√_

Indicate by check mark whether the registrant (1) has filed ~~all~~ all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ~~[X]~~√_ No ~~[ ]~~__

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 ~~[X] No [ ]~~√_ No___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) 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. Yes ~~[X]~~_ No ~~[ ]~~√

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

Large accelerated filer~~[ ]~~ Accelerated filer ~~[ ]~~_ Non-accelerated filer ~~[ ]~~ Smaller reporting company [X]

Emerging growth company [X]

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [__ ] No ~~[X]~~√

As of June 30, ~~2017~~2018 (the last business day of the most recently completed second fiscal quarter) the aggregate market value of the common stock held by non-affiliates was $0, as there was no market for the common stock.

As of ~~March~~April 3015, ~~2018~~2019, there were 30,000,000 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: None

FORWARD-LOOKING STATEMENTS: NO ASSURANCES INTENDED

In addition to historical information, this Annual Report contains forward-looking statements, which are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans to,” “estimates,” “projects,” or similar expressions. These forward-looking statements represent Management’s belief as to the future of Dongxing International Inc. Whether those beliefs become reality will depend on many factors that are not under Management’s control. Many risks and uncertainties exist that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in Section 1A of this Report, entitled “Risk Factors.” Readers are cautioned not to place undue reliance on these forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements.

USE OF DEFINED TERMS; CONVENTIONS

Except where the context otherwise requires and for the purposes of this report only:

●	"we," "us," "our company," "our" “Company” and "Dongxing International" refer to the combined business of Dongxing International Inc., its consolidated subsidiaries and its consolidated affiliate, as the case may be;

●	"Central Dynamic" refers to Central Dynamic Holdings Limited, our direct, wholly-owned subsidiary, a BVI corporation;

●	"Dongxing BVI" refers to Dongxing Holdings Limited, our indirect, wholly-owned subsidiary, a BVI corporation;

●	"Dongxing Hong Kong" refers to Dongxing Holdings Limited, our indirect, wholly-owned subsidiary, a Hong Kong corporation;

●	"Harbin Donghui" refers to Harbin Donghui Technology Co., Ltd., our indirect, wholly-owned subsidiary, a Chinese corporation;

●	“Harbin Dongxing” refers to Harbin Dongxing Energy Saving Technical Service Co., Ltd., our indirect, consolidated affiliate, a Chinese corporation;

●	"SEC" refers to the United States Securities and Exchange Commission;

●	"China," "Chinese" and "PRC," refer to the People's Republic of China;

●	"Renminbi" and "RMB" refer to the legal currency of China;

●	"U.S. dollars," "dollars" and "$" refer to the legal currency of the United States;

●	"Securities Act" refers to the United States Securities Act of 1933, as amended; and

●	"Exchange Act" refers to the United States Securities Exchange Act of 1934, as amended.

Solely for the convenience of the reader, this report contains conversions of certain Renminbi amounts into U.S. dollars at specified rates. Except as otherwise indicated, all conversions from Renminbi to U.S. dollars were made based on the Exchange Rate on December 31, 2017, which was RMB 6.53 to $1.00. No representation is made that the Renminbi or U.S. dollar amounts referred to in this prospectus could have been or could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all. See “Item 1A: Risk Factors—Risks Related to Our Business— Fluctuations in exchange rates could adversely affect our business and the value of our securities” for a discussion of the effects on the Company of fluctuating exchange rates.3

Solely for the convenience of the reader, this report contains conversions of certain Renminbi amounts into U.S. dollars at specified rates. Except as otherwise indicated, all conversions from Renminbi to U.S. dollars were made based on the Exchange Rate on December 31, 2018, which was RMB 6.86 to $1 .00. No representation is made that the Renminbi or U.S. dollar amounts referred to in this prospectus could have been or could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all. See “Item 1A: Risk Factors—Risks Related to Our Business— Fluctuations in exchange rates could adversely affect our business and the value of our securities” for a discussion of the effects on the Company of fluctuating exchange rates.

PART 1

Item 1. Business

We conduct our operations through Harbin Dongxing, our consolidated affiliate. Harbin Dongxing has, ~~founded~~since in 2011, isbeen ~~a company~~ engaged in marketing lighting products and services. ~~that~~Currently Harbin Dongxing is ~~also~~focused heavily on developing a website to facilitate multi-nation trade in connection with China's Belt and Road Initiative. Harbin Dongxing conducts a portion of its business through two wholly-owned subsidiaries: Harbin Dongrong Business Management Consulting Co., Ltd. and Harbin Dongxing Online Technology Co., Ltd. The offices of Harbin Dongxing and its subsidiaries are located in Harbin City, People’s Republic of China.

The Parent Company

Dongxing International was incorporated in June 2010 in accordance with the laws of the State of Delaware under the name Apex 1, Inc. On November 19, 2015 the Company's corporate name was changed to "Dongxing International Inc." Dongxing International was a “shell company”, as defined in Rule 12b-2 under the Securities Exchange Act of 1934, from the date of its incorporation until September 30, 2016, when it acquired control of Harbin Dongxing.

Organization of Central Dynamic and Acquisition by Dongxing International

The corporate structure of Dongxing International and its subsidiaries and affiliates was developed through the following steps:

On November 17, 2011 two individuals (Cheng Zhao and Su Dianli) organized Harbin Dongxing as a limited liability company in the PRC. The registered equity was allocated among the founders thus: Cheng Zhao - 97.5%, Su Dianli - 2.5%. Since the time of its organization, Harbin Dongxing has been engaged in the marketing of lighting products and related services.

On November 10, 2010 Central Dynamic was organized under the BVI Business Companies Act, 2004 in the British Virgin Islands. Cheng Zhao has served as its director since May 8, 2012. Cheng Zhao purchased 4,250,000 ordinary shares (of the 25,000,000 ordinary shares outstanding) from Central Dynamic for a commitment to pay $42,500, and has purchased an additional 1,750,000 shares from other shareholders for an aggregate price of $17,500. The other 19 shareholders of Central Dynamic acquired their 19,000,000 ordinary shares by committing to pay a total of $190,000 to Central Dynamic. Central Dynamic has not engaged in any business since its formation.

On November 25, 2010 Dongxing BVI was organized under the BVI Business Companies Act, 2004 in the British Virgin Islands under the name "Douce Holdings Limited". Central Dynamic has been the sole equity-owner of Dongxing BVI since December 1, 2011. On November 17, 2014 the corporate name was changed to Dongxing Holdings Limited. Dongxing BVI has not engaged in any business since its formation.

2 4

On January 12, 2011 Dongxing Hong Kong was organized in Hong Kong under the name "Dongke Holdings Limited. Dongxing BVI has been the sole equity-owner of Dongxing Hong Kong since its formation. The corporate name was changed to Dongxing Holdings Limited on November 12, 2014. Dongxing Hong Kong has not engaged in any business since its formation.

On January 13, 2016 Harbin Donghui was organized in the PRC as a Wholly Foreign-Owned Enterprise. Dongxing Hong Kong has been the sole equity owner of Harbin Donghui since its formation. Harbin Donghui has conducted no business since its formation other than pursuant to the VIE Agreements discussed below.

On March 30, 2016 Harbin Donghui, Harbin Dongxing and the equity owners in Harbin Dongxing entered into the VIE Agreements discussed below, as a result of which Harbin Dongxing became a controlled affiliate of Harbin Donghui.

On September 30, 2016 Dongxing International entered into and closed an exchange agreement with Central Dynamic and all of the shareholders of Central Dynamic (the "Exchange Agreement"), pursuant to which the shareholders of Central Dynamic transferred all of the issued and outstanding stock of Central Dynamic to Dongxing International, and we issued to the shareholders of Central Dynamic 25,000,000 shares of our common stock (the “ Share Exchange ”), representing 83.3% of the outstanding shares. This reverse acquisition transaction vested in Dongxing International ownership of the chain of subsidiaries described above.

After the Share Exchange, our current organizational structure is as follows:

3 5

Contractual Arrangements with our Controlled Consolidated Affiliate and its Shareholders

On March 30, 2016, prior to the reverse acquisition transaction, Harbin Donghui and Harbin Dongxing and its shareholders, Cheng Zhao and Su Dianli, entered into a series of agreements known as variable interest agreements (the “VIE Agreements”) pursuant to which Harbin Dongxing became Harbin Donghui’s contractually controlled affiliate. The use of VIE agreements is a common structure used to acquire PRC corporations, particularly in certain industries in which foreign investment is restricted or forbidden by the PRC government. Although Harbin Dongxing participates in an industry that is not a restricted or forbidden to foreign investment, PRC regulations make only certain methods of foreign ownership permissible. Stock exchanges are not a permissible method of gaining foreign ownership of a PRC operating company under current PRC regulations. In order for Harbin Donghui to acquire ownership of Harbin Dongxing, Harbin Donghui would have to purchase Harbin Dongxing for cash, and the purchase price would be subject to the approval of the Ministry of Commerce, which would only approve the purchase price after a lengthy review to determine that the purchase price was commercially fair.

Due to the obstacles to actual acquisition of Harbin Dongxing, the Company utilized the VIE Agreements in order to properly gain control and the economic benefits of Harbin Dongxing. The VIE Agreements included:

(1) an Exclusive Business Cooperation Agreement between Harbin Donghui and Harbin Dongxing pursuant to which Harbin Donghui has the exclusive right and obligation to provide technical support and management and marketing services to Harbin Dongxing in exchange for (i) 95% the total annual net profit of Harbin Dongxing and (ii) RMB 10,000 per month ($1,~~531~~457). The term of the agreement is indefinite, and Harbin Dongxing is specifically barred from terminating the agreement.

(2) an Exclusive Purchase Right Agreement among Cheng Zhao, Su Dianli, Harbin Dongxing and Harbin Donghui under which the shareholders of Harbin Dongxing have granted to Harbin Donghui the irrevocable right and option to acquire all of the equity interests in Harbin Dongxing to the extent permitted by PRC law. If PRC law limits the percentage of Harbin Dongxing that Harbin Donghui may purchase at any time, then Harbin Donghui may repeatedly exercise its option in such increments as may be allowed by PRC law. The exercise price of the option is RMB10 ($1.5346) or any other price permitted by PRC law. This option could be exercised if, in the future, the PRC liberalizes the regulations governing acquisition of PRC entities, or if Dongxing International transferred to Harbin Donghui sufficient capital to satisfy the requirements of the Ministry of Commerce as to an adequate purchase price. In the meantime, the Exclusive Purchase Right Agreement serves to protect the Company’s interest in Harbin Dongxing, as Harbin Dongxing shareholders agree to refrain from taking certain actions which might harm the value of Harbin Dongxing or Harbin Donghui’s option;

(3)

A Pledge of Shares Agreement among Cheng Zhao, Su Dianli, Harbin Dongxing and Harbin Donghui under which the shareholders of Harbin Dongxing have pledged all of their equity in Harbin Dongxing to Harbin Donghui to guarantee Harbin Dongxing’s and Harbin Dongxing’s shareholders’ performance of their obligations under the Exclusive Business Cooperation Agreement and the Exclusive Purchase Right Agreement.

As discussed above, share exchanges are not permitted methods to transfer ownership of PRC operating companies to foreign investors. As a result, the VIE agreements are an attempt to give Harbin Donghui the option to gain actual ownership of the shares of Harbin Dongxing in the event it is can be achieved in accordance with PRC laws. The transfer of ownership interests in Harbin Dongxing to Harbin Donghui would be beneficial to U.S. investors because having ownership control, in contrast to contractual rights over Harbin Dongxing, strengthens the control the US parent company has over the operating company, Harbin Dongxing.

The VIE Agreements with our Chinese affiliate and its shareholders, which relate to critical aspects of our operations, may not be as effective in providing operational control as direct ownership. In addition, these arrangements may be difficult and costly to enforce under PRC law. To date, Harbin Dongxing has not made any payment to Harbin Donghui, but all amounts due under the Exclusive Business Cooperation Agreement have been accrued. Our plan for the foreseeable future is that Harbin Dongxing will make payments to Harbin Donghui to the extent necessary for that entity, Dongxing Hong Kong and Central Dynamic to pay their expenses. Harbin Dongxing may also make payments to Harbin Donghui for the purpose of funding the expenses of our U.S. parent company, although in the near term we expect to fund those expenses by borrowing U.S. Dollars from related parties. The remainder of the obligations of Harbin Dongxing to Harbin Donghui will be accrued without interest, penalties or other compensation for the delay in payment. See “Risk Factors - Risks Relating to the VIE Agreements.”

Under the terms of the VIE Agreements, Harbin Dongxing and its shareholders are contractually required to operate Harbin Dongxing prudently and effectively in a manner intended to maximize profits. Without the consent of Harbin Donghui, Harbin Dongxing’s shareholders may not allow it to: dispose of or mortgage its assets or income (except in the ordinary course of business); increase or decrease its registered capital (including issuing any equity securities); enter into any material agreements with its shareholders outside of the ordinary course of business; appoint or remove any of Harbin Dongxing’s directors or management; make any distribution of profits or dividends; or be terminated, liquidated or dissolved.

However, Harbin Dongxing is not specifically prohibited from acting in certain ways which could reduce its value to the Company. For example, Harbin Dongxing can pay its officers and directors compensation without Harbin Donghui’s consent, and such compensation could reduce the net profits payable by Harbin Dongxing to Harbin Donghui under the terms of the Exclusive Business Cooperation Agreement.

Our Business

Lighting Contracting

Harbin Dongxing was organized in 2011 to engage in the distribution, installation and service of lighting systems, primarily for commercial enterprises. The overall goal of ~~our~~this business is to provide customers with programs for achieving cost-savings by reconstruction of a facility's lighting or cost-efficient programs for lighting new facilities. Among the services that our employees provide to customers are energy diagnosis, project design, equipment procurement, lighting engineering, technology consulting and personnel training. The customers for our services include both commercial enterprises, such as factories and office buildings, and government agencies, including hospitals, schools and roadways.

In 2016 Harbin Dongxing obtained ISO9001 certification. We also obtained China Compulsory Certification for marketing of LED products. These two certifications will allow us to market to government-related industries, such as participants in the electric grid or participants in the communications grid, as well as to bid on government procurements.

In September 2015 Cheng Zhao, the Chairman of Harbin Dongxing, contributed to Harbin Dongxing ownership of Harbin Dongrong Business Management Consulting Co., Ltd. ("Harbin Dongrong"). Until November 2016, Harbin Dongrong carried on essentially the same type of business operations as Harbin Dongxing, except that Harbin Dongrong holds certain licenses from the Chinese government that enable it to bid on government contracts and other projects that require a licensed contractor, such as urban road lighting and lighting design and construction on public lands. In November 2016 Harbin Dongrong changed its business to business consulting, marketing planning and advertising.

LED Lighting

The key to our ability to offer customers cost-savings lighting alternatives is the rapid advances achieved during the past decade in the technology of LED lighting. “LED” is the acronym for light emitting diode, the element of LED lighting that transforms electric current into light. Engineers create diodes by pairing a negatively charged semiconductor. When electric power is connected to the diode, the semiconductors are forced into imbalance and release light as electrons jump to a different energy level.

Over the past decade, as the technology has improved, the popularity of LED lighting has soared. ~~Between 2006 and 2012, sales of LED products in China increased by 539%.~~ The advantages of LED lamps over traditional incandescent and fluorescent lighting include:

Longer Life Span. Electrodes in incandescent and conventional fluorescent lamps decay, producing less light over time, and are generally the limiting factor in the lives of the light. The average life span of a traditional lamp is no more than one year. By avoiding the use of electrodes, LED lamps can have life spans of up to 60,000 hours. The extended life reduces the frequency and cost of replacement. It also makes LED lamps particularly suitable for locations or structures where servicing and light replacement are difficult.

High Luminous Efficiency. Electrodes in incandescent or conventional fluorescent lighting give rise to power loss and place limits on the gas pressure and its composition. These restrictions do not apply to LED lights, as they have no electrodes. As a result, the power rating and light output of the lamps can be significantly increased.

Quick Start. LED lights can be started or restarted without pre-heating. Only a low current is necessary to initiate operation. This enables the size of the distribution box to be reduced, lowering the installation cost. Their quick start-up makes the technology particularly well suited for emergency lighting.

Automatic Brightness Adjustment. Many of our products incorporate programmable smart cards, which can adjust the level of brightness based on such factors as the time of day or the level of natural light. The lamps can function at any point down to 30% of their capacity, providing significant flexibility.

Energy Efficiency. LED technology can save as much as 75% of the energy that would be used in conventional fluorescent lamps.

High Lighting Quality. LEDs also emit steady light, producing a very limited amount of flickering under steady current.

Marketing

Our marketing is done by a direct sales force. Most of our marketing effort focuses on explaining the savings that our customers will achieve by replacing traditional incandescent and fluorescent lights with new LED lights. When a customer expresses interest, our sales personnel visit the customer's facility and develop a lighting design, drawing from products offered by dozens of manufacturers. We provide the customer a budget as well as an estimate of electric cost savings to be gained by implementing our proposal. If the customer contracts with us, we take a down payment, purchase and install the lights, then monitor the new lighting. All of our installations have either a one-year or a three-year performance guarantee, and we monitor all sales to assure the guarantee is fulfilled. For customers with whom we enter energy management contracts, as described below, we provide five years of after-sales service.

We expect that many of the sales by Harbin Dongxing will take the form of energy management contracts (“EMC”). In this business model, energy efficient equipment is sold to an end user on a payment plan designed to net no cost to the customer: payments by the customer are scheduled to conform to the savings realized from use of the energy efficient equipment. Typically, a customer's payment obligation to us represents 90% of the cost-savings realized in the first year after installation, 80% of the savings in year two; 70% in year three; 60% in year four and 50% in year five. At the end of the fifth year, title to the lighting systems is passed to the customer. Harbin Dongxing and Harbin Dongrong offer this option to customers directly as well as to contractors as part of a broader EMC program. Although an EMC sale results in significantly longer payment terms than a conventional net-90 days sale, profit margins on EMC sales are far higher than on conventional sales, as customers are much less price-resistant in the EMC model. In 2017 we hads EMC contracts with two customers, one of which terminated at the end of 2017 and one for which installations will take place during 2018. We expect our relationship with the latter customer to eventually yield revenue of between $80,000 and $100,000.8

We expect that many of the sales by Harbin Dongxing will take the form of energy management contracts (“EMC”). In this business model, energy efficient equipment is sold to an end user on a payment plan designed to net no cost to the customer: payments by the customer are scheduled to conform to the savings realized from use of the energy efficient equipment. Typically, a customer's payment obligation to us represents 90% of the cost-savings realized in the first year after installation, 80% of the savings in year two; 70% in year three; 60% in year four and 50% in year five. At the end of the fifth year, title to the lighting systems is passed to the customer. Harbin Dongxing and Harbin Dongrong offer this option to customers directly as well as to contractors as part of a broader EMC program. Although an EMC sale results in significantly longer payment terms than a conventional net-90 days sale, profit margins on EMC sales are far higher than on conventional sales, as customers are much less price-resistant in the EMC model. In 2017 we had EMC contracts with two customers, one of which terminated at the end of 2017 and the other terminated in 2018.

Lighting contracts entered by Harbin Dongrong, because they often involve government customers or government-related construction projects, are generally not EMC contracts. In our standard Harbin Dongrong contract, the customer pays us 30% of the contract price when the contract is signed, 30% when the products are delivered; 30% upon installation, and the final 10% after the one year quality guarantee is fulfilled.

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~~Mengqiao~~Harbin ~~Eurasian~~Dongxing ~~Trade~~is ~~E-commerce~~located ~~Platform~~in the Heilongjiang Province of China, which has a border with Russia extending over 3,000 kilometers. Heilongjiang Province's 25 ports (15 shipping ports, 4 aviation ports, 2 railway and 4 road ports) are exceeded in number only by Guangdong Province. For these reasons, Heilongjiang Province is the natural location for trade with eastern Russia, a notion repeatedly emphasized in the proclamations of both China's State Council and the Provincial government. In October 2013 the national government designated Harbin, the capital of Heilongjiang Province, as a pilot city entitled to implement cross border ecommerce.

~~Harbin~~In ~~Dongxing~~July is2013, ~~located~~seeking into take advantage of the ~~Heilongjiang~~opportunities ~~Province~~for trade ofwith ~~China~~eastern Russia, ~~which~~ ~~has~~we aorganized ~~border~~Harbin ~~with~~Dongxing ~~Russia~~Online ~~extending~~Business ~~over~~Trading 3Co.,~~000~~ ~~kilometers~~Ltd. ~~Heilongjiang~~("Dongxing ~~Province's~~Online") 25as ~~ports~~a ~~(15~~subsidiary of ~~shipping~~Harbin ~~ports,~~Dongxing 4for ~~aviation ports,~~the 2purpose ~~railway~~of ~~and~~effecting 4online ~~road~~distribution ~~ports)~~of ~~are~~Chinese ~~exceeded~~lighting products into Russia. Dongxing Online was established in ~~number~~China ~~only~~with byregistered ~~Guangzhou~~capital ~~Province~~of 1 million RMB. ~~For~~Since ~~these~~its ~~reasons~~organization, ~~Heilongjiang~~Dongxing ~~Province is~~Online ~~the~~has ~~natural~~been ~~location~~engaged ~~for~~in ~~trade~~developing the ~~with~~Mengqiao ~~eastern~~Cross-Border ~~Russia~~E-commerce Platform, a ~~notion~~B2B ~~repeatedly~~website ~~emphasized~~initially indesigned ~~the~~to ~~proclamations~~distribute oflighting ~~both~~products from China's ~~State~~to commercial ~~Council~~customers ~~and~~in ~~the Provincial government~~Russia. InThe ~~October~~prototype ~~2013~~website ~~the~~(URL: ~~national~~union-bridge.com) ~~government~~now ~~designated~~includes ~~Harbin~~over 5,000 ~~the~~products ~~capital~~from ofalmost ~~Heilongjiang~~100 ~~Province,~~manufacturers. asAmong athe ~~pilot~~attractive ~~city~~features ~~entitled~~of tothe ~~implement~~union-bridge.com ~~cross~~website ~~border ecommerce.~~are:

In July 2013, seeking to take advantage of the opportunities for trade with eastern Russia, we organized Harbin Dongxing Online Business Trading Co., Ltd. ("Dongxing Online") as a subsidiary of Harbin Dongxing for the purpose of effecting online distribution of Chinese lighting products into Russia. Dongxing Online was established in China with registered capital of 1 million RMB. Since its organization, Dongxing Online has been engaged in developing the Mengqiao Eurasian Trade E-commerce Platform, a B2B website initially designed to distribute lighting products from China to commercial customers in Russia. The prototype website (URL: union-bridge.com) now includes over 5,000 products from almost 100 manufacturers. Among the attractive features of the union-bridge.com website are:

product listings, transactions and customer service offered in three languages: Chinese, Russian and English;

real-time currency conversion of posted prices;

supply and demand information is available to registered users, both suppliers and customers.

a wide variety of payment methods, including Paypal, Visa, MasterCard, Webmoney, Qiwi, RBK Money, UnionPay, WeChatPay, Alipay, E-bank and telegraphic transfer, permitting online payment in RMB,U.S. Dollars and Russian Roubles;

customer choice of international delivery methods;

supplier guarantees of delivery within three days.

Each supplier enters into a Distribution Agreement with Dongxing Online. The agreement provides the supplier will ship products as directed by Dongxing Online, with title and risk of loss retained by the supplier until delivery is complete. Dongxing Online is required to pay for the products upon delivery. The supplier warrants the quality of the products and takes responsibility for the after-sale service that is mandated by Chinese law. The supplier also covenants that the price posted on the website for the advertised goods is the best price offered anywhere.

In 2016 we began to expand the scope of the Mengqiao Platform, to make it a full-fledged participant in China's Belt and Road Initiative. The Belt and Road Initiative, launched in 2013, involves China underwriting billions of dollars of infrastructure investment in countries along the old Silk Road linking China with Europe. China is spending roughly $150bn a year in the 68 countries that have chosen to participate in the Initiative. The mission of the Belt and Road Initiative was described in 2015 by the National Development and Reform Commission, Ministry of Foreign Affairs, and Ministry of Commerce of the People’s Republic of China, thus:

The Initiative is an ambitious economic vision of the opening-up of and cooperation among the countries along the Belt and Road. Countries should work in concert and move toward the objectives of mutual benefit and common security. To be specific, they need to improve the region’s infrastructure, and put in place a secure and efficient network of land, sea and air passages, lifting their connectivity to a higher level; further enhance trade and investment facilitation, establish a network of free trade areas that meet high standards, maintain closer economic ties, and deepen political trust; enhance cultural exchanges; encourage different civilizations to learn from each other and flourish together; and promote mutual understanding, peace and friendship among people of all countries.

