0001010549-17-000217.txt : 20170524 0001010549-17-000217.hdr.sgml : 20170524 20170524143816 ACCESSION NUMBER: 0001010549-17-000217 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 40 CONFORMED PERIOD OF REPORT: 20170331 FILED AS OF DATE: 20170524 DATE AS OF CHANGE: 20170524 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEAVENSTONE CORP CENTRAL INDEX KEY: 0001624025 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 471445393 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 333-201314 FILM NUMBER: 17866373 BUSINESS ADDRESS: STREET 1: 17800 CASTLETON STREET STREET 2: SUITE 300 CITY: CITY OF INDUSTRY STATE: CA ZIP: 91748 BUSINESS PHONE: 626-581-0388 MAIL ADDRESS: STREET 1: 17800 CASTLETON STREET STREET 2: SUITE 300 CITY: CITY OF INDUSTRY STATE: CA ZIP: 91748 10-Q/A 1 hstone10q033117.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2017

[ ]

TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ________ TO ________

Commission File No. 333-201314

HEAVENSTONE CORP.

(Exact name of registrant as specified in its charter)

Nevada

47-1445393

(State or Other Jurisdiction of Incorporation or Organization)

(IRS Employer Identification No.)

17800 Castleton Street, Suite 300, City of Industry, California 91748

(Address of Principal Executive Offices, Including Zip Code)

Registrant’s telephone number, including area code: (626) 581-3335

Securities Registered under Section 12(b) of the Exchange Act: None

Securities Registered under Section 12(g) of the Exchange Act: None

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 [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 [ ] No [X]

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

Large accelerated filer [ ]

Non-accelerated filer [ ]

Accelerated filer [ ]

Smaller reporting company [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 May 22, 2017, 71,159,423 shares of the common stock of the registrant were issued and outstanding.

Documents Incorporated by Reference: None.

EXPLANATORY NOTE

The purpose of this Amendment No. 1 (the “Amended Filing”) to Heavenstone Corp.’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017, filed with the Securities and Exchange Commission on May 22, 2017 (the “Original Filing”), is to furnish Exhibit 101.INS, Exhibit 101.SCH, Exhibit 101.CAL, Exhibit 101.DEF, Exhibit 101.LAB and Exhibit 101.PRE, which exhibits consist of the following financial statements from the Original Filing, formatted in XBRL (eXtensible Business Reporting Language):

- Unaudited Consolidated Balance Sheets as of March 31, 2017, and June 30, 2016;

- Unaudited Consolidated Statements of Operations for the Three and Nine Months Ended March 31, 2017 and 2016;

- Unaudited Consolidated Statements of Cash Flows for the Three and Nine Months Ended March 31, 2017 and 2016; and

- Notes to Unaudited Consolidated Financial Statements

In addition to the items noted above, the information included in the Original Filing is being amended to remove disclosure stating that $2,100,000 in loans were in default at March 31, 2017. Such loans were not in default on such date. No other information included in the Original Filing is being amended by this Amended Filing.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

INDEX TO FINANCIAL STATEMENTS
	Page
Unaudited Consolidated Balance Sheets as of March 31, 2017, and June 30, 2016		3
Unaudited Consolidated Statements of Operations for the Three and Nine Months Ended March 31, 2017 and 2016		4
Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2017 and 2016		5
Notes to Unaudited Consolidated Financial Statements		7

HEAVENSTONE CORP. CONSOLIDATED BALANCE SHEETS
	As of March 31, 2017 (unaudited)			As of June 30, 2016
ASSETS
Current assets
Cash and cash equivalents	$	14,337		$	52,592
Prepaid and other current assets		16,850			156,340
Total current assets		31,187			208,932
Fixed assets
Land and land development cost		6,045,703			3,888,846
Office furniture and equipment		14,047			14,047
Accumulated depreciation		(6,555	)		(4,448	)
Total fixed assets		6,053,195			3,898,445
Total assets	$	6,084,382		$	4,107,377
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable	$	186,592		$	155,538
Interest payable		319,438			185,509
Short-term notes payable		---			38,846
Short-term related party debt		2,100,000			2,100,000
Total current liabilities		2,606,030			2,479,893
Non-current liabilities
Long-term related party debt		2,019,940			929,975
Long-term notes payable		1,500,000			750,000
Total non-current liabilities		3,519,940			1,679,975
Total liabilities		6,125,970			4,159,868
Stockholders’ deficit
Preferred stock, $.0001 par value: 50,000,000 shares authorized; zero and zero shares issued and outstanding at March 31, 2017, and June 30, 2016, respectively		---			---
Common stock, $.0001 par value: 200,000,000 shares authorized; 71,159,423 shares and 71,159,423 shares issued and outstanding at March 31, 2017, and June 30, 2016, respectively		7,116			7,116
Additional paid-in capital		394,386			394,386
Accumulated deficit		(557,846	)		(453,993	)
Total Heavenstone stockholders’ deficit		(156,344	)		(52,491	)
Non-controlling interest		114,756			---
Total stockholders’ deficit		(41,588	)		(52,491	)
Total liabilities and stockholders’ deficit	$	6,084,382		$	4,107,377
The accompanying notes are an integral part of these unaudited financial statements.

HEAVENSTONE CORP. CONSOLIDATED STATEMENTS OF OPERATIONS
	For the Three Months Ended						For the Nine Months Ended
	March 31, 2017 (unaudited)			March 31, 2016 (unaudited)			March 31, 2017 (unaudited)			March 31, 2016 (unaudited)
Operating expenses	$	23,546		$	42,484		$	70,345		$	85,782
Operating loss		(23,546	)		(42,484	)		(70,345	)		(85,782	)
Interest expense		(18,128	)		(37,902	)		(34,914	)		(109,153	)
Net loss		(41,674	)		(80,386	)		(105,259	)		(194,935	)
Less: Net loss attributable to non-controlling interest		1,406			---			1,406			---
Net loss attributable to Heavenstone Corp.	$	(40,268	)	$	(80,386	)	$	(103,853	)	$	(194,935	)
Net loss per common share
Basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average number of common shares outstanding:
Basic and diluted		71,159,423			71,159,423			71,159,423			71,159,423
The accompanying notes are an integral part of these unaudited financial statements.

HEAVENSTONE CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS
	For the Nine Months Ended March 31, 2017 (unaudited)			For the Nine Months Ended March 31, 2016 (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(105,259	)	$	(194,935	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation expense		2,107			2,107
Changes in operating assets and liabilities:
Prepaid and other current assets		(139,490	)		(105,504	)
Accounts payable		(112,364	)		(56,301	)
Interest payable		(461	)		81,027
Net cash used in operating activities		(76,487	)		(273,606	)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for land development costs		(1,021,887	)		(337,988	)
Net cash used in investing activities		(1,021,887	)		(337,988	)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on loans from related parties		1,089,965			300,000
Borrowings on loans from third parties		---			150,000
Repayments on loans to third parties		(38,846	)		---
Net cash provided by financing activities		1,051,119			450,000
NET DECREASE IN CASH		(38,255	)		(161,594	)
Cash, beginning of period		52,592			271,101
Cash, end of period	$	14,337		$	109,507
The accompanying notes are an integral part of these unaudited financial statements.

HEAVENSTONE CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (cont.)
	For the Nine Months Ended March 31, 2017 (unaudited)		For the Nine Months Ended March 31, 2016 (unaudited)
Non-cash investing the financing activities
Land development costs incurred on credit	$	143,418	$	---
Capitalized interest to land development cost	$	134,390	$	---
Third-party notes issued for land purchase	$	750,000	$	---
Purchase of land acquisition costs directly by non-controlling interest	$	116,162	$	---
Supplemental disclosure of cash flow information
Cash paid for income taxes	$	---	$	---
Cash paid for interest	$	35,375	$	28,126
The accompanying notes are an integral part of these unaudited financial statements.

HEAVENSTONE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(unaudited)

NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements of Heavenstone Corp. (“Heavenstone” or the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (the “SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended June 30, 2016, filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the Financial Statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2016 as reported in the Company’s Annual Report on Form 10-K have been omitted.

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation.

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiary. All significant intercompany accounts and transactions have been eliminated.

NOTE 2. GOING CONCERN

These unaudited interim consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. For the nine months ended March 31, 2017, the Company had an accumulated deficit of $557,846 and revenue of $0. The continuation of the Company as a going concern is dependent upon the Company's continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company intends to fund operations through equity and debt financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending June 30, 2017.

NOTE 3. LAND AND LAND DEVELOPMENT COSTS

Land and land development costs are carried at cost. Land development costs capitalized include costs associated with the development of the purchased land, including inspection fees and engineering fees. For the nine months ended March 31, 2017, the Company had incurred $2,156,857 in land and land development costs, of which $1,012,887 was paid in cash, $141,162 was incurred on credit, $750,000 was settled with note payable and $116,162 was assumed by non-controlling interest (see further discussion in Note 6). Also, the Company capitalized the interest costs of $134,390 incurred for the real estate projects under ASC 835-20, during the nine months ended March 31, 2017.

NOTE 4. RELATED-PARTY TRANSACTIONS

Loans from Officer's Family

During the nine months ended March 31, 2017, the Company obtained two separate loans from the family of one of its officers, as follows:

July 2016 – $170,000. The Company obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount $170,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in July 2018. The proceeds from this loan were used by the Company for operating expenses.

August 2016 – $100,000. The Company obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount $100,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in August 2018. The proceeds from this loan were used by the Company for operating expenses.

Loans from Related Party

During the nine months ended March 31, 2017, the Company obtained two separate loans from a related party, as follows:

September 2016 – $270,000. The Company obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount $270,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in September 2018. The proceeds from this loan were applied by the Company to operating expenses.

