UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~June~~September 30, 2021

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

For the transition period from ______ to ______

Commission file number 98-~~0440762~~0440762000-52506

ESP RESOURCES, INC.

(Exact name of registrant as specified in its charter)

Nevada

98-0440762

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

6770

(Primary Standard Industrial Classification Code Number)

1185 Avenue of the Americas 3rd Floor New York,
Unit 1905, 19/F.,Tower 1 China HK City,
New York		10036
33 Canton Road Tsim Sha Tsui, Hong Kong		N/A
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code ~~(646)~~+852 ~~768~~3310 ~~-8417~~4641

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

Title of each class

Trading Symbol(s)

Name of exchange

on which registered

N/A

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☐ Yes ☒ 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 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.

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

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

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

The number of shares outstanding of the registrant’s common stock as of ~~July~~November 203, 2021 was 237,080,429 shares.

DOCUMENTS INCORPORATED BY REFERENCE — NONE

ESP RESOURCES, INC.

QUARTERLY REPORT ON FORM 10-Q

For the ~~three~~Three and ~~six~~Nine months ended ~~June~~September 30, 2021

Part I – FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	10

Item 4.	Controls and Procedures	10

Part II – OTHER INFORMATION

Item 1.	Legal Proceedings	12

Item 1A.	Risk Factors	12

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	12

Item 3.	Defaults Upon Senior Securities	12

Item 4.	Mine Safety Disclosures	12

Item 5.	Other Information	12

Item 6.	Exhibits	13

SIGNATURES		14

PART I FINANCIAL INFORMATION

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Information contained in this quarterly report on Form 10-Q contains “forward-looking statements.” These forward-looking statements are contained principally in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology. The forward-looking statements herein represent our expectations, beliefs, plans, intentions or strategies concerning future events, including, but not limited to: our ability to consummate the Merger, as such term is defined below; the continued services of the Custodian as such term is defined below; our future financial performance; the continuation of historical trends; the sufficiency of our resources in funding our operations; our intention to engage in mergers and acquisitions; and our liquidity and capital needs. Our forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that any projections or other expectations included in any forward-looking statements will come to pass. Moreover, our forward-looking statements are subject to various known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. These risks, uncertainties and other factors include but are not limited to: the risks of limited management, labor, and financial resources; our ability to establish and maintain adequate internal controls; our ability to develop and maintain a market in our securities; and our ability obtain financing, if and when needed, on terms that are acceptable. Except as required by applicable laws, we undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

As used in this quarterly report on Form 10-Q, “we”, “our”, “us” and the “Company” refer to ESP RESOURCES, INC. a Nevada corporation unless the context requires otherwise.

Item 1. Financial Statements.

Index to Financial Statements

		Page
FINANCIAL STATEMENTS:
Balance Sheets, June 30, 2021 (unaudited), and December 31, 2020		2
Balance Sheets, September 30, 2021 (unaudited), and December 31, 2020		2
Unaudited Statements of Operations for the Three and Six Months Ended June 30, 2021, and 2020		3
Unaudited Statements of Operations for the Three and Nine Months Ended September 30, 2021, and 2020		3
Unaudited Statements of Changes in Stockholders’ Deficit for the Three and Six Months Ended June 30, 2021, and 2020		4
Unaudited Statements of Changes in Stockholders’ Deficit for the Three and Nine Months Ended September 30, 2021, and 2020		4
Unaudited Statements of Cash Flows for the Three Months and Six Months Ended June 30, 2021, and 2020		5
Unaudited Statements of Cash Flows for the Three Months and Nine Months Ended September 30, 2021, and 2020		5
Notes to the Unaudited Interim Financial Statements		6

ESP RESOURCES, INC.

~~Balance~~Consolidated Balance Sheets

(~~unaudited~~Unaudited)

	June 30,			December 31,
	September 30,			December 31,
	2021			2020
Assets
Total assets	$	-		$	-
Liabilities and Stockholders’ Deficit
Current Liabilities
Due to related parties		~~9,620~~-			9,546
Total current liabilities		~~9,620~~-			9,546
Total liabilities		~~9,620~~-			9,546
Stockholders’ Deficit
Common Stock - $0.001 par value, 350,000,000 shares authorized; 237,830,249 shares and outstanding as of June 30, 2021 and December 31, 2020, respectively		237,831			237,831
Common Stock - $0.001 par value, 350,000,000 shares authorized; 237,830,249 shares and outstanding as of September 30, 2021 and December 31, 2020, respectively		237,831			237,831
Additional paid in capital		26,~~620~~632,~~553~~273			26,620,553
Accumulated deficit		(26,~~868~~870,~~004~~104	)		(26,867,930	)
Total stockholders’ deficit		~~(9,620~~-	)		(9,546	)
Total liabilities and stockholders’ deficit	$	-		$	-

The accompanying notes are an integral part of these financial statements

ESP RESOURCES, INC.