Our contribution to the Belt and Road Initiative, toward which we are working, will be the expansion of our Mengqiao Platform to serve as an e-commerce platform facilitating trade and cultural exchange among 64 countries along the Silk Road Economic Belt. Our expanded Mengqiao Platform will realize the principles of the Belt and Road Initiative by integrating its multi-national trading network around a Chinese focus, promoting economic and cultural exchange for the sake of a bilateral win-win. As the majority of the countries that are participating in the Belt and Road Initiative are developing countries with limited access for foreign markets, we expect a strong favorable response from the nations that we invite to participate in the Mengqiao Platform.

8 During 2018 we expanded the participation in the Mengqiao Platform to include cultural and art products. The expanded Mengqiao Platform will offer each of 64 nations its own national pavilion, where online visitors can browse that nation's featured cultural products and learn about the nation's culture, natural environment and opportunities for tourism. In addition to our online customer service staff, which offers assistance in Chinese, English and Russian, each national pavilion will include a customer service staff speaking that nation's principal language, able to facilitate use of the platform, solve customer problems, and aid customers in finding the product offerings they desire among the 64 national pavilions.

The expanded Mengqiao Platform will offer each of 64 nations its own national pavilion, where online visitors can browse that nation's featured cultural products and learn about the nation's culture, natural environment and opportunities for tourism. In addition to our online customer service staff, which offers assistance in Chinese, English and Russian, each national pavilion will include a customer service staff speaking that nation's principal language, able to facilitate use of the platform, solve customer problems, and aid customers in finding the product offerings they desire among the 64 national pavilions. Fulfillment of sales made on the Mengqiao Platform will be enabled by the construction of a complex of cross-border high-speed railways that is a central part of the Belt and Road Initiative.10

Fulfillment of sales made on the Mengqiao Platform will be enabled by the construction of a complex of cross-border high-speed railways that is a central part of the Belt and Road Initiative.

Our goal in developing the Mengqiao Eurasian Trade E-commerce Platform was to surmount some of the difficulties that have limited the growth of Chinese manufacturing exports. In particular, we have developed extensive avenues on the website for product and market information to be exchanged between manufacturers and customers, aimed at increasing mutual understanding of the market with a view towards optimizing the benefits of trade for both purchasers and sellers. The Platform offers registered users:

an information portal, offering supply and demand statistics, information on industry trends, and reports of prior sales and customer feedback, among other items;

a transaction portal enabling contracting, documentation, and transaction tracking; and

a customer service portal, facilitated by detailed information regarding customer purchases and feedback.

Dongxing Online has obtained an import/export license from the Government of China that will allow us to facilitate trade with 64 nations. IfWe ~~the~~expect ~~necessary financing is obtained, we project~~ that initial operations of the Mengqiao Platform will commence inseveral ~~October~~months ~~2018~~after we secure the necessary financing. Our budget for initiating commercialization of ~~the~~ the website is $2 million, to pay for the initial advertising and promotion activities as well as to build our first after-sales ~~service~~ service centers. Full development of the Mengqiao Platform, including development of the 64 national pavilions with accompanying ~~customer~~ customer service staffing, is budgeted at $20 million.

Revenue from the Mengqiao Eurasian Trade E-commerce Platform will primarily come from fees paid by participants on the Platform and advertising fees for more advantageous positioning on the website. Dongxing Online will also have the benefit of holding the purchase price for products sold on the website between the date when the end user orders the product and the date on which payment is due.

Intellectual Property

We have registered the copyright for Dongxing Online's trading platform with the National Copyright Administration of the People's Republic of China: the copyright registration number 2015SR078522.

We have also registered our trademark with the national government: trademark registration number TMZC16118206ZCSL01.

~~Recently~~ Harbin Dongxing ~~was~~holds ~~awarded~~ a patent in China for its ~~invention~~ invention of an LED external control nixie tube. The patent number is ZL201220204547.X.

Employees

The Company has ~~nine~~seven employees: ~~three~~two are employed by Harbin Dongxing, four ~~five~~ are employed by Dongxing Online, and one is employed by Harbin Dongrong. We believe that our relationship with our employees is good.

9 11

~~Harbin~~Item ~~Dongxing~~1A. ~~carries~~Risk ~~the following insurance policies for the benefit of its employees:~~Factors

	Annual Premium
	RMB	US$
Endowment	14,400	2,205
Unemployment	1,320	202
Medical	15,600	2,389
Work-related Injury	360	55
Maternity	360	55

Investing in our common stock will involve risk. You should carefully consider the risks described below together with all of the other information contained in this Report, including the financial statements and the related notes, before deciding whether to purchase any shares of our common stock. If any of the following risks is realized, our business, financial condition or operating results could materially suffer. In that event, the trading price of our common stock could decline and you may lose all or part of your investment.

~~Item~~Risks ~~1A.~~Related ~~Risk~~To ~~Factors~~Our Business

~~Investing~~We inhave ~~our~~a ~~common~~limited ~~stock~~operating ~~will~~history ~~involve risk. You should carefully consider the risks described below together with all of the other information contained in this Report, including the financial statements~~ and ~~the~~limited ~~related notes, before deciding whether to purchase any shares of our common stock. If any of the following risks~~historical ~~is realized, our business,~~ financial ~~condition~~information orupon ~~operating~~which ~~results could materially suffer. In that event, the trading price of our common stock could decline and~~ you may ~~lose~~evaluate ~~all~~our ~~or part of your investment~~performance.

~~Risks~~We ~~Related~~have Toonly recently initiated operations, and to date we have realized very limited revenues. You should consider, among other factors, our prospects for success in light of the risks and uncertainties encountered by companies that, like us, are in their early stages of development. We may not successfully address these risks and uncertainties or successfully implement our existing and new products and services. If we fail to do so, it could materially harm our business and impair the value of our common stock. Even if we accomplish these objectives, we may not generate the positive cash flows or profits we anticipate in the future. Our ~~Business~~current business plan involves initiating online marketing of an array of lighting and other products, which we expect to be the engine for the growth of our company. However, no member of our management has experience with online product distribution, and our website remains in the development stage. Therefore, our ability to carry out our business plan successfully is completely untested. Unanticipated problems, expenses and delays are frequently encountered in establishing a new business and developing new products and services. These include, but are not limited to, inadequate funding, lack of consumer acceptance, competition, product development, and inadequate sales and marketing. Our failure to meet any of these conditions would have a materially adverse effect upon us and may force us to reduce or curtail operations. No assurance can be given that we can or will ever operate profitably.

WeOur ~~have~~auditor ahas ~~limited~~indicated ~~operating~~that ~~history~~there ~~and~~is ~~limited~~a ~~historical~~substantial ~~financial~~doubt ~~information~~as ~~upon~~to ~~which~~whether ~~you~~we ~~may~~will ~~evaluate~~be ~~our~~able ~~performance~~to continue as a going concern.

WeIn ~~have~~its ~~only~~report ~~recently~~on ~~initiated operations, and to date we have~~our ~~realized~~financial ~~very~~statements ~~limited~~for ~~revenues.~~the ~~You~~year ~~should~~ended ~~consider~~December 31, ~~among other factors~~2018, our ~~prospects~~independent ~~for~~registered ~~success~~public inaccounting ~~light~~firm ~~of the risks and uncertainties~~has ~~encountered~~stated ~~by companies~~ that, ~~like~~the ~~us,~~fact ~~are~~that inthe ~~their~~Company ~~early~~has ~~stages~~generated oflimited ~~development.~~revenues Weand ~~may~~does not ~~successfully~~have ~~address~~positive ~~these~~cash ~~risks~~flow ~~and~~from operations ~~uncertainties~~raises orsubstantial ~~successfully~~doubt ~~implement~~as to our ~~existing~~ability ~~and~~to ~~new~~continue ~~products~~as ~~and~~a ~~services~~going concern. IfA we“going ~~fail~~concern” toopinion dois ~~so,~~an indication itthat ~~could~~the ~~materially~~auditor’s ~~harm our~~review ~~business~~of ~~and impair~~ the ~~value~~company’s ofresources ~~our~~and ~~common~~business ~~stock.~~activities ~~Even~~raised ifdoubt weas ~~accomplish~~to whether ~~these~~the ~~objectives,~~company wewill ~~may~~be ~~not~~able ~~generate~~to ~~the~~realize ~~positive cash~~its ~~flows~~assets orand ~~profits~~discharge weits ~~anticipate~~liabilities in the ~~future.~~ordinary ~~Our~~course ~~current~~of business. ~~plan~~The risk ~~involves~~of ~~initiating~~investing ~~online~~in ~~marketing~~a ofcompany ~~lighting~~whose ~~products, which~~financial westatements ~~expect~~carry toa begoing ~~the~~concern ~~engine~~opinion ~~for~~is ~~the~~that ~~growth~~you ofare ~~our~~likely ~~company.~~to ~~However,~~lose noall ~~member~~ of your ~~our~~investment ~~management~~if ~~has~~the ~~experience~~company ~~with~~fails ~~online product~~to ~~distribution,~~continue ~~and~~as ~~our~~a ~~website~~going ~~remains~~concern. inIn the ~~development~~case ~~stage.~~of ~~Therefore~~Dongxing International, ~~our~~the ~~ability~~fact tothat ~~carry out our business plan successfully~~we ishave ~~completely~~minimal ~~untested.~~assets ~~Unanticipated problems, expenses~~ and ~~delays~~a ~~are~~limited ~~frequently~~source ~~encountered~~of inrevenue ~~establishing~~means athat ~~new~~we ~~business~~will ~~and developing~~continue ~~new~~as ~~products~~a ~~and~~going ~~services.~~concern ~~These~~only ~~include,~~if ~~but~~we are ~~not~~able ~~limited~~ to~~, inadequate funding, lack of consumer acceptance, competition,~~ ~~product~~obtain ~~development,~~the ~~and~~funds ~~inadequate~~necessary ~~sales and marketing. Our failure~~ to ~~meet~~implement ~~any~~our ofbusiness ~~these~~plan ~~conditions~~and ~~would~~are ~~have~~successful ain ~~materially~~that ~~adverse effect~~implementation. ~~upon~~If uswe ~~and~~are ~~may~~not ~~force~~able us to convert ~~reduce~~our orbusiness ~~curtail~~into ~~operations.~~a Nogoing ~~assurance~~concern, ~~can~~investors bein ~~given~~the ~~that~~Company ~~we can or~~ will ~~ever~~lose ~~operate~~their ~~profitably~~investment.

~~Our auditor has indicated that there is a substantial doubt as to whether we will be able to continue as a going concern.~~ 12

InOur ~~its~~expansion ~~report~~into ~~on our financial statements for~~ the ~~years~~international ~~ended~~market ~~December~~will ~~31,~~require ~~2017 and 2016~~capital investment, ~~our~~which ~~independent~~may ~~registered~~result ~~public~~in ~~accounting~~dilution ~~firm~~of ~~has stated that~~ the ~~fact~~ ~~that~~equity ~~the~~of ~~Company has generated limited revenues and does not have positive cash flow from operations raises substantial doubt as to~~ our ~~ability~~present toshareholders ~~continue~~or assignificantly aincreased ~~going~~borrowing ~~concern~~costs. ~~A “going concern” opinion is an indication that the auditor’s review of the company’s resources and business activities raised doubt as to whether the company will be~~

10 Our business plan contemplates that we will expand our sales both domestically and internationally. To achieve that aim, we will need capital. So our business plan contemplates that we will raise $2 million in capital during the next year in order to complete development of our product distribution website and initiate marketing. Subsequently, we expect to invest an additional $18 million in expansion of our website. We intend to raise all or a large portion of the necessary funds by selling equity in our company. At present we have no commitment from any source for those funds. We cannot determine, therefore, the terms on which we will be able to raise the necessary amounts. It is possible that we will be required to dilute the value of our current shareholders’ equity in order to obtain the funds. On the other hand, if we are forced to borrow these amounts, our cost of capital will significantly increase. But if we are unable to raise the necessary funds, our growth will be limited, as will our ability to compete effectively.

~~able to realize its assets and discharge its liabilities in the ordinary course of business.~~ The ~~risk~~nature of ~~investing~~our inreceivables aand ~~company~~the ~~whose~~unavailability ~~financial statements carry a going concern opinion is that you are likely to lose all~~ of ~~your investment if the company fails to continue as a going~~receivables ~~concern.~~financing Inin ~~the~~China ~~case of Dongxing International, the fact that we have minimal assets and a limited source of revenue means that we~~ will ~~continue~~restrict ~~as a going concern only if we are able to obtain the funds necessary to implement~~ our ~~business~~cash ~~plan~~flows, and ~~are~~may ~~successful in~~interfere ~~that~~with ~~implementation.~~our Ifability ~~we are not able~~ to ~~convert~~fund ~~our business into a going concern, investors in the Company will lose their investment~~growth.

~~Obstacles~~Our standard arrangement with customers for our lighting installation services requires payment for sales 90 days after delivery. In many situations, however, we afford customers much longer to ~~trade~~pay. For ~~between~~example, ~~Russia~~when ~~and~~we ~~China~~provide ~~may~~lighting ~~interfere~~products to contractors working on government construction projects, we respect the government practice of paying only after the entire project is inspected by requiring payment 90 days after actual installation of the lamps. In addition, a growing portion of our business involves entering into energy management contracts with customers or participating in energy management contracts written by contractors, under which the ~~development~~customer is not required to pay until cost savings from the energy efficient lamps are realized. In these and similar circumstances, our collection of receivables will take place over an extended period of time. In the meantime, however, the current efforts of China’s government to restrict bank lending and control monetary expansion will prevent us from financing our ~~online~~receivables. ~~business~~As a result, in many cases our cash resources must be used to pay ongoing expenses before the cash revenue arising from those expenses is collected. This situation will limit our cash resources and may, in turn, limit our growth and prevent us from taking advantage of opportunities for expansion and market penetration that present themselves

~~Our~~We ~~business~~may ~~plan~~not ~~contemplates~~be ~~that~~able ~~the initiation of distribution operations through our website will yield substantial growth and, in particular, a marked improvement in our cash flow. Our website was initially designed~~ to ~~primarily~~find ~~attract~~suitable ~~Russian~~software ~~customers~~developers ~~for lighting products, as our business plan was to take advantage~~at ofan ~~the~~acceptable proximity of our headquarters in Heilongjiang Province to the border of eastern Russia. Even as we have expanded the scope of our website to participate in the entire Belt and Road Initiative, our initial focus will depend heavily on our ability to open trade with Russia. However, trade between China and Russia is still hindered by significant difficulties, some the result of historical animosity between Russia and China and some the result of bureaucratic and political impediments to trade. Both governments, for example, impose duties and taxes on cross-border trade that significantly increase the cost ~~of imported products and so reduce demand for those products~~. In addition, the time required to pass through customs at the border can be substantial, thus adding to the incentive for residents of Russia to purchase products manufactured within Russia. Moreover, the recent declines in he market prices of oil and natural gas has severely damaged the Russian economy, reducing overall demand for products in Russia. These factors may contribute to the difficulty in developing active users in Russia for our online distribution services, which could make our online venture unprofitable.

~~Our~~We ~~expansion~~have ~~into~~contracted ~~the~~with ~~international~~a ~~market~~software developer to further develop and upgrade our website and associated backend interface. We will continue to require ~~capital investment,~~such ~~which~~expertise ~~may~~in ~~result~~the future, in ~~dilution~~order to meet the demands of developing online technology. Due to the ~~equity~~current demand for skilled software developers, we run the risk of not ~~our~~being ~~present~~able ~~shareholders~~to find or ~~significantly~~retain ~~increased~~suitable ~~borrowing~~personnel ~~costs~~at an acceptable price. We would also need to ensure that the candidates are adequately qualified to develop a website that is user friendly, free of errors and seamless in design. Without these developers, we may not be able to further develop and upgrade the software, which is the most important aspect of our business development.

Our ~~business~~management ~~plan~~has ~~contemplates~~limited ~~that~~experience wein ~~will~~managing ~~expand~~and ~~our sales both~~operating ~~domestically~~a ~~and~~public ~~internationally~~company. ToAny ~~achieve~~failure ~~that aim, we will need capital. So our business plan contemplates that we will raise $2 million in capital during the next year in order~~ to ~~complete~~comply ~~development~~with offederal ~~our~~securities ~~product distribution website and initiate marketing. Subsequently~~laws, werules ~~expect~~or toregulations ~~invest~~could ansubject ~~additional~~us ~~$18 million in expansion of our website. We intend~~ to ~~raise~~fines ~~all~~ or ~~a large portion~~regulatory ~~of the necessary funds by selling equity in our company. At present we have no commitment from any source for those funds. We cannot determine~~actions, ~~therefore, the terms on~~ which wemay ~~will~~materially beadversely ~~able~~affect ~~to raise the necessary amounts. It is possible that we will be required to dilute the value of~~ our ~~current shareholders’ equity in order to obtain the funds. On the other hand~~business, ifresults ~~we are forced to borrow these amounts, our cost~~ of ~~capital~~operations ~~will~~and ~~significantly~~financial ~~increase~~condition. ~~But if we are unable to raise the necessary funds, our growth will be limited, as will our ability to compete effectively.~~

~~The nature of our receivables and the unavailability of receivables financing in China will restrict our cash flows, and may interfere with our ability to fund growth.~~13

Our ~~standard~~management ~~arrangement~~personnel ~~with~~have ~~customers~~no ~~requires~~prior ~~payment~~experience ~~for sales~~managing 90and ~~days~~operating ~~after~~a ~~delivery~~public company. InThey will rely in many ~~situations~~instances on the professional experience and advice of third parties, including ~~however~~our attorneys and accountants. None of the members of our management staff were educated and trained in U.S. business systems, and we ~~afford~~may ~~customers~~have ~~much~~difficulty ~~longer~~hiring tonew ~~pay~~employees in the PRC with such training. ~~For~~As ~~example~~a result, ~~when~~ we ~~provide lighting~~may ~~products~~experience todifficulty ~~contractors~~in ~~working~~establishing onmanagement, ~~government~~legal ~~construction~~and ~~projects~~financial controls, wecollecting ~~respect~~financial ~~the~~data ~~government~~and ~~practice~~preparing financial statements, books of ~~paying~~account ~~only~~and ~~after~~corporate ~~the~~records and instituting business practices that meet U.S. standards. ~~entire~~Therefore, ~~project~~we ismay, ~~inspected~~in byturn, ~~requiring~~experience ~~payment~~difficulties 90in ~~days~~implementing ~~after~~and ~~actual~~maintaining ~~installation~~adequate internal controls as required under Section 404 of the ~~lamps.~~Sarbanes-Oxley InAct ~~addition~~of 2002, aas ~~growing~~amended. ~~portion~~This may result in significant deficiencies or material weaknesses in our internal controls, which could impact the reliability of our ~~business~~financial ~~involves~~statements ~~entering~~and ~~into~~prevent ~~energy~~us ~~management~~from complying ~~contracts~~with the SEC rules and regulations. Failure to comply with ~~customers~~any laws, rules, or ~~participating~~regulations applicable to our business may result in ~~energy~~fines ~~management~~or ~~contracts written~~regulatory byactions, ~~contractors~~which may materially adversely affect our business, ~~under~~results ~~which~~of operation, or financial condition and could result in delays in development of an active and liquid trading market for our common stock. To the ~~customer~~extent isthat the market place perceives that we do not ~~required~~have toa ~~pay~~strong ~~until~~financial ~~cost~~staff ~~savings~~and ~~from~~financial controls, the ~~energy~~market for, ~~efficient~~and ~~lamps~~price ~~are realized~~of, our stock may be impaired.

11 The lack of expertise in U.S. GAAP among the staff of our finance department could result in errors in our filings.

InThe ~~these~~books and ~~similar~~records ~~circumstances~~of Harbin Dongxing, our ~~collection~~operating entity, are maintained in accordance with bookkeeping practices that are customary in China. The financial statements of ~~receivables~~Harbin Dongxing ~~will~~and ~~take~~Harbin ~~place~~Donghui ~~over~~are anprepared ~~extended~~in ~~period~~accordance with accounting principles generally accepted in China. The staff of ~~time~~our finance department, which prepares those financial statements, has experience with Chinese GAAP, but very limited experience with U.S. GAAP. InTherefore, in order to file with the ~~meantime,~~SEC ~~however~~consolidated financial statements prepared in accordance with U.S. GAAP, we have engaged an independent consultant who makes the ~~current~~adjustments ~~efforts~~to the financial statements of ~~China’s~~Harbin ~~government~~Dongxing toand ~~restrict~~Harbin Donghui necessary ~~bank~~to ~~lending~~achieve ~~and~~compliance ~~control~~with ~~monetary~~U.S. ~~expansion~~GAAP, ~~will~~then ~~prevent~~performs usthe ~~from~~consolidation ~~financing~~required ~~our~~to ~~receivables~~produce the consolidated financial statements of Dongxing International. AsBecause athat ~~result~~consultant, inwho ~~many~~is ~~cases~~not ~~our~~present ~~cash resources~~in ~~must~~our beexecutive ~~used~~offices, tois ~~pay~~the ~~ongoing~~only ~~expenses~~participant ~~before~~in the preparation ~~cash~~of ~~revenue~~our ~~arising~~financial ~~from~~statements ~~those~~possessing ~~expenses~~a isfamiliarity ~~collected~~with U.S. ~~This~~GAAP, ~~situation~~there is a risk that the persons responsible for ~~will~~the ~~limit~~initial classifications of the elements of our ~~cash~~financial ~~resources~~results ~~and~~will ~~may,~~err in ~~turn~~making those classifications, ~~limit~~which will cause our ~~growth~~reported ~~and~~financial ~~prevent~~statements usto ~~from~~be ~~taking~~erroneous. ~~advantage~~Any ofsuch ~~opportunities~~errors, ~~for~~besides ~~expansion~~being misleading to investors, could result in subsequent ~~and~~restatements, ~~market~~which ~~penetration~~could ~~that~~have ~~present~~an ~~themselves~~adverse effect on the perception of the Company among investors.

We may not be able to ~~find~~meet ~~suitable~~the ~~software~~internal ~~developers~~control atreporting anrequirements ~~acceptable~~imposed ~~cost~~by the SEC resulting in a possible decline in the price of our common stock and our inability to obtain future financing.

WeAs ~~have~~directed ~~contracted~~by ~~with~~Section a404 ~~software~~of ~~developer~~the toSarbanes-Oxley ~~further~~Act, ~~develop and~~the ~~upgrade~~SEC ~~our~~adopted rules ~~website~~requiring ~~and~~each ~~associated~~public ~~backend~~company ~~interface.~~to Weinclude ~~will~~a ~~continue~~report toof ~~require~~management ~~such~~on ~~expertise~~the incompany’s ~~the~~internal ~~future,~~controls inover ~~order~~financial toreporting ~~meet~~in ~~the~~its ~~demands~~annual ofreports. ~~developing~~Although ~~online~~the ~~technology.~~Dodd-Frank ~~Due~~Wall toStreet ~~the~~Reform ~~current~~and ~~demand~~Consumer ~~for~~Protection ~~skilled~~Act ~~software~~exempts ~~developers,~~companies wewith ~~run~~a ~~the~~public ~~risk of~~float ~~not~~of ~~being~~less ~~able~~than to$250 ~~find~~million orfrom ~~retain~~the ~~suitable~~requirement ~~personnel~~that atour anindependent ~~acceptable~~registered ~~price.~~public Weaccounting ~~would~~firm ~~also~~attest ~~need~~ to ~~ensure~~our ~~that~~financial ~~the candidates are~~controls, ~~adequately~~this ~~qualified~~exemption todoes ~~develop~~not aaffect ~~website~~the requirement that iswe ~~user~~include ~~friendly,~~a ~~free~~report of ~~errors~~management ~~and~~on ~~seamless~~our ininternal ~~design.~~control ~~Without~~over ~~these~~financial ~~developers,~~reporting weand ~~may~~does not beaffect ~~able~~the requirement to ~~further~~include ~~develop and upgrade~~ the ~~software,~~independent ~~which~~registered ispublic ~~the~~accounting ~~most~~firm’s ~~important~~attestation ~~aspect~~if of our ~~business~~public float ~~development~~exceeds $250 million.

~~Our~~While ~~management~~we ~~has~~expect ~~limited~~to ~~experience~~expend significant resources in ~~managing~~developing the necessary documentation and ~~operating~~ testing procedures required by Section 404 of the Sarbanes-Oxley Act, there is a ~~public~~risk ~~company.~~that ~~Any~~we may ~~failure~~not be able to comply timely with ~~federal~~all ~~securities~~of ~~laws,~~the ~~rules~~requirements orimposed ~~regulations~~by ~~could~~this ~~subject~~rule. usRegardless of whether we are required to receive ~~fines~~a orpositive ~~regulatory~~attestation from our independent registered public accounting firm with respect to our internal controls, ~~actions~~if we are unable to do so, ~~which~~investors and others may ~~materially~~lose ~~adversely~~confidence ~~affect~~in the reliability of our ~~business,~~financial ~~results~~statements ofand ~~operations~~our stock price and ~~financial~~ability ~~condition~~to obtain equity or debt financing as needed could suffer.