January 2017 – $100,000. The Company obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount $100,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in January 2019. The proceeds from this loan were applied by the Company to operating expenses.

January 2017 - $449,965. The Company obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount $449,965, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in January 2019. The proceeds from this loan were applied by the Company to operating expenses.

As of March 31, 2017, and June 30, 2016, the total outstanding short-term related party debt was $2,100,000.

As of March 31, 2017, and June 30, 2016, the total outstanding long-term related party debt was $2,019,940 and $929,975, respectively.

NOTE 5. NOTES PAYABLE

In February 2016, the Company delivered a promissory note, face amount $76,587, in payment of certain insurance premiums associated with an officers' and directors' insurance policy obtained by the Company. Unpaid principal on such loan bears interest at 6.95% per annum. Repayment of this promissory note is to be made in ten equal monthly payments of $7,904, beginning in March 2016.

During the nine months ended March 31, 2017, the Company repaid a total of $38,846 in principal. The outstanding principal as of March 31, 2017, and June 30, 2016, are $-0- and $38,846, respectively.

As of March 31, 2017, and June 30, 2016, the total outstanding long-term notes payable was $1,500,000 and $750,000, respectively.

NOTE 6. REAL ESTATE DEVELOPMENT PROJECT

In January 2017, the Company and a third party formed Temecula QK Holdings, LLC, a California limited liability company (“TQKH”), for the purpose of acquiring and developing approximately 40 acres of land located in Temecula, California, for $1,318,383. The Company owns 75% of TQKH. In connection with TQKH’s purchase of such land, TQKH issued a $750,000 face amount promissory note to the third-party seller of the land. The principal balance is due in March 2019. The unpaid principal balance of such promissory note bears interest at 4.5% per annum, with interest-only payments due monthly until the due date. This promissory note is secured by a deed of trust in favor of the selling party. For the three months ended March 31, 2017, TQKH received $116,162 from its non-controlling shareholder for the land acquisition costs.

NOTE 7. SUBSEQUENT EVENTS

Loan from Related Party

In April 2017, we obtained a loan in the amount of $140,000 pursuant to a loan agreement and delivered a promissory note, face amount $140,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in April 2019.

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

Jumpstart Our Business Startups Act of 2012

As a company with less than $1 billion in revenue during our last fiscal year, we qualify as an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act). As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:

•

Only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure.

•

Reduced disclosure about our executive compensation arrangements.

•

Not having to obtain non-binding advisory votes on executive compensation or golden parachute arrangements.

•

Exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.

We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1 billion in annual revenue, we have more than $700 million in market value of our stock held by non-affiliates, or we issue more than $1 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all of these reduced burdens. We have taken advantage of these reduced reporting burdens herein, and the information that we provide may be different than what you might get from other public companies in which you hold stock.

Cautionary Statement

The following discussion and analysis should be read in conjunction with our financial statements for the nine months ended March 31, 2017 (unaudited) and 2016 (unaudited), included elsewhere in this Quarterly Report on Form 10-Q. The results shown herein are not necessarily indicative of the results to be expected for any future periods.

This discussion contains forward-looking statements. These forward-looking statements are based on our management’s current expectations with respect to future events, financial performance and operating results, which statements are subject to risks and uncertainties, including, but not limited to, those discussed below and elsewhere in this prospectus. The risks and uncertainties discussed herein could cause our actual results to differ from the results contemplated by these forward-looking statements.

Basis of Presentation – “True” Inception Date

While our company was incorporated in the State of Nevada in June 2014, we undertook no activities until July 14, 2014. Due to our having less than one year of actual operations, we determined, for financial statement purposes, our “true” inception date to be July 14, 2014, the date of first activities. The following discussion, as well as the accompanying financial statements, is presented in accordance with such determination.

Background and Recent Developments

We are a development-stage company that was incorporated under the laws of the State of Nevada on June 13, 2014. At that time, we intended to become a large real estate development and construction company with operations, primarily, in the luxury vineyard estate home construction industry and, secondarily, and the hospitality industry.

However, in January 2017, our Board of Directors determined to refocus our plan of business, in an effort to better position our company to generate ongoing revenues from our future operations. As a result of this action, we now concentrate more emphasis on engaging in the hospitality industry, which we call our Hospitality Segment. Nevertheless, we continue to participate in the real estate development and home building industries as an adjunct to our Hospitality Segment. These efforts are now referred to as our Real Estate Development Segment.

Until such time as the results of our operations require us to do so, this discussion will not present separate segment information.

Real Estate Development Progress

Since our inception, we have acquired at total of approximately 110 acres of unimproved real estate located in Temecula, California, on which we intend to construct a total of 18 vineyard estate rental properties. Out of such 110 acres, on two five-acre parcels, we have begun construction efforts with respect to two vineyard estate rental properties. We are nearing completion of the permitting process with respect to each of such homes and have, as required by local ordinances, planted grapevines on approximately 50% of each 5 acre parcel.

Further, we have purchased approximately 25 acres also located in Temecula, on which we intend to build and operate our planned Sorrento Resort, Vineyard & Winery.

We continue to lack the capital with which to develop fully the properties described, and there is no assurance that we will ever possess such capital.

Principal Factors Affecting Our Financial Performance

We expect that our operating results will be primarily affected by the following factors:

• our ability to obtain capital with which to build our rental properties;

• our ability to attract guests to our rental properties and resort property, once built; and

• our ability to contain our costs and maintain our low overhead.

Expected Financial Performance

Based on our current business plan, we expect to incur operating losses through at least the first quarter of 2018. However, because we do not yet possess capital to commence operations, we cannot predict whether we will have any revenues in our Hospitality Segment or our Real Estate Development Segment prior to the end of such period.

We must obtain approximately $4 million in order to begin construction of the first two of our vineyard estate rental properties and approximately $20 million in order to begin construction and full-scale operations of our planned Sorrento Resort property. There is no assurance that we will be successful in obtaining this needed funding.

Results of Operations

Until we begin full scale business operations, we expect the level of our quarterly expenses to be approximately $50,000.

For the Three Months Ended March 31, 2017 and 2016, we generated no revenues. We do not expect to generate any revenues until the first quarter of 2018, at the earliest.

For the Three Months Ended March 31, 2017 and 2016, we incurred a net loss of $(41,674) (unaudited) and $(80,386) (unaudited), respectively.

For the Nine Months Ended March 31, 2017 and 2016, we generated no revenues. We do not expect to generate any revenues until the first quarter of 2018, at the earliest.

Results of Operations

Until we begin full scale business operations, we expect the level of our quarterly expenses to be approximately $50,000.

For the Three Months Ended March 31, 2017 and 2016, we generated no revenues. We do not expect to generate any revenues until the first quarter of 2018, at the earliest.

For the Three Months Ended March 31, 2017 and 2016, we incurred a net loss of $(41,674) (unaudited) and $(80,386) (unaudited), respectively.

For the Nine Months Ended March 31, 2017 and 2016, we generated no revenues. We do not expect to generate any revenues until the first quarter of 2018, at the earliest.

For the Nine Months Ended March 31, 2017 and 2016, we incurred a net loss of $(105,259) (unaudited) and $(194,935) (unaudited), respectively. Had we not experienced a reimbursement of approximately $48,000 in consulting and related fees, our net loss for the Nine Months Ended March 31, 2017, would have been approximately $153,259.

Plan of Operations

General. We require significant funding to achieve our objectives. Sources of funding are expected to be from sources of equity or debt financing, as well as from sales of our estate homes. As with any start-up company that offers unproven products, there is no assurance that our company will be successful with any level of additional funding.

Our plan of business now focuses primarily on our becoming a hospitality-focused company. In conjunction with these efforts, we intend to develop and build vineyard estate properties and one or more resort properties.

Hospitality Segment. Our Hospitality Segment will operate the rental properties that are built and/or acquired by us. In addition, we have purchased 25 acres of undeveloped real estate located in Temecula, California, on which we intend to construct and operate our planned Sorrento Resort, Vineyard and Winery. To complete the construction of the resort facility, we must obtain approximately $20 million in funding. There is no assurance that we will be able to secure such funding.

Real Estate Development Segment. Since our inception, we have acquired approximately 110 acres of unimproved real estate located in Temecula, California. We intend to construct vineyard estate rental properties on these acquired tracts.

Since acquiring these properties, we have taken substantially all actions necessary for obtaining needed permits and approvals for the subdivision planning and construction of two vineyard estate rental properties.

We expect to have obtained all of the necessary permits and approvals by the end of the third quarter of 2017, at which time we will commence construction of these two vineyard estate rental properties. However, due to the nature of this process, we cannot assure you that we will be able to accomplish these objectives by such date.

We anticipate a long-term development of vineyard estate rental properties on the 110 acres we currently own. However, we must first obtain approximately $4 million for the completion of the first two of our vineyard estate rental properties. There is no assurance that we will be able to obtain such needed capital. Any inability to so obtain needed capital would negatively impact our ability to be successful in establishing these rental properties.

Liquidity

For the Nine Months Ended March 31, 2017. At March 31, 2017, we had a working capital deficit of $2,574,843 and cash of $14,337. Currently, we possess approximately $1,500 in cash.

Loans from Related Parties and Third Parties. During the Current Nine Month Period, we obtained the following loans from related parties and from third parties, as follows, as follows:

July 2016 – $170,000. We obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount $170,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in July 2018. The proceeds from this loan were used for operating expenses.

August 2016 – $100,000. We obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount $100,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in August 2018. The proceeds from this loan were used for operating expenses.

September 2016 – $270,000. We obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount $270,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in September 2018. The proceeds from this loan were used for operating expenses.

