10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2019 or

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

For the transition period from __________to _________

001-32522

Commission file number

China Foods Holdings Ltd.

(Exact name of registrant as specified in its charter)

Delaware	84-1735478
State or other jurisdiction of incorporation or organization	(I.R.S. Employer Identification No.)

Everbright Center, Suite 3102 108 Gloucester Road Wanchai, Hong Kong	0000
(Address of principal executive offices)	(Zip Code)

(852) 3618-8608

Registrant’s telephone number, including area code

 (Former name, former address and former fiscal year, if changed since last report)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit. Yes [x] No [  ]

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,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer	[  ]	Smaller reporting company	[x]
		Emerging growth company	[  ]

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

Class	Outstanding August 15, 2019
Common Stock, with $0.0001 par value	5,252,309 shares

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Table of Contents

	PART I – FINANCIAL INFORMATION
		Page
		No.
Item 1.	Financial Statements (Unaudited) Notes to unaudited condensed Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	18
Item 4.	Controls and Procedures	18
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	19
Item 1A.	Risk Factors	19
Item 2.	Unregistered Sales of Equity Securities and Proceeds	19
Item 3.	Defaults Upon Senior Securities	19
Item 4.	Mine Safety Disclosure	19
Item 5.	Other Information	19
Item 6.	Exhibits	21
SIGNATURES		22

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PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements

China Foods Holdings Ltd.

Balance Sheets

	June 30,  2019	September 30, 2018
	$	$
	(Unaudited)	(Audited)
ASSETS
Current Assets
Prepaid expenses	1,250	-
Total Current Assets	1,250	-
TOTAL ASSETS	1,250	-
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accrued expenses	5,133	3,959
Income taxes payable	100	100
Amount due to a related party	87,858	14,000
Total Current Liabilities and Total Liabilities	93,091	18,059
Stockholders’ Deficit
Common stock ($0.0001 par value, 100,000,000 shares authorized, 5,252,309 shares issued and outstanding	525	137,413
Additional paid-in capital	136,988	-
Other reserve	350,547	350,547
Accumulated deficit	(579,901)	(506,019)
Total Stockholders' Deficit	(91,841)	(18,059)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	1,250	-

The accompanying notes are an integral part of these unaudited condensed financial statements

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China Foods Holdings Ltd.

Statements of Operations

(Unaudited)

	For the three months ended June 30, 2019	For the three months ended June 30, 2018	For the nine months ended June 30, 2019	For the nine months ended June 30, 2018
	$	$	$	$
Income	-	-	-	-
Cost of Sales	-	-	-	-
Gross Profit	-	-	-	-
General and administrative expense	44,643	10,430	73,882	25,066
Operating loss	(44,643)	(10,430)	(73,882)	(25,066)
Interest expense to a related party	-	(7,050)	-	(20,350)
Loss before income taxes	(44,643)	(17,480)	(73,882)	(45,416)
Provision for income taxes	-	-	-	-
Net loss	(44,643)	(17,480)	(73,882)	(45,416)
Net loss per common share Basic and diluted	($0.00)*	($0.00)*	($0.00)*	($0.00)*
Weighted average number of common share     Basic and diluted	5,252,309	5,251,309	5,252,309	5,251,309

*denotes net loss per common share of less than $0.01 per share.

The accompanying notes are an integral part of these unaudited condensed financial statements

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CHINA FOODS HOLDINGS LTD.

Statements of Shareholders' Deficit

(Unaudited)

	Common Stock			Additional paid-in capital	Other Reserve		Accumulated Deficit		Total Stockholders’ Deficit
	Share	Amount
			$	$		$		$		$
Balances at September 30, 2018	5,251,309		137,413	-		350,547		(506,019)		(18,059)
Net loss for the period	-		-	-		-		(5,766)		(5,766)
Balances at December 31, 2018	5,251,309		137,413	-		350,547		(511,785)		(23,825)
Net loss for the period	-		-			-		(23,473)		(23,473)
Merger transaction	1,000		(136,888)	136,988		-		-		100
Balances at March 31, 2019	5,252,309		525	136,988		350,547		(535,258)		(47,198)
Net loss for the period	-		-	-		-		(44,643)		(44,643)
Balances at June 30, 2019	5,252,309		525	136,988		350,547		(579,901)		(91,841)

	Common Stock			Other Reserve		Accumulated Deficit		Total Stockholders’ Deficit
	Share	Amount
			$		$		$		$
Balances at September 30, 2017	5,251,309		137,413		-		(443,261)		(305,848)
Net loss for the period	-		-		-		(12,651)		(12,651)
Balances at December 31, 2017	5,251,309		137,413		-		(455,912)		(318,499)
Net loss for the period	-		-		-		(15,286)		(15,286)
Balances at March 31, 2018	5,251,309		137,413		-		(471,198)		(333,785)
Net loss for the period	-		-		-		(17,480)		(17,480)
Balances at June 30, 2018	5,251,309		137,413		-		(488,678)		(351,265)

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

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China Foods Holdings Ltd.