Our management personnel have no prior experience managing and operating a public company. They will rely in many instances on the professional experience and advice of third parties, including our attorneys and accountants. None of the members of our management staff were educated and trained in U.S. business systems, and we may have difficulty hiring new employees in the PRC with such training. As a result, we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet U.S. standards. Therefore, we may, in turn, experience difficulties in implementing and maintaining adequate internal controls as required under Section 404 of the Sarbanes-Oxley Act of 2002, as amended. This may result in significant deficiencies or material weaknesses in our internal controls, which could impact the reliability of our financial statements and prevent us from complying with the SEC rules and regulations. Failure to comply with any laws, rules, or regulations applicable to our business may result in fines or regulatory actions, which may materially adversely affect our business, results of operation, or financial condition and could result in delays in development of an active and liquid trading market for our common stock. To the extent that the market place perceives that we do not have a strong financial staff and financial controls, the market for, and price of, our stock may be impaired.14

~~The~~In ~~lack~~addition, in the event that our independent registered public accounting firm is unable to rely on our internal controls in connection with its audit of ~~expertise~~our financial statements, and in ~~U.S.~~the further ~~GAAP~~event ~~among~~that it is unable to devise alternative procedures in order to satisfy itself as to the ~~staff~~material accuracy of our ~~finance~~financial ~~department~~statements and related disclosures, it is possible that we would be unable to file our Annual Report on Form 10-K with the SEC, which could ~~result~~also inadversely ~~errors~~affect inthe market for and the market price of our ~~filings~~common stock and our ability to secure additional financing as needed.

~~The~~We ~~books~~require ~~and~~highly ~~records~~qualified ofpersonnel ~~Harbin Dongxing~~and, ~~our~~if ~~operating entity,~~we are ~~maintained in accordance with bookkeeping practices that are customary in China. The financial statements of~~unable Harbin Dongxing and Harbin Donghui are prepared in accordance with accounting principles generally accepted in China. The staff of our finance department, which prepares those financial statements, has experience with Chinese GAAP, but very limited experience with U.S. GAAP. Therefore, in order to ~~file~~hire ~~with~~or ~~the~~retain ~~SEC~~qualified ~~consolidated financial statements prepared in accordance with U.S. GAAP~~personnel, we ~~have~~may engaged an independent consultant who makes the adjustments to the financial statements of Harbin Dongxing and Harbin Donghui necessary to achieve compliance with U.S. GAAP, then performs the consolidation required to produce the consolidated financial statements of Dongxing International. Because that consultant, who is not present in our executive offices, is the only participant in the preparation of our financial statements possessing a familiarity with U.S. GAAP, there is a risk that the persons responsible for the initial classifications of the elements of our financial results will err in making those classifications, which will cause our reported financial statements to be ~~erroneous.~~able ~~Any such errors, besides being misleading~~ to ~~investors,~~grow ~~could result in subsequent restatements, which could have an adverse effect on the perception of the Company among investors~~effectively.

12Our future success also depends upon our ability to attract and retain highly qualified personnel. Expansion of our business and the proposed growth of our business will require additional managers and employees with industry experience, and our success will be highly dependent on our ability to attract and retain skilled management personnel and other employees. We may not be able to attract or retain highly qualified personnel. Competition for skilled marketing and administrative personnel in China is significant. This competition may make it more difficult and expensive to attract, hire and retain qualified managers and employees.

WeThe ~~may~~loss ~~not~~of ~~be able to meet~~ the ~~internal~~services ~~control~~of ~~reporting requirements~~our ~~imposed~~key byemployees, particularly the ~~SEC~~services ~~resulting~~rendered inby aCheng ~~possible~~Zhao, ~~decline~~our inchief ~~the~~executive ~~price~~officer, ofcould ~~our~~harm ~~common stock and~~ our ~~inability to obtain future financing~~business.

AsOur ~~directed~~success bydepends ~~Section~~to ~~404~~a ofsignificant ~~the~~degree ~~Sarbanes-Oxley~~on ~~Act,~~ the ~~SEC~~services ~~adopted~~rendered ~~rules requiring each public company~~ to ~~include~~us aby ~~report~~our ofkey ~~management~~employees. onIf ~~the~~we ~~company’s~~fail ~~internal~~to ~~controls~~attract, ~~over~~train ~~financial~~and ~~reporting in~~retain ~~its~~sufficient ~~annual~~numbers ~~reports.~~of ~~Although~~these ~~the~~qualified ~~Dodd-Frank~~people, ~~Wall~~our ~~Street~~prospects, business, ~~Reform~~financial condition and ~~Consumer~~results ~~Protection~~of ~~Act~~operations ~~exempts~~will ~~companies~~be ~~with~~materially aand ~~public~~adversely ~~float of~~affected. ~~less~~In ~~than~~particular, ~~$75~~we ~~million~~are ~~from~~heavily dependent on the ~~requirement~~continued ~~that~~services ~~our~~of ~~independent~~Cheng ~~registered~~Zhao, ~~public~~who ~~accounting~~founded ~~firm attest to~~ our ~~financial~~business ~~controls, this~~and ~~exemption~~now ~~does~~serves ~~not~~as ~~affect~~our ~~the~~chief ~~requirement~~executive ~~that~~officer. weWe ~~include~~currently do anot ~~report~~have ofkey ~~management~~employee oninsurance for our ~~internal~~officers ~~control~~and ~~over~~directors. ~~financial~~The ~~reporting and~~loss ~~does~~of ~~not~~any ~~affect~~of ~~the~~these ~~requirement~~key toemployees, ~~include~~including ~~the~~members ~~independent~~of our ~~registered~~senior ~~public~~management ~~accounting~~team, ~~firm’s~~could ~~attestation~~harm if our ~~public float exceeds $75 million~~business.

~~While~~ We wedo ~~expect to expend significant resources in developing the necessary documentation and testing procedures required by Section 404 of the Sarbanes-Oxley Act, there is a risk that we may~~ not be ~~able to comply timely with all of the requirements imposed by this rule. Regardless of whether we are required to receive a~~anticipate ~~positive~~paying ~~attestation~~dividends ~~from our independent registered public accounting firm with respect to our internal controls, if we are unable to do so, investors and others may lose confidence~~ in the ~~reliability~~foreseeable ~~of our financial statements and our stock price and ability to obtain equity or debt financing as needed could suffer~~future.

InWe ~~addition,~~have innever ~~the~~declared ~~event~~or ~~that~~paid ~~our~~any ~~independent~~cash ~~registered~~dividends ~~public accounting~~or ~~firm is unable to rely~~ distributions on our ~~internal~~capital ~~controls~~stock. inWe ~~connection~~currently ~~with~~intend ~~its~~to ~~audit~~retain of our ~~financial~~future ~~statements~~earnings, ~~and~~if inany, ~~the further event that it is unable~~ to ~~devise~~support ~~alternative~~operations ~~procedures~~and ~~in order~~ to ~~satisfy~~finance ~~itself as to the material accuracy of our~~expansion ~~financial statements~~ and ~~related~~therefore ~~disclosures,~~we itdo isnot ~~possible~~anticipate ~~that~~paying weany ~~would~~cash bedividends ~~unable~~on ~~to file~~ our ~~Annual~~common ~~Report~~stock onin ~~Form 10-K with~~ the ~~SEC,~~foreseeable ~~which~~future. ~~could~~Investors ~~also~~requiring current ~~adversely~~or ~~affect~~near-term ~~the~~income ~~market~~from ~~for~~their ~~and~~investment ~~the~~should ~~market~~not ~~price~~invest ofin our ~~common stock and our ability to secure additional financing as needed~~Company.

WeRisks ~~require~~Relating ~~highly qualified personnel and, if we are unable~~ to ~~hire~~the orVIE ~~retain qualified personnel, we may not be able to grow effectively.~~Agreements

~~Our~~The ~~future~~PRC ~~success~~government ~~also~~may ~~depends~~determine ~~upon~~that ~~our ability to attract and retain highly qualified personnel. Expansion of our business and~~ the ~~proposed~~VIE ~~growth~~Agreements ~~of our business will require additional~~are ~~managers and employees with industry experience, and our success will be highly dependent on our ability to attract and retain skilled management personnel and other employees. We may~~ not ~~be able to attract or retain highly qualified personnel. Competition for skilled marketing and administrative personnel~~ in ~~China~~compliance iswith ~~significant.~~applicable ~~This~~PRC ~~competition may make it more difficult and expensive to attract~~laws, ~~hire~~rules and ~~retain qualified managers and employees~~regulations.

~~The~~Harbin ~~loss~~Donghui ofprovides support and consulting service to Harbin Dongxing pursuant to the ~~services~~VIE Agreements. Almost all economic benefits and risks arising from Harbin Dongxing’s operations are transferred to Harbin Donghui under these agreements. There are risks involved with the operation of our ~~key~~business ~~employees~~in reliance on the VIE Agreements, ~~particularly~~ including the ~~services~~risk ~~rendered~~that the VIE Agreements may be determined by ~~Cheng~~PRC ~~Zhao,~~regulators ~~our~~or ~~chief~~courts ~~executive~~to ~~officer~~be unenforceable. Our PRC counsel has advised that if the VIE Agreements were for any reason determined to be in breach of any existing or future PRC laws or regulations, ~~could~~the ~~harm~~relevant ~~our~~regulatory authorities ~~business.~~would have broad discretion in dealing with such breach, including:

Our success depends to a significant degree on the services rendered to us by our key employees. If we fail to attract, train and retain sufficient numbers of these qualified people, our prospects, business, financial condition and results of operations will be materially and adversely affected. In particular, we are heavily dependent on the continued services of Cheng Zhao, who founded our business and now serves as our chief executive officer. We currently do not have key employee insurance for our officers and directors. The loss of any of these key employees, including members of our senior management team, could harm our business.15

13 ● imposing economic penalties; ● discontinuing or restricting the operations of Harbin Donghui or Harbin Dongxing; ● imposing conditions or requirements in respect of the VIE Agreements with which Harbin Donghui or Harbin Dongxing may not be able to comply; ● requiring our company to restructure the relevant ownership structure or operations; ● taking other regulatory or enforcement actions that could adversely affect our company’s business; and ● revoking the business licenses and/or the licenses or certificates of Harbin Dongxing, and/or voiding the VIE Agreements.

WeAny doof ~~not~~these ~~anticipate~~actions could adversely affect our ability to manage, ~~paying~~operate ~~dividends~~and ingain the ~~foreseeable~~financial ~~future~~benefits of Harbin Dongxing, which would have a material adverse impact on our business, financial condition and results of operations.

WeOur ~~have~~ability ~~never declared or paid any cash dividends or distributions on our capital stock. We currently intend~~ to ~~retain~~control ~~our~~Harbin ~~future~~Dongxing ~~earnings,~~under ifthe ~~any,~~VIE ~~to support operations and to finance expansion~~Agreements ~~and~~may ~~therefore we do~~ not ~~anticipate~~be ~~paying~~as ~~any~~effective ~~cash~~as ~~dividends~~direct ~~on our common stock in the foreseeable future~~ownership. ~~Investors requiring current or near-term income from their investment should not invest in our Company.~~

~~Risks~~We ~~Relating~~conduct toour business in the PRC and generate all of our revenues through the VIE Agreements. Our plans for future growth are based substantially on expanding the operations of Harbin Dongxing and its subsidiaries. However, the VIE Agreements may not be as effective in providing us with control over Harbin Dongxing as direct ownership. Under the current VIE arrangements, as a legal matter, if Harbin Dongxing fails to perform its obligations under these contractual arrangements, we may have to (i) incur substantial costs and resources to enforce such arrangements, and (ii) rely on legal remedies under PRC law, which we cannot be sure would be effective. Therefore, if we are unable to effectively control Harbin Dongxing, it may have an adverse effect on our ability to achieve our business objectives and grow our revenues.

The VIE Agreements are governed by PRC ~~government~~law ~~may~~and ~~determine~~provide ~~that~~for the resolution of disputes through the jurisdiction of courts in the PRC. If Harbin Dongxing or its shareholders fail to perform the obligations under the VIE Agreements, ~~are~~we would be required to resort to legal remedies available under PRC law, including seeking specific performance or injunctive relief, or claiming damages. We cannot be sure that such remedies would provide us with effective means of causing Harbin Dongxing or its shareholder to meet their obligations, or recovering any losses or damages as a result of non-performance. Further, the legal environment in China is not as developed as in ~~compliance~~other ~~with~~jurisdictions. ~~applicable~~Uncertainties ~~PRC~~in the application of various laws, rules, regulations or policies in PRC legal system could limit our liability to enforce the VIE Agreements and ~~regulations~~protect our interests.

~~Harbin~~The ~~Donghui~~payment ~~provides~~arrangement support and consulting service to Harbin Dongxing pursuant to the VIE Agreements. Almost all economic benefits and risks arising from Harbin Dongxing’s operations are transferred to Harbin Donghui under ~~these agreements. There are risks involved with~~ the ~~operation of our business in reliance on the~~ VIE Agreements, ~~including the risk that the VIE Agreements~~ may be ~~determined~~ challenged by ~~PRC regulators or courts to be unenforceable. Our PRC counsel has advised that if~~ the ~~VIE Agreements were for any reason determined to be in breach of any existing or future~~ PRC ~~laws~~tax ~~or regulations, the relevant regulatory~~ authorities ~~would have broad discretion in dealing with such breach, including:~~.

●We ~~imposing~~generate ~~economic~~our ~~penalties;~~revenues ●through ~~discontinuing~~the orpayments ~~restricting~~we receive pursuant to the ~~operations~~VIE ofAgreements. ~~Harbin~~We ~~Donghui~~could orface ~~Harbin~~adverse ~~Dongxing;~~tax ●consequences ~~imposing~~if ~~conditions~~the orPRC ~~requirements~~tax inauthorities ~~respect~~determine ofthat the VIE Agreements ~~with~~were ~~which Harbin Donghui or Harbin Dongxing may~~ not beentered ~~able~~into tobased ~~comply;~~on ●arm’s ~~requiring~~length ~~our~~negotiations. ~~company~~For toexample, ~~restructure~~PRC ~~the~~tax ~~relevant~~authorities ~~ownership~~may ~~structure~~adjust orour income ~~operations;~~and ●expenses ~~taking~~for ~~other~~PRC ~~regulatory~~tax orpurposes ~~enforcement~~which ~~actions that~~ could ~~adversely~~result ~~affect~~in our ~~company’s~~being ~~business;~~subject ~~and~~to ●higher ~~revoking~~tax ~~the business licenses and/or the licenses or certificates of Harbin Dongxing~~liability, ~~and/~~or ~~voiding~~cause ~~the~~other adverse ~~VIE~~financial ~~Agreements~~consequences.

Any of these actions could adversely affect our ability to manage, operate and gain the financial benefits of Harbin Dongxing, which would have a material adverse impact on our business, financial condition and results of operations.16

~~Our~~Risks ~~ability~~Related toTo ~~control~~Doing ~~Harbin~~Business ~~Dongxing~~In ~~under the VIE Agreements may not be as effective as direct ownership.~~China

WeUncertainties ~~conduct~~with ~~our~~respect ~~business~~to in the PRC ~~and~~legal ~~generate~~system ~~all~~could ~~of our~~limit ~~revenues through~~ the VIE Agreements. Our plans for future growth are based substantially on expanding the operations of Harbin Dongxing and its subsidiaries. However, the VIE Agreements may not be as effective in providing us with control over Harbin Dongxing as direct ownership. Under the current VIE arrangements, as a legal ~~matter,~~protections ifavailable ~~Harbin Dongxing fails~~ to ~~perform~~you ~~its obligations under these contractual arrangements, we may have to (i) incur substantial costs~~ and ~~resources to enforce such arrangements, and (ii) rely on legal remedies under PRC law, which we cannot be sure would be effective~~us. ~~Therefore, if we are unable to effectively control Harbin Dongxing, it may have an adverse effect on our ability to achieve our business objectives and grow our revenues.~~

14 We conduct substantially all of our business through our operating subsidiary and affiliate in the PRC. Our operating subsidiary and affiliate are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws applicable to foreign-invested enterprises. The PRC legal system is based on written statutes, and prior court decisions may be cited for reference but have limited precedential value. Since 1979, a series of new PRC laws and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, since the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit legal protections available to you and us. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.

~~The~~We ~~VIE Agreements~~ are ~~governed~~a byDelaware ~~PRC~~holding ~~law~~company and ~~provide~~most ~~for~~of ~~the~~our ~~resolution~~assets are located outside of ~~disputes~~the ~~through~~United ~~the~~States. ~~jurisdiction~~All of ~~courts~~our current business operations are conducted in the PRC~~. If~~ through our VIE entity, Harbin Dongxing. In oraddition, ~~its~~all ~~shareholders~~of ~~fail~~our todirectors ~~perform~~and officers are nationals and residents of the ~~obligations~~ ~~under~~PRC, and the ~~VIE~~assets ~~Agreements~~of these persons are located outside the United States. As a result, weit ~~would~~may be ~~required~~difficult tofor ~~resort~~you to ~~legal~~effect ~~remedies~~service ~~available~~of ~~under~~process ~~PRC~~within ~~law,~~the ~~including~~United ~~seeking~~States upon ~~specific~~these ~~performance~~persons. orIt ~~injunctive~~may ~~relief,~~also orbe ~~claiming~~difficult ~~damages~~for you to enforce in U.S. Wecourts ~~cannot~~judgments beon ~~sure~~the ~~that~~civil ~~such~~liability ~~remedies~~provisions ~~would~~of ~~provide~~the U.S. federal securities laws against us ~~with~~and ~~effective~~our officers and directors, none of whom are residents in the United States and the substantial ~~means~~majority of ~~causing~~whose ~~Harbin~~assets ~~Dongxing~~are orlocated ~~its~~outside ~~shareholder~~of tothe ~~meet~~United ~~their~~States. ~~obligations~~In addition, there is uncertainty as to whether the courts of the PRC would recognize or ~~recovering~~enforce judgments of U.S. courts. China does not have any ~~losses~~treaties or ~~damages~~other asarrangements athat ~~result~~provide for the reciprocal recognition and enforcement of ~~non-performance~~foreign judgments with the United States. ~~Further~~In addition, according to the ~~legal~~PRC ~~environment~~Civil Procedures Law, courts in ~~China~~the isPRC will not asenforce ~~developed~~a asforeign injudgment ~~other~~against ~~jurisdictions.~~us ~~Uncertainties~~or inour ~~the~~directors and officers if they decide that ~~application~~the judgment violates basic principles of ~~various~~PRC ~~laws,~~law ~~rules~~or national sovereignty, ~~regulations~~security or ~~policies~~the inpublic ~~PRC~~interest. ~~legal~~So ~~system~~it ~~could~~is ~~limit~~uncertain whether ~~our~~a ~~liability~~PRC tocourt would enforce ~~the~~a ~~VIE~~judgment ~~Agreements and~~rendered ~~protect~~by ~~our~~a ~~interests~~court in the United States.

~~The~~Restrictions ~~payment~~on ~~arrangement~~currency ~~under~~exchange ~~the~~may ~~VIE~~limit ~~Agreements~~our ~~may~~ability ~~be challenged~~to byreceive ~~the~~and ~~PRC~~use ~~tax~~our ~~authorities~~sales revenue effectively.

WeAll ~~generate~~ our ~~revenues~~sales ~~through~~revenue ~~the~~and ~~payments~~expenses weare ~~receive~~denominated ~~pursuant~~in RMB. Under toPRC law, the ~~VIE~~RMB ~~Agreements.~~is Wecurrently ~~could~~convertible ~~face~~under ~~adverse~~the ~~tax~~“current ~~consequences~~account,” ifwhich ~~the~~includes ~~PRC~~dividends ~~tax~~and ~~authorities~~trade ~~determine~~and ~~that~~service-related foreign ~~the~~exchange ~~VIE~~transactions, ~~Agreements~~but ~~were~~ not ~~entered~~under ~~into~~the ~~based~~“capital onaccount,” ~~arm’s~~which ~~length~~includes ~~negotiations.~~foreign ~~For~~direct ~~example~~investment and loans. Currently, our PRC ~~tax~~operating ~~authorities~~subsidiary and affiliate may ~~adjust~~purchase ~~our~~foreign ~~income~~currencies ~~and~~for ~~expenses~~settlement of current account transactions, ~~for~~including ~~PRC~~payments ~~tax~~of ~~purposes~~dividends ~~which~~to ~~could~~us, ~~result~~without inthe ~~our~~approval ~~being~~of ~~subject~~the toState ~~higher~~Administration ~~tax~~of ~~liability~~Foreign Exchange, or ~~cause~~SAFE, ~~other~~by ~~adverse~~complying with ~~financial~~certain ~~consequences~~procedural requirements. However, the relevant PRC government authorities may limit or eliminate our ability to purchase foreign currencies in the future.

~~Risks~~Foreign ~~Related~~exchange Totransactions ~~Doing~~by ~~Business~~our PRC operating subsidiary under the capital account continue to be subject to significant foreign exchange controls and require the approval of or need to register with PRC government authorities, including SAFE. In ~~China~~particular, if our PRC operating subsidiary borrows foreign currency through loans from us or other foreign lenders, these loans must be registered with SAFE, and if we finance the subsidiary by means of additional capital contributions, these capital contributions must be approved by certain government authorities, including the Ministry of Commerce, or MOFCOM, or their respective local counterparts. These limitations could affect their ability to obtain foreign exchange through debt or equity financing.

~~Uncertainties with respect to the PRC legal system could limit the legal protections available to you and us.~~17

WeFluctuations ~~conduct~~in ~~substantially~~exchange ~~all~~rates ofcould ~~our~~adversely ~~business~~affect ~~through~~ our ~~operating~~ ~~subsidiary~~business and ~~affiliate in~~ the PRC. Our operating subsidiary and affiliate are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws applicable to foreign-invested enterprises. The PRC legal system is based on written statutes, and prior court decisions may be cited for reference but have limited precedential value. ~~Since 1979, a series~~ of ~~new~~our ~~PRC laws and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China~~securities. However, since the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit legal protections available to you and us. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.

WeThe ~~are~~value ~~a Delaware holding company and most~~ of our ~~assets~~common ~~are located~~stock ~~outside~~will ofbe ~~the~~indirectly ~~United~~affected ~~States.~~by ~~All of our current business operations are conducted in~~ the foreign ~~PRC~~exchange ~~through~~rate ~~our~~between ~~VIE entity, Harbin Dongxing~~U.S. Indollars ~~addition, all of our directors~~ and ~~officers~~RMB ~~are nationals~~ and ~~residents~~between ofthose ~~the~~currencies ~~PRC,~~ and ~~the~~other ~~assets~~currencies ~~of these~~in ~~persons~~which ~~are~~our ~~located~~sales ~~outside the United States. As a result, it~~ may be denominated. ~~difficult~~Appreciation ~~for~~or ~~you~~depreciation toin ~~effect~~the ~~service~~value of ~~process within~~ the ~~United~~RMB ~~States~~relative ~~upon these persons. It may also be difficult for you~~ to ~~enforce~~the in U.S. ~~courts~~dollar ~~judgments~~would onaffect ~~the civil~~our ~~liability~~financial ~~provisions~~results reported ofin ~~the~~ U.S. ~~federal~~dollar ~~securities~~terms ~~laws~~without ~~against~~giving useffect ~~and~~to ~~our~~any ~~officers~~underlying ~~and~~change ~~directors, none of whom are residents~~ in ~~the~~our ~~United~~business ~~States~~or ~~and~~results ~~the substantial majority~~ of ~~whose assets are located outside of the United States~~operations. InFluctuations ~~addition,~~in ~~there~~the isexchange ~~uncertainty~~rate aswill toalso ~~whether~~affect the ~~courts~~relative value of ~~the~~any ~~PRC~~dividend ~~would~~we ~~recognize~~issue orthat ~~enforce~~will ~~judgments~~be ofexchanged into U.S. ~~courts.~~dollars ~~China does~~as ~~not have any treaties or other arrangements that provide for the reciprocal recognition and enforcement of foreign~~well ~~judgments~~as ~~with~~earnings ~~the United States. In addition~~from, ~~according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors~~ and ~~officers if they decide that~~ the ~~judgment~~value ~~violates basic principles~~ of ~~PRC law or national sovereignty~~, ~~security~~any ~~or the public interest~~U.S. Sodollar-denominated itinvestments iswe ~~uncertain~~make ~~whether a PRC court would enforce a judgment rendered by a court~~ in the ~~United States~~future.

15 Although the People’s Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

~~Restrictions~~Very onlimited ~~currency~~hedging ~~exchange~~transactions ~~may~~are ~~limit~~available in China to reduce our ~~ability~~exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions. While we may enter into ~~receive~~hedging transactions in the future, the availability and ~~use~~effectiveness of these transactions may be limited, and we may not be able to successfully hedge our ~~sales~~exposure ~~revenue~~at ~~effectively~~all. In addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies.