January 2017 – $100,000. We obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount $100,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in January 2019. The proceeds from this loan were used for operating expenses.

Without these loans, we would have been unable to continue our operations.

As of March 31, 2017, the total outstanding principal balance on the foregoing loans was $1,089,965, with another $140,000 in accrued and unpaid interest.

Other Financing. In connection our purchase of 50 acres of land in Temecula, California, in 2014, we issued a $750,000 face amount promissory note to the third-party seller of the land. The unpaid principal balance of such promissory note bears interest at 5% per annum, with payments of $3,125 due monthly until the entire principal balance has been paid. This promissory note is secured by a deed of trust in favor of the selling party.

In January 2017, our company and a third party formed Temecula QK Holdings, LLC, a California limited liability company (“TQKH”), for the purpose of acquiring and developing approximately 40 acres of land located in Temecula, California. We own 75% of TQKH. In connection with TQKH’s purchase of such land, TQKH issued a $750,000 face amount promissory note to the third-party seller of the land. The principal balance is due in March 2019. The unpaid principal balance of such promissory note bears interest at 4.5% per annum, with interest-only payments due monthly until the due date. This promissory note is secured by a deed of trust in favor of the selling party.

Working Capital. At March 31, 2017, we had a working capital deficit of $2,574,843 and cash of $14,337, compared to our working capital deficit of $2,270,961 and cash of $52,592, at June 30, 2016.

We are currently pursuing approximately $24 million in additional funding with which to build our vineyard estate rental properties and our Sorrento Resort property. We are actively pursuing this funding, with a current focus on potential foreign sources located throughout the world. While we would prefer to obtain funds through private sales of our equity securities, it is possible that funds would be obtained through loans or a combination of loans and sales of equity securities.

As of the date of this Quarterly Report on Form 10-Q, however, we have not obtained any commitments from any person that would have our company obtaining needed capital. There is no assurance that we will ever obtain capital in amounts as would allow us to pursue our full plan of business.

Profits from sales, if any, of our vineyard estate rental properties will serve as another source of capital with which to further our business development. There is no assurance that any such sales would occur.

To sustain our current operations, we obtained loans in the total amount of $1,089,965, during the Current Nine Month Period. These loans accrue interest at 5% per annum, with principal and accrued interest due in July 2018 (as to $170,000), August 2018 (as to $100,000), September 2018 (as to $270,000) and January 2019 (as to $549,965). Subsequent to March 31, 2017, in April 2017, we obtained a $140,000 loan, which accrues interest at 5% per annum, with principal and accrued interest due in April 2019.

Cash Flows.

Operating Activities. During the Current Nine Month Period, our operating activities used $683,067 in cash. During the Prior Nine Month Period, we used $76,487 in our operating activities. We expect that, until we commence full-scale operations, operations will use between $50,000 and $100,000 of cash during future three-month periods.

Investing Activities. During the Current Nine Month Period, we used $1,012,887 in our investing activities, which was for land development costs. During the Prior Nine Month Period, we used $337,988 in our investing activities for land development costs.

Financing Activities. During the Current Nine Month Period, our financing activities provided $1,051,119 in cash, all of which was proceeds of loans from related parties and repayments of loans to third parties. During the Prior Nine Month Period, our financing activities provided $450,000 in cash, all of which was proceeds of loans from related parties.

Contractual Obligations

Monthly Payment Obligations. We have entered into two significant long-term obligations that require us to make monthly cash payments.

In connection with our purchase, through TQKH, a 75%-owned subsidiary, of 40 acres of land in Temecula, California, TQKH issued a $750,000 face amount promissory note to the third-party seller of the land. The unpaid principal balance of such promissory note bears interest at 4.5% per annum, with interest-only payments due monthly until March 2019, when the entire principal balance is due. This promissory note is secured by a deed of trust in favor of the selling party.

Balloon Payment Obligations. In 2014, we obtained three separate loans from our majority shareholder, as follows:

•

In October 2014, we obtained a loan in the amount of $850,000 pursuant to a loan agreement and delivered a promissory note, face amount $850,000, in consideration of such loan. In February 2017, we entered into an amended and restated loan agreement and issued an amended and restated promissory note, face amount $850,000, in connection therewith. Unpaid principal on such loan bears interest at 5% per annum. Originally, principal and accrued interest was due in October 2016. Now, principal and accrued interest is due in December 2017. The proceeds from this loan were used by us to purchase approximately 50 acres of land in Temecula, California.

•

In October 2014, we obtained a loan in the amount of $650,000 pursuant to a loan agreement and delivered a promissory note, face amount $650,000, in consideration of such loan. In February 2017, we entered into an amended and restated loan agreement and issued an amended and restated promissory note, face amount $650,000, in connection therewith. Unpaid principal on such loan bears interest at 5% per annum. Originally, principal and accrued interest was due in October 2016. Now, principal and accrued interest is due in December 2017. The proceeds from this loan were used by us to purchase approximately 10 acres of land in Temecula, California.

•

In December 2014, we obtained a loan in the amount of $600,000 pursuant to a loan agreement and delivered a promissory note, face amount $600,000, in consideration of such loan. In February 2017, we entered into an amended and restated loan agreement and issued an amended and restated promissory note, face amount $650,000, in connection therewith. Unpaid principal on such loan bears interest at 5% per annum. Originally, principal and accrued interest was due in December 2016. Now, principal and accrued interest is due in December 2017. The proceeds from this loan were used by the Company to purchase approximately 10 acres of land in Temecula, California.

Loans During Current Nine Month Period. During the nine months ended March 31, 2017, we obtained the following loans from related parties and from third parties, as follows:

•

In July 2016, we obtained a loan in the amount of $170,000 pursuant to a loan agreement and delivered a promissory note, face amount $170,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in July 2018. The proceeds from this loan were used by us for operating expenses.

•

In August 2016, we obtained a loan in the amount of $100,000 pursuant to a loan agreement and delivered a promissory note, face amount $100,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in August 2018. The proceeds from this loan were used by us for operating expenses.

•

In September 2016, we obtained a loan in the amount of $270,000 pursuant to a loan agreement and delivered a promissory note, face amount $270,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in September 2018. The proceeds from this loan were used by us for operating expenses.

•

In January 2017, we obtained a loan in the amount of $100,000 pursuant to a loan agreement and delivered a promissory note, face amount $100,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in January 2019. The proceeds from this loan were used by us for operating expenses.

•

In January 2017, the Company obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount $449,965, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in January 2019. The proceeds from this loan were applied by the Company to operating expenses

Loan Subsequent to March 31, 2017. Subsequent to March 31, 2017, we have obtained a single loan from a related party, as follows:

•

Without these loans, we would have been unable to continue our operations.

Critical Accounting Policies

Our critical accounting policies, including the assumptions and judgments underlying them, are disclosed in the notes to our financial statements included in this prospectus. We have consistently applied these policies in all material respects. We do not believe that our operations to date have involved uncertainty of accounting treatment, subjective judgment or estimates, to any significant degree.

Uncertainties and Trends

We do not currently possess sufficient cash to commence full-scale business operations. In the future, our operations and revenues will be dependent upon the following factors, among others:

• our ability to obtain capital with which to build our rental properties;

• our ability to attract guests to our rental properties and resort property, once built; and

• our ability to contain our costs and maintain our low overhead.

There is no assurance that we will be able to accomplish our objectives. Our failure to do so would likely cause purchasers of our common stock to lose their entire investments in our company.

Inflation

Inflation can be expected to have an impact on our operating costs. A prolonged period of inflation could cause interest rates, wages and other costs to increase which would adversely affect our results of operations. In the current economic and political climate, no predictions can be made with respect to the future effects of inflation on our business.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that would have any current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Capital Expenditures

During the Current Nine Month Period, our capital expenditures were $2,154,750, all of which was for land development costs.

During the Prior Nine Month Period, our capital expenditures were $337,988, all of which was for land development costs.

Should we be successful in obtaining the funding needed for us to commence full-scale operations, it can be expected that we would make significant capital expenditures. However, due to the uncertainty associated with our obtaining capital, we cannot predict the exact amount or timing of these potential capital expenditures.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

Our management, after evaluating the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, has concluded that, as of the end of the fiscal quarter covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were not effective to provide reasonable assurances that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and such information is accumulated and communicated to management, including the Principal Executive Officer and Principal Financial Officer as appropriate, to allow timely decisions regarding disclosures.

There was no change in our internal control over financial reporting during the quarter ended March 31, 2017, that has materially affected, or is reasonably likely to materially affect, our company's internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

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

During the three months ended March 31, 2017, we did not issue unregistered securities that have not been reported previously.

Subsequent to March 31, 2017, we issued unregistered securities, as follows:

1. (a) Securities Sold. In April 2017, a $140,000 principal amount promissory note was issued; (b) Underwriter or Other Purchasers. Such promissory note was issued to Yang Cong; (c) Consideration. Such promissory note was issued for $140,000 in cash; and (d) Exemption from Registration Claimed. These securities are exempt from registration under the Securities Act of 1933, as amended, pursuant to the provisions of Section 4(a)(2) thereof, as a transaction not involving a public offering. This purchaser was an accredited investor.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosure.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit No. Description

10.1 * First Amended and Restated Loan Agreement between Registrant and Astonia Group Ltd., dated February 17, 2017.

10.2 * First Amended and Restated Loan Agreement Promissory Note, face amount $850,000, with Registrant as borrower and Astonia Group Ltd. as lender, dated February 17, 2017.

10.3 * First Amended and Restated Loan Agreement between Registrant and Astonia Group Ltd., dated February 17, 2017.

10.4 * First Amended and Restated Loan Agreement Promissory Note, face amount $650,000, with Registrant as borrower and Astonia Group Ltd. as lender, dated February 17, 2017.