~~Statements~~Consolidated Statements of Operations

(~~unaudited~~Unaudited)

	For the three Months Ended					For the Six Months Ended
	For the Three Months Ended					For the Nine Months Ended
	June 30,					June 30,
	September 30,					September 30,
	2021			2020		2021			2020
Revenue
Total revenue, net	$	-		$	-	$	-		$	-
Operating expenses
General and administrative expenses		742,100			-		742,174			-
Total operating expenses		742,100			-		742,174			-
Loss from Operations		(742,100	)		-		(742,174	)		-
Other income (expenses)
Total other income (expenses), net		-			-		-			-
Loss from operations before income taxes		(742,100	)		-		(742,174	)		-
Income tax expense		-			-		-			-
Net Loss	$	(742,100	)	$	-	$	(742,174	)	$	-
Weighted average number of ordinary shares
Basic and diluted		237,830,249			-		237,830,249			-
Earnings per share
Basic and diluted	$	-		$	-	$	-		$	-

The accompanying notes are an integral part of these financial statements

ESP RESOURCES, INC.

~~Statements~~Consolidated Statements of Changes in Shareholders’ Deficit

(~~unaudited~~Unaudited)

	Common Stock				Additional paid in		Accumulated
	Shares		Amount		capital		Deficit			Total
Balance, January 1, 2021		237,830,249	$	237,831	$	26,620,553	$	(26,867,930	)	$	(9,546	)
Net loss		-		-		-		-			-
Balance, March 31, 2021		237,830,249	$	237,831	$	26,620,553	$	(26,867,930	)	$	(9,546	)
Net loss		-		-		-		(74	)		(74	)
Balance, June 30, 2021		237,830,249	$	237,831	$	26,620,553	$	(26,868,004	)	$	(9,620	)
Net loss				-				(2,100	)		(2,100	)
Forgiveness of debt by related party						11,720					11,720
Balance, September 30, 2021		237,830,249	$	237,831	$	26,632,273	$	(26,870,104	)	$	-

The accompanying notes are an integral part of these financial statements

ESP RESOURCES, INC.

~~Statements~~Consolidated Statements of Cash Flows

(~~unaudited~~Unaudited)

	For the Six Months Ended
	For the Nine Months Ended
	June 30,
	September 30,
	2021			2020
Cash Flows From Operating Activities
Net loss	$	(742,174	)	$	-
Adjustments to reconcile net income to net cash provided by operating activities:
Changes in operating assets and liabilities
Net cash used in operating activities		(2,174	)		-
Due to related parties		74			-
Net cash used in operating activities		-			-
Cash Flows From Investing Activities
Net cash used in investing activities		-			-
Cash Flows From Financing Activities
Net cash provided by financing activities		-			-
Related party loans		2,174
Net cash provided by financing activities		2,174			-
Net change in cash		-			-
Cash , beginning of year		-			-
Cash, beginning of year		-			-
Cash, end of year	$	-		$	-
Supplemental disclosure of cash flow information
Cash paid for income tax expense	$	-		$	-
Cash paid for interest expense	$	-		$	-
Supplemental disclosure of non-cash investing and financing activity
Forgiveness of debt by related party	$	11,720		$	-

The accompanying notes are an integral part of these financial statements

ESP RESOURCES, INC.

NOTES TO (UNAUDITED) FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

ESP Resources, Inc. (“ESP Resources” the “Company”) was incorporated in the State of Nevada on October 27, 2004.

On March 10, 2016, ESP Resources, Inc. (the “Company” and/or the “Debtor”) filed a voluntary petition (the “Voluntary Petition”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) Case No. 16-60021-H2-11 seeking relief under the provisions of Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”). The Company’s bankruptcy case is being jointly administered with that of ESP Petrochemicals, Inc. under Case No. 16-60020-H2-11.

On January 7, 2021, as a result of a custodianship in Clark County, Nevada, Case Number: A-20-825339-B, Custodian Ventures LLC (“Custodian”) was appointed custodian of (the “Company”). David Lazar is the managing director of Custodian

On January 7, 2021, Custodian appointed David Lazar as the Company’s Chief Executive Officer, President, Secretary, Chief Financial Officer, Chief Executive Officer and Chairman of the Board of Directors.