~~All~~Restrictions ~~our~~under ~~sales revenue and expenses are denominated in RMB. Under~~ PRC law, ~~the~~on ~~RMB~~our isPRC ~~currently~~subsidiary's ~~convertible~~ability to ~~under~~make ~~the~~dividend ~~“current~~and ~~account,”~~other ~~which~~distributions ~~includes~~could ~~dividends~~materially and ~~trade~~adversely ~~and~~affect ~~service-related foreign~~our ~~exchange~~ability ~~transactions,~~to ~~but not under the “capital account~~grow,” ~~which~~make ~~includes~~investments ~~foreign~~or ~~direct~~complete acquisitions ~~investment~~that ~~and~~could ~~loans. Currently,~~benefit our ~~PRC operating subsidiary and affiliate may purchase foreign currencies for settlement of current account transactions~~business, ~~including~~ ~~payments~~pay of dividends to usyou, ~~without~~and ~~the~~otherwise ~~approval~~fund ofand ~~the~~conduct ~~State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. However, the relevant PRC government authorities may limit or eliminate~~ our ~~ability to purchase foreign currencies in the future~~businesses.

~~Foreign~~Substantially ~~exchange~~all ~~transactions~~of our revenues are earned by our PRC ~~operating~~ subsidiary ~~under~~. However, PRC regulations restrict the ~~capital~~ability ~~account~~of ~~continue~~our PRC subsidiary to bemake ~~subject~~dividend and other payments to ~~significant~~its ~~foreign~~offshore ~~exchange~~parent company. ~~controls~~PRC ~~and~~legal ~~require~~restrictions ~~the~~permit ~~approval~~payments of ordividends ~~need~~by toour ~~register with~~ PRC ~~government~~subsidiary ~~authorities,~~only ~~including~~out ~~SAFE.~~of Inits ~~particular,~~accumulated after-tax profits, if ~~our~~any, determined in accordance with PRC ~~operating~~accounting standards and regulations. Our PRC subsidiary ~~borrows~~is ~~foreign~~also ~~currency~~required ~~through~~under PRC laws ~~loans~~and ~~from~~regulations usto orallocate ~~other~~at ~~foreign~~least ~~lenders,~~10% ~~these~~of ~~loans~~our ~~must~~annual beafter-tax ~~registered~~profits determined in accordance with ~~SAFE,~~PRC ~~and~~GAAP ifto wea ~~finance~~statutory general reserve fund until the ~~subsidiary~~amounts byin ~~means~~said fund reaches 50% of ~~additional~~ the subsidiary's registered capital. ~~contributions,~~Allocations to these ~~capital~~statutory reserve ~~contributions~~funds ~~must~~can only be ~~approved~~used byfor ~~certain~~specific ~~government~~purposes ~~authorities,~~and ~~including~~are not transferable to us in the ~~Ministry~~ form of ~~Commerce~~loans, advances or ~~MOFCOM,~~cash ordividends. Any ~~their~~limitations ~~respective~~on ~~local~~the ~~counterparts.~~ability ~~These~~of ~~limitations~~our PRC subsidiary to transfer funds to us could ~~affect~~materially ~~their~~and adversely limit our ability to ~~obtain~~ ~~foreign~~grow, ~~exchange~~make ~~through~~investments ~~debt~~ or ~~equity~~acquisitions ~~financing~~that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.

~~Fluctuations~~Under inthe ~~exchange~~EIT ~~rates~~Law, ~~could~~we ~~adversely~~may ~~affect~~be ~~our business~~classified ~~and~~as ~~the~~a ~~value~~"resident enterprise" of China. Such classification will likely result in unfavorable tax consequences to us and our ~~securities~~non-PRC stockholders.

~~The~~Under ~~value~~the ofNew ~~our~~Income ~~common~~Tax ~~stock~~Law, ~~will~~enterprises beestablished ~~indirectly~~outside the ~~affected~~PRC bywhose ~~the foreign~~“de ~~exchange~~facto ~~rate~~management ~~between~~bodies” ~~U.S.~~are ~~dollars~~located ~~and~~in ~~RMB~~the ~~and~~PRC ~~between~~are ~~those~~considered ~~currencies~~“resident enterprises” and ~~other~~their ~~currencies~~global inincome ~~which~~will ~~our~~generally ~~sales~~be ~~may~~subject ~~be denominated.~~to ~~Appreciation~~the oruniform ~~depreciation~~25% inenterprise ~~the~~income ~~value~~tax ofrate. On December 6, 2007, the ~~RMB~~PRC ~~relative~~State toCouncil promulgated the ~~U.S.~~Implementation ~~dollar~~Regulations ~~would~~on ~~affect~~the ~~our~~New ~~financial~~Income ~~results~~Tax Law, which define ~~reported~~“de infacto ~~U.S.~~management ~~dollar~~bodies” ~~terms~~as ~~without~~bodies ~~giving~~that ~~effect~~have tomaterial ~~any~~and ~~underlying~~overall ~~change~~management incontrol ~~our~~over the business, personnel, oraccounts ~~results~~and properties of ~~operations~~an enterprise. ~~Fluctuations in~~In ~~the~~addition, ~~exchange~~a ~~rate~~circular ~~will~~issued ~~also~~by ~~affect~~ the ~~relative~~State ~~value~~Administration of ~~any~~Taxation on ~~dividend~~April we22, ~~issue~~2009 provides that ~~will~~a beforeign ~~exchanged~~enterprise ~~into~~controlled ~~U.S.~~by ~~dollars~~a asPRC ~~well~~ company or a PRC company group will be classified as a ~~earnings~~“resident ~~from,~~enterprise” ~~and~~with ~~the~~its ~~value~~“de ~~of,~~facto ~~any~~management ~~U.S.~~bodies” ~~dollar-denominated~~located ~~investments~~within wethe ~~make~~PRC inif the ~~future.~~following requirements are satisfied:

In August 2015, the PRC government devaluated the RMB by approximately 3.5%, and during 2016 the PRC government devalued its currency by an additional 6.5%. Additional devaluation could occur in the future and affect our results.18

~~Since~~(i) ~~July~~the ~~2005,~~senior ~~the~~management ~~RMB~~and iscore nomanagement ~~longer~~departments ~~pegged~~in tocharge ~~the~~of ~~U.S.~~its ~~dollar. Although~~daily ~~the~~operations ~~People’s~~function ~~Bank~~mainly ofin ~~China~~the ~~regularly~~PRC; ~~intervenes~~(ii) inits ~~the~~financial ~~foreign~~and ~~exchange~~human ~~market~~resources decisions are subject to ~~prevent~~determination ~~significant~~or ~~short-term fluctuations~~approval inby ~~the~~persons ~~exchange~~or ~~rate,~~bodies in the ~~RMB~~PRC; ~~may~~(iii) ~~appreciate~~its ormajor ~~depreciate~~assets, ~~significantly~~accounting inbooks, ~~value~~company ~~against~~seals, ~~the~~and ~~U.S.~~minutes ~~dollar~~and infiles ~~the~~of ~~medium to~~its ~~long~~board ~~term.~~and ~~Moreover,~~shareholders' itmeetings isare ~~possible~~located ~~that~~or kept in the ~~future~~ PRC; ~~authorities~~and ~~may~~(iv) ~~lift~~more ~~restrictions~~than onhalf ~~fluctuations~~of in the ~~RMB~~enterprise's ~~exchange rate~~directors ~~and~~or ~~lessen~~senior ~~intervention~~management inwith ~~the~~voting ~~foreign~~rights ~~exchange~~reside ~~market~~in the PRC.

~~Very~~If ~~limited~~the ~~hedging~~PRC ~~transactions~~tax authorities determine that we are ~~available~~a in“resident enterprise” ~~China~~for toPRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we ~~reduce~~may ~~our~~be ~~exposure~~subject to ~~exchange~~the enterprise income tax at a rate ~~fluctuations~~of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. ToIn ~~date~~our case, wethis ~~have~~would ~~not~~mean ~~entered~~that ~~into~~non-China ~~any~~source ~~hedging~~income ~~transactions.~~would ~~While~~be wesubject ~~may enter~~to ~~into~~PRC ~~hedging~~enterprise ~~transactions~~income intax at ~~the~~a ~~future~~rate of 25%. Second, although under the ~~availability~~EIT Law and ~~effectiveness~~its ofimplementing ~~these~~rules ~~transactions~~dividends ~~may~~paid beto ~~limited,~~us ~~and~~from our PRC subsidiary would qualify as “tax-exempt income,” we ~~may~~cannot guarantee that such dividends will not be ~~able~~subject to ~~successfully~~a ~~hedge~~10% ~~our~~withholding ~~exposure~~tax, as atthe ~~all.~~PRC Inforeign ~~addition~~exchange control authorities, ~~our~~which ~~foreign~~enforce ~~currency~~the ~~exchange~~withholding ~~losses~~tax, ~~may~~have benot yet issued guidance with respect to ~~magnified~~the byprocessing of outbound remittances to entities that are treated as resident enterprises for PRC ~~exchange~~enterprise ~~control~~income ~~regulations~~tax purposes. Finally, it is possible that ~~restrict~~future guidance issued with respect to the new “resident enterprise” classification could result in a situation in which a 10% withholding tax is imposed on dividends we pay to our ~~ability~~non-PRC stockholders and with respect to ~~convert~~gains ~~RMB~~derived ~~into~~by ~~foreign~~our ~~currencies~~non-PRC stockholders from transferring our shares.

16 If we were treated as a “resident enterprise” by PRC tax authorities, we would be subject to taxation in both the U.S. and China, and our PRC tax may not be creditable against our U.S. tax.

~~Restrictions~~Failure ~~under~~to ~~PRC~~comply ~~law~~with ~~on our~~ PRC ~~subsidiary's~~regulations ~~ability~~ relating to ~~make~~the ~~dividend~~establishment of ~~and~~offshore ~~other~~special ~~distributions~~purpose ~~could~~companies ~~materially~~by ~~and~~PRC ~~adversely~~residents ~~affect~~may subject our ~~ability~~PRC resident shareholders to ~~grow~~personal liability, ~~make~~limit ~~investments~~our ability to acquire PRC companies or ~~complete acquisitions~~to ~~that~~inject ~~could~~capital ~~benefit~~into our ~~business~~PRC subsidiary or affiliate, ~~pay~~limit ~~dividends~~our toPRC ~~you,~~subsidiary’s and affiliate’s ~~otherwise~~ability ~~fund~~to ~~and~~distribute ~~conduct~~profits ~~our~~to ~~businesses~~us or otherwise materially adversely affect us.

~~Substantially~~On ~~all~~July of4, ~~our~~2014, ~~revenues~~SAFE ~~are~~issued ~~earned~~the byNotice ~~our~~on ~~PRC~~Issues ~~subsidiary.~~Relating ~~However,~~to ~~PRC regulations restrict~~ the ~~ability~~Administration of ~~our~~Foreign ~~PRC~~Exchange ~~subsidiary~~for toOverseas ~~make~~Investment ~~dividend~~and Financing and ~~other~~Reverse ~~payments~~Investment toby ~~its~~Domestic ~~offshore~~Residents ~~parent~~via ~~company.~~Special ~~PRC~~Purpose ~~legal~~Vehicles, ~~restrictions~~or ~~permit~~Circular ~~payments~~37, ofwhich ~~dividends~~replaced bythe ~~our~~Notice ~~PRC~~on ~~subsidiary~~Issues ~~only~~Relating ~~out~~to ofthe ~~its~~Administration ~~accumulated~~of ~~after-tax~~Foreign ~~profits,~~Exchange iffor ~~any,~~the ~~determined~~Financing inand ~~accordance~~Reverse ~~with~~Investment ~~PRC~~by ~~accounting~~Domestic ~~standards~~Residents ~~and~~via ~~regulations.~~Offshore ~~Our~~Special ~~PRC~~Purpose ~~subsidiary~~Vehicles isissued ~~also~~by ~~required~~SAFE ~~under~~in ~~PRC laws~~October ~~and~~2005, ~~regulations~~or toCircular ~~allocate~~75. atPursuant ~~least~~to ~~10%~~Circular of37, ~~our~~any ~~annual~~PRC ~~after-tax~~residents, ~~profits~~including ~~determined~~both ~~in accordance with~~ PRC ~~GAAP~~institutions toand aindividual ~~statutory~~residents, are ~~general~~required ~~reserve~~to ~~fund~~register ~~until~~with the ~~amounts~~local inSAFE ~~said~~branch ~~fund~~before ~~reaches~~making ~~50%~~any ofcontribution ~~the~~to ~~subsidiary's~~a ~~registered~~company ~~capital.~~set ~~Allocations~~up toor ~~these~~controlled ~~statutory reserve~~by ~~funds~~the ~~can~~PRC ~~only~~residents outside beof ~~used~~the PRC for ~~specific~~the ~~purposes~~purpose ~~and~~of ~~are~~overseas ~~not~~investment ~~transferable~~or tofinancing uswith intheir ~~the~~legally ~~form~~owned ofdomestic ~~loans, advances~~ or ~~cash~~offshore ~~dividends.~~assets or ~~Any~~interests, ~~limitations~~referred onto ~~the~~in ~~ability~~this ofcircular ~~our~~as ~~PRC~~a ~~subsidiary~~"special topurpose ~~transfer~~vehicle." ~~funds~~Under toCircular us37, ~~could~~the ~~materially~~term ~~and~~"PRC ~~adversely~~institutions" refers ~~limit~~to ~~our~~entities ~~ability~~with ~~to grow,~~legal ~~make~~person ~~investments~~status or ~~acquisitions~~other ~~that~~economic ~~could~~organizations beestablished ~~beneficial~~within tothe ~~our~~territory ~~business,~~of ~~pay~~the ~~dividends~~PRC. ~~and~~The ~~otherwise~~term "PRC ~~fund~~individual ~~and~~residents" ~~conduct~~includes ~~our business.~~all PRC citizens

~~Under the EIT Law, we may be classified as a "resident enterprise" of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders.~~19

~~Under~~(also ~~the~~including ~~New~~PRC ~~Income~~citizens ~~Tax~~abroad) ~~Law,~~and ~~enterprises~~foreigners ~~established~~who ~~outside~~habitually reside in the PRC ~~whose~~for ~~“de~~economic ~~facto~~benefits. ~~management~~A ~~bodies”~~registered ~~are~~special ~~located~~purpose vehicle is required to amend its SAFE registration in the event ~~PRC~~of ~~are~~any ~~considered~~change “of basic information including PRC individual resident ~~enterprises”~~shareholder, ~~and~~name, term of operation, or PRC individual ~~their~~resident's ~~global~~increase ~~income~~or ~~will~~decrease ~~generally~~of becapital, ~~subject~~transfer toor ~~the~~exchange ~~uniform~~of ~~25%~~shares, ~~enterprise~~merger, ~~income~~division ~~tax~~or ~~rate~~other material changes. OnIn ~~December~~addition, if 6a non-listed special purpose vehicle grants any equity incentives to directors, ~~2007~~supervisors or employees of domestic companies under its direct or indirect control, the relevant PRC ~~State Council~~individual ~~promulgated~~residents could register with the ~~Implementation~~local ~~Regulations~~SAFE onbranch ~~the~~before ~~New~~exercising such ~~Income~~options. ~~Tax~~The ~~Law,~~SAFE ~~which~~simultaneously ~~define~~issued ~~“de~~a ~~facto~~series ~~management~~of ~~bodies”~~guidances to its local branches with respect to the implementation of asCircular ~~bodies~~37. ~~that~~Circular ~~have~~37 ~~material~~modified ~~and~~certain ~~overall~~defined ~~management~~terms ~~control~~under ~~over~~Circular 75 to clarify the ~~business,~~SAFE ~~personnel~~registration scope. For example, Circular ~~accounts~~37 ~~and~~broadened ~~properties~~the definition of anspecial ~~enterprise.~~purpose vehicle to offshore entities that were (i) established for the purpose Inof overseas investments by PRC residents (in addition, ato ~~circular~~for ~~issued~~the purpose of financing as defined under Circular 75) and (ii) established by ~~the~~PRC ~~State~~residents ~~Administration~~with oftheir ~~Taxation~~legally onowned ~~April~~offshore ~~22,~~assets ~~2009~~or ~~provides~~interests ~~that~~(in aaddition to domestic assets or interests as defined under Circular 75); and it also broadened the definition of reverse investment to include establishing new foreign ~~enterprise~~invested ~~controlled~~entities byor projects as a way of domestic direct investment by PRC ~~company~~residents, directly or indirectly, through a ~~PRC~~special ~~company~~purpose ~~group~~vehicle, which ~~will~~was beexcluded ~~classified~~by asCircular a75. ~~“resident~~Furthermore, ~~enterprise”~~Circular ~~with~~37 ~~its~~modified ~~“de~~certain ~~facto~~SAFE ~~management~~registration procedures and requirements for ~~bodies”~~special ~~located~~purpose ~~within~~vehicles and clarified the ~~PRC~~SAFE ifregistration ~~the~~procedures ~~following~~for ~~requirements~~equity ~~are~~incentive ~~satisfied:~~awards granted by non-listed special purpose vehicles to directors, supervisors or employees of their controlled domestic companies.

~~(i)~~We ~~the~~have ~~senior~~advised ~~management~~our ~~and~~shareholders ~~core~~who ~~management~~are ~~departments~~PRC residents, as defined in ~~charge~~Circular 37, to register with the relevant branch of ~~its~~SAFE, ~~daily~~as ~~operations~~currently ~~function~~required, ~~mainly~~in connection with their equity interests in ~~the~~us and our acquisitions of equity interests in our PRC; ~~(ii)~~subsidiary ~~its~~and ~~financial~~affiliate. However, as SAFE registration is a personal obligation of each shareholder, we cannot provide any assurances that their existing registrations have fully complied with, and they ~~human~~have ~~resources~~made ~~decisions~~all ~~are~~necessary ~~subject~~amendments to ~~determination~~their registration to fully comply with, all applicable registrations or ~~approval~~approvals required by ~~persons~~Circular or37. ~~bodies~~Moreover, inbecause ~~the~~of ~~PRC;~~uncertainty ~~(iii)~~over ~~its~~how ~~major~~Circular ~~assets~~37 will be interpreted and implemented, ~~accounting~~and ~~books~~how or whether SAFE will apply it to us, ~~company~~we ~~seals~~cannot predict how it will affect our business operations or future strategies. For example, our present and ~~minutes~~prospective ~~and~~PRC ~~files~~subsidiaries’ ofability ~~its~~to ~~board~~conduct foreign exchange activities, such as the remittance of dividends and foreign ~~shareholders'~~currency-denominated ~~meetings~~borrowings, ~~are~~may ~~located~~be orsubject ~~kept~~to incompliance ~~the~~with Circular 37 by our PRC; ~~and~~resident ~~(iv)~~beneficial ~~more~~holders. In ~~than~~addition, ~~half~~such ofPRC residents may not always be able to complete the ~~enterprise's~~necessary ~~directors~~registration procedures required by Circular 37. We also have little control over either our present or ~~senior~~prospective ~~management~~direct or indirect shareholders or the outcome of such registration procedures. A failure by our PRC resident beneficial holders or future PRC resident shareholders to comply with ~~voting~~Circular ~~rights~~37, ~~reside~~if SAFE inrequires ~~the~~it, could subject these PRC resident beneficial holders to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiaries’ ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.

IfAdditionally ~~the~~in ~~PRC~~October ~~tax~~of ~~authorities~~2016, ~~determine~~the ~~that~~Interim weMeasures ~~are~~for ~~a “resident~~the ~~enterprise”~~Administration ~~for~~of ~~PRC~~the ~~enterprise~~Establishment ~~income~~and ~~tax~~Record ~~purposes,~~Alteration aof ~~number~~Foreign ofInvestment ~~unfavorable~~Enterprises ~~PRC~~(“Interim ~~tax~~Measures”) took ~~consequences~~effect ~~could~~and ~~follow.~~now ~~First,~~mandates ~~we may~~that beWFOEs, ~~subject~~among toother ~~the~~types ~~enterprise~~of ~~income~~PRC ~~tax~~domiciled atcompanies amust ~~rate~~register ofwith ~~25%~~MOFCOM onand ~~our~~request MOFCOM’s ~~worldwide~~approval ~~taxable~~for ~~income~~any aschange ~~well~~in asownership ~~PRC~~by ~~enterprise~~foreign ~~income~~investors. ~~tax reporting~~Neither ~~obligations~~our U.S. Inparent company nor our ~~case~~operating subsidiary, ~~this~~Harbin ~~would~~Dongxing, ~~mean~~are ~~that~~affected ~~non-China~~by ~~source~~the ~~income~~Interim ~~would~~Measures, bebut ~~subject~~our tosubsidiary ~~PRC~~Harbin ~~enterprise~~Donghui ~~income~~is ~~tax~~subject to the atInterim aMeasures ~~rate~~as ofa ~~25%~~WFOE. ~~Second~~As such, ~~although~~any ~~under~~change ~~the~~in ~~EIT~~ownership ~~Law~~of ~~and~~Harbin ~~its~~Donghui ~~implementing~~would ~~rules~~require ~~dividends~~the ~~paid~~approval toof usMOFCOM, ~~from~~and ~~our PRC subsidiary would~~such ~~qualify~~approval ascannot ~~“tax-exempt~~be ~~income,”~~guaranteed. weAny ~~cannot~~failure ~~guarantee~~to ~~that~~seek ~~such~~approval ~~dividends~~of ~~will~~any ~~not~~change bein ~~subject~~ownership toof aHarbin ~~10%~~Donghui ~~withholding~~could ~~tax,~~create asliability ~~the~~affecting ~~PRC~~our ~~foreign~~U.S. ~~exchange~~parent ~~control authorities~~company, ~~which~~and ~~enforce~~ the ~~withholding~~potential ~~tax,~~barrier ~~have~~in ~~not yet~~changing ~~issued~~the ~~guidance~~ownership ~~with~~structure ~~respect~~of to the ~~processing~~U.S. ofparent and ~~outbound~~its ~~remittances~~subsidiaries toowned ~~entities~~by ~~that~~Harbin ~~are~~Donghui ~~treated~~could aslimit ~~resident~~opportunities ~~enterprises~~ for ~~PRC~~restructuring. ~~enterprise~~Harbin ~~income~~Donghui ~~tax~~has ~~purposes.~~already registered ~~Finally,~~its itcurrent isownership ~~possible~~with ~~that~~MOFCOM ~~future~~prior ~~guidance~~to ~~issued~~the ~~with~~effective ~~respect~~date toof the ~~new~~Interim ~~“resident enterprise”~~Measures, ~~classification~~so ~~could~~under ~~result~~the inU.S. Company’s acurrent ~~situation~~corporate instructure, ~~which~~the aInterim ~~10%~~Measures ~~withholding~~will ~~tax~~not isaffect ~~imposed~~our onbusiness. ~~dividends~~Harbin weDonghui ~~pay~~does tonot ~~our~~have ~~non-PRC~~any ~~stockholders~~material operations, and ~~with~~we ~~respect~~plan to ~~gains~~retain ~~derived~~the bycurrent ~~our~~ownership ~~non-PRC~~structure ~~stockholders~~under ~~from~~Harbin ~~transferring~~Donghui’s ~~our~~existing registration ~~shares~~with MOFCOM in order to avoid any risk.

17 20

IfWe wemay ~~were~~be ~~treated~~exposed asto aliabilities ~~“resident~~under ~~enterprise”~~the byForeign ~~PRC~~Corrupt ~~tax~~Practices ~~authorities,~~Act weand ~~would~~Chinese beanti-corruption ~~subject~~law, toand ~~taxation~~any indetermination ~~both~~that ~~the~~we ~~U.S.~~violated ~~and~~these ~~China,~~laws ~~and~~could ~~our~~have ~~PRC~~a ~~tax~~material ~~may~~adverse effect ~~not~~on ~~be creditable against~~ our ~~U.S.~~ ~~tax~~business.

~~Failure~~We toare ~~comply~~subject ~~with~~to ~~PRC~~the ~~regulations~~U.S. ~~relating~~Foreign toCorrupt ~~the~~Practices ~~establishment~~Act, (“FCPA”) ofand ~~offshore~~other ~~special~~laws ~~purpose~~that ~~companies~~prohibit byimproper ~~PRC~~payments ~~residents~~or ~~may~~offers ~~subject~~of ~~our~~payments ~~PRC~~to ~~resident~~foreign ~~shareholders~~governments toand ~~personal~~their ~~liability,~~officials ~~limit~~and ~~our~~political parties ~~ability~~by toU.S. ~~acquire~~persons ~~PRC~~and ~~companies~~issuers orfor tothe ~~inject~~purpose ~~capital~~of ~~into~~obtaining ~~our~~or ~~PRC~~retaining ~~subsidiary~~business. orWe ~~affiliate,~~are ~~limit~~also ~~our~~subject ~~PRC~~to ~~subsidiary’s~~Chinese ~~and~~anti-corruption ~~affiliate’s~~law, ~~ability~~which tostrictly ~~distribute~~prohibits ~~profits~~the topayment usof orbribes ~~otherwise~~to ~~materially~~government ~~adversely affect us~~officials.