10.5 * First Amended and Restated Loan Agreement between Registrant and Astonia Group Ltd., dated February 17, 2017.

10.6 * First Amended and Restated Loan Agreement Promissory Note, face amount $600,000, with Registrant as borrower and Astonia Group Ltd. as lender, dated February 17, 2017.

101.INS ** XBRL Instance Document.

101.SCH ** XBRL Schema Document.

101.CAL ** XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF ** XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB ** XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE ** XBRL Taxonomy Extension Presentation Linkbase Document.

_____________________

* filed herewith.

** furnished herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q/A to be signed on May 24, 2017, on its behalf by the undersigned, thereunto duly authorized.

HEAVENSTONE CORP.

By: /s/ WILLIAM E. SLUSS

William E. Sluss

Chief Financial Officer

(Principal Financial Officer)

EX-31 2 ex311.htm

			EXHIBIT 31.1
Certification of Controls and Procedures
I, Jack Jie Qin, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of Heavenstone Corp.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
c)		Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)		Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: May 24, 2017.				HEAVENSTONE CORP.
By:					/s/ JACK JIE QIN
					Jack Jie Qin President and Chief Executive Officer

EX-31 3 ex312.htm

			EXHIBIT 31.2
Certification of Controls and Procedures
I, William E. Sluss, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of Heavenstone Corp.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
c)		Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)		Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: May 24, 2017.				HEAVENSTONE CORP.
By:					/s/ WILLIAM E. SLUSS
					William E. Sluss Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer

EX-32 4 ex321.htm

		EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Heavenstone Corp. (the “Company”) on Form 10-Q for the period ended March 31, 2017, as filed with the Securities and Exchange Commission (the “Report”), the undersigned, Chief Executive Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, based on his knowledge and belief:
(1)	The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 24, 2017.			HEAVENSTONE CORP.
By:				/s/ JACK JIE QIN
				Jack Jie Qin President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Heavenstone Corp. and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32 5 ex322.htm

		EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Heavenstone Corp. (the “Company”) on Form 10-Q for the period ended March 31, 2017, as filed with the Securities and Exchange Commission (the “Report”), the undersigned, Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer, of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, based on his knowledge and belief:
(1)	The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 24, 2017.			HEAVENSTONE CORP.
By:				/s/ WILLIAM E. SLUSS
				William E. Sluss Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer

EX-10 6 ex101.htm FIRST AMENDED AND

Exhibit 10.1

FIRST AMENDED AND

RESTATED LOAN AGREEMENT

This First Amended and Restated Loan Agreement (the “Agreement”) is entered into as of February 17, 2017, between the Astonia Group Ltd. (“Lender”), located at c/o Mossack Fonseca & C0 (BVI) Ltd., P.O. Box 3136, Road Town, Tortola, BVI, and Heavenstone Corp, (“Borrower”) located at 17800 Castleton Street, Ste. 300, City of Industry, CA.

ALL PRIOR AGREEMENTS SUPERSEDED

The Lender and the Borrower agree that this Agreement supersedes all prior agreements and understandings (whether written or oral) between the Lender and the Borrower, with respect to the subject matter hereof.

AUTHORITY AND LOAN

-Lender has approved Borrower’s original loan dated October 2, 2014. Lender’s approval of Borrower’s loan under this Agreement is made on reliance of the following:

a. that borrower agrees that this loan is the most senior debt among all debts;

b. that borrower agrees to repay the loan prior to all other debts and obligations; and

c. that borrower agrees to transfer/collateralize all future income or receivable, including but not limited to income derived from operation, litigations, arbitration, settlement with third party to Lender.

By executing this Agreement the Borrower represents under penalty of perjury are true and accurate in all respects.

-Lender agrees to loan (the “Loan”), dated October 2, 2014, to Borrower, in the amount of US Eight Hundred Fifty Thousand Dollars (US$850,000), evidenced by a First Amended and Restated Promissory Note (the “Promissory Note”) attached hereto as Exhibit A.

- The Loan, in the amount of US Eight Hundred FiftyThousand Dollars (US$850,000), has been approved for the period from October 2, 2014 to December 31, 2017, with interest rate of five percent (5%) per annum under this Agreement.

PURPOSE

The Borrower agrees to expend all funds disbursed pursuant to this Agreement only for the purposes of its business operation and in the amounts set forth in the Borrower’s Budget. Any other use of funds disbursed hereunder shall require prior written approval by Lender.

LOAN REPAYMENT AND INTEREST

All Loan funds disbursed hereunder, together with all interest payable thereon, shall be repaid to Lender in accordance with the terms of the Promissory Note. The Loan shall bear simple interest at the annual rate set forth in the attached Promissory Note on the principal balance of Loan funds disbursed to the Borrower. Payment of said interest shall be due at the end of the loan term, and interest shall accrue from the time of disbursement of Loan funds to the Borrower until receipt of full Loan repayment to Lender.

EFFECTIVE DATE OF AGREEMENT

This Agreement shall become effective as of October 2, 2014 (the “Effective Date”).

The Borrower agrees to complete performance of its obligations within the time periods required by Lender and any fully executed documents, if applicable.

PREPAYMENT

Borrower shall have the right to prepay all or any part of the outstanding balance of this Loan at any time without penalty. Any partial prepayment will not excuse any later scheduled payments until the Loan is paid in full. Prepayments shall be applied first to the payment of any outstanding late fees, then to interest and then to principal installments.

PROMISSORY NOTE

In order to evidence its debt to Lender hereunder, the Borrower agrees to, contemporaneously with the execution of this Agreement, execute and deliver to Lender the Promissory Note (attached as Exhibit A hereto).

ACCOUNTS

The Borrower agrees to establish on its books a separate account for this Loan. This account shall be maintained, and is subject to review and audit by Lender, as long as the Loan obligation remains unsatisfied.

The Borrower further agrees to maintain records that accurately and fully show the date, amount, purpose, and payee of all expenditures drawn on said account for three (3) years after the date Lender determines this Loan is repaid in full.

The Borrower further agrees to allow Lender, or its designated representatives, on written request, to have reasonable access to, and the right of inspection of, all books and records that pertain to the Loan account.

DEFAULT

The Borrower’s failure to comply with any of the terms of the Agreement shall constitute a breach of this Agreement and an Event of Default. In the event of any default, Lender may, in its discretion, declare this Agreement to have been breached and be released from any further performance hereunder. Events of default are detailed in the Promissory Note and are incorporated herein by reference.

In the event of any default or breach of this Agreement by the Borrower, Lender, without limiting any of its other legal rights or remedies, may accelerate the Loan and declare any remaining unpaid principal balance, along with accrued interest and late fees, immediately due and payable, as provided in the Promissory Note evidencing this Loan.

In the event of any default or breach of this Agreement by the Borrower, Lender shall have priority right above any secured or unsecured creditor to declare any remaining unpaid principal balance, along with accrued interest and late fees, immediately due and payable, as provided in the Promissory Note evidencing this Loan.

GENERAL TERMS

Indemnification by Borrower

The Borrower agrees to indemnify, defend, and save harmless Lender and its officers, agents, and employees from any and all claims, losses, or costs (including reasonable attorney fees) arising out of, resulting from, or in any way connected with the Loan or this Agreement, or the financing or the operation of the business financed with the Loan.

Independent Capacity

The Borrower, and the agents and employees of Borrower, in the performance of this Agreement, shall and do act in an independent capacity, and they acknowledge and agree that they are not officers or employees or agents of the Lender and accordingly they are not authorized to act, and may not act, in such capacity.

Assignment

Without the written consent of Lender, this Agreement is not assignable or transferable by Borrower either in whole or in part. Lender may assign its rights under this Agreement for security purposes, and in such event the assignee of this Agreement shall be entitled to enforce the provisions hereof and shall be a third party beneficiary of this Agreement.

Amendment

No amendment or variation of the terms of this Agreement shall be valid unless made in writing and signed by the parties hereto, and no oral understanding or agreement not incorporated herein shall be binding on any of the parties hereto.

Severability

In the event that any provision of this Agreement is unenforceable or held to be unenforceable, then the parties agree that all other provisions of this Agreement continue to have force and effect and shall not be affected thereby.

Governing Law and Venue

This Agreement is governed by and shall be interpreted in accordance with the laws of the State of California. Venue shall be in Los Angeles County. In any contest arising under the Loan Documents, Lender and the Borrower agree to waive a trial by jury.

Borrower Authorization

The Borrower certifies that it has full power and authority to enter into this Agreement and this Agreement has been duly authorized, executed and delivered by the Borrower. The Borrower acknowledges that the resolution of its governing body or other official action authorizing it to enter into this Agreement also authorizes such further acts as are necessary, including execution of the Promissory Note as well as Security Agreement, if any, to implement and further the intent of this Agreement.

NOTICE

Any notice required to be given to Lender hereunder shall be sent to c/o Mossack Fonseca & C0 (BVI) Ltd., P.O. Box 3136, Road Town, Tortola, BVI, attention “Director”, or at such other address as Lender may designate in writing to the Borrower. Any notice required to be given to the Borrower hereunder shall be sent to the address shown below the Borrower’s execution of this Agreement, or at such other address as the Borrower shall designate in writing to Lender. Notice to either party may be given using the following delivery methods: U.S. Mail, overnight mail, or personal delivery, providing evidence of receipt, to the respective parties identified in this Agreement. Delivery by fax or e-mail is not considered notice for the purposes of this Agreement. Notice shall be effective when received, unless otherwise stated in this Agreement.

[ SIGNATURE PAGE FOLLOWS ]

IN WITNESS WHEREOF, this Loan Agreement has been executed by the parties hereto.