Statements of Cash Flows

(Unaudited)

	For the nine months ended June 30,
	2019	2018
	$	$
Operating Activities:
Net loss	(73,882)	(45,416)
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in operating assets and liabilities:
Increase in accrued expenses	1,174	4,000
(Increase) decrease in prepaid expenses	(1,250)	2,499
Increase in interest payable	-	20,350
Decrease in income taxes payable	-	(100)
Increase in amount due to a related party	73,958	-
NET CASH USED BY OPERATING ACTIVITIES	-	(18,667)
NET CASH FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable, related party	-	20,000
NET INCREASE IN CASH	-	1,333
CASH at beginning of period	-	15,140
CASH at end of period	-	16,473
Supplemental disclosure of cash flow information
Interest paid	-	-
Taxes paid	100	100

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

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China Foods Holdings Ltd.

Notes to the Unaudited Condensed Financial Statements

June 30, 2019

NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

China Foods Holdings Ltd.  (the "Company") was incorporated in Delaware on January 10, 2019. On January 23, 2019, the Company entered into an Agreement and Plan of Merger (the “Agreement”) with Trafalgar Resources, Inc., a  Utah corporation (“Trafalgar”).  Pursuant to the Agreement, the Company merged with Trafalgar (the “Merger”) with the Company as the surviving entity.  Prior to the Merger, Trafalgar had not commenced operations that had resulted in significant revenue and Trafalgar’s efforts had been devoted primarily to activities related to raising capital and attempting to acquire an operating entity.

Prior to the Merger, Trafalgar’s majority stockholder who owned 5,000,000 shares (approximately 95.2%) of the 5,251,309 outstanding shares of Trafalgar’s common stock, par value $0.0001, signed a written consent approving the Merger and the related transactions. Such approval and consent were sufficient under Utah law and Trafalgar’s Bylaws to approve the Merger.  The boards of directors and shareholders of the Company and Trafalgar approved the Merger.

Pursuant to the Merger, each share of Trafalgar’s common stock was converted into one share of the Company’s common stock.  After the Merger, HY (HK) Financial Investments Co, Ltd. owns 5,000,000 shares of common stock of the Company.

The Merger was effective on March 13, 2019.  

Basis of Presentation

The unaudited condensed financial statements present the balance sheets, statements of operations, statements of shareholders' deficit and statements of cash flows of the Company. These unaudited condensed financial statements are presented in the United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States.

Unaudited Condensed Financial Statements

The accompanying unaudited condensed financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SFC, including the instruction to Form 10-Q and Article 8 of Regulation S-X. In the opinion of Management, all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results for the nine months ended June 30, 2019, have been made. Operating results for the nine months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending September 30, 2019. They do not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.

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NOTE 2 – SIGNIFICANT ACCOUTING POLICIES

Net Loss per Common Share

Loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.  There are no such common stock equivalents outstanding as of June 30, 2019.

Income Taxes

The Company accounts for income taxes pursuant to FASB ASC 740-10-05, “Accounting for Income Taxes”. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets will be reflected on the balance sheet when it is determined that it is more likely than not that the asset will be realized. A valuation allowance has currently been recorded to reduce our deferred tax asset to $0.

Fair Value of Financial Instruments

The Company estimates the fair value of financial instruments using the available market information and valuation methods. The Company’s financial instruments consist of accounts payable and amount due to a related party. The carrying amount of these financial instruments approximated fair value due to the length of maturity or interest rates that approximate prevailing market rates.

Use of estimates

The presentation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities. Certain significant accounting policies that contain subjective management estimates and assumptions include those related to going concern and valuation allowance on deferred income tax. Operating results in the future could vary from the amounts derived from management’s estimates or assumptions.