OnWe ~~July~~principally have 4operations, ~~2014,~~agreements ~~SAFE~~with ~~issued~~third ~~the Notice on Issues Relating~~parties ~~to the Administration of Foreign Exchange for Overseas Investment~~ and ~~Financing~~make ~~and~~sales ~~Reverse~~in ~~Investment by Domestic Residents via Special Purpose Vehicles~~China, ~~or Circular 37,~~ which ~~replaced~~may ~~the~~experience ~~Notice~~corruption. onOur ~~Issues~~activities ~~Relating~~in toChina create the ~~Administration~~risk of ~~Foreign~~unauthorized ~~Exchange for~~payments ~~the Financing and Reverse Investment by Domestic Residents via Offshore Special Purpose Vehicles issued by SAFE in October 2005,~~ or ~~Circular 75. Pursuant to Circular 37, any PRC residents, including both PRC institutions and individual residents, are~~offers ~~required~~of topayments ~~register with the local SAFE branch before making any contribution to a company set up or controlled~~ by ~~the~~one ~~PRC residents outside~~ of the ~~PRC~~employees, ~~for~~consultants ~~the~~or ~~purpose~~distributors of ~~overseas~~our ~~investment~~company, orbecause ~~financing~~these ~~with~~parties ~~their~~are ~~legally~~not ~~owned~~always ~~domestic~~subject ~~or offshore assets or~~to ~~interests,~~our ~~referred to in this circular as a "special purpose vehicle~~control." ~~Under~~We ~~Circular~~believe ~~37,~~that ~~the term "PRC institutions" refers~~ to ~~entities~~date ~~with~~we ~~legal~~have ~~person~~complied ~~status~~in orall ~~other~~material ~~economic~~respects ~~organizations~~with ~~established within~~ the ~~territory~~provisions of the ~~PRC.~~FCPA ~~The term "PRC individual residents" includes all PRC citizens (also including PRC citizens abroad)~~ and ~~foreigners~~Chinese ~~who habitually~~anti-corruption ~~reside in the PRC for economic benefits~~law. AHowever, ~~registered~~our ~~special~~existing ~~purpose~~safeguards ~~vehicle~~and ~~is required to amend its SAFE registration in the event of~~ any ~~change~~future ofimprovements ~~basic~~may ~~information~~prove ~~including~~to ~~PRC~~be ~~individual~~less ~~resident~~than ~~shareholder~~effective, ~~name,~~and ~~term~~the ~~of operation~~employees, ~~or PRC individual~~consultants ~~resident's increase~~ or ~~decrease~~distributors of ~~capital,~~our ~~transfer~~Company ormay ~~exchange~~engage ofin ~~shares,~~conduct ~~merger,~~for ~~division~~which orwe ~~other~~might ~~material~~be ~~changes.~~held In addition, if a non-listed special purpose vehicle grants any equity incentives to directors, supervisors or employees of domestic companies under its direct or indirect control, the relevant PRC individual residents could register with the local SAFE branch before exercising such optionsresponsible. ~~The~~Violations ~~SAFE simultaneously issued a series~~ of ~~guidances to its local branches with respect to~~ the ~~implementation~~FCPA ~~of Circular~~or ~~37. Circular 37 modified certain defined terms under Circular 75 to clarify the SAFE registration scope. For example,~~Chinese ~~Circular~~anti-corruption 37law ~~broadened~~may ~~the~~result ~~definition of special purpose vehicle to offshore entities that were (i) established for the purpose of overseas investments by PRC residents (~~in ~~addition~~severe tocriminal ~~for the purpose of financing as defined under Circular 75) and (ii) established by PRC residents with their legally owned offshore assets~~ or ~~interests~~civil ~~(in~~sanctions, ~~addition to domestic assets or interests as defined under Circular 75);~~ and itwe ~~also~~may ~~broadened~~be ~~the~~subject ~~definition of reverse investment~~ to ~~include~~other ~~establishing new foreign invested entities or projects as a way of domestic direct investment by PRC residents~~liabilities, ~~directly~~which orcould ~~indirectly, through a special purpose vehicle,~~negatively ~~which~~affect ~~was~~our ~~excluded by Circular 75. Furthermore~~business, ~~Circular~~operating 37results ~~modified certain SAFE registration procedures~~ and ~~requirements~~financial for special purpose vehicles and clarified the SAFE registration procedures for equity incentive awards granted by non-listed special purpose vehicles to directors, supervisors or employees of their controlled domestic companiescondition.

WeRisks ~~have~~Related ~~advised our shareholders who are PRC residents, as defined in Circular 37,~~ to ~~register with~~ the ~~relevant~~Market ~~branch~~for ofOur ~~SAFE, as currently required, in connection with their equity interests~~Stock in us and our acquisitions of equity interests in our PRC subsidiary and affiliate. However, as SAFE registration is a personal obligation of each shareholder, we cannot provide any assurances that their existing registrations have fully complied with, and they have made all necessary amendments to their registration to fully comply with, all applicable registrations or approvals required by Circular 37. Moreover, because of uncertainty over how Circular 37 will be interpreted and implemented, and how or whether SAFE will apply it to us, we cannot predict how it will affect our business operations or future strategies. For example, our present and prospective PRC subsidiaries’ ability to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with Circular 37 by our PRC resident beneficial holders. In addition, such PRC residents may not always be able to complete the necessary registration procedures required by Circular 37. We also have little control over either our present or prospective direct or indirect shareholders or the outcome of such registration procedures. A failure by our PRC resident beneficial holders or future PRC resident shareholders to comply with Circular 37, if SAFE requires it, could subject these PRC resident beneficial holders to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiaries’ ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.Generally

18 The Company may fail to secure a listing for its common stock or, even if it obtains a listing, trading in the common stock may be inadequate to provide liquidity for our shareholders.

~~Additionally~~We plan in ~~October~~the offuture ~~2016,~~to ~~the~~request ~~Interim~~that ~~Measures~~a ~~for~~market ~~the~~maker ~~Administration~~apply to list ofour ~~the~~common ~~Establishment~~stock ~~and~~on ~~Record~~an ~~Alteration~~interdealer ofelectronic ~~Foreign~~quotation ~~Investment~~system, ~~Enterprises~~such ~~(“Interim~~as ~~Measures”)~~the ~~took~~OTC ~~effect~~Pink ~~and~~Market or the OTCQB. Many market makers refuse ~~now~~to ~~mandates~~be ~~that~~involved ~~WFOEs~~in such applications, ~~among~~as ~~other~~the ~~types~~process of ~~PRC~~applying ~~domiciled~~for ~~companies~~a ~~must~~listing ~~register~~consumes ~~with~~the ~~MOFCOM~~time and ~~request~~effort ~~MOFCOM’s~~of ~~approval~~their personnel, ~~for~~and ~~any~~often ~~change~~provides inlittle ~~ownership~~or byno ~~foreign~~reward ~~investors.~~to ~~Neither~~the ~~our~~market Umaker.S. ~~parent~~If ~~company~~we ~~nor~~are ~~our~~unable ~~operating~~to ~~subsidiary,~~persuade ~~Harbin~~a ~~Dongxing, are~~market ~~affected~~maker byto ~~the~~sponsor ~~Interim~~our ~~Measures,~~common ~~but~~stock on ~~our~~an ~~subsidiary~~interdealer ~~Harbin~~electronic ~~Donghui~~quotation issystem, ~~subject~~we towill ~~the~~not ~~Interim~~obtain ~~Measures~~a aslisting, aand ~~WFOE.~~our Ascommon ~~such, any~~stock ~~change~~will inremain ~~ownership~~illiquid. ofThe ~~Harbin~~application process ~~Donghui~~itself ~~would~~is ~~require~~likely ~~the~~to ~~approval~~take ofseveral ~~MOFCOM~~months, and ~~such~~will ~~approval~~not ~~cannot~~necessarily beresult ~~guaranteed.~~in ~~Any~~a ~~failure to~~listing, ~~seek~~as ~~approval~~FINRA, ofwhich ~~any~~must ~~change~~authorize inthe listing, ~~ownership~~has ofdiscretion ~~Harbin~~to ~~Donghui~~refuse ~~could~~a ~~create~~listing ~~liability~~to ~~affecting~~a ~~our~~security ~~U.S.~~for ~~parent~~many ~~company,~~possible ~~and~~reasons ~~the potential~~pertaining ~~barrier~~to ~~in changing~~ the ~~ownership~~likely ~~structure~~character of the ~~U.S.~~trading market ~~parent~~that ~~and~~could ~~its~~develop ~~subsidiaries~~in ~~owned~~the bysecurity. ~~Harbin~~Finally, ~~Donghui~~even ~~could~~if ~~limit opportunities~~and ~~for~~when ~~restructuring.~~our ~~Harbin~~common ~~Donghui~~stock ~~has~~does ~~already~~become ~~registered~~listed, ~~its~~the ~~current~~small ~~ownership~~number ~~with~~of ~~MOFCOM~~holders of ~~prior~~our tocommon ~~the~~stock ~~effective date~~means ofthat ~~the~~for ~~Interim~~some ~~Measures,~~indefinite soperiod ~~under~~of time the ~~U.S.~~trading ~~Company’s~~volume ~~current~~in ~~corporate~~our ~~structure,~~common ~~the~~stock ~~Interim~~will ~~Measures~~be ~~will~~very ~~not~~low. ~~affect~~For ~~our~~all ~~business.~~of ~~Harbin~~these ~~Donghui~~reasons, ~~does~~for ~~not~~some ~~have~~period ~~any~~of ~~material~~the ~~operations~~future, ~~and~~our weshareholders ~~plan~~may tofind ~~retain~~it ~~the~~difficult ~~current~~or ~~ownership~~impossible ~~structure~~to ~~under Harbin~~sell ~~Donghui’s~~their ~~existing~~shares when ~~registration~~they ~~with~~wish ~~MOFCOM~~and infor ~~order~~prices tothey ~~avoid~~consider ~~any risk~~reasonable.

WeIf ~~may~~our becommon ~~exposed~~stock todoes ~~liabilities~~become ~~under~~listed ~~the~~for ~~Foreign Corrupt Practices Act and Chinese anti-corruption law~~trading, ~~and~~it ~~any~~is likely ~~determination~~to ~~that~~subject weto ~~violated~~penny ~~these~~stock ~~laws could have a material adverse effect on our business~~rules.

WeIf ~~are~~a market for our common stock does develop, unless the market price exceeds $5.00 per share, our common stock will be subject to ~~the~~SEC Uregulations for "penny stock".S. ~~Foreign~~SEC Rules ~~Corrupt~~15g-1 ~~Practices~~through 15g-9 under the Exchange Act, ~~(“FCPA”)~~impose certain sales practice requirements on broker-dealers which sell ~~and~~penny stock to persons other ~~laws~~than ~~that~~established ~~prohibit~~customers ~~improper~~and ~~payments~~“accredited orinvestors” ~~offers~~(generally, individuals with net worth's in excess of ~~payments~~$1,000,000 toor ~~foreign~~annual ~~governments~~incomes ~~and~~exceeding ~~their~~$200,000 ~~officials~~(or ~~and~~$300,000 ~~political~~together ~~parties~~with their spouses)). For transactions covered by ~~U.S.~~this ~~persons~~rule, ~~and~~a ~~issuers~~broker-dealer must make a special suitability determination for the ~~purpose~~purchaser ofand ~~obtaining~~have received orthe ~~retaining~~purchaser's ~~business.~~written Weconsent ~~are~~to ~~also~~the ~~subject~~transaction prior to ~~Chinese~~the ~~anti-corruption~~sale. This rule would adversely affects the ability ~~law,~~of ~~which~~broker-dealers ~~strictly~~to ~~prohibits~~sell our common stock and the ~~payment~~ability of ~~bribes~~our stockholders to ~~government~~sell ~~officials~~their shares of common stock.

We principally have operations, agreements with third parties and make sales in China, which may experience corruption. Our activities in China create the risk of unauthorized payments or offers of payments by one of the employees, consultants or distributors of our company, because these parties are not always subject to our control. We believe that to date we have complied in all material respects with the provisions of the FCPA and Chinese anti-corruption law. However, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants or distributors of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA or Chinese anti-corruption law may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition.21

19 Penny stock includes any equity security that is not listed on a national exchange and has a market price of less than $5.00 per share, subject to certain exceptions. The regulations require that prior to any non-exempt buy/sell transaction in a penny stock, a disclosure schedule set forth by the SEC relating to the penny stock market must be delivered to the purchaser of such penny stock. This disclosure must include the amount of commissions payable to both the broker-dealer and the registered representative and current price quotations for the common stock. The regulations also require that monthly statements be sent to holders of penny stock that disclose recent price information for the penny stock and information of the limited market for penny stocks. If applicable, these requirements would adversely affect the market liquidity of our common stock.

~~Risks~~Item ~~Related~~1B. toUnresolved ~~the~~Staff ~~Market for Our Stock Generally~~Comments

~~The~~Not ~~Company may fail to secure a listing for its common stock or, even if it obtains a listing, trading in the common stock may be inadequate to provide liquidity for our shareholders~~Applicable.

We plan in the future to request that a market maker apply to list our common stock on an interdealer electronic quotation system, such as the OTC Pink Market or the OTCQB. Many market makers refuse to be involved in such applications, as the process of applying for a listing consumes the time and effort of their personnel, and often provides little or no reward to the market maker. If we are unable to persuade a market maker to sponsor our common stock on an interdealer electronic quotation system, we will not obtain a listing, and our common stock will remain illiquid. The application process itself is likely to take several months, and will not necessarily result in a listing, as FINRA, which must authorize the listing, has discretion to refuse a listing to a security for many possible reasons pertaining to the likely character of the trading market that could develop in the security. Finally, even if and when our common stock does become listed, the small number of holders of our common stock means that for some indefinite period of time the trading volume in our common stock will be very low. For all of these reasons, for some period of the future, our shareholders may find it difficult or impossible to sell their shares when they wish and for prices they consider reasonable.

If our common stock does become listed for trading, it is likely to subject to penny stock rules.

If a market for our common stock does develop, unless the market price exceeds $5.00 per share, our common stock will be subject to SEC regulations for "penny stock". SEC Rules 15g-1 through 15g-9 under the Exchange Act impose certain sales practice requirements on broker-dealers which sell penny stock to persons other than established customers and “accredited investors” (generally, individuals with net worth's in excess of $1,000,000 or annual incomes exceeding $200,000 (or $300,000 together with their spouses)). For transactions covered by this rule, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction prior to the sale. This rule would adversely affects the ability of broker-dealers to sell our common stock and the ability of our stockholders to sell their shares of common stock.

Penny stock includes any equity security that is not listed on a national exchange and has a market price of less than $5.00 per share, subject to certain exceptions. The regulations require that prior to any non-exempt buy/sell transaction in a penny stock, a disclosure schedule set forth by the SEC relating to the penny stock market must be delivered to the purchaser of such penny stock. This disclosure must include the amount of commissions payable to both the broker-dealer and the registered representative and current price quotations for the common stock. The regulations also require that monthly statements be sent to holders of penny stock that disclose recent price information for the penny stock and information of the limited market for penny stocks. If applicable, these requirements would adversely affect the market liquidity of our common stock.

Item B. Unresolved Staff Comments

Not Applicable.

Item 2. Properties

Harbin Dongxing leases aits office facility ~~of 480 m2~~ at 26633 Keji'er ~~Hengshan~~Street ~~Road~~ in Harbin, ~~although~~from ~~the~~Cheng ~~first~~Zhao, ~~floor~~its ~~(approximately~~Chairman, ~~120~~pursuant ~~m2) is subleased~~ to a ~~store. The~~ lease ~~provided~~ ~~for~~with ~~termination~~a onterm ~~April~~from 17May 1, 2018, ~~but was extended~~ to ~~October~~December ~~2018~~31, 2019. The annual rental is approximately $4918,000. ~~The sublease provides for annual rental of approximately $17,000, and is co-terminous with the master lease.~~

Recently we entered into a ten year lease for premises in the International Finance Building in the Songbei District of Harbin. We plan to move our administrative offices to the new premises in May 2018.

Item 3. Legal Proceedings

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

PART II

(a) Market Information

There has never been a market for the Company's common stock.

(b) Shareholders

Our shareholders list contains the names of ~~296~~297 stockholders of record of the Company’s Common Stock.

(c) Dividends

The Company has not, within the past decade, paid or declared any cash dividends on its Common Stock and does not foresee doing so in the foreseeable future. The Company intends to retain any future earnings for the operation and expansion of the business. Any decision as to future payment of dividends will depend on the available earnings, the capital requirements of the Company, its general financial condition and other factors deemed pertinent by the Board of Directors.

(d) Securities Authorized for Issuance Under Equity Compensation Plans

The Company had no securities authorized for issuance under equity compensation plans as of December 31, ~~2017~~2018.

(e) Sale of Unregistered Securities

The Company did not issue any unregistered equity securities during the 4th quarter of fiscal ~~2017~~2018.

(f) Repurchase of Equity Securities

The Company did not repurchase any shares of its common stock during the 4th quarter of ~~2017~~2018.

Item 6.

Selected Financial Data

Not applicable.

Item 7. Management’s Discussion and Analysis

Accounting for Variable Interest

Dongxing International is a holding company whose only asset is an indirect 100% ownership interest in Harbin Donghui, a Wholly Foreign Owned Entity organized under the laws of the People’s Republic of China on January 13, 2016. On March 30, 2016, Harbin Donghui entered into three agreements with Harbin Dongxing and with the equity owners in Harbin Dongxing. Collectively, the VIE agreements provide Harbin Donghui exclusive control over the business of Harbin Dongxing, and provide that 95% of the income or loss realized by Harbin Dongxing accrues to the account of Harbin Donghui.

The accounting effect of the VIE Agreements between Harbin Donghui and Harbin Dongxing is to cause the balance sheets and financial results of Harbin Dongxing to be consolidated with those of Harbin Donghui, with respect to which Harbin Dongxing is now a variable interest entity. Since the parties to the VIE Agreements were both controlled by Cheng Zhao, who is CEO of both Harbin Donghui and Harbin Dongxing, the financial statements included in this report reflect the consolidation of the results of operations and cash flows of Harbin Dongxing since its inception.

Results of Operations

The revenue-producing business of Harbin Dongxing at this time consists entirely of the sale and installation of lighting products, primarily in new construction projects. The bulk of our expenses, however, are attributable to our efforts to develop the Mengqiao Platform to participate in the Belt and Road Initiative. For the future, we expect that online sales by Dongxing Online, athe subsidiary of Harbin Dongxing responsible for the Mengqiao Platform, will produce the greater portion of our revenue. But those sales will not commence until we launch operations of the ~~Dongxing~~Mengqiao ~~Online website~~Platform.

Our business at this time, therefore, is very seasonal. The ~~weather~~ weather in Heilongjiang Province is very cold in the first five months of the year, with much snow and ice, making installation of lighting fixtures nearly impossible. Generally, the construction projects in which we are involved are installed during the period from June to December. Project acceptance and payment usually occurs in November and December. As a result, the bulk or our revenues are realized in the second half of the year, particularly the fourth quarter. 2018 was no exception.

During 2017 our attention was primarily focused on development of the Mengqiao Platform. As a result, sales revenue during 2017 totaled only $21,857, a decrease of 67% from sales during 2016. The sales in 2016 were also more profitable than those recorded in 2017. This occurred because a large portion of our revenue in 2016 was recorded on our energy management contracts ("EMC"). These are arrangements in which we install lighting products in exchange for a share of the ongoing profits realized by our customers. EMC sales are recorded as sales-type leases, with the present value of the contracted lease payments recorded on our balance sheet as lease payment receivables and the balance of the contracted lease payments recorded as unearned revenue. Through the term of the EMC contract, as payments are made by the customer, the unearned revenue is amortized and recorded as sales revenue. In 2017 we had two EMC arrangements amortizing in this fashion, one of which terminated at the end of 2017.

Our operating expenses of $197,416 and $260,818 for 2017 and 2016, respectively, were comprised, primarily, of professional expenses, salaries and office rent. Our labor cost is high, relative to revenue, because the majority of our employees are engaged in developing our online platform. Operating expenses were greater in 2016 than during 2017, as professional fees relating to preparation for the share exchange in September 2016 increased operating expenses.

After taking into account our interest expense (net of interest income) and miscellaneous other income (including a government subsidy of $33,013 in 2017, the first of what we expect to be a series of such subsidies relating to our involvement in the Belt and Road Initiative), we recorded net loss of $159,184 and $222,498 for 2017 and 2016, respectively. Our VIE agreements, however, assign to Harbin Donghui only 95% of the profit or loss reported by Harbin Dongxing. For that reason, we reduced the net loss on the Dongxing International consolidated statements by an allocation to non-controlling interest. After that allocation, the net loss attributable to the shareholders of Dongxing International Inc. was $151,250 ($0.01 per share) for 2017 and $211,550 ($0.01 per share) for 2016. We expect to continue to incur losses until our online marketing business is launched, as we are paying the expenses of that business without any offsetting revenue.

Our reporting currency is the U.S. dollar. Our local currency, the Renminbi (RMB), is our functional currency. Results of operations and cash flow are translated at average exchange rates during the period being reported upon, and assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China on the balance sheet date. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statements of stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. For the 2017 foreign currency translation adjustments yielded a comprehensive loss of $14,241, while such adjustments during 2016 provided us comprehensive income of $5,091.

Liquidity and Capital Resources

The development of our company has been funded primarily by contributions to capital and loans from our equity-holders. As a result, at December 31, 2017 we had no debt other than $312,057 owed to related parties. This included $81,723 owed to Harbin Dongke Optronics Science and Technology Co., Ltd., representing lighting products sold to Harbin Dongrong in 2013 for a project that is not yet completed. The debt became consolidated with our balance sheet when our Chairman, Cheng Zhao, contributed Harbin Dongrong to Harbin Dongxing. A payment of $48,068 in reduction of the debt was made during 2017, and the remainder will be satisfied when the project is completed, Harbin Dongrong is paid, and in turn Harbin Dongrong pays Harbin Dongke. Cheng Zhao was the General Manager of Harbin Dongke until the end of 2015.

At December 31, 2017 we had a working capital deficit of $(287,575), an increase in the deficit of $99,400 during 2017. Our company is viable despite the working capital deficit because the amount we owe to related parties exceeds the deficit, and we will not be required to satisfy the related party debts until we have sufficient cash flow.

Our operations used $178,485 in cash during 2017 and $138,188 in cash during 2016. Our use of cash during 2016 was less than our net loss primarily due to collections on EMC contracts, the present value of which are taken into income upon installation, although payments are spread over the life of the contract. We had less revenue from EMC contracts during 2017, however, and we also increased our use of cash by increasing inventory and prepaid rent while reducing our accrued expenses.

The $178,485 cash used in operations during 2017 was funded primarily by loans from related parties totaling $147,043, supplemented by capital contributions of $21,698. From time to time we have taken short-term loans from a Chinese bank, but the balance of that loan was fully satisfied by a payment of $30,110 early in 2016.

The opinion of our independent registered public accounting firm on our financial statements for the year ended December 31, 2017 expresses substantial doubt as to whether our company is a going concern, due to our limited revenue and negative cash flow. We believe that our related parties will continue to fund our operations for the foreseeable future, and so believe that we can sustain operations at our current level. However, full implementation of our business plan will require significant capital infusions or third party loans. We have no commitment for either equity or debt financing at this time.

Almost all of our 2018 revenue was recorded in the fourth quarter from two sales: a $41,000 sale of lighting equipment to an agency of the Provincial government and a $9,400 system upgrade for a different agency of the Provincial government. This revenue represented a 153% increase over revenue in 2017. In both years our attention was primarily focused on development of the Mengqiao Platform. As a result, sales revenue from our lighting business lagged. Our plan is that, when we are able to launch the Mengqiao Platform, we will use it to leverage growth in our lighting equipment business.

Our operating expenses of $219,823 and $197,281 for 2018 and 2017, respectively, were comprised, primarily, of professional expenses, salaries and office rent. Our labor cost is high, relative to revenue, because the majority of our employees are engaged in developing our online platform.

Our net loss of $177,952 for 2018 was identical to our loss from operations, as we incurred no interest expense nor any other income or expense, nor had income to be taxed. In 2017, we recorded as miscellaneous other income a government subsidy of $33,013, the first of what we expect to be a series of such subsidies relating to our involvement in the Belt and Road Initiative, which reduced our net loss to $159,184. Our VIE agreements, however, assign to Harbin Donghui only 95% of the profit or loss reported by Harbin Dongxing. For that reason, we reduced the net loss on the Dongxing International consolidated statements by an allocation to non-controlling interest. After that allocation, the net loss attributable to the shareholders of Dongxing International Inc. was $169,063 ($0.01 per share) for 2018 and $151,250 ($0.01 per share) for 2017. We expect to continue to incur losses until our online marketing business is launched, as we are paying the expenses of that business without any offsetting revenue.