Lender	Borrower

/s/ YANG CONG	/s/ WILLIAM E. SLUSS
Yang Cong	William E. Sluss
Director	Chief Financial Officer
Astonia Group Ltd.	Heavenstone Corp.

EXHIBIT A

_______________________________________

FIRST AMENDED AND RESTATED PROMISSORY NOTE

October 2, 2014

as amended February 17, 2017

For value received, the undersigned, (hereinafter referred to as the “Borrower”), promises to pay to the order of the Astonia Group Ltd., (hereinafter referred to as “Lender”), at its principal place of business at c/o Mossack Fonseca & C0 (BVI) Ltd., P.O. Box 3136, Road Town, Tortola, BVI, or at such other place as Lender may designate, the principal sum of US Eight Hundred Fifty Thousand Dollars (US$850,000) or such lesser amount as shall equal the aggregate amount disbursed to the Borrower by Lender pursuant to the Agreement between the Borrower and Lender, together with interest thereon at the rate of five (5%) percent per annum on the unpaid principal balance, computed from the date of each disbursement to the Borrower, until the Loan is repaid by the Borrower. Principal, together with interest thereon, is due and payable on or before December 31, 2017.

The Borrower may prepay this Promissory Note in full or in part, without penalty. Any partial prepayment will not excuse any later scheduled payments until the Loan is paid in full. Prepayments shall be applied first to the payment of any outstanding late fees, then to interest and then to principal installments.

On the occurrence of any event of default, as defined in paragraph 4 of this Promissory Note, Lender, at its sole election, may take any or all of the following actions:

Declare all or any portion of the principal balance, along with accrued interest and late fees, under this Promissory Note to be immediately due and payable and may proceed to enforce this Promissory Note, upon the expiration of not less than thirty (30) days after the date written notice of Lender’s decision to accelerate is sent to Borrower. All amounts due after acceleration shall bear interest at the rate of five percent (5%) per annum. Lender may exercise this option to accelerate during any default by Borrower regardless of any prior forbearance.

Require Borrower to take any and all action necessary, as security for the loan, to collateralize under duly executed security documents and agrees to be bound by the terms contained therein to Lender as the Secured Party.

Exercise all of its rights and remedies enumerated herein, which rights are in addition to and not in limitation of any other rights Lender may have under the Agreement and applicable law.

Each of the following events and conditions shall constitute an event of default under this Promissory Note and the Agreements:

Failure of the Borrower to repay any principal, accrued interest, and late fees, if applicable, when due under the terms of this Promissory Note.

Failure of the Borrower to comply with, and satisfy, all the terms, conditions, and obligations, required by the Loan Agreement as a condition for this Loan.

Termination of the Loan Agreement pursuant to the terms thereof or breach by the Borrower of any terms or conditions of said Loan Agreement.

Occurrence of: (1) the Borrower becoming insolvent or bankrupt or being unable or admitting in writing its inability to pay its debts as they mature or making a general assignment for the benefit of or entering into any composition or arrangement with creditors; (2) proceedings for the appointment of a receiver, trustee, or liquidator of the assets of the Borrower or a substantial part thereof, being authorized or instituted by or against the Borrower; (3) proceedings under any bankruptcy, reorganization, readjustment of debt, insolvency, dissolution, liquidation or other similar law, or any jurisdiction being authorized or instituted against the Borrower; or (4) the Borrower ceases operations, is dissolved, or terminates its existence.

Discovery of any false or misleading statement, warranty, representation, or fact, whether or not contained in any other Loan Documents, that when made or furnished to the Lender by or on behalf of the Borrower was relied upon by Lender and induced it to extend the Loan to Borrower.

No delay or failure of Lender in the exercise of any right or remedy hereunder or under any other agreement which secures or is related hereto shall affect any such right or remedy, and no single or partial exercise of any such right or remedy shall preclude any further exercise thereof, and no action taken or omitted by Lender shall be deemed a waiver of any such right or remedy.

Any notice required to be given to the Borrower hereunder shall be sent to the address shown on the Loan Agreement, or at such other address as the Borrower shall designate in writing to Lender. Notice to either party may be given using the following delivery methods: U.S. Mail, overnight mail, or personal delivery, providing evidence of receipt, to the respective parties identified in this Agreement. Delivery by fax or e-mail is not considered notice for the purposes of this Promissory Note.

Borrower agrees to pay all costs and expenses, including reasonable attorney fees, which may be incurred by Lender in the enforcement and defense of the Loan Agreement, including such costs and expenses incurred in any appeal.

This Promissory Note shall be binding upon the Borrower and its permitted successors and assigns and upon Lender and its permitted successors and assigns. Without the written consent of Lender, this Promissory Note is not assignable or transferable by Borrower either in whole or in part. Lender may assign its rights under this Promissory Note for security purposes, and in such event the assignee of this Promissory Note shall be entitled to enforce the provisions hereof and shall be a third party beneficiary of this Promissory Note.

This Promissory Note shall be construed and enforced in accordance with the laws of the State of California.

	Heavenstone Corp
	Borrower

	William E. Sluss
	Name of Authorized Representative

	__________________
	Authorized Signature

	Chief Financial Officer
	Title

	February 17, 2017
	Date

EX-10 7 ex102.htm FIRST AMENDED AND RESTATED PROMISSORY NOTE

Exhibit 10.2

FIRST AMENDED AND RESTATED PROMISSORY NOTE

October 2, 2014

as amended February 17, 2017

On the occurrence of any event of default, as defined in paragraph 4 of this Promissory Note, Lender, at its sole election, may take any or all of the following actions:

Exercise all of its rights and remedies enumerated herein, which rights are in addition to and not in limitation of any other rights Lender may have under the Agreement and applicable law.

Each of the following events and conditions shall constitute an event of default under this Promissory Note and the Agreements:

Failure of the Borrower to repay any principal, accrued interest, and late fees, if applicable, when due under the terms of this Promissory Note.

Failure of the Borrower to comply with, and satisfy, all the terms, conditions, and obligations, required by the Loan Agreement as a condition for this Loan.

Termination of the Loan Agreement pursuant to the terms thereof or breach by the Borrower of any terms or conditions of said Loan Agreement.

This Promissory Note shall be construed and enforced in accordance with the laws of the State of California.

	Heavenstone Corp
	Borrower

	William E. Sluss
	Name of Authorized Representative

	/s/ WILLIAM E. SLUSS
	Authorized Signature

	Chief Financial Officer
	Title

	February 17, 2017
	Date

EX-10 8 ex103.htm FIRST AMENDED AND

Exhibit 10.3

FIRST AMENDED AND

RESTATE LOAN AGREEMENT

ALL PRIOR AGREEMENTS SUPERSEDED

AUTHORITY AND LOAN

-Lender has approved Borrower’s original loan dated October 29, 2014. Lender’s approval of Borrower’s loan under this Agreement is made on reliance of the following:

a. that borrower agrees that this loan is the most senior debt among all debts;

b. that borrower agrees to repay the loan prior to all other debts and obligations; and

By executing this Agreement the Borrower represents under penalty of perjury are true and accurate in all respects.

-Lender agrees to loan (the “Loan”), dated October 29, 2014, to Borrower, in the amount of US Six Hundred Fifty Thousand Dollars (US$650,000), evidenced by a First Amended and Restated Promissory Note (the “Promissory Note”) attached hereto as Exhibit A.

- The Loan, in the amount of US Six Hundred FiftyThousand Dollars (US$650,000), has been approved for the period from October 29, 2014 to December 31, 2017, with interest rate of five percent (5%) per annum under this Agreement.

PURPOSE

LOAN REPAYMENT AND INTEREST

EFFECTIVE DATE OF AGREEMENT

This Agreement shall become effective as of October 29, 2014 (the “Effective Date”).

The Borrower agrees to complete performance of its obligations within the time periods required by Lender and any fully executed documents, if applicable.

PREPAYMENT

PROMISSORY NOTE

ACCOUNTS

DEFAULT

GENERAL TERMS

Indemnification by Borrower

Independent Capacity

Assignment

Amendment

Severability

Governing Law and Venue

Borrower Authorization

NOTICE

[ SIGNATURE PAGE FOLLOWS ]

IN WITNESS WHEREOF, this Loan Agreement has been executed by the parties hereto.

Lender	Borrower

/s/ YANG CONG	/s/ WILLIAM E. SLUSS
Yang Cong	William E. Sluss
Director	Chief Financial Officer
Astonia Group Ltd.	Heavenstone Corp.

EX-10 9 ex104.htm FIRST AMENDED AND RESTATED PROMISSORY NOTE

Exhibit 10.4

FIRST AMENDED AND RESTATED PROMISSORY NOTE

October 29, 2014

as amended February 17, 2017

For value received, the undersigned, (hereinafter referred to as the “Borrower”), promises to pay to the order of the Astonia Group Ltd., (hereinafter referred to as “Lender”), at its principal place of business at c/o Mossack Fonseca & C0 (BVI) Ltd., P.O. Box 3136, Road Town, Tortola, BVI, or at such other place as Lender may designate, the principal sum of US Six Hundred Fifty Thousand Dollars (US$650,000) or such lesser amount as shall equal the aggregate amount disbursed to the Borrower by Lender pursuant to the Agreement between the Borrower and Lender, together with interest thereon at the rate of five (5%) percent per annum on the unpaid principal balance, computed from the date of each disbursement to the Borrower, until the Loan is repaid by the Borrower. Principal, together with interest thereon, is due and payable on or before December 31, 2017.

On the occurrence of any event of default, as defined in paragraph 4 of this Promissory Note, Lender, at its sole election, may take any or all of the following actions:

Exercise all of its rights and remedies enumerated herein, which rights are in addition to and not in limitation of any other rights Lender may have under the Agreement and applicable law.