Recently Issued Accounting Pronouncements

The Company has reviewed Accounting Standards Updates (“ASU”) through ASU No. 2018-05, which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company's financial position or results of operations upon adoption.

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NOTE 3 - GOING CONCERN

As shown in the accompanying financial statements, the Company had a deficit working capital and an accumulated deficit incurred through June 30, 2019 which raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. Management intends to seek new capital from a related party to provide needed funds.

NOTE 4 – RELATED PARTY TRANSACTIONS

All the twelve notes owed to Anthony Brandon Escobar, the former president of the Company (the “Former President”), have been waived during the year ended September 30, 2018. An aggregated principal and interest of $350,547 has been waived, while the Former President closed the Company’s bank accounts and drew the cash in the amount of $13,392.

NOTE 5 – INCOME TAXES

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Income tax periods 2016, 2017 and 2018 are open for examination by taxing authorities.

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NOTE 5 – INCOME TAXES - continued

The income tax expense (benefit) for the period ended June 30, 2019 differs from the amount computed using the federal statutory rates as follows:

	Nine months Ended June 30, 2019	Nine months Ended June 30, 2018
Income tax expense (benefit) at Federal tax rate of 21% for 2018 and 35% for 2017	$      (15,515)	$     (11,225)
Effect of rate changes on deferred tax assets and valuation allowance	-	6,358
Valuation allowance	15,515	4,867
	-	-

On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the Tax Act) was enacted into law including a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We are required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, remeasuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. The Company does not have any foreign earnings and therefore, we do not anticipate the impact of a transition tax. We have remeasured our U.S. deferred tax assets at a statutory income tax rate of 21%. Since the Tax Act was passed late in the fourth quarter of 2017, and ongoing guidance and accounting interpretation are expected over the next 12 months, we consider the accounting of any transition tax, deferred tax re-measurements, and other items to be incomplete due to the forthcoming guidance and our ongoing analysis of final year-end data and tax positions. We expect to complete our analysis within the measurement period in accordance with SAB 118.

Deferred tax assets for the quarter ending June 30, 2019 are comprised primarily of the following:

	$
Net Operating Loss Carryforward	74,574
Valuation Allowance	(74,574)
Total deferred tax asset	-

At June 30, 2019, the Company’s had a net operating loss carry forward of approximately $389,900 that may be offset against future taxable income through 2038.  These losses will start to expire in the year 2019 through 2038.  No tax benefit has been reported in the financial statements because the Company believes that it is more likely than not that the carryforwards will expire unused.  The utilization of future losses may be limited under various provisions of the Internal Revenue Code pertaining to continuity of business operations limits and substantial changes in ownership. Accordingly, the potential tax benefits of the loss carryforwards are offset by a valuation allowance of the same amount.  The valuation allowance decreased during the period ended June 30, 2019 by approximately $6,358. Deferred tax assets related to operating loss carryforwards increased approximately $48,816 and related party interest decreased by approximately $20,350, respectively, due to the Tax Act.

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Item 2. Management’s Discussion and Analysis or Plan of Operation.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This periodic report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive positions, growth opportunities for existing products, plans and objectives of management. Statements in this periodic report that are not historical facts are hereby identified as forward-looking statements.  Our Company and our representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this Quarterly Report and other filings with the Securities and Exchange Commission and in reports to our Company’s stockholders. Management believes that all statements that express expectations and projections with respect to future matters, as well as from developments beyond our Company’s control including changes in global economic conditions are forward-looking statements within the meaning of the Act. These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and business performance. There can be no assurance, however, that management’s expectations will necessarily come to pass. Factors that may affect forward-looking statements include a wide range of factors that could materially affect future developments and performance, including the following:

Changes in Company-wide strategies, which may result in changes in the types or mix of businesses in which our Company is involved or chooses to invest; changes in U.S., global or regional economic conditions; changes in U.S. and global financial and equity markets, including significant interest rate fluctuations, which may impede our Company’s access to, or increase the cost of, external financing for our operations and investments; increased competitive pressures, both domestically and internationally; legal and regulatory developments, such as regulatory actions affecting environmental activities; the imposition by foreign countries of trade restrictions and changes in international tax laws or currency controls; adverse weather conditions or natural disasters, such as hurricanes and earthquakes; and labor disputes, which may lead to increased costs or disruption of operations.