On August 19, 2021, Ms. Zhuang Qiao Luan (the “Purchaser”) purchased 10,000,000 shares (the “Shares”) of the Series A Preferred Stock (the “Series A”) of ESP Resources, Inc. from NYJJ (Hong Kong) Limited. The Purchaser purchased the Shares for cash consideration of $400,000. The Shares represent 100% of the issued and outstanding Series A. The Series A has 90% of the voting power of all classes of stock issued and outstanding of the Company.

On August 31, 2021 David Lazar resigned from his positions as sole member of the Board of Directors of the Company and President, CEO, Treasurer, CFO and Secretary positions of the Company. On the same day the Company’s Board approved, by unanimous written consent in lieu of special meeting of the Board, the appointment of Messrs. Zhuang Rong Cheng and Zhuang Ze Qiang as the new directors of the Company, effective as of the Effective Time. The Board submitted such appointment for approval and ratification by the Company’s stockholders, who approved such appointment by a vote of 90% of the total voting stock of the Company.

Zhuang Rong Cheng, 64, acted as director of Pacific International Limited, a food trading business, from 1991 to July 2021. He is currently serving as the legal representative of Shihui Jiagang Real Estate Development Co. Ltd., Shenzhen Jinshuihe Green Food Management Co., Ltd., and as a director of Chuang’s Foundation Limited. Mr. Zhuang was selected to serve as a director due to his extensive management and marketing experience and his judgment in assessing business strategies and accompanying risks. Neither Mr. Zhuang nor his affiliates have within the past five years, filed any bankruptcy petition, been convicted in or been the subject of any pending criminal proceedings, nor or is any such person the subject of any order, judgment or decree involving the violation of any state or federal securities laws. Mr. Zhuang does not anticipate taking cash compensation from the Company in connection with his service as officer of the Company and has yet to negotiate a compensation agreement with the Company.

Zhuang Ze Qiang, 51, is the managing director of Asia Gem International Trading Limited and CNWeb Culture Media Co., Limited. Mr. Zhuang was selected to serve as a director due to his broad experience spanning different industries and sectors, including marketing, food, cosmetics, and health products. Neither he nor his affiliates have, within the past five years, filed any bankruptcy petition, been convicted in or been the subject of any pending criminal proceedings, nor or is any such person the subject of any order, judgment or decree involving the violation of any state or federal securities laws. Mr. Zhuang does not anticipate taking cash compensation from the Company in connection with his service as officer of the Company and has yet to negotiate a compensation agreement with the Company.

The Company’s year-end is December 31.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States.

Management’s Representation of Interim Financial Statements

The accompanying unaudited financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These financial statements should be read in conjunction with the audited financial statements and notes thereto on December 31, 2020, as presented in the Company’s Annual Report on Form 10-K.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ from those estimates.

Income taxes

The Company accounts for income taxes under FASB ASC 740, ”Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. 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. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05, ”Accounting for Uncertainty in Income Taxes” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.

The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit.

Net Loss per Share

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.

Recent Accounting Pronouncements

There are no recent accounting pronouncements that impact the Company’s operations.

NOTE 3 - GOING CONCERN

As of ~~June~~September 30, 2021, the Company had $-0- in cash and cash equivalents. The Company has net loss of $~~-0-~~2,100 for the three months ended ~~June~~ September 30, 2021 and has ~~negative~~an ~~working capital of $99,620 and~~ accumulated deficit of $26,~~868~~870,~~004~~104 on ~~June~~September 30, 2021. The Company’s principal sources of liquidity have been cash provided by operating activities, as well as financial support from related parties. The Company’s operating results for future periods are subject to numerous uncertainties and it is uncertain if the Company will be able to maintain profitability and continue growth for the foreseeable future. If management is not able to increase revenue and/or manage operating expenses in line with revenue forecasts, the Company may not be able to maintain profitability. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company will focus on improving operation efficiency and cost reduction, developing core cash-generating business, and enhancing marketing function. Actions include developing more customers, as well as creating synergy using the Company’s resources.

The Company believes that available cash and cash equivalents, the cash provided by operating activities, together with actions as developing more customers and create synergy of the Company’s resources, should enable the Company to meet presently anticipated cash needs for at least the next 12 months after the date that the financial statements are issued and the Company has prepared the financial statements on a going concern basis. If the Company encounters unforeseen circumstances that place constraints on its capital resources, management will be required to take various measures to conserve liquidity, which could include, but not necessarily be limited to, obtaining financial support from related parties and controlling overhead expenses. Management cannot provide any assurance that the Company’s efforts will be successful. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties.