Each of the following events and conditions shall constitute an event of default under this Promissory Note and the Agreements:

Failure of the Borrower to repay any principal, accrued interest, and late fees, if applicable, when due under the terms of this Promissory Note.

Failure of the Borrower to comply with, and satisfy, all the terms, conditions, and obligations, required by the Loan Agreement as a condition for this Loan.

Termination of the Loan Agreement pursuant to the terms thereof or breach by the Borrower of any terms or conditions of said Loan Agreement.

This Promissory Note shall be construed and enforced in accordance with the laws of the State of California.

	Heavenstone Corp
	Borrower

	William E. Sluss
	Name of Authorized Representative

	/s/ WILLIAM SLUSS
	Authorized Signature

	Chief Financial Officer
	Title

	February 17, 2017
	Date

EX-10 10 ex105.htm FIRST AMENDED AND

Exhibit 10.5

FIRST AMENDED AND

RESTATED LOAN AGREEMENT

ALL PRIOR AGREEMENTS SUPERSEDED

AUTHORITY AND LOAN

-Lender has approved Borrower’s original loan dated December 26, 2014. Lender’s approval of Borrower’s loan under this Agreement is made on reliance of the following:

a. that borrower agrees that this loan is the most senior debt among all debts;

b. that borrower agrees to repay the loan prior to all other debts and obligations; and

By executing this Agreement the Borrower represents under penalty of perjury are true and accurate in all respects.

-Lender agrees to loan (the “Loan”), dated December 26, 2014, to Borrower, in the amount of US Six Hundred Thousand Dollars (US$600,000), evidenced by a First Restated and Amended Promissory Note (the “Promissory Note”) attached hereto as Exhibit A.

- The Loan, in the amount of US Six Hundred Thousand Dollars (US$600,000), has been approved for the period from December 26, 2014 to December 31, 2017, with interest rate of five percent (5%) per annum under this Agreement.

PURPOSE

LOAN REPAYMENT AND INTEREST

EFFECTIVE DATE OF AGREEMENT

This Agreement shall become effective as of December 26, 2014 (the “Effective Date”).

The Borrower agrees to complete performance of its obligations within the time periods required by Lender and any fully executed documents, if applicable.

PREPAYMENT

PROMISSORY NOTE

ACCOUNTS

DEFAULT

GENERAL TERMS

Indemnification by Borrower

Independent Capacity

Assignment

Amendment

Severability

Governing Law and Venue

Borrower Authorization

NOTICE

[ SIGNATURE PAGE FOLLOWS ]

IN WITNESS WHEREOF, this Loan Agreement has been executed by the parties hereto.

Lender	Borrower

/s/ YANG CONG	/s/ WILLIAM E. SLUSS
Yang Cong	William E. Sluss
Director	Chief Financial Officer
Astonia Group Ltd.	Heavenstone Corp.

EX-10 11 ex106.htm FIRST AMENDED AND RESTATED PROMISSORY NOTE

Exhibit 10.6

FIRST AMENDED AND RESTATED PROMISSORY NOTE

December 26, 2014

as amended February 17, 2017

For value received, the undersigned, (hereinafter referred to as the “Borrower”), promises to pay to the order of the Astonia Group Ltd., (hereinafter referred to as “Lender”), at its principal place of business at c/o Mossack Fonseca & C0 (BVI) Ltd., P.O. Box 3136, Road Town, Tortola, BVI, or at such other place as Lender may designate, the principal sum of US Six Hundred Thousand Dollars (US$600,000) or such lesser amount as shall equal the aggregate amount disbursed to the Borrower by Lender pursuant to the Agreement between the Borrower and Lender, together with interest thereon at the rate of five (5%) percent per annum on the unpaid principal balance, computed from the date of each disbursement to the Borrower, until the Loan is repaid by the Borrower. Principal, together with interest thereon, is due and payable on or before December 31, 2017.

On the occurrence of any event of default, as defined in paragraph 4 of this Promissory Note, Lender, at its sole election, may take any or all of the following actions:

Exercise all of its rights and remedies enumerated herein, which rights are in addition to and not in limitation of any other rights Lender may have under the Agreement and applicable law.

Each of the following events and conditions shall constitute an event of default under this Promissory Note and the Agreements:

Failure of the Borrower to repay any principal, accrued interest, and late fees, if applicable, when due under the terms of this Promissory Note.

Failure of the Borrower to comply with, and satisfy, all the terms, conditions, and obligations, required by the Loan Agreement as a condition for this Loan.

Termination of the Loan Agreement pursuant to the terms thereof or breach by the Borrower of any terms or conditions of said Loan Agreement.

This Promissory Note shall be construed and enforced in accordance with the laws of the State of California.

	Heavenstone Corp
	Borrower

	William E. Sluss
	Name of Authorized Representative

	WILLIAM E. SLUSS
	Authorized Signature

	Chief Financial Officer
	Title

	February 17, 2017
	Date

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NOTE 1. BASIS OF PRESENTATION   The accompanying unaudited interim consolidated financial statements of Heavenstone Corp. (Heavenstone or the Company), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (the SEC), and should be read in conjunction with the audited financial statements and notes thereto contained in the Companys Annual Report on Form 10-K for the year ended June 30, 2016, filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the Financial Statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2016 as reported in the Companys Annual Report on Form 10-K have been omitted.   Reclassifications   Certain prior year amounts have been reclassified to conform with the current year presentation.   Basis of Consolidation   The consolidated financial statements include the accounts of the Company and its subsidiary. All significant intercompany accounts and transactions have been eliminated.

NOTE 2. GOING CONCERN   These unaudited interim consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. For the nine months ended March 31, 2017, the Company had an accumulated deficit of $557,846 and revenue of $0. The continuation of the Company as a going concern is dependent upon the Company's continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Companys ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.   The Company intends to fund operations through equity and debt financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending June 30, 2017.

NOTE 3. LAND AND LAND DEVELOPMENT COSTS   Land and land development costs are carried at cost. Land development costs capitalized include costs associated with the development of the purchased land, including inspection fees and engineering fees. For the nine months ended March 31, 2017, the Company had incurred $2,156,857 in land and land development costs, of which $1,012,887 was paid in cash, $141,162 was incurred on credit, $750,000 was settled with note payable and $116,162 was assumed by non-controlling interest (see further discussion in Note 6). Also, the Company capitalized the interest costs of $134,390 incurred for the real estate projects under ASC 835-20, during the nine months ended March 31, 2017.

NOTE 4. RELATED-PARTY TRANSACTIONS   Loans from Officer's Family   During the nine months ended March 31, 2017, the Company obtained two separate loans from the family of one of its officers, as follows:   July 2016 $170,000. The Company obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount $170,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in July 2018. The proceeds from this loan were used by the Company for operating expenses.   August 2016 $100,000. The Company obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount $100,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in August 2018. The proceeds from this loan were used by the Company for operating expenses.   Loans from Related Party   During the nine months ended March 31, 2017, the Company obtained two separate loans from a related party, as follows:   September 2016 $270,000. The Company obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount $270,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in September 2018. The proceeds from this loan were applied by the Company to operating expenses.   January 2017 $100,000. The Company obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount $100,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in January 2019. The proceeds from this loan were applied by the Company to operating expenses.   January 2017 - $449,965. The Company obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount $449,965, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in January 2019. The proceeds from this loan were applied by the Company to operating expenses.   As of March 31, 2017, and June 30, 2016, the total outstanding short-term related party debt was $2,100,000.   As of March 31, 2017, and June 30, 2016, the total outstanding long-term related party debt was $2,019,940 and $929,975, respectively.

NOTE 5. NOTES PAYABLE   In February 2016, the Company delivered a promissory note, face amount $76,587, in payment of certain insurance premiums associated with an officers' and directors' insurance policy obtained by the Company. Unpaid principal on such loan bears interest at 6.95% per annum. Repayment of this promissory note is to be made in ten equal monthly payments of $7,904, beginning in March 2016.   During the nine months ended March 31, 2017, the Company repaid a total of $38,846 in principal. The outstanding principal as of March 31, 2017, and June 30, 2016, are $-0- and $38,846, respectively.   As of March 31, 2017, and June 30, 2016, the total outstanding long-term notes payable was $1,500,000 and $750,000, respectively.

NOTE 6. REAL ESTATE DEVELOPMENT PROJECT   In January 2017, the Company and a third party formed Temecula QK Holdings, LLC, a California limited liability company (TQKH), for the purpose of acquiring and developing approximately 40 acres of land located in Temecula, California, for $1,318,383. The Company owns 75% of TQKH. In connection with TQKHs purchase of such land, TQKH issued a $750,000 face amount promissory note to the third-party seller of the land. The principal balance is due in March 2019. The unpaid principal balance of such promissory note bears interest at 4.5% per annum, with interest-only payments due monthly until the due date. This promissory note is secured by a deed of trust in favor of the selling party. For the three months ended March 31, 2017, TQKH received $116,162 from its non-controlling shareholder for the land acquisition costs.

NOTE 7. SUBSEQUENT EVENTS   Loan from Related Party   In April 2017, we obtained a loan in the amount of $140,000 pursuant to a loan agreement and delivered a promissory note, face amount $140,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in April 2019.