Our reporting currency is the U.S. dollar. Our local currency, the Renminbi (RMB), is our functional currency. Results of operations and cash flow are translated at average exchange rates during the period being reported upon, and assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China on the balance sheet date. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statements of stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. For the 2018 foreign currency translation adjustments yielded other comprehensive gain of $19,921, while such adjustments during 2017 provided us other comprehensive loss of $14,241.

Liquidity and Capital Resources

The development of our company has been funded primarily by contributions to capital and loans from our equity-holders. As a result, at December 31, 2018 we had no debt other than $418,436 owed to related parties. This included $41,449 owed to Harbin Dongke Optronics Science and Technology Co., Ltd., representing lighting products sold to Harbin Dongrong in 2013 for a project that is not yet completed. The debt became consolidated with our balance sheet when our Chairman, Cheng Zhao, contributed Harbin Dongrong to Harbin Dongxing. A payment of $37,707 in reduction of the debt was made during 2018, and the remainder will be satisfied when the project is completed, Harbin Dongrong is paid, and in turn Harbin Dongrong pays Harbin Dongke. Cheng Zhao was the General Manager of Harbin Dongke until the end of 2015.

At December 31, 2018 we had a working capital deficit of $(435,684), an increase in the deficit of $148,109 during 2018. Our company is viable despite the working capital deficit because the amount we owe to related parties constitutes 96% of the deficit, and we will not be required to satisfy the related party debts until we have sufficient cash flow.

Our operations used $135,394 in cash during 2018 and $178,485 in cash during 2017. Our use of cash during 2018 was less than our net loss primarily due to our amortization of prepaid rent and an increase in our accrued expenses. During 2017, on the other hand, our use of cash exceeded our net loss primarily because we increased our inventory and prepaid rent while reducing our accrued expenses.

The $135,394 used in our 2018 operations was funded by a loan of $136,097 from our Chairman. The $178,485 cash used in operations during 2017 was funded primarily by loans from related parties totaling $147,043, supplemented by capital contributions of $21,698.

The opinion of our independent registered public accounting firm on our financial statements for the year ended December 31, 2018 expresses substantial doubt as to whether our company is a going concern, due to our limited revenue and negative cash flow. We believe that our related parties will continue to fund our operations for the foreseeable future, and so believe that we can sustain operations at our current level. However, full implementation of our business plan will require significant capital infusions or third party loans. We have no commitment for either equity or debt financing at this time.

Restrictions on Transfers of Funds

The VIE Agreements among Harbin Donghui and the Harbin Dongxing Shareholders provide that Harbin Donghui is entitled to 95% of the net profits (and will bear all losses) arising from Harbin Dongxing’s operations plus a monthly fee of RMB 10,000 ($1,~~531~~457). The VIE Agreements also entitle Harbin Donghui to manage the operations and control the cash flows of Harbin Dongxing. Although Harbin Donghui is entitled to Harbin Dongxing’s profits, any distributions of such profits from Harbin Donghui to our U.S. parent company must comply with applicable Chinese laws affecting payments from foreign invested enterprises incorporated in China to their equity holders.

The sales revenue and expenses of Harbin Dongxing are denominated in RMB. The Chinese government strictly regulates conversion of RMB into foreign currencies. Currently, Harbin Dongxing and Harbin Donghui may purchase foreign currencies for settlement of current account transactions, including payments of dividends, without the approval of the State Administration of Foreign Exchange (“SAFE”), by complying with certain procedural requirements. Pursuant to applicable Chinese laws and regulations, foreign invested enterprises incorporated in China, such as Harbin Donghui, are required to apply for “Foreign Exchange Registration Certificates.” Currently, conversion within the scope of the “current account” (e.g. remittance of foreign currencies for payment of dividends, trade and service-related foreign exchange transactions, etc.) can be effected without requiring the approval of SAFE, but must be effected through authorized Chinese banks in accordance with regulatory procedures. However, conversion of currency in the “capital account” (e.g. for capital items such as direct investments, loans, securities, etc.) still requires the approval of SAFE. Compliance with those procedural requirements can result in delays in obtaining foreign exchange, which could interfere with offshore activities by the Company, such as acquisitions, offshore investments, or the payment of dividends to the Company’s shareholders. Because of the effort involved in obtaining foreign currencies in exchange for RMB, the Company intends to pay most of the operating expenses of its U.S. parent from dollars loaned to the Company by related parties.

Under PRC regulations, the Company’s operating subsidiary, Harbin Dongxing, may pay dividends only out of its accumulated profits, if any, determined in accordance with the accounting standards and regulations prevailing in the PRC. In addition, Harbin Dongxing is required to set aside at least 10% of its accumulated profits each year, if any, to fund the statutory general reserve until the balance of the reserve reaches 50% of its registered capital. The amount in excess of 10% of accumulated profits that may be contributed to the statutory general reserve is at Harbin Dongxing’s discretion. The statutory general reserve is not distributable in the form of cash dividends to the Company and can be used to make up cumulative prior year losses, if any, and may be converted into share capital by the issue of new shares to shareholders in proportion to their existing shareholdings, or by increasing the par value of the shares currently held by them, provided that the reserve balance after such use is not less than 25% of the registered capital. As of December 31, ~~2017~~2018, no amount has been appropriated from retained earnings and set aside for the statutory reserve by Harbin Dongxing. There remains approximately 2,500,000 RMB ($~~382~~364,~~848~~262) to be appropriated from our future profits and set aside for the statutory reserve until we have satisfied the reserve requirement.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.

Recent Accounting Pronouncements

There were no recent accounting pronouncements that have or will have a material effect on the Company’s financial position or results of operations

Item 7a. Quantitative And Qualitative Disclosures About Market Risk.

Not Applicable.

Item 8. Financial Statements

INDEX TO FINANCIAL STATEMENTS

	Page
	F-26	Report of Independent Registered Public Accounting Firm.
	F-27	Report of Independent Registered Public Accounting Firm - 2018
	F-27	Consolidated Balance Sheets as of December 31, 2017 and 2016.
	F-28	Report of Independent Registered Public Accounting Firm - 2017
	F-28	Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2017 and 2016.
	F-29	Consolidated Balance Sheets as of December 31, 2018 and 2017.
	F-29	Consolidated Statements of Stockholders’ Equity (Deficiency) for the Years Ended December 31, 2017 and 2016.
	F-30	Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2018 and 2017.
	F-30	Consolidated Statements of Cash Flows for the Years Ended December 31, 2017 and 2016.
	F-31	Consolidated Statements of Stockholders’ Deficiency for the Years Ended December 31, 2018 and 2017.
	F-31 to F-42	Notes to Consolidated Financial Statements.
	F-32	Consolidated Statements of Cash Flows for the Years Ended December 31, 2018 and 2017.
	F-33 to F-44	Notes to Consolidated Financial Statements.

25 26

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To Stockholders and the Board of Directors ~~and~~ of Dongxing International Inc.

Stockholders of Dongxing International Inc.

Harbin, China

Opinion on the Financial Statements

We have audited the accompanying ~~consolidated~~ consolidated balance ~~sheets~~sheet of Dongxing International Inc. (the “Company”) as of December 31, ~~2017 and 2016~~2018, and the related ~~consolidated~~ consolidated statements of comprehensive loss, stockholders’ ~~equity (~~deficiency), and cash flows for ~~each of~~ the ~~years in the two~~ year ~~period~~ ~~ended~~then ~~December 31~~ended, ~~2017,~~ and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2017 and 2016~~2018, and the results of its operations and its cash flows for ~~each of~~ the ~~years in the two~~ year ~~period~~then ended ~~December 31~~, ~~2017,~~ in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 2 to the consolidated financial statements, the Company had a working capital deficiency of $435,684 and an accumulated deficit of $1,045,478 as of December 31, 2018, at which time the Company's stockholders’ deficiency was $378,430. The Company has not generated cash or income from its operation since inception. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, 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.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~The~~/s/ ~~accompanying~~Prager ~~financial~~Metis ~~statements~~CPAs, ~~have been~~LLC ~~prepared~~We ~~assuming~~have ~~that~~served ~~the Company will continue~~ as ~~a going concern. As described in Note 2 to~~ the ~~financial statements, the~~ Company ~~had a working capital deficit of $287,575, accumulated deficit of $876,415 and stockholders~~’s ~~deficiency~~auditor ofsince ~~$238,292 as~~2018 ~~of December 31~~Hackensack, ~~2017,~~New ~~and~~Jersey ~~has~~April ~~not generated cash or income from its operation since inception. These factors~~12, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.2019

We have served as the Company’s auditor since 2015. Hackensack, NJ March 30, 2018

F-26

Dongxing International Inc.
Consolidated Balance Sheets
		December 31, 2017			December 31, 2016
ASSETS
Current Assets
Cash and cash equivalents	$	1,644		$	12,924
Accounts receivable, net of allowance of $28,257 and $29,265, respectively		7,329			3,512
Inventories		15,175			2,640
Lease payment receivable-current		3,826			23,353
Prepaid rent		32,989			9,715
Project in progress		58,913			55,492
Other current assets		16,169			19,579
Total Current Assets		136,045			127,215
Other Assets
Office equipment, net of accumulated depreciation of $8,542 and $7,587, respectively		2,583			1,018
Lease payment receivable		—			3,892
Total Other Assets		2,583			4,910
Total Assets	$	138,628		$	132,125
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities
Unearned revenue	$	28		$	923
Due to related parties		312,057			199,473
Advance from customers		58,913			55,492
Accrued expenses and other payables		52,622			59,502
Total Current Liabilities		423,620			315,390
Total Liabilities		423,620			315,390
Stockholders' Deficiency
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, none issued and outstanding		—			—
Common stock, $0.0001 par value, 250,000,000 shares authorized, 30,000,000 shares issued and outstanding		3,000			3,000
Additional paid-in capital		850,041			828,343
Stock subscription receivable		(200,000	)		(250,000	)
Accumulated deficit		(876,415	)		(725,165	)
Accumulated other comprehensive loss		(14,918	)		(1,389	)
Total Stockholders' Deficiency of Dongxing International Inc.		(238,292	)		(145,211	)
Non-controlling interest		(46,700	)		(38,054	)
Total Stockholders' Deficiency		(284,992	)		(183,265	)
Total Liabilities and Stockholders’ Deficiency	$	138,628		$	132,125
The accompanying notes are an integral part of these consolidated financial statements.

F-27

Dongxing International Inc.
Consolidated Statements of Comprehensive Loss
	For the Year Ended
	December 31,
	2017			2016
Revenue	$	21,857		$	66,624
Cost of revenue		16,773			28,030
Gross profit		5,084			38,594
Operating expenses
Selling, general and administrative expense		197,416			260,818
Total operating expenses		197,416			260,818
Loss from operations		(192,332	)		(222,224	)
Other income (expense):
Interest income (expense), net		14			(551	)
Subsidy income		33,013			—
Other income		121			277
Total other income (expense)		33,148			(274	)
Loss before income taxes		(159,184	)		(222,498	)
Income tax provision		—			—
Net loss		(159,184	)		(222,498	)
Less: Loss attributable to non-controlling interest		(7,934	)		(10,948	)
Net loss attributable to Dongxing International Inc.		(151,250	)		(211,550	)
Other comprehensive income (loss)
Foreign currency translation adjustment		(14,241	)		5,091
Comprehensive loss		(173,425	)		(217,407	)
Less: Comprehensive loss attributable to non-controlling interest		(8,646	)		(10,693	)
Comprehensive loss attributable to Dongxing International Inc.	$	(164,779	)	$	(206,714	)
Loss per share - Basic and Diluted	$	(0.01	)	$	(0.01	)
Weighted average shares outstanding - Basic and Diluted		30,000,000			30,000,000
The accompanying notes are an integral part of these consolidated financial statements.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Dongxing International Inc. Harbin, China

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Dongxing International Inc. (the “Company”) as of December 31, 2017, and the related consolidated statements of comprehensive loss, stockholders’ deficiency, and cash flows for the year then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company had a working capital deficiency of $287,575, accumulated deficit of $876,415 and stockholders’ deficiency of $238,292 as of December 31, 2017, and has not generated cash or income from its operation since inception. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

/s/ Paritz & Company, P.A.

We have served as the Company’s auditor since 2015.

Hackensack, NJ

March 30, 2018

F-28

Dongxing International Inc.
Consolidated Statements of Stockholders' Equity (Deficiency)
Consolidated Balance Sheets
	Preferred Stock						Common Stock
		December 31, 2018			December 31, 2017
	Number of Shares			Amount			Number of Shares		Amount		Additional Paid-in Capital		Stock Subscription Receivable			Accumulated Deficit			Other Comprehensive Income (loss)			Non- Controlling Interest			Total
ASSETS
Balance at January 1, 2016		—		$	—			30,000,000	$	3,000	$	801,244	$	(250,000	)	$	(513,615	)	$	(6,225	)	$	(27,361	)	$	7,043
Current Assets
Capital Contribution		—			—			—		—		27,099		—			—			—			—			27,099
Cash	$	638		$	1,644
Net loss		—			—			—		—		—		—			(211,550	)		—			(10,948	)		(222,498	)
Accounts receivable, net of allowance of $20,055 and $28,257, respectively		42,110			7,329
Foreign currency translation adjustment		—			—			—		—		—		—			—			4,836			255			5,091
Inventories		2,645			15,175
Balance at December 31, 2016		—			—			30,000,000		3,000		828,343		(250,000	)		(725,165	)		(1,389	)		(38,054	)		(183,265	)
Lease payment receivable - current		—			3,826
Capital Contribution		—			—			—		—		21,698		—			—			—			—			21,698
Prepaid rent		—			32,989
Subscription received		—			—			—		—		—		50,000			—			—			—			50,000
Project in progress		56,089			58,913
Net loss		—			—			—		—		—		—			(151,250	)		—			(7,934	)		(159,184	)
Other current assets		7,889			16,169
Foreign currency translation adjustment		—			—			—		—		—		—			—			(13,529	)		(712	)		(14,241	)
Total Current Assets		109,371			136,045
Balance at December 31, 2017		—		$	—			30,000,000	$	3,000	$	850,041	$	(200,000	)	$	(876,415	)	$	(14,918	)	$	(46,700	)	$	(284,992	)
Other Assets
The accompanying notes are an integral part of these consolidated financial statements.
Office equipment, net of accumulated depreciation of $8,865 and $8,542, respectively		2,661			2,583
Total Assets	$	112,032		$	138,628
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities
Due to related parties	$	418,436		$	312,057
Advance from customers		56,089			58,913
Accrued expenses and other payables		70,530			52,650
Total Current Liabilities		545,055			423,620
Total Liabilities		545,055			423,620
Stockholders' Deficiency
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, none issued and outstanding		—			—
Common stock, $0.0001 par value, 250,000,000 shares authorized, 30,000,000 shares issued and outstanding		3,000			3,000
Additional paid-in capital		660,041			850,041
Stock subscription receivable		—			(200,000	)
Accumulated deficit		(1,045,478	)		(876,415	)
Accumulated other comprehensive income (loss)		4,007			(14,918	)
Total Stockholders' Deficiency of Dongxing International Inc.		(378,430	)		(238,292	)
Non-controlling interest		(54,593	)		(46,700	)
Total Stockholders' Deficiency		(433,023	)		(284,992	)
Total Liabilities and Stockholders’ Deficiency	$	112,032		$	138,628
The accompanying notes are an integral part of these consolidated financial statements.

F-29

Dongxing International, Inc. Consolidated Statements of Cash Flows
Dongxing International Inc.
Consolidated Statements of Comprehensive Loss
	For the Year Ended
	December 31,
	2017			2016
	2018			2017
CASH FLOW FROM OPERATING ACTIVITIES
Revenue	$	55,192		$	21,857
Net loss	$	(159,184	)	$	(222,498	)
Cost of revenue		13,321			16,773
Adjustment to reconcile net loss to net cash used in operating activities:
Gross profit		41,871			5,084
Depreciation and amortization		472			76
Operating expenses
(Reversal of) Bad debt provision		(2,721	)		17,307
Selling, general and administrative expense		219,823			197,281
Change in operating assets and liabilities:
Total operating expenses		219,823			197,281
Accounts receivable		(763	)		8,378
Loss from operations		(177,952	)		(192,197	)
Inventory		(11,974	)		(847	)
Other income:
Lease payment receivable		24,290			27,011
Subsidy income		—			33,013
Prepaid rent		(21,944	)		14,102
Total other income		—			33,013
Project in progress		—			—
Loss before provision for income tax		(177,952	)		(159,184	)
Other current assets		4,469			(12,566	)
Provision for income tax		—			—
Unearned revenue		(922	)		(2,374	)
Net loss		(177,952	)		(159,184	)
Advance from customers		—			—
Less: Loss attributable to non-controlling interest		(8,889	)		(7,934	)
Accrued expenses and other payables		(10,208	)		33,223
Net loss attributable to Dongxing International Inc.		(169,063	)		(151,250	)
Net cash used in operating activities		(178,485	)		(138,188	)
Other comprehensive income (loss)
CASH FLOW FROM INVESTING ACTIVITIES
Foreign currency translation adjustment		19,921			(14,241	)
Purchase of office equipment		(1,925	)		(1,024	)
Comprehensive loss		(158,031	)		(173,425	)
Net cash used in investing activities		(1,925	)		(1,024	)
Less: Comprehensive loss attributable to non-controlling interest		(7,893	)		(8,646	)
CASH FLOW FROM FINANCING ACTIVITIES
Comprehensive loss attributable to Dongxing International Inc.	$	(150,138	)	$	(164,779	)
Capital contribution		21,698			27,099
Loss per share - Basic and Diluted	$	(0.01	)	$	(0.01	)
Repayment of short-term bank loans		—			(30,110	)
Weighted average shares outstanding - Basic and Diluted		30,000,000			30,000,000
Proceeds from related party loan		147,043			99,045
Net cash provided by financing activities		168,741			96,034
Effect of exchange rate changes on cash		389			(2,812	)
DECREASE IN CASH		(11,280	)		(45,990	)
Cash - beginning of year		12,924			58,914
Cash - ending of year	$	1,644		$	12,924
Supplement disclosure information
Cash paid for interest	$	—		$	572
Cash paid for income taxes	$	—		$	—
Non-cash financing activities
Subscription received by conversion of related party loan	$	50,000		$	—
The accompanying notes are an integral part of these consolidated financial statements.

F-30

Dongxing International Inc.
Consolidated Statements of Stockholders' Deficiency

	Preferred Stock				Common Stock													Accumulated
	Number of Shares		Amount		Number of Shares		Amount		Additional Paid-in Capital			Stock Subscription Receivable			Accumulated Deficit			Other Comprehensive Income (loss)			Non- Controlling Interest			Total
Balance at January 1, 2017		—	$	—		30,000,000	$	3,000	$	828,343		$	(250,000	)	$	(725,165	)	$	(1,389	)	$	(38,054	)	$	(183,265	)
Capital Contribution		—		—		—		—		21,698			—			—			—			—			21,698
Subscription received		—		—		—		—		—			50,000			—			—			—			50,000
Net loss		—		—		—		—		—			—			(151,250	)		—			(7,934	)		(159,184	)
Foreign currency translation adjustment		—		—		—		—		—			—			—			(13,529	)		(712	)		(14,241	)
Balance at December 31, 2017		—		—		30,000,000		3,000		850,041			(200,000	)		(876,415	)		(14,918	)		(46,700	)		(284,992	)
Cancellation of subscription receivable in relation to 1-for-2,000,000 reverse split		—		—		—		—		(190,000	)		190,000			—			—			—			—
Subscription received		—		—		—		—		—			10,000			—			—			—			10,000
Net loss		—		—		—		—		—			—			(169,063	)		—			(8,889	)		(177,952	)
Foreign currency translation adjustment		—		—		—		—		—			—			—			18,925			996			19,921
Balance at December 31, 2018		—	$	—		30,000,000	$	3,000	$	660,041		$	—		$	(1,045,478	)	$	4,007		$	(54,593	)	$	(433,023	)


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

F-31

Dongxing International Inc.
Consolidated Statements of Cash Flows

	For the Year Ended
	December 31,
	2018			2017
CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$	(177,952	)	$	(159,184	)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,387			472
Loss on disposal of property and equipment		68			—
Reversal of bad debt provision		(7,102	)		(2,721	)
Change in operating assets and liabilities:
Accounts receivable		(29,334	)		(763	)
Inventory		12,241			(11,974	)
Lease payment receivable		3,778			24,290
Prepaid rent		32,574			(21,944	)
Other current assets		7,784			4,469
Accrued expenses and other payables		21,162			(11,130	)
Net cash used in operating activities		(135,394	)		(178,485	)

CASH FLOW FROM INVESTING ACTIVITIES
Purchase of office equipment		(1,664	)		(1,925	)
Net cash used in investing activities		(1,664	)		(1,925	)

CASH FLOW FROM FINANCING ACTIVITIES
Capital contribution		—			21,698
Proceeds from related party loan, net of repayment		136,097			147,043
Net cash provided by financing activities		136,097			168,741

Effect of exchange rate changes on cash		(45	)		389
DECREASE IN CASH		(1,006	)		(11,280	)
Cash - beginning of year		1,644			12,924
Cash - ending of year	$	638		$	1,644

Supplement disclosure information
Cash paid for interest	$	—		$	—
Cash paid for income taxes	$	—		$	—

Non-cash financing activities
Subscription received by conversion of related party loan	$	10,000		$	50,000
Cancellation of subscription receivable in relation to 1-for-2,000,000 reverse split	$	190,000		$	—

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

F-32

DONGXING INTERNATIONAL INC.

~~December~~Notes ~~31,~~to ~~2017~~Consolidated ~~and~~Financial ~~2016~~Statements

~~Notes~~December To31, ~~Consolidated~~2018 ~~Financial~~and ~~Statements~~2017

NOTE 1 - CORPORATE INFORMATION

Dongxing International Inc. (the “Company” or “Dongxing”) was incorporated in June 2010 in accordance with the laws of the State of Delaware under the name Apex 1, Inc. On November 19, 2015 the Company's corporate name was changed to “Dongxing International Inc.”

On September 30, 2016, the Company entered into and closed a share exchange agreement with Central Dynamic Holdings Limited (“Central Dynamic”) and its shareholders. Pursuant to the terms of the exchange agreement, the shareholders, who together owned 100% of the ownership rights in Central Dynamic, agreed to transfer all of the issued and outstanding shares of common stock into the Company in exchange for the issuance of an aggregate of 25,000,000 shares of the Company’s common stock, par value $0.0001 per share.

As a result of the share exchange, the Central Dynamic shareholders become the majority shareholders and have control of the Company. The acquisition of Central Dynamic was accounted for as a reverse merger effected by a share exchange agreement. Dongxing is considered the legal acquirer and Central Dynamic and its subsidiaries is considered the accounting acquirer. Accordingly, the historical financial statements presented are those of Central Dynamic and its subsidiaries.

Central Dynamic Holdings Limited is incorporated under the laws of the British Virgin Islands. Dongxing Holdings Limited (“Dongxing BVI”), which is a wholly owned subsidiary of Central Dynamic, is also incorporated under the laws of the British Virgin Islands. Dongxing Holdings Limited (“Dongxing HK”), a wholly owned subsidiary of Dongxing BVI, is incorporated under the laws of Hong Kong. Harbin Donghui Technology Co., Ltd. (“Harbin Donghui”), a wholly-owned subsidiary of Dongxing HK, is incorporated under the laws of the People's Republic of China ("PRC"). Harbin Dongxing Energy Saving Technical Service Co., Ltd. (“Harbin Dongxing”), a limited liability company incorporated under the laws of the PRC, is effectively and substantially controlled by Harbin Donghui through a series of agreements known as variable interest agreements (the “VIE agreements”) dated March 30, 2016 pursuant to which Harbin Dongxing became Harbin Donghui’s contractually controlled affiliate. The VIE Agreements provide that Harbin Donghui will receive 95% of the net profit or loss derived from the operations of Harbin Dongxing and its subsidiaries. Central Dynamic and its wholly owned subsidiaries, Dongxing BVI, Dongxing HK and Harbin Donghui, are holding companies with no business operation.

Harbin Dongxing provides Energy Diagnosis, Project Design, Project Auditing, Equipment Procurement Services, Construction Engineering, Personnel Training, and Technology Consulting to customers. Harbin Dongxing Online Technology Co., Ltd (“Dongxing Online”), which is 100% owned by Harbin Dongxing, engages in Software Development, Website Production, Systems Integration, Web Merchandise Sales, and Import and Export of Goods. Until November 4, 2016, Harbin Dongrong Business Management Consulting Co., Ltd (“Harbin Dongrong”), which is 100% owed by Harbin Dongxing, engaged in lighting design and construction for urban roads and landscapes. Since that date, the scope of Harbin Dongrong's business has entailed business consulting, marketing planning, and advertising.