This list of factors that may affect future performance and the accuracy of forward-looking statements are illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

Business Overview

China Foods Holdings Ltd.  (the "Company") was incorporated in Delaware on January 10, 2019. Currently, the Company is in the process of investigating potential business ventures which, in the opinion of management, will provide a source of eventual profit to the Company.  Such involvement may take many forms, including the acquisition of an existing business or the acquisition of assets to establish subsidiary businesses.  All risks inherent in new and inexperienced enterprises are inherent in the Company’s business. As of June 30, 2019, the Company has no business operations.

The selection of a business opportunity in which to participate is complex and risky. Additionally, as the Company has only limited resources, it may be difficult to find good opportunities.  There can be no assurance that the Company will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to the Company and its shareholders. The Company will select any potential business opportunity based on management’s business judgment.

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The activities of the Company are subject to several significant risks which arise primarily as a result of the fact that the Company has no specific business and may acquire or participate in a business opportunity based on the decision of management which potentially could act without the consent, vote, or approval of the Company’s shareholders.  The risks faced by the Company are further increased as a result of its lack of resources and its inability to provide a prospective business opportunity with significant capital.

Merger with Trafalgar Resources, Inc.

On January 23, 2019, the Company entered into an Agreement and Plan of Merger (the “Agreement”) with Trafalgar Resources, Inc., an Utah corporation (“Trafalgar”).  Pursuant to the Agreement, the Company merged with Trafalgar (the “Merger”) with the Company as the surviving entity.  Prior to the Merger, Trafalgar had not commenced operations that had resulted in significant revenue and Trafalgar’s efforts had been devoted primarily to activities related to raising capital and attempting to acquire an operating entity. The purpose of the Merger was to change the Company’s jurisdiction of incorporation from Utah to Delaware, which the Company’s management and board of directors believe is a more favorable domicile for the Company to pursue its new strategy of development and distribution of health related products, including supplements, across the global with a focus on opportunities in mainland China, Europe, and Australia.  

Prior to the Merger, Trafalgar’s majority stockholder who owned 5,000,000 shares (approximately 95.2%) of the 5,251,309 outstanding shares of Trafalgar’s common stock, par value $0.0001, signed a written consent approving the Merger and the related transactions. Such approval and consent were sufficient under Utah law and Trafalgar’s Bylaws to approve the Merger.  The boards of directors and shareholders of the Company and Trafalgar approved the Merger.

Pursuant to the Merger, each share of Trafalgar’s common stock was converted into one share of the Company’s common stock.  After the Merger, HY (HK) Financial Investments Co,, Ltd. owns 5,000,000 shares of common stock of the Company.

Previous Operations of Trafalgar Resources, Inc.

Trafalgar was incorporated under the laws of the state of Utah on October 25, 1972, under the name of Electronic Agricultural Machinery Development Corporation.  The entity changed its name three times: In 1974, it  changed its name to Zenith Development Corporation.  In 1980, Zenith Development Corporation changed its name to Alternative Energy Resources, Inc., and in 2004, Alternative Energy Resources, Inc. changed its name to Trafalgar Resources, Inc.

Initially, Trafalgar sought to develop and market inventions, including an asparagus harvester, a hot water saving device and a gas alert signal.  Ultimately, none of the inventions were successful and they were abandoned. Trafalgar ceased to conduct any business and has not conducted any business during the last three years.

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Previous Acquisition of Trafalgar Resources, Inc. by HY (HK) Financial Investments, Co., Ltd.

On July 13, 2018, HY (HK) Financial Investments Co., Ltd. A Hong Kong limited company (“HY”) purchased 5,000,000 shares of common stock (the “Shares”) of Trafalgar for $410,000. Of the Shares, 4,937,500, were acquired from Anthony Escobar, Trafalgar’s former Chief Executive Officer and former Director, 31,250 were acquired from Anthony Coletti, Trafalgar’s former Principal Accounting Officer, former Secretary, former Treasurer, and former Director, and 31,250 were acquired from Sean Escobar, a Trafalgar former Vice President and former Director. The Shares represented approximately 95% of Trafalgar’s issued and outstanding common stock.

HY used funds from its working capital to acquire the Shares and the transaction completed on July 13, 2018.

Critical Accounting Policies, Judgments and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the unaudited Financial Statements and accompanying notes.  Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions.  The Company believes there have been no significant changes during the nine month periods ended June 30, 2019, to the items disclosed as significant accounting policies since the Company’s last audited financial statements for the year ended September 30, 2018.