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10-Q 2017-03-31 false HEAVENSTONE CORP 0001624025 hvsc --06-30 71159423 Smaller Reporting Company Yes No No 2017 Q3 0001624025 2016-07-01 2017-03-31 0001624025 2017-03-31 0001624025 2017-05-22 0001624025 2017-01-01 2017-03-31 0001624025 2016-01-01 2016-03-31 0001624025 2015-07-01 2016-03-31 0001624025 2016-06-30 0001624025 2015-06-30 0001624025 2016-03-31 0001624025 2016-07-31 0001624025 2016-08-31 0001624025 2016-09-30 0001624025 2017-01-31 0001624025 2016-12-31 0001624025 2016-02-29 0001624025 2017-04-30 iso4217:USD shares iso4217:USD shares pure EX-101.SCH 13 hvsc-20170331.xsd XBRL SCHEMA FILE 000170 - Statement - REAL ESTATE DEVELOPMENT PROJECT (Details) link:presentationLink link:definitionLink link:calculationLink 000100 - Disclosure - NOTES PAYABLE link:presentationLink link:definitionLink link:calculationLink 000150 - Statement - RELATED-PARTY TRANSACTIONS (Details) link:presentationLink link:definitionLink link:calculationLink 000110 - Disclosure - REAL ESTATE DEVELOPMENT PROJECT link:presentationLink link:definitionLink link:calculationLink 000130 - Statement - GOING CONCERN (Details) link:presentationLink link:definitionLink link:calculationLink 000080 - Disclosure - LAND AND LAND DEVELOPMENT COSTS link:presentationLink link:definitionLink link:calculationLink 000160 - Statement - NOTES PAYABLE (Details) link:presentationLink link:definitionLink link:calculationLink 000070 - Disclosure - GOING CONCERN link:presentationLink link:definitionLink link:calculationLink 000120 - Disclosure - SUBSEQUENT EVENTS link:presentationLink link:definitionLink link:calculationLink 000010 - Document - Document and Entity Information link:presentationLink link:definitionLink link:calculationLink 000140 - Statement - LAND AND LAND DEVELOPMENT COSTS (Details) link:presentationLink link:definitionLink link:calculationLink 000060 - Disclosure - BASIS OF PRESENTATION link:presentationLink link:definitionLink link:calculationLink 000020 - Statement - CONSOLIDATED BALANCE SHEETS (Unaudited) link:presentationLink link:definitionLink link:calculationLink 000030 - Statement - CONSOLIDATED BALANCE SHEETS PARENTHETICALS link:presentationLink link:definitionLink link:calculationLink 000090 - Disclosure - RELATED-PARTY TRANSACTIONS link:presentationLink link:definitionLink link:calculationLink 000050 - Statement - CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) link:presentationLink link:definitionLink link:calculationLink 000040 - Statement - CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) link:presentationLink link:definitionLink link:calculationLink 000180 - Statement - SUBSEQUENT EVENTS TRANSACTIONS (Details) link:presentationLink link:definitionLink link:calculationLink EX-101.CAL 14 hvsc-20170331_cal.xml XBRL CALCULATION FILE EX-101.DEF 15 hvsc-20170331_def.xml XBRL DEFINITION FILE EX-101.LAB 16 hvsc-20170331_lab.xml XBRL LABEL FILE Land acquired for development (in acres) Land acquired for development (in acres) NOTES PAYABLE Borrowings on loans from related parties Changes in operating assets and liabilities: Long-term notes payable Entity Voluntary Filers SUBSEQUENT EVENTS TRANSACTIONS Non-controlling interest {1} Non-controlling interest The amount of expenses assumed by the non-controlling interest during the period. Non-cash investing the financing activities Cash paid for land development costs Cash paid for land development costs Accounts payable {1} Accounts payable Non-current liabilities Repayment of promissory note Repayment of promissory note GOING CONCERN {1} GOING CONCERN Cash paid for interest Third-party notes issued for land purchase The fair value of third party notes issued for land purchase during the period under non-cash investing and financing activities. Capitalized interest to land development cost Capitalized interest to land development cost., Net cash used in investing activities CASH FLOWS FROM OPERATING ACTIVITIES Basic and diluted {1} Basic and diluted Net loss per common share Common Stock, shares outstanding Stockholders' deficit TQKH issued promissory note TQKH issued promissory note for the third party seller of the land Land and land development costs paid in cash The cash outflow from the acquisition of real estate intended to generate income for the owner; excludes land acquired for use by the owner. LAND AND LAND DEVELOPMENT COSTS DETAILS Revenues: LIABILITIES AND STOCKHOLDERS' DEFICIT Entity Registrant Name SUBSEQUENT EVENTS Depreciation expense Net loss attributable to Heavenstone Corp. Preferred stock, shares outstanding Additional paid-in capital Long-term related party debt Total fixed assets Office furniture and equipment Land and land development cost Current Fiscal Year End Date Temecula QK Holdings, LLC (TQKH) paid for land acquisition Temecula QK Holdings, LLC (TQKH) paid for land acquisition Short-term notes payable {1} Short-term notes payable RELATED-PARTY TRANSACTIONS Supplemental disclosure of cash flow information Operating loss Parentheticals Total stockholders' deficit Total liabilities Entity Current Reporting Status Loan from Related Party in amount Loan from Related Party in amount Unpaid principal on such loan bears interest per annum Unpaid principal on such loan bears interest per annum Capitalized interest costs for the real estate projects Capitalized interest costs for the real estate projects NOTES PAYABLE {1} NOTES PAYABLE Total Heavenstone stockholders' deficit Total current liabilities Repaid a total in principal Repaid a total in principal Short-term related party debt {1} Short-term related party debt GOING CONCERN Purchase of land acquisition costs directly by non-controlling interest The amount of land acquisition costs paid directly by non-controlling interest under non-cash investing and financing activities. Borrowings on loans from third parties Net loss {1} Net loss Less: Net loss attributable to non-controlling interest Short-term notes payable Cash and cash equivalents Promissory note bears interest Promissory note bears interest NOTES PAYABLE DETAILS Land and land development costs on credit The amount of expenses paid on credit for the acquisition of real estate intended to generate income for the owner; excludes land acquired for use by the owner. SUBSEQUENT EVENTS {1} SUBSEQUENT EVENTS Cash, beginning of period Cash, beginning of period Cash, end of period Operating expenses Common Stock, shares issued Common stock, $.0001 par value: 200,000,000 shares authorized; 71,159,423 shares and 71,159,423 shares issued and outstanding at March 31, 2017, and June 30, 2016, respectively Fixed assets Entity Central Index Key Document Period End Date Document Type Related Party Transactions Details The amount of expenses assumed by the non-controlling interest during the period. Accumulated deficit {1} Accumulated deficit The cumulative amount of the reporting entity's undistributed earnings or deficit. Adjustments to reconcile net loss to cash used in operating activities: Interest expense Non-controlling interest Preferred stock, $.0001 par value: 50,000,000 shares authorized; zero and zero shares issued and outstanding at March 31, 2017, and June 30, 2016, respectively Total assets Total assets Accumulated depreciation Amendment Flag Revenue REAL ESTATE DEVELOPMENT PROJECT: LAND AND LAND DEVELOPMENT COSTS Interest payable {1} Interest payable Common Stock, shares authorized Preferred stock, shares authorized Accumulated deficit Entity Filer Category Promissory note, face amount Promissory note, face amount Prepaid and other current assets {1} Prepaid and other current assets Weighted average number of common shares outstanding: Preferred stock, par value Accounts payable Document Fiscal Year Focus Entity Common Stock, Shares Outstanding Real Estate Development Project Details Company delivered a promissory note, face amount RELATED-PARTY TRANSACTIONS {1} RELATED-PARTY TRANSACTIONS LAND AND LAND DEVELOPMENT COSTS {1} LAND AND LAND DEVELOPMENT COSTS The entire disclosure is about the land and land development costs capitalized during the period. BASIS OF PRESENTATION Repayments on loans to third parties Common Stock, par value Total liabilities and stockholders' deficit Total liabilities and stockholders' deficit Interest payable Entity Well-known Seasoned Issuer TQKH received from its non-controlling shareholder during the period TQKH received from its non-controlling shareholder during the period Company delivered a promissory note, face amount Company delivered a promissory note, face amount Long-term related party debt {1} Long-term related party debt Note payable The amount of expenses settled by issue of notes payable during the period. Cash paid for income taxes Basic and diluted Net loss Short-term related party debt Prepaid and other current assets ASSETS loan bears interest per annum Loan bears interest per annum Company obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount Company obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount REAL ESTATE DEVELOPMENT PROJECT Land development costs incurred on credit Net cash provided by financing activities CASH FLOWS FROM FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Net cash used in operating activities Net cash used in operating activities Preferred stock, shares issued Total non-current liabilities Total current assets Trading Symbol Document and Entity Information: Land and land development costs Carrying amount during the period, net of valuation allowances and impairment losses, of costs of land expected to be developed in the near term plus capitalized costs of development, for purposes of selling completed units to home buyers or commercial or industrial entities.. GOING CONCERN DETAILS BASIS OF PRESENTATION {1} BASIS OF PRESENTATION NET DECREASE IN CASH Current assets Entity Public Float Interest rate on loan per annum Interest rate on loan per annum Long-term notes payable {1} Long-term notes payable Current liabilities Document Fiscal Period Focus EX-101.PRE 17 hvsc-20170331_pre.xml XBRL PRESENTATION FILE XML 18 R1.htm IDEA: XBRL DOCUMENT

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Mar. 31, 2017	May 22, 2017
Document and Entity Information:
Entity Registrant Name	HEAVENSTONE CORP
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Trading Symbol	hvsc
Amendment Flag	false
Entity Central Index Key	0001624025
Current Fiscal Year End Date	--06-30
Entity Common Stock, Shares Outstanding		71,159,423
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3