NOTE 4 – EQUITY

Common Stock

The Company has authorized 350,000,000 shares of $0.001 par value, common stock. As of ~~June~~September 30, 2021 and December 31, 2020 there were 237,830,249 shares of Common Stock issued and outstanding.

NOTE 5 – RELATED PARTY NOTES PAYABLE

All of the Company’s financing has come from its Court appointed custodian, Custodian Ventures, LLC. As a result of ~~June~~the 30change of control on August 19, 2021 ~~the~~described ~~Company’s court~~in ~~appointed~~Footnote 1, “Organization and Description of the Business” custodian agreed to forgive $11,720 in ~~Custodian~~interest- ~~Ventures~~free loans it had ~~loaned~~provided to the Company. ~~$9,620~~This amount was treated as a capital contribution from a related party and did not have any impact on anthe ~~interest~~Company’s ~~free~~Statement ~~basis.~~of Operations for the three months ended September 30, 2021

NOTE 6 – COMMITMENTS AND CONTINGENCIES

The Company did not have any contractual commitments as of ~~June~~September 30, 2021.

NOTE 7 – SUBSEQUENT EVENTS

In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events after September 30, 2021 through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial ~~statements~~ ~~except as follows:~~statements.

On July 2, 2021 the Company’s Board of Directors designated a class of 10,000,000 shares of Series A Preferred stock was a par value of $0.001. On July 16, 2021 the Board of Directors hereby approves issuing to Custodian Ventures LLC, a Wyoming limited-liability company,10,000,000 shares of Series A Preferred Stock in the Corporation for par value, as repayment of funds loaned to the Company by Custodian Ventures, LLC, and for services performed. As of June 30, 2021 the loans amounted to $9,620.

The holders of the Series A Preferred Stock, shall have conversion rights as follows (the “Conversion Rights”), the holder of issued and outstanding shares of Series A Preferred Stock shall be entitled to convert the Series A Preferred Stock, at the option of the holder(s) thereof, at any time after the date of issuance of such shares, at the office of the Corporation or any transfer agent for such stock, into such number of fully paid and nonassessable shares of Common Stock that are equal to ninety percent (90%), post conversion, of the total number of issued and outstanding shares of Common Stock of the Corporation, if all Series A Preferred Stock are converted (the “Conversion Shares”), with each share of Series A Preferred Stock so converted to be converted into the number of common shares equal to the Conversion Shares multiplied by the quotient of the number of the shares of Series A Preferred Stock converted by a holder divided by the number of all Series A Preferred Stock issued and outstanding.

Based on the conversion formula described above, each share of Series A Preferred Stock is convertible into 214.05 shares of common stock as of July 16, 2021.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Organizational History of the Company and Overview

No Current Operations

Plan of Operation

The Company has no operations from a continuing business other than the expenditures related to running the Company and has no revenue from continuing operations as of the date of this Report.

Management intends to explore and identify business opportunities within the U.S., including a potential acquisition of an operating entity through a reverse merger, asset purchase or similar transaction. Our Chief Executive Officer has experience in business consulting, although no assurances can be given that he can identify and implement a viable business strategy or that any such strategy will result in profits. Our ability to effectively identify, develop and implement a viable plan for our business may be hindered by risks and uncertainties which are beyond our control, including without limitation, the continued negative effects of the coronavirus pandemic on the U.S. and global economies. For more information about the risk of coronavirus on our business, see Item 1A “Risk Factors.”

We do not currently engage in any business activities that provide revenue or cash flow. During the next 12-month period we anticipate incurring costs in connection with investigating, evaluating, and negotiating potential business combinations, filing SEC reports, and consummating an acquisition of an operating business.

Given our limited capital resources, we may consider a business combination with an entity which has recently commenced operations, is a developing company or is otherwise in need of additional funds for the development of new products or services or expansion into new markets, or is an established business experiencing financial or operating difficulties and is in need of additional capital. Alternatively, a business combination may involve the acquisition of, or merger with, an entity which desires access to the U.S. capital markets.

As of the date of this Report, our management has not had any discussions with any representative of any other entity regarding a potential business combination. Any target business that is selected may be financially unstable or in the early stages of development. In such event, we expect to be subject to numerous risks inherent in the business and operations of a financially unstable or early stage entity. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk or in which our management has limited experience, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.

Our management anticipates that we will likely only be able to effect one business combination due to our limited capital. This lack of diversification will likely pose a substantial risk in investing in the Company for the indefinite future because it will not permit us to offset potential losses from one venture or operating territory against gains from another. The risks we face will likely be heightened to the extent we acquire a business operating in a single industry or geographical region.