F-31 33

DONGXING INTERNATIONAL INC.

~~December~~Notes ~~31,~~to ~~2017~~Consolidated ~~and~~Financial ~~2016~~Statements

~~Notes~~December To31, ~~Consolidated~~2018 ~~Financial~~and ~~Statements~~2017

NOTE 2 – GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company had a working capital deficit of $~~287~~435,~~575~~684 and an accumulated deficit of $~~876~~1,~~415~~045,478 as of December 31, ~~2017~~2018, at which time the Company's stockholders’ deficiency was $~~238~~378,~~292~~430. The Company has not generated cash or income from its operation since inception. These factors, among others, raise ~~substantial~~ substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company plans to rely on the proceeds from loans from both unrelated and related parties to provide the resources necessary to fund the development of our business plan and operations. The Company also plans to raise funds from domestic and foreign banks and/or financial institutions to increase working capital in order to meet capital demands. However, no assurance can be given that the Company will be successful in raising additional capital.

NOTE 3 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation and Consolidation

These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or US GAAP.

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries and entities controlled through the VIE agreements. All significant inter-company accounts and transactions have been eliminated in consolidation.

Certain amounts have been reclassified to conform to current year presentation.

Use of Estimates

The Company’s consolidated financial statements have been prepared in accordance with US GAAP. This requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting period. The significant areas requiring the use of management estimates include, but are not limited to, the allowance for doubtful accounts receivable, estimated useful life and residual value of property, plant and equipment, provision for staff benefit, recognition and measurement of deferred income taxes and valuation allowance for deferred tax assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately differ from those estimates and such differences may be material to our consolidated financial statements.

F-32

DONGXING INTERNATIONAL INC.

December 31, 2017 and 2016

Notes To Consolidated Financial Statements

Impairment of Long-Lived Assets

In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, or it is reasonably possible that these assets could become impaired as a result of technological or other industrial changes. The determination of recoverability of assets to be held and used is made by comparing the carrying amount of an asset to future undiscounted cash flows to be generated by the assets.

F-34

DONGXING INTERNATIONAL INC.

Notes to Consolidated Financial Statements

December 31, 2018 and 2017

If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell. During the reporting periods there was no impairment loss recognized on long-lived assets.

Fair Value of Financial Instruments

ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy that requires classification based on observable and unobservable inputs when measuring fair value. The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels:

• Level one - Quoted market prices in active markets for identical assets or liabilities;

• Level two - Inputs other than level one inputs that are either directly or indirectly observable; and

• Level three - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter.

There are no financial instruments measured at fair value on a recurring basis.

F-33

DONGXING INTERNATIONAL INC.

December 31, 2017 and 2016

Notes To Consolidated Financial Statements

Cash

Cash includes cash on hand and demand deposits placed with banks or other financial institutions that are unrestricted as to withdrawal and use and have an original maturity of three months or less.

Deposits in banks in the PRC are not insured by any government entity or agency, and are consequently exposed to risk of loss.

Accounts receivable, net of allowance

Accounts receivable are stated at cost, net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses, if any, resulting from the failure of customers to make required payments. The Company reviews the accounts receivable on a periodic basis and makes allowances where there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, the customer’s payment history, its current credit-worthiness and current economic trends. Based on its reviews, during the ~~year~~years ended December 31, ~~2016~~2018 and 2017, the Company ~~added~~ reversed $177,~~307~~102 toand $2,721 respectively of its provision for bad debt, ~~then~~which ~~reversed~~was ~~$2,721~~included ofin ~~that~~selling, ~~provision~~general ~~during~~and ~~the~~administrative ~~year ended December 31, 2017~~expenses.

F-35

DONGXING INTERNATIONAL INC.

Notes to Consolidated Financial Statements

December 31, 2018 and 2017

Inventories

Inventories consist of raw materials and energy saving lights which are valued at the lower of cost or ~~market~~net realizable value. We determine cost on the basis of the weighted average method. The Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are reserved or written off. Although we believe that the assumptions we use in estimate inventory write-downs are reasonable, future changes in these assumptions could provide a significantly different result. During the years ended December 31, ~~2017~~2018 and ~~2016~~2017, no inventory markdown was recorded.

Property and equipment

Property and equipment, consisting of office equipment, is stated at cost less accumulated depreciation and accumulated impairment losses, if any. Gains or losses on disposals are reflected as gain or loss in the year of disposal. The cost of improvements that extend the life of buildings, machinery and equipment are capitalized. These capitalized costs may include structural improvements, equipment and fixtures. All ordinary repair and maintenance costs are expensed as incurred.

Depreciation for financial reporting purposes is provided using the straight-line method over the estimated useful lives of the assets, generally 3 years for office equipment. Depreciation expense for the years ended December 31, ~~2017~~2018 and ~~2016~~2017 was $~~472~~1,387 and $76472 respectively.

F-34

DONGXING INTERNATIONAL INC.

December 31, 2017 and 2016

Notes To Consolidated Financial Statements

Revenue Recognition

~~The~~In ~~Company~~May ~~recognizes~~2014, ~~revenue~~the inFinancial ~~accordance~~Accounting Standards ~~with~~Board ~~ASC~~(FASB) ~~605, Revenue Recognition~~issued Accounting Standards Update (ASU) No. 2014-09, Revenue from ~~sales~~Contracts ofwith ~~products~~Customers is(Topic ~~recognized~~606), that ~~when~~replaces ~~persuasive~~existing ~~evidence~~revenue ofrecognition ~~sales~~guidance. ~~arrangements~~The ~~exist,~~new ~~title~~standard ~~and~~requires ~~risk~~companies to recognize revenue in a way that depicts the transfer of ~~loss~~promised ~~have~~goods ~~been~~or ~~transferred~~services to customers in an amount that reflects the ~~customers,~~consideration to which the ~~sales~~entity ~~amounts~~expects to ~~are~~be ~~fixed~~entitled ~~and~~in ~~determinable~~exchange ~~and~~for ~~collection~~those goods or services. In addition, Topic 606 requires disclosures of the ~~revenue~~nature, isamount, ~~reasonably~~timing ~~assured~~and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the new accounting standard, Topic 606, Revenue from Contracts with Customers, ~~have~~and noall ~~contractual~~the ~~right~~related amendments (new revenue standard) to ~~return~~all ~~products~~contracts using the modified retrospective method beginning on January 1, 2018.

~~Revenue~~In ~~from~~accordance ~~LED~~with ~~lights~~Topic ~~installation~~606, ~~projects~~product revenue is recognized ~~per~~ ~~ASC~~when ~~605-35~~the ~~Construction-Type~~Company ~~and~~satisfies ~~Production-Type~~its ~~Contracts.~~performance ~~All~~obligation ~~projects~~by ~~were~~transferring ~~less~~promised ~~than~~goods ~~one~~to ~~year~~a customer. ~~Contract price~~ Revenue is ~~recorded as~~measured ~~revenue~~at ~~once~~ the ~~project~~transaction price, which is ~~completed.~~based ~~Deposits~~on ~~received~~the ~~from~~amount ~~customers~~of ~~before~~consideration that the ~~project~~Company isexpects ~~completed~~to ~~are~~receive ~~recorded~~in ~~as advance~~exchange ~~from~~for ~~customers.~~transferring ~~The~~the ~~costs~~promised ofgoods to the ~~projects~~customer. Generally, ~~including~~the ~~materials~~Company ~~used~~recognizes ~~and~~revenue ~~other~~from ~~labor~~product ~~costs~~sales ~~incurred~~when goods are delivered ~~recorded~~to asthe ~~Project~~customer, ~~in Progress and recognized~~ as ~~cost~~control of ~~project~~goods ~~once~~occurs at the ~~project~~same ~~is complete~~time.

For revenue from LED lights installation projects, contract price is recorded as revenue once the project is completed. All projects were less than one year. Deposits received from customers before the project is completed are recorded as advance from customers. The costs of the projects, including materials used and other labor costs incurred are recorded as Project in Progress and recognized as cost of project once the project is complete.

F-36

DONGXING INTERNATIONAL INC.

Notes to Consolidated Financial Statements

December 31, 2018 and 2017

Revenue from LED lights installation projects with profit sharing terms is recognized per ASC 840-30 Capital Leases. On the profit sharing installation projects, the Company transfers ownership of the LED lights to customers at the end of the contract period with no charge. The Company accounts for this type of transaction as a sales-type lease and records as revenue the present value of the total profit sharing receipts from the customer at the inception of the profit sharing period and records a lease payment receivable. The difference between the total amount of profit sharing receipts and the present value of the profit sharing receipts is recorded as unearned revenue to be amortized over the term of the profit sharing period.

The Company utilized the modified retrospective approach when reviewing its current accounting policies to identify potential differences that would result from applying the new requirements to its customer contracts. This approach includes the evaluation of sales terms, performance obligations, variable consideration, and costs to obtain and fulfill contracts. Based on the Company’s review, management did not need to record a cumulative effect adjustment to retained earnings as of the date of initial application and application of this guidance did not have a material impact on its consolidated financial statements for the years ended December 31, 2018 and 2017, respectively.

Income Taxes

We use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.

F-35

DONGXING INTERNATIONAL INC.

December 31, 2017 and 2016

Notes To Consolidated Financial Statements

Comprehensive Income

Comprehensive income is defined to include all changes in equity except those resulting from investments by shareholders and distributions to shareholders. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. Comprehensive income includes net income and the foreign currency translation gain, net of tax.

F-37

DONGXING INTERNATIONAL INC.

Notes to Consolidated Financial Statements

December 31, 2018 and 2017

Foreign Currency

The Company and its subsidiaries maintain their books and records in their functional currency, RMB or HKD. The consolidated financial statements of the Company are translated from Renminbi (“RMB”) or Hong Kong dollars (“HKD”) into United States dollars (U.S. Dollars or “US$” or “$”). Accordingly, assets and liabilities of the Company and its subsidiaries are translated from RMB or HKD to U.S. Dollars using the applicable exchange rates prevailing at the balance sheet date. Items on the ~~statement~~statements of comprehensive income (loss) and cash flows are translated at average exchange rates during the reporting period. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the Company’s financial statements are recorded as accumulated other comprehensive income (loss).

The exchange rates used to translate amounts in RMB or HKD into U.S. Dollars for the purposes of preparing the consolidated financial statements are based on the rates as published on the website of People’s Bank of China and are as follows:

	December 31, 2017	December 31, 2016
	December 31, 2018	December 31, 2017
Balance sheet items, except for equity accounts	US$1=RMB6.~~5342~~8632	US$1=RMB6.~~9370~~5342
	US$1=HKD7.8170	US$1=HKD7.7552
	US$1=HKD7.8329	US$1=HKD7.8170
	For the year
	Years Ended December 31
	2017	2016
	2018	2017
Items in the statements of comprehensive loss and cash flows	US$1=RMB6~~,7518~~.6174	US$1=RMB6.~~6423~~7518
	US$1=HKD7.7974	US$1=HKD7.7597
	US$1=HKD7.8377	US$1=HKD7.7974

No representation is made that the RMB amounts could have been, or could be, converted into U.S. dollars at the above rates. The value of RMB against U.S. dollars and other currencies may fluctuate and is affected by, among other things, changes in China’s political and economic conditions. Any significant revaluation of RMB may materially affect the Company’s financial condition in terms of U.S. dollar reporting.

F-36

DONGXING INTERNATIONAL INC.

December 31, 2017 and 2016

Notes To Consolidated Financial Statements

Recent Accounting Pronouncements

In ~~January~~June ~~2016~~2018, the FASB issued ASU ~~2016~~No. 2018-0107, Compensation ~~Financial~~– ~~Instruments -~~Stock ~~Overall~~Compensation (~~Subtopic~~Topic ~~825-10~~718): ~~Recognition~~Improvements ~~and~~to ~~Measurement~~Employee ofShare-Based ~~Financial~~Payment ~~Assets~~Accounting, ~~and~~or ~~Financial~~ASU ~~Liabilities~~2018-07. ~~This guidance makes targeted~~ASU ~~improvements~~2018-07 tosimplifies ~~existing~~the ~~U.S.~~accounting ~~GAAP~~ for ~~financial~~share-based ~~instruments,~~payments ~~including~~made ~~requiring~~to ~~equity~~nonemployees ~~investments~~so ~~(except~~the ~~those~~accounting ~~accounted~~ for ~~under~~ ~~the~~such ~~equity~~payments ~~method~~is ofsubstantially the ~~accounting,~~same oras those ~~that~~made ~~result~~to inemployees. ~~consolidation~~Under ofthis ~~the~~ASU, ~~investee)~~share based awards to nonemployees will be measured at fair value ~~with changes~~on inthe ~~fair~~grant date ~~value~~of ~~recognized~~the inawards, ~~net~~entities ~~income;~~will ~~requiring~~need ~~entities~~ to ~~use~~assess the ~~exit~~probability ~~price notion when measuring the fair value~~ of ~~financial~~ ~~instruments~~satisfying ~~for~~performance ~~disclosure~~conditions ~~purposes;~~if ~~requiring~~any ~~separate~~are ~~presentation~~present, ~~of financial assets~~ and ~~financial liabilities by~~awards ~~measurement~~will ~~category~~continue ~~and~~to ~~form~~be ofclassified ~~financial~~according ~~asset and requiring entities~~ to ~~present~~Accounting ~~separately~~Standards inCodification ~~other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk~~ (~~also referred to as~~ “~~own credit~~ASC”) ~~when~~718 ~~the~~upon ~~organization~~vesting ~~has~~which ~~elected~~eliminates the need to ~~measure~~reassess ~~the~~classification ~~liability~~upon atvesting, ~~fair~~consistent ~~value in accordance~~ with ~~the~~awards ~~fair~~granted ~~value~~to ~~option~~employees. ~~The~~This ~~new~~ASU ~~guidance~~ is effective for ~~public companies for~~ fiscal years beginning after December 15, ~~2017.~~ ~~Early~~2018, ~~adoption~~including ofinterim ~~the~~periods ~~own~~within ~~credit~~those ~~provision~~fiscal ~~is permitted~~years. ~~The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.~~

~~In February 2016, the FASB issued ASU 2016~~F-02, Leases (Topic 842). Under this guidance, lessees will be required to recognize on the balance sheet a lease liability and a right-of-use asset for all leases, with the exception of short-term leases. The lease liability represents the lessee's obligation to make lease payments arising from a lease, and will be measured as the present value of the lease payments. The right-of-use asset represents the lessee’s right to use a specified asset for the lease term, and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs. The standard also requires a lessee to recognize a single lease cost allocated over the lease term, generally on a straight-line basis. The new guidance is effective for fiscal years beginning after December 15, 2018. ASU 2016-02 is required to be applied using the modified retrospective approach for all leases existing as of the effective date and provides for certain practical expedients. Early adoption is permitted. The Company is currently evaluating the effects that the adoption of ASU 2016-02 will have on the Company’s consolidated financial statements.38

In September 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This guidance clarifies the presentation requirements of eight specific issues within the statement of cash flows. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The adoption of this guidance is not expected to have a significant impact on the Company's financial statements, as the Company's treatment of the relevant affected items within its consolidated statement of cash flows is consistent with the requirements of this guidance.

In December 2017, the Securities and Exchange Commission (“SEC”) released Staff Accounting Bulletin No. 118 (the “Bulletin”), which provides accounting guidance regarding accounting for income taxes for the reporting period that includes the enactment of the Tax Act. The Bulletin provides guidance in those situations where the accounting for certain income tax effects of the Tax Act will be incomplete by the time financial statements are issued for the reporting period that includes the enactment date. For those elements of the Tax Act that cannot be reasonably estimated, no effect will be recorded.

F-37

DONGXING INTERNATIONAL INC.

~~December~~Notes ~~31,~~to ~~2017~~Consolidated ~~and~~Financial ~~2016~~Statements

~~Notes~~December To31, ~~Consolidated~~2018 ~~Financial~~and ~~Statements~~2017

The ~~SEC~~Company ~~has~~does ~~provided~~not inbelieve the ~~Bulletin that in situations where the~~adoption ~~accounting is incomplete for certain effects~~ of ~~the~~this ~~Tax~~ASU ~~Act,~~will have a ~~measurement~~material ~~period~~effect ~~which~~on ~~begins in~~ the ~~reporting~~Company’s ~~period~~consolidated ~~that~~financial ~~includes the~~statements ~~enactment~~or ofrelated ~~the Tax Act and ends when the entity has obtained, prepared and analyzed the information is needed in order to complete the accounting requirements~~disclosures. ~~The measurement period shall not exceed one year from enactment.~~

In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This guidance is effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The amendments in ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company ~~adoption~~is ofcurrently ~~this~~evaluating ~~guidance~~the ispotential ~~not~~impact ~~expected~~of toadopting ~~have~~this anew ~~material~~standard ~~impact~~ on ~~the~~its ~~Company's~~consolidated ~~Consolidated~~statements ~~Financial Statements~~ and related disclosures.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases (Topic 842). ASU 2016-02 requires a lessee to record a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, on the balance sheet for all leases with terms longer than 12 months, as well as the disclosure of key information about leasing arrangements. ASU 2016-02 requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the lease is allocated over the lease term. ASU 2016-02 requires classification of all cash payments within operating activities in the statement of cash flows. Disclosures are required to provide the amount, timing and uncertainty of cash flows arising from leases. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on the Company’s consolidated financial statement presentation or disclosures.

NOTE 4 – OTHER CURRENT ASSETS

Other current assets consist of the following:

	December 31, 2017			December 31, 2016
	December 31, 2018			December 31, 2017
Bid deposit	$	7773		$	~~17,299~~77
Employee advance		~~1,557~~—			1,~~062~~557
Other receivables		138,~~215~~114			—13,215
Other		~~1,320~~(297	)		1,~~218~~320
		16,169		$	19,579
	$	7,889		$	16,169

F-39

DONGXING INTERNATIONAL INC.

Notes to Consolidated Financial Statements

December 31, 2018 and 2017

NOTE 5 – PROJECT IN PROGRESS

Projects in progress represents costs accumulated on two projects at various stages of completion. Payments made by the customers to offset those costs are recorded as Advances from Customers. The Company started the two projects in 2013 and could not complete the projects since the projects' sites were not ready for the installation of energy saving lights. The Company could not estimate the time when the projects could be completed. During 2014 and 2015, the Company performed impairment tests based on the available information and had recorded a 100% impairment loss by the end of 2015.

FNOTE 6 -38 RELATED PARTY TRANSACTIONS AND BALANCES

DONGXING INTERNATIONAL INC.

December 31, 2017 and 2016

Notes To Consolidated Financial Statements

NOTE 6 - RELATED PARTY TRANSACTIONS

Due to related parties are non-interest bearing and due on demand. The balance of due to related parties consists of the following:

	Notes		December 31, ~~2017~~2018		December 31, ~~2016~~2017
Stockholders
Cheng,Zhao		(1)	$	222,682	$	75,711
Cheng, Zhao		(1)	$	369,702	$	222,682
Jufang,Yang		(3)		7,652		-
Jufang, Yang		(3)		7,285		7,652
Other related parties
Harbin Dongke Optronics Science and Technology Co., Ltd. ("Dongke")		(2)		8141,~~723~~449		~~123~~81,~~762~~723
Total due to related parties			$	~~312~~418,~~057~~436	$	~~199~~312,~~473~~057

(1) Mr. Cheng Zhao is the Company's CEO and a stockholder. During the years ended December 31, ~~2017~~2018 and ~~2016~~2017, Mr. Cheng advance $~~187~~173,~~706~~ 804 and $ 90187,~~775~~ 706 to the Company. During the year ended December 31, ~~2017~~2018, Mr. Cheng agreed to reduce the Company's obligation by $5010,000 in satisfaction of Mr. Cheng's stock subscription in that amount (See Note 8). On April 16, 2018, the Company signed a lease agreement with Mr. Cheng Zhao to lease office space from Mr. Cheng Zhao in China for approximately $12,000 (RMB80,000) for rent period from May 1, 2018 to December 31, 2018. The lease was renewed on December 29, 2018 for one year until December 31, 2019 for approximately $18,000 (RMB120,000) per annual. Rent expense incurred to Mr. Cheng Zhao was approximately $12,000 for the year ended December 31, 2018 (See Note 10).

(2) Dongke is a company organized in China. Mr. Cheng Zhao, stockholder and Chief Executive Officer of the Company, was the president of Dongke until 2015. During the years ended December 31, ~~2016~~2018 and 2017, ~~Dongke~~the ~~advanced~~Company made repayment of $937,~~644~~707 and $48,068 respectively to Dongke ~~the~~on ~~Company~~account of prior advances. ~~During~~In addition, the ~~year~~Company’s ~~ended~~subsidiary, ~~December~~Harbin 31Dongxing, provided design service to Dongke ~~2017,~~in the ~~Company~~amount ~~repaid~~of $481,~~068~~834 toduring ~~Dongke~~the onyear ~~account~~ended ofDecember ~~prior~~31, ~~advances~~2018.

(3) Ms. Jufang Yang is a stockholder of the Company. During the year ended December 31, 2017, Ms. Jufang Yang advanced $7,652 (RMB50,000) to the Company as an investment deposit.

F-40

DONGXING INTERNATIONAL INC.

Notes to Consolidated Financial Statements

December 31, 2018 and 2017

NOTE 7 - ACCRUED EXPENSES AND OTHER PAYABLES

Accrued expenses and other payables consisted of the following:

	December 31, 2017		December 31, 2016
	December 31, 2018		December 31, 2017
Accrued expenses	$	2438,~~180~~115	$	3424,~~734~~180
Tax payable		~~717~~516		~~1,704~~717
Deposit payable		2624,~~093~~843		2326,~~064~~093
Others		1,632		—
Salary payable		6,844		—
	$	52,622	$	59,502
Others		212		1,660
	$	70,530	$	52,650

F-39

DONGXING INTERNATIONAL INC.

December 31, 2017 and 2016

Notes To Consolidated Financial Statements

NOTE 8 - STOCKHOLDERS’ DEFICIENCY

~~During~~Capital ~~2017 and 2016, Mr. Cheng Zhao, the Company's CEO and a stockholder, made capital~~ contribution ~~to the Company of $21,698 and $27,099, respectively.~~

During the years ended December 31, 2018 and 2017, Mr. Cheng Zhao, the Company CEO and a stockholder, made capital contribution to the Company of $0 and $21,698, respectively.

Reverse split and forward split

On August 9, 2018 the Company filed a Certificate of Amendment of Certificate of Incorporation. The Amendment effected a 1-for-2,000,000 reverse split of the Company's common stock. The Amendment further provided that any fractional shares resulting from the reverse split will be purchased by the Company for a price based on Ten Cents ($.10) per full share, upon delivery of the stock certificate to the Company's transfer agent. The effect of the reverse split was that 10,000,000 shares previously held by Cheng Zhao were reduced to five shares, and the remaining 20,000,000 shares previously held by the shareholders of the Company were eliminated.

The Amendment further provided that after giving effect to the reverse split, a 6,000,000-for-1 forward split of the common stock was implemented. The effect of the forward split was to increase the number of shares held by Cheng Zhao to 30,000,000.

Stock subscription receivable

During the period from May 8, 2012 to November 30, 2015, Mr. Cheng Zhao purchased 6,000,000 ordinary shares from Central Dynamic for a commitment to pay $60,000. During the period from May 8, 2012 to November 30, 2015, 19 shareholders of Central Dynamic acquired 19,000,000 ordinary shares by committing to pay a total of $190,000 to Central Dynamic. On September 30, 2016, those 20 shareholders exchanged their shares of Central Dynamic for 25,000,000 shares of the Company's common stock. Effective as of August 9, 2018, before the reverse split, Mr. Cheng Zhao satisfied his $60,000 payment commitment in full. At the time of reverse split, the Company cancelled the $190,000 subscription receivable that related to the 19,000,000 shares issued to other shareholders on September 30, 2016 and eliminated as a result of the reverse split on August 9, 2018.

F-41

DONGXING INTERNATIONAL INC.

Notes to Consolidated Financial Statements

December 31, 2018 and 2017

NOTE 9 - INCOME TAXES

The Company was incorporated in the United States and has operations in four tax jurisdictions - the United States, the Hong Kong Special Administrative Region (“HK SAR”), the PRC, and the British Virgin Islands (“BVI”).

The Company’s BVI operations are not subject to any taxes according to BVI tax law. The Company’s HK SAR subsidiary is subject to a 16.5% profit tax based on its taxable net profit. The Company’s U.S. operations are subject to income tax according to U.S. tax law.