XML 19 R2.htm IDEA: XBRL DOCUMENT

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Mar. 31, 2017	Jun. 30, 2016
Current assets
Cash and cash equivalents	$ 14,337	$ 52,592
Prepaid and other current assets	16,850	156,340
Total current assets	31,187	208,932
Fixed assets
Land and land development cost	6,045,703	3,888,846
Office furniture and equipment	14,047	14,047
Accumulated depreciation	(6,555)	(4,448)
Total fixed assets	6,053,195	3,898,445
Total assets	6,084,382	4,107,377
Current liabilities
Accounts payable	186,592	155,538
Interest payable	319,438	185,509
Short-term notes payable	0	38,846
Short-term related party debt	2,100,000	2,100,000
Total current liabilities	2,606,030	2,479,893
Non-current liabilities
Long-term related party debt	2,019,940	929,975
Long-term notes payable	1,500,000	750,000
Total non-current liabilities	3,519,940	1,679,975
Total liabilities	6,125,970	4,159,868
Stockholders' deficit
Preferred stock, $.0001 par value: 50,000,000 shares authorized; zero and zero shares issued and outstanding at March 31, 2017, and June 30, 2016, respectively	0	0
Common stock, $.0001 par value: 200,000,000 shares authorized; 71,159,423 shares and 71,159,423 shares issued and outstanding at March 31, 2017, and June 30, 2016, respectively	7,116	7,116
Additional paid-in capital	394,386	394,386
Accumulated deficit	(557,846)	(453,993)
Total Heavenstone stockholders' deficit	(156,344)	(52,491)
Non-controlling interest	114,756	0
Total stockholders' deficit	(41,588)	(52,491)
Total liabilities and stockholders' deficit	$ 6,084,382	$ 4,107,377

XML 20 R3.htm IDEA: XBRL DOCUMENT

CONSOLIDATED BALANCE SHEETS PARENTHETICALS - $ / shares	Mar. 31, 2017	Jun. 30, 2016
Parentheticals
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common Stock, par value	$ 0.0001	$ 0.0001
Common Stock, shares authorized	200,000,000	200,000,000
Common Stock, shares issued	71,159,423	71,159,423
Common Stock, shares outstanding	71,159,423	71,159,423

XML 21 R4.htm IDEA: XBRL DOCUMENT

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Revenues:
Operating expenses	$ 23,546	$ 42,484	$ 70,345	$ 85,782
Operating loss	(23,546)	(42,484)	(70,345)	(85,782)
Interest expense	(18,128)	(37,902)	(34,914)	(109,153)
Net loss	(41,674)	(80,386)	(105,259)	(194,935)
Less: Net loss attributable to non-controlling interest	1,406	0	1,406	0
Net loss attributable to Heavenstone Corp.	$ (40,268)	$ (80,386)	$ (103,853)	$ (194,935)
Net loss per common share
Basic and diluted	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Weighted average number of common shares outstanding:
Basic and diluted	71,159,423	71,159,423	71,159,423	71,159,423

XML 22 R5.htm IDEA: XBRL DOCUMENT

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (105,259)	$ (194,935)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation expense	2,107	2,107
Changes in operating assets and liabilities:
Prepaid and other current assets	(139,490)	(105,504)
Accounts payable	(112,364)	(56,301)
Interest payable	(461)	81,027
Net cash used in operating activities	(76,487)	(273,606)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for land development costs	(1,021,887)	(337,988)
Net cash used in investing activities	(1,021,887)	(337,988)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on loans from related parties	1,089,965	300,000
Borrowings on loans from third parties	0	150,000
Repayments on loans to third parties	(38,846)	0
Net cash provided by financing activities	1,051,119	450,000
NET DECREASE IN CASH	(38,255)	(161,594)
Cash, beginning of period	52,592	271,101
Cash, end of period	14,337	109,507
Non-cash investing the financing activities
Land development costs incurred on credit	143,418	0
Capitalized interest to land development cost	134,390	0
Third-party notes issued for land purchase	750,000	0
Purchase of land acquisition costs directly by non-controlling interest	116,162	0
Supplemental disclosure of cash flow information
Cash paid for income taxes	0	0
Cash paid for interest	$ 35,375	$ 28,126

XML 23 R6.htm IDEA: XBRL DOCUMENT

BASIS OF PRESENTATION

9 Months Ended

Mar. 31, 2017

BASIS OF PRESENTATION

BASIS OF PRESENTATION

NOTE 1. BASIS OF PRESENTATION

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation.

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiary. All significant intercompany accounts and transactions have been eliminated.

XML 24 R7.htm IDEA: XBRL DOCUMENT

GOING CONCERN

9 Months Ended

Mar. 31, 2017

GOING CONCERN

GOING CONCERN

NOTE 2. GOING CONCERN

XML 25 R8.htm IDEA: XBRL DOCUMENT

LAND AND LAND DEVELOPMENT COSTS

9 Months Ended

Mar. 31, 2017

LAND AND LAND DEVELOPMENT COSTS

LAND AND LAND DEVELOPMENT COSTS

NOTE 3. LAND AND LAND DEVELOPMENT COSTS

XML 26 R9.htm IDEA: XBRL DOCUMENT

RELATED-PARTY TRANSACTIONS

9 Months Ended

Mar. 31, 2017

RELATED-PARTY TRANSACTIONS

RELATED-PARTY TRANSACTIONS

NOTE 4. RELATED-PARTY TRANSACTIONS

Loans from Officer's Family

During the nine months ended March 31, 2017, the Company obtained two separate loans from the family of one of its officers, as follows:

Loans from Related Party

During the nine months ended March 31, 2017, the Company obtained two separate loans from a related party, as follows:

As of March 31, 2017, and June 30, 2016, the total outstanding short-term related party debt was $2,100,000.

As of March 31, 2017, and June 30, 2016, the total outstanding long-term related party debt was $2,019,940 and $929,975, respectively.

XML 27 R10.htm IDEA: XBRL DOCUMENT

NOTES PAYABLE

9 Months Ended

Mar. 31, 2017

NOTES PAYABLE

NOTES PAYABLE

NOTE 5. NOTES PAYABLE

During the nine months ended March 31, 2017, the Company repaid a total of $38,846 in principal. The outstanding principal as of March 31, 2017, and June 30, 2016, are $-0- and $38,846, respectively.

As of March 31, 2017, and June 30, 2016, the total outstanding long-term notes payable was $1,500,000 and $750,000, respectively.

XML 28 R11.htm IDEA: XBRL DOCUMENT

REAL ESTATE DEVELOPMENT PROJECT

9 Months Ended

Mar. 31, 2017

REAL ESTATE DEVELOPMENT PROJECT:

REAL ESTATE DEVELOPMENT PROJECT

NOTE 6. REAL ESTATE DEVELOPMENT PROJECT

- Definition

The entire disclosure for certain real estate investment financial statements, real estate investment trust operating support agreements, real estate owned, retail land sales, time share transactions, as well as other real estate related disclosures.

+ References + Details

XML 29 R12.htm IDEA: XBRL DOCUMENT

SUBSEQUENT EVENTS

9 Months Ended

Mar. 31, 2017

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 7. SUBSEQUENT EVENTS

Loan from Related Party

XML 30 R13.htm IDEA: XBRL DOCUMENT

GOING CONCERN (Details)	9 Months Ended
GOING CONCERN (Details)	Mar. 31, 2017 USD ($)
GOING CONCERN DETAILS
Accumulated deficit	$ 557,846
Revenue	$ 0

XML 31 R14.htm IDEA: XBRL DOCUMENT

LAND AND LAND DEVELOPMENT COSTS (Details)	9 Months Ended
LAND AND LAND DEVELOPMENT COSTS (Details)	Mar. 31, 2017 USD ($)
LAND AND LAND DEVELOPMENT COSTS DETAILS
Land and land development costs	$ 2,156,857
Land and land development costs paid in cash	1,012,887
Land and land development costs on credit	141,162
Note payable	750,000
Non-controlling interest	116,162
Capitalized interest costs for the real estate projects	$ 134,390

XML 32 R15.htm IDEA: XBRL DOCUMENT

RELATED-PARTY TRANSACTIONS (Details) - USD ($)	Mar. 31, 2017	Jan. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Aug. 31, 2016	Jul. 31, 2016	Jun. 30, 2016
Related Party Transactions Details
Company obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount		$ 449,965	$ 100,000	$ 270,000	$ 100,000	$ 170,000
Unpaid principal on such loan bears interest per annum		5.00%	5.00%	5.00%	5.00%	5.00%
Short-term related party debt	$ 2,100,000						$ 2,100,000
Long-term related party debt	$ 2,019,940						$ 929,975

XML 33 R16.htm IDEA: XBRL DOCUMENT

NOTES PAYABLE (Details) - USD ($)	Mar. 31, 2017	Jun. 30, 2016	Feb. 29, 2016
NOTES PAYABLE DETAILS
Company delivered a promissory note, face amount			$ 76,587
loan bears interest per annum			6.95%
Repayment of promissory note			$ 7,904
Repaid a total in principal	$ 38,846
Short-term notes payable	0	$ 38,846
Long-term notes payable	$ 1,500,000	$ 750,000

XML 34 R17.htm IDEA: XBRL DOCUMENT

REAL ESTATE DEVELOPMENT PROJECT (Details)	Mar. 31, 2017 USD ($)	Jan. 31, 2017 USD ($)
Real Estate Development Project Details
Land acquired for development (in acres)		40
Temecula QK Holdings, LLC (TQKH) paid for land acquisition		$ 1,318,383
TQKH issued promissory note		$ 750,000
Promissory note bears interest		4.50%
TQKH received from its non-controlling shareholder during the period	$ 116,162

XML 35 R18.htm IDEA: XBRL DOCUMENT

SUBSEQUENT EVENTS TRANSACTIONS (Details)	Apr. 30, 2017 USD ($)
SUBSEQUENT EVENTS TRANSACTIONS
Loan from Related Party in amount	$ 140,000
Promissory note, face amount	$ 140,000
Interest rate on loan per annum	5.00%

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