We anticipate that the selection of a business combination will be a complex and risk-prone process. Because of general economic conditions, including unfavorable conditions caused by the coronavirus pandemic, rapid technological advances being made in some industries and shortages of available capital, management believes that there are a number of firms seeking business opportunities at this time at discounted rates with which we will compete. We expect that any potentially available business combinations may appear in a variety of different industries or regions and at various stages of development, all of which will likely render the task of comparative investigation and analysis of such business opportunities extremely difficult and complicated. Once we have developed and begun to implement our business plan, management intends to fund our working capital requirements through a combination of our existing funds and future issuances of debt or equity securities. Our working capital requirements are expected to increase in line with the implementation of a business plan and commencement of operations.

Based upon our current operations, we do not have sufficient working capital to fund our operations over the next 12 months. If we are able to close a reverse merger, it is likely we will need capital as a condition of closing that acquisition. Because of the uncertainties, we cannot be certain as to how much capital we need to raise or the type of securities we will be required to issue. In connection with a reverse merger, we will be required to issue a controlling block of our securities to the target’s shareholders which will be very dilutive.

Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences, or privileges senior to our Common Stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

We anticipate that we will incur operating losses in the next 12 months, principally costs related to our being obligated to file reports with the SEC. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development. Such risks for us include, but are not limited to, an evolving and unpredictable business model, recognition of revenue sources, and the management of growth. To address these risks, we must, among other things, develop, implement, and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain, and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business prospects, financial condition, and results of operations.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or “GAAP.” The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are fully described in Note 2 to our financial statements appearing elsewhere in this Quarterly Report, and we believe those accounting policies are critical to the process of making significant judgments and estimates in the preparation of our financial statements.

Off-Balance Sheet Arrangements

None.

Item 3. Quantitative And Qualitative Disclosures About Market Risk.

As a smaller reporting company, we are not required to provide the information called for by this Item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.

Our management is responsible for establishing and maintaining a system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:

	●	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

	●	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

	●	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting based on the parameters set forth above and has concluded that as of ~~June~~September 30, 2021, our internal control over financial reporting was not effective to provide reasonable assurance ~~regarding~~ regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles as a result of the following material weaknesses:

	●	The Company does not have sufficient segregation of duties within accounting functions due to only having one officer and limited resources.

	●	The Company does not have an independent board of directors or an audit committee.

	●	The Company does not have written documentation of our internal control policies and procedures.

	●	All of the Company’s financial reporting is carried out by a financial consultant.

We plan to rectify these weaknesses by implementing an independent board of directors, establishing written policies and procedures for our internal control of financial reporting, and hiring additional accounting personnel at such time as we complete a reverse merger or similar business acquisition.

Changes in Internal Control over Financial Reporting.

There have been no change in our internal control over financial reporting during three months ended ~~June~~September 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

Item 1. Legal Proceedings.

The Company may be involved in certain legal proceedings that arise from time to time in the ordinary course of its business. Legal expenses associated with any contingency are expensed as incurred. The Company’s officers and directors are not aware of any threatened or pending litigation to which the Company is a party or which any of its property is the subject and which would have any material, adverse effect on the Company.

Item 1A. Risk Factors.

Reference is made to the risks and uncertainties disclosed in Item 1A (“Risk Factors”) of our Annual Report on Form 10-K for the period ended December 31, 2020 which sections are incorporated by reference into this report, as the same may be updated from time to time. Prospective investors are encouraged to consider the risks described in our 2020 Form 10-K, and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Report and other information publicly disclosed or contained in documents we file with the Securities and Exchange Commission before purchasing our securities.

As a smaller reporting company, the Company is not required to disclose material changes to the risk factors that were contained in the 2020 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use Of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

The exhibits listed on the Exhibit Index below are provided as part of this report.

Exhibit No.		Description

31.1*		Certification of principal executive and financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended.

32.1*		Certification of principal executive officer and principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended.

101.INS*		XBRL INSTANCE

101.SCH*		XBRL TAXONOMY EXTENSION SCHEMA

101.CAL*		XBRL TAXONOMY EXTENSION CALCULATION

101.DEF*		XBRL TAXONOMY EXTENSION DEFINITION

101.LAB*		XBRL TAXONOMY EXTENSION LABELS

101.PRE*		XBRL TAXONOMY EXTENSION PRESENTATION

* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ESP RESOURCES, INC.
Dated: July 29, 2021	By:	/s/ David Lazar
Dated: November 3, 2021	By:	/s/ Zhuang Rong Cheng
		David Lazar
		Zhuang Rong Cheng
		Chief Executive Officer and Chief Financial Officer Principal Executive Officer, Principal Financial Officer

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

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