The U.S. Tax Cuts and Jobs Act (Tax Act) was enacted on December 22, 2017 and introduces significant changes to U.S. income tax law. Effective in 2018, the Tax Act reduces the U.S. statutory tax rate from 35% to 21% and creates new taxes on certain foreign-sourced earnings and certain related-party payments, which are referred to as the global intangible low-taxed income tax and the base erosion tax, respectively. The Tax Act requires the Company to pay U.S. income taxes on accumulated foreign subsidiary earnings not previously subject to U.S. income tax at a rate of 15.5% to the extent of foreign cash and certain other net current assets and 8% on the remaining earnings. Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, the Company has not recorded any adjustments according to Tax Act. As we collect and prepare necessary data, and interpret the Tax Act and any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, we may make adjustments to the provisional amounts. Those adjustments may materially impact our provision for income taxes and effective tax rate in the period in which the adjustments are made. The accounting for the tax effects of the Tax Act will be completed in 2018.

The Company’s three operating subsidiaries, Harbin Dongxing, Dongxing Online and Harbin Dongrong, are generally subject to PRC enterprise income tax (“EIT”). These three companies are subject to an EIT rate of 25% under China’s Unified Enterprise Income Tax Law (“New Tax Law”).

~~F-40~~ A reconciliation of the provision for income taxes determined at the U.S. statutory rate of 21% and 35% to the Company's effective income tax rate is as follows:

	Years ended December 31,
	2018			2017
Loss before provision for income tax	$	(177,952	)	$	(159,184	)
U.S. federal corporate income tax rate		21	%		35	%
Expected U.S. income tax credit		(37,370	)		(55,714	)
Tax rate difference between U.S. and foreign operations		(7,111)			15,947
Change of valuation allowance		44,481			39,767
Effective tax expense	$	—		$	—

The Company had deferred tax assets as follows:
		December 31,			December 31,
		2018			2017
Net operating losses carried forward	$	225,558		$	199,564
Less: Valuation allowance		(225,558)			(199,564	)
Net deferred tax assets	$	—		$	—

As of December 31, 2018, the Company has approximately $900,000 net operating loss carryforwards available in China and HK SAR to reduce future taxable income. The net operating loss of Chinese subsidiaries could be carried forward for a period of not more than five years from the year of the initial loss pursuant to relevant PRC tax laws and regulations. The net operating loss from Hong Kong operations can be carried forward with no time limit from the year of the initial loss pursuant to relevant Hong Kong tax laws and regulations. It is more likely than not that the deferred tax assets cannot be utilized in the future because there will not be significant future earnings from the entity which generated the net operating loss. Therefore, the Company recorded a full valuation allowance on its deferred tax assets.

F-42

DONGXING INTERNATIONAL INC.

~~December~~Notes ~~31,~~to ~~2017~~Consolidated ~~and~~Financial ~~2016~~Statements

~~Notes~~December To31, ~~Consolidated~~2018 ~~Financial~~and ~~Statements~~2017

AAs ~~reconciliation~~ of ~~the~~December ~~provision~~31, ~~for~~2018 ~~income~~and ~~taxes~~2017, ~~determined~~the atCompany has no material unrecognized tax benefits which would favorably affect the ~~local~~effective income tax rate toin future periods, and does not believe that there will be any significant increases or decreases of unrecognized tax benefits within the ~~Company’s~~next ~~effective~~twelve months. No interest or penalties relating to income tax ~~rate~~matters have been imposed on the Company during the years ended December 31, 2018 and 2017, and no provision for interest and penalties is deemed necessary as ~~follows:~~of December 31, 2018 and 2017.

	Years ended December 31,
	2017			2016
Pre-tax loss	$	(159,184	)	$	(222,498	)
U.S. federal corporate income tax rate		35	%		35	%
Expected U.S. income tax credit		(55,714	)		(77,874	)
Tax rate difference between U.S. and foreign operations		15,947			22,524
Change of valuation allowance		39,767			55,350
Effective tax expense	$	—		$	—
The Company had deferred tax assets as follows:
		December 31,			December 31,
		2017			2016
Net operating losses carried forward	$	199,564		$	183,324
Less: Valuation allowance		(199,564	)		(183,324	)
Net deferred tax assets	$	—		$	—

As of December 31, 2017, the Company has approximately $799,000 net operating loss carryforwards available in China to reduce future taxable income. The net operating loss of Chinese subsidiaries could be carried forward for a period of not more than five years from the year of the initial loss pursuant to relevant PRC tax laws and regulations. It is more likely than not that the deferred tax assets cannot be utilized in the future because there will not be significant future earnings from the entity which generated the net operating loss. Therefore, the Company recorded a full valuation allowance on its deferred tax assets.

As of December 31, 2017 and 2016, the Company has no material unrecognized tax benefits which would favorably affect the effective income tax rate in future periods, and does not believe that there will be any significant increases or decreases of unrecognized tax benefits within the next twelve months. No interest or penalties relating to income tax matters have been imposed on the Company during 2017 or 2016, and no provision for interest and penalties is deemed necessary as of December 31, 2017 and 2016.

According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or its withholding agent. The statute of limitations extends to five years under special circumstances, which are not clearly defined. In the case of a related party transaction, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion.

FThe U.S. Tax Cuts and Jobs Act (Tax Act) was enacted on December 22, 2017 and introduces significant changes to U.S. income tax law. Effective in 2018, the Tax Act reduces the U.S. statutory tax rate from 35% to 21% and creates new taxes on certain foreign-41 sourced earnings and certain related-party payments, which are referred to as the global intangible low-taxed income tax and the base erosion tax, respectively. The Tax Act requires the Company to pay U.S. income taxes on accumulated foreign subsidiary earnings not previously subject to U.S. income tax at a rate of 15.5% to the extent of foreign cash and certain other net current assets and 8% on the remaining earnings. Since the Company’s foreign subsidiaries have not generated income since inception, the Company believes that Tax Act will not have significant impact on the Company’s consolidated financial statements.

~~DONGXING~~NOTE ~~INTERNATIONAL~~10 ~~INC.~~- COMMITMENT AND CONTINGENCIES

December 31, 2017 and 2016

Notes To Consolidated Financial Statements

NOTE 10 - STOCK SUBSCRIPTION RECEIVABLE

During the period from May 8, 2012 to November 30, 2015, Mr. Cheng Zhao purchased 6,000,000 ordinary shares from Central Dynamic for a commitment to pay $60,000. During the period from May 8, 2012 to November 30, 2015, 19 shareholders of Central Dynamic acquired 19,000,000 ordinary shares by committing to pay a total of $190,000 to Central Dynamic. On September 30, 2016 those 20 shareholders exchanged their shares of Central Dynamic for 25,000,000 shares of the Company's common stock. Effective as of December 31, 2017, Mr. Cheng Zhao satisfied $50,000 of his payment commitment. The unpaid balance of $200,000 has been recorded as a stock subscription receivable on the consolidated statements of stockholders’ equity (deficiency).

NOTE 11 - COMMITMENT AND CONTINGENCIES

Lease commitments

Lease with independent parties

The Company has entered into office lease agreements with independent parties which expire on April 17, 2018. On December 1, 2017, the Company renewed the lease for another half year from May 1, 2018 to October 31, 2018. The Company’s lease payments are paid annually in advance and has been paid in full as of December 31, 2017.

The Company subleased part of the office space to a third party with annual rent of approximately $17,000. The sublease expires on April 17, 2018. The rental income from sublease was recorded as net of rental expense. Uncollected rent was recorded as rent receivable on the Company's balance sheet. The rental income ~~to be~~ received in 2018 under the noncancelable sublease aggregates approximately $4,~~700~~800.

~~The net rental expense was approximately $32,000 for the years ended December 31, 2017 and 2016, respectively.~~F-43

~~NOTE~~DONGXING ~~12-~~INTERNATIONAL ~~SUBSEQUENT EVENT~~INC.

Notes to Consolidated Financial Statements

December 31, 2018 and 2017

Lease with related parties

On April 16, 2018, the Company signed a lease agreement with Mr. Cheng Zhao to lease office space from Mr. Cheng Zhao in China for approximately $12,000 (RMB80,000) for rent period from May 1, 2018 to December 31, 2018. The lease was renewed on December 29, 2018 for one year until December 31, 2019 for approximately $18,000 (RMB120,000) per annual. Lease payment of approximately $12,000 (RMB80,000) was paid in December 2018. The rent expense to be paid in 2019 under the noncancelable lease agreement aggregates approximately $18,000 (RMB120,000).

The net rental expense (independent parties and related parties) was approximately $44,000 and $32,000 for the years ended December 31, 2018 and 2017, respectively.

NOTE 11 - MAJOR CUSTOMERS

Sales to two customers represented 74% and 17% of total sales for the year ended December 31, 2018, respectively and sales to one customer represented 89% of total sales for the year ended December 31, 2017.

NOTE 12 - SUBSEQUENT EVENT

The Company has evaluated the existence of significant events subsequent to the balance sheet date through the date the financial statements were issued and has determined that there were no subsequent events or transactions which would require recognition or disclosure in the financial statements.

F-42 44

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not Applicable

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. As of December 31, ~~2017~~2018, Cheng Zhao, our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures have the following material weaknesses:

The relatively small number of employees who are responsible for accounting functions prevents us from segregating duties within our internal control system.
Our internal financial staff lack expertise in identifying and addressing complex accounting issued under U.S. Generally Accepted Accounting Principles.
Our Chief Financial Officer is not familiar with the accounting and reporting requirements of a U.S. public company.
We have not developed sufficient documentation concerning our existing financial processes, risk assessment and internal controls.

Based on his evaluation, Mr. Cheng concluded that the Company’s system of disclosure controls and procedures was not effective as of December 31, ~~2017~~2018 for the purposes described in this paragraph.

Changes in Internal Controls. There was no change in internal control over financial reporting (as defined in Rule 13a-15(f) promulgated under the Securities Exchange Act or 1934) identified in connection with the evaluation described in the preceding paragraph that occurred during Dongxing International Inc.’s fourth fiscal quarter that has materially affected or is reasonably likely to materially affect Dongxing International Inc.’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. We have assessed the effectiveness of those internal controls as of December 31, ~~2017~~2018 using the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) Internal Control – Integrated Framework (1992) as a basis for our assessment.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

43 45

A material weakness in internal controls is a deficiency in internal control, or combination of control deficiencies, that adversely affects the Company’s ability to initiate, authorize, record, process, or report external financial data reliably in accordance with accounting principles generally accepted in the United States of America such that there is more than a remote likelihood that a material misstatement of the Company’s annual or interim financial statements that is more than inconsequential will not be prevented or detected. In the course of making our assessment of the effectiveness of internal controls over financial reporting, we identified three material weaknesses in our internal control over financial reporting. These material weaknesses consisted of:

The relatively small number of employees who are responsible for accounting functions prevents us from segregating duties within our internal control system.
Our internal financial staff lack expertise in identifying and addressing complex accounting issued under U.S. Generally Accepted Accounting Principles.
Our Chief Financial Officer is not familiar with the accounting and reporting requirements of a U.S. public company.
We have not developed sufficient documentation concerning our existing financial processes, risk assessment and internal controls.

Management does not believe that the current level of the Company’s operations warrants a remediation of the weaknesses identified in this assessment. However, because of the above condition, management’s assessment is that the Company’s internal controls over financial reporting were not effective as of December 31, ~~2017~~2018.

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

Item 9B Other Information

None.

44 46

PART III

Item 10.

Directors, Executive Officers and Corporate Governance

Dongxing International Inc.

The name of the sole officer and director of Dongxing International Inc., our U.S. parent company, and certain information about him, is set forth below:

Name		Age		Position(s)	Director Since
Cheng Zhao		4344		Chairman of the Board, Chief Executive Officer, Chief Financial Officer	2015

Cheng Zhao. Cheng Zhao has been employed for more than the past ten years in managerial positions in the People's Republic of China. Since 2011 he has served as President and Chief Executive Officer of Harbin Dongxing. From 2008 to 2015, Mr. Cheng was employed as General Manager of Harbin Dongke Optronics Science and Technology Co., Ltd., which manufactured and marketed electronic lighting products. From 2004 to 2008, Mr. Cheng was employed as General Manager of Harbin Litian Scientific and Technological Development Co., Ltd., which developed high-tech products for the agriculture industry. In 2004 Mr. Cheng was awarded a Master's Degree in Business Administration by the City University of Seattle (State of Washington). In 1998, he earned a Bachelor's Degree with a concentration in International Business at the Heilongjiang University of Commerce (Heilongjiang Province).

Harbin Dongxing Energy Saving Technical Service Co., Ltd.

The names of officers of Harbin Dongxing, our operating company, and certain information about them, are set forth below:

Name	Age	Position(s)
Cheng Zhao	4344	President
Zhao Zhongnan	4849	Finance Manager
Yi Liqiu	4546	Engineering Manager

Cheng Zhao. See above.

Zhao Zhongnan. Zhao Zhongnan has ~~twenty~~over twenty years experience in financial management. Prior to being engaged as Finance Manager by Harbin Dongxing in 2016, Ms. Zhao was employed for ten years as Finance Manager of Harbin Zhengda Longxiang Pharmaceutical Co., Ltd. Previously, from 2000 to 2007, Ms. Zhao was employed as Finance Director of Harbin Shenlan Jiade Technology R&D Co., Ltd., and from 1997 to 2000 as an Accounting ~~Assistant~~ Assistant in the Harbin Dazheng Accounting Firm. Ms. Zhao graduated from the Harbin University of Commerce in 1997 with a major in Commercial Economic Administration. She was certified as a Middle-Level Certified Accountant in 2005.

Yi Liqui. Yi Liqui has ~~fifteen~~sixteen years experience in production engineering, and is currently responsible for supervising the engineering and design functions of Harbin Dongxing. Mr. Yi gained his understanding of LED technology while employed as Electrical Design and Production Supervisor for the Harbin Institute of Technology Bada Group, Director of Electrical Design for the Harbin Huachun Medical Chemistry Environmental Protection Co., Ltd., and Designer and Team Leader for the Harbin Tianye Electronic Co., Ltd., among other employers. Mr. Yi earned a Bachelor degree in industrial automation.

45 47

Audit Committee

The Board of Directors has not appointed an Audit Committee. The functions that would be performed by an Audit Committee are performed by the Board of Directors. The Board of Directors does not have an “audit committee financial expert,” because there is only one Board member.

Code of Ethics

The Company has not adopted a formal code of ethics applicable to its executive officers. The Board of Directors has determined that the Company’s financial operations are not sufficiently complex to warrant adoption of a formal code of ethics.

Section 16(a) Beneficial Ownership Reporting Compliance

None of the officers, directors or beneficial owners of more than 10% of the Company’s common stock failed to file on a timely basis the reports required by Section 16(a) of the Exchange Act during the year ended December 31, ~~2017~~2018, except that Cheng Zhao has failed to file a Form 3 and a Form 4 when due.

Item 11. Executive Compensation

The following table sets forth all compensation awarded to, earned by, or paid by Dongxing International Inc. and its subsidiaries to its Chief Executive Officer during the past three fiscal years. ~~Andrew Zagorski served as Chief Executive Officer through September 21, 2015, when he was replaced by Cheng Zhao.~~ There was no officer or employee whose compensation for ~~2017~~2018 exceeded $100,000.

	Fiscal Year		Salary		Bonus		Stock Awards		Option Awards		Other Compensation
Cheng Zhao		~~2017~~2018	$	115,~~000~~587		—		—		—	$	21,~~200~~707
		2017	$	11,000		—		—		—	$	2,200
		2016	$	5,871		—		—		—	$	541
		2015		—		—		—		—		—
Andrew Zagorski		2015		—		—		—		—		—

Employment Agreements

Dongxing International does not have any employment agreements with any of its directors or executive officers. Harbin Dongxing, our operating affiliate, has employment agreements with all of its officers other than Cheng Zhao, as required by Chinese labor laws.

PRC employment law requires an employee be paid severance pay based on the number of years worked with the employer at the rate of one month’s wage for each full year worked. Any period of more than six months but less than one year shall be counted as one year.　The severance pay payable to an employee for any period of less than six months shall be one-half of his monthly wages. The monthly salary mentioned above is defined as the average salary of 12 months before revocation or termination of the employment contract.

46 48

We have not provided retirement benefits (other than a state pension scheme in which all of our employees in China participate) or severance or change of control benefits to our named executive officers.

Equity Grants

The following tables set forth certain information regarding the stock options acquired by the Company’s Chief Executive Officer during the year ended December 31, ~~2017~~2018 and those options held by him on December 31, ~~2017~~2018.

Option Grants in the Last Fiscal Year

Potential realizable
value at assumed
annual rates of
appreciation
for option term

Number of

securities

underlying

option

granted

Percent

of total

options

granted to

employees

in fiscal

year

Exercise

Price

($/share)

Expiration

Date

10%

Cheng Zhao

—

The following tables set forth certain information regarding the stock grants received by the executive officers named in the table above during the year ended December 31, ~~2017~~2018 and held by them unvested at December 31, ~~2017~~2018.

Unvested Stock Awards in the Last Fiscal Year

Number of

Shares That

Have Not

Vested

Market Value

of Shares That

Have Not

Vested

Cheng Zhao

—

Compensation of Directors

The members of our Board of Directors receive no compensation for their services on the Board.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information known to us with respect to the beneficial ownership of our common stock as of the date of this report by the following:

each shareholder known by us to own beneficially more than 5% of our common stock;

Cheng Zhao;

each of our directors; and

all directors and executive officers as a group.

There are 30,000,000 shares of our common stock outstanding on the date of this report. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed below have sole voting power and investment power with respect to their shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission.

In computing the number of shares beneficially owned by a person and the percent ownership of that person, we include shares of common stock subject to options or warrants held by that person that are currently exercisable or will become exercisable within 60 days. We do not, however, include these “issuable” shares in the outstanding shares when we compute the percent ownership of any other person.

Beneficial Owner(1)	Amount and Nature of Beneficial Ownership	~~Amount~~Percentage ~~and Nature~~ of ~~Beneficial Ownership~~Class		~~Percentage of Class~~
Cheng Zhao	9,500,000	31.7%	~~10,500,000~~		~~35.0~~	%
All officers and directors As a group (1 person)	9,500,000	31.7%	~~10,500,000~~		~~35.0~~	%

____________________________

(1) The address of each shareholder, unless otherwise noted, is c/o Dongxing International Inc., 3FRoom 1101,~~No.~~ 26International Finance Building, ~~Hengshan~~633 ~~Road~~Keji'er Street, ~~Nangang~~Songbei District, Harbin, Heilongjiang Province, P.R. China

~~Certain~~Except ~~Relationships~~as ~~and~~set forth in Note 6: “Related Party Transactions and Balances” to the Notes to Consolidated Financial Statements, there have been no transactions since the beginning of the 2018 fiscal year, or any currently proposed transaction, in which Dongxing International or any of its subsidiaries was or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of the total assets of Harbin Dongxing at year-end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest.

There have been no transactions since the beginning of the 2017 fiscal year, or any currently proposed transaction, in which Dongxing International or any of its subsidiaries was or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of the total assets of Harbin Dongxing at year-end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest.

Director Independence

None of the members of the Board of Directors is independent, as “independence” is defined in the Rules of the NYSE MKT.

Item 14. Principal Accountant Fees and Services

~~Paritz~~Prager &Metis ~~Company,~~CPAs ~~P.A.~~LLC was engaged to serve as as the Company's independent registered public accounting firm on October 1712, ~~2016~~2018. Prior to that date, ~~DeLeon~~Paritz & Company, P.A. was engaged as the Company's independent registered public accounting firm.

Audit Fees

~~Paritz~~Prager &Metis ~~Company,~~CPAs ~~P.A.~~LLC billed $3627,000 in connection with the audit and reviews of the Company’s financial statements for the year ended December 31, ~~2017~~2018. Paritz & Company, P.A. billed $10,000 and $36,000, respectively, in connection with the audit and reviews of the Company’s financial ~~statements~~ statements for the ~~year~~years ended December 31, ~~2016~~2018 and 2017. Also included are those services normally provided by the accountant in ~~connection~~ connection with the Company’s statutory and regulatory filings.

Audit-Related Fees

~~Paritz~~Prager &Metis ~~Company,~~CPAs ~~P.A.~~LLC did not bill the ~~Company~~ Company for any Audit-Related fees in fiscal ~~2017~~2018. Paritz & Company, P.A. did not bill the Company for any Audit-Related fees in fiscal ~~2016~~ 2017.

Tax Fees

~~Paritz~~Prager &Metis ~~Company,~~CPAs ~~P.A.~~LLC billed the Company $3,500 in fiscal ~~2017~~2018 for professional services rendered for tax compliance, tax advice and tax planning. Paritz & Company, P.A. ~~did not bill~~ billed the Company $3,500 in fiscal ~~2016~~2017 for professional services rendered for tax compliance, tax advice and tax planning.

All Other Fees

~~Paritz~~Prager &Metis ~~Company,~~CPAs ~~P.A.~~LLC did not bill the Company for any other fees in fiscal ~~2017~~2018. ~~Paritz & Company, P.A. did not bill the Company for any other fees in fiscal 2016.~~

Paritz & Company, P.A. did not bill the Company for any other fees in fiscal 2017.

It is the policy of the Company that all services, other than audit, review or attest services, must be pre-approved by the Board of Directors.

49 51

Item 15. Exhibits and Financial Statement Schedules

Exhibits

3.1	Certificate of Incorporation - filed as an exhibit to the Company’s Registration Statement on Form 10 filed on September 8, 2010, and incorporated herein by reference.
3.1(a)	Certificate of Amendment of Certificate of Incorporation dated May 20, 2011 - filed as an exhibit to the Current Report on Form 8-K filed on May 31, 2011, and incorporated herein by reference.
3.1(b)	Certificate of Amendment of Certificate of Incorporation dated December 23, 2013 - filed as an exhibit to the Current Report on Form 8-K filed on December 27, 2013, and incorporated herein by reference.
3.1(c)	Certificate of Amendment of Certificate of Incorporation dated November 19, 2015 - filed as an exhibit to the Current Report on Form 8-K filed on November 20, 2015, and incorporated herein by reference.
3.1(d)	Certificate of Amendment of Certificate of Incorporation dated August 9, 2018 - filed as an exhibit to the Current Report on Form 8-K filed on August 13, 2018, and incorporated herein by reference.
3.2	By-laws - filed as an exhibit to the Company’s Registration Statement on Form 10 filed on September 8, 2010, and incorporated herein by reference.
10.1	Exclusive Business Cooperation Agreement dated March 30, 2016 between Harbin Donghui Technology Co., Ltd. and Harbin Dongxing Energy Saving Technical Service Co., Ltd. (1)
10.2	Exclusive Purchase Right Agreement dated March 30, 2016 between Harbin Donghui Technology Co., Ltd., Cheng Zhao, Su Dianli and Harbin Dongxing Energy Saving Technical Service Co., Ltd. (1)
10.3	Pledge of Shares Agreement dated March 30, 2016 between Harbin Donghui Technology Co., Ltd., Cheng Zhao, Su Dianli and Harbin Dongxing Energy Saving Technical Service Co., Ltd. (1)
10.4	Letter of Authority dated March 30, 2016 given by Cheng Zhao to Harbin Donghui Technology Co., Ltd. (1)
10.5	Letter of Consent dated March 30, 2016 given by Ding Xue to Harbin Donghui Technology Co., Ltd. (1)
10.6	Letter of Authority dated March 30, 2016 given by Su Dianli to Harbin Donghui Technology Co., Ltd. (1)
10.7	Letter of Consent dated March 30, 2016 given by Shu Xueli to Harbin Donghui Technology Co., Ltd. (1)
10.8	Form of Distribution Agreement between Harbin Dongxing Online Technology Co., Ltd. and suppliers. (1)
21	Subsidiaries
31	Rule 13a-14(a) Certification
32	Rule 13a-14(b) Certification
101.INS	XBRL Instance
101.SCH	XBRL Schema
101.CAL	XBRL Calculation
101.DEF	XBRL Definition
101.LAB	XBRL Label
101.PRE	XBRL Presentation

______________________________

⁽¹⁾

Filed as an exhibit to the Current Report on Form 8-K filed on October 14, 2016 and incorporated herein by reference.

50 ITEM 16. FORM 10-K SUMMARY. None.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dongxing International Inc. ~~By: /s/ Cheng Zhao Cheng Zhao, Chief Executive Officer~~

InBy: ~~accordance~~/s/ ~~with~~Cheng ~~the~~Zhao ~~Exchange Act, this Report has been signed below on March 30, 2018 by the following persons, on behalf of the Registrant and in the capacities and on the dates indicated.~~

Cheng Zhao, Chief Executive Officer

In accordance with the Exchange Act, this Report has been signed below on April 15, 2019 by the following persons, on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ Cheng Zhao

Cheng Zhao, Director

Chief Executive Officer, Chief Financial and Accounting Officer

~~Financial and Accounting Officer~~53

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