The Company’s accounting policies are more fully described in Note 1 and 2 of the financial statements.  As discussed in Note 1 and 2, the preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about the future events that affect the amounts reported in the financial statements and the accompanying notes. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances.  Actual differences could differ from these estimates under different assumptions or conditions.  The Company believes that the following addresses the Company’s most critical accounting policies.

Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse.  Deferred tax assets will be reflected on the balance sheet when it is determined that it is more likely than not that the asset will be realized.  A valuation allowance has currently been recorded to reduce our deferred tax asset to $0.  

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Discussion and Analysis of Financial Condition and Results of Operations

The Company is in the process of looking for potential business ventures.  As the Company possesses limited funds, the Company will be limited in its attempts to locate potential business situations for investigation. The Company will commence, on a limited basis, the process of investigating possible merger and acquisition candidates, and believes that the Company’s status as a publicly-held corporation will enhance its ability to locate such potential business ventures.  No assurance can be given as to when the Company may locate suitable business opportunities and such opportunities may be difficult to locate; however, the Company intends to actively search for potential business ventures for the foreseeable future. The Company’s management does not expect to remain involved as management of any acquired business.  

In its search for potential business ventures, management may identify one or more potential business venture.  In the event Management enters into only one venture, this lack of diversification should be considered a substantial risk because it will not permit the Company to offset potential losses from one venture against gains from another.

Business opportunities, if any arise, are expected to become available to the Company principally from the personal contacts of its officers and directors.  While it is not expected that the Company will engage professional firms specializing in business acquisitions or reorganizations, such firms may be retained if funds become available in the future, and if deemed advisable. Opportunities may thus become available from professional advisors, securities broker-dealers, venture capitalists, members of the financial community, and other sources of unsolicited proposals.

In certain circumstances, the Company may agree to pay a finder’s fee or other form of compensation, including perhaps one-time cash payments, payments based upon a percentage of revenues or sales volume, and/or payments involving the issuance of securities, for services provided by persons who submit a business opportunity in which the Company shall decide to participate, although no contracts or arrangements of this nature presently exist. The company is still pursuing successful potential acquisition.

The analysis of business opportunities will be undertaken by or under the supervision of the Company’s management. Among the factors which management will consider in analyzing potential business opportunities are the available technical, financial and managerial resources; working capital and financial requirements; the history of operation, if any; future prospects; the nature of present and anticipated competition; potential for further research, developments or exploration; growth and expansion potential; the perceived public recognition or acceptance of products or services; name identification, and other relevant factors.  

It is not possible at present to predict the exact manner in which the Company may participate in a business opportunity.  Specific business opportunities will be reviewed and, based upon such review, the appropriate legal structure or method of participation will be decided upon by management.  Such structures and methods may include, without limitation, leases, purchase and sale agreements, licenses, joint ventures; and may involve merger, consolidation or reorganization.  The Company may act directly or indirectly through an interest in a partnership, corporation or reorganization.  However, it is most likely that any acquisition of a business venture the Company would make would be by conducting a reorganization involving the issuance of the Company’s restricted securities. Such a reorganization may involve a merger (or combination pursuant to state corporate statutes, where one of the entities dissolves or is absorbed by the other), or it may occur as a consolidation, where a new entity is formed and the Company and such other entity combine assets in the new entity.  A reorganization may also occur, directly or indirectly, through subsidiaries, and there is no assurance that the Company would be the surviving entity.  Any such reorganization could result in loss of control of a

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majority of the shares.  The Company’s present directors may be required to resign in connection with a reorganization.  

The Company may choose to enter into a venture involving the acquisition of or merger with a company which does not need substantial additional capital but desires to establish a public trading market of its securities.  Such a company may desire to consolidate its operations with the Company through a merger, reorganization, asset acquisition, or other combination, in order to avoid possible adverse consequences of undertaking its own public offering. Such consequences might include expense, time delays or loss of voting control.  In the event of such a merger, the Company may be required to issue significant additional shares, and it may be anticipated that control over the Company’s affairs may be transferred to others.

As part of their investigation of acquisition possibilities, the Company’s management may meet with executive officers of the business and its personnel; inspect its facilities; obtain independent analysis or verification of the information provided, and conduct other reasonable measures, to the extent permitted by the Company’s limited resources and management’s limited expertise. Generally, the Company intends to analyze and make a determination based upon all available information without reliance upon any single factor as controlling.  

The Company’s management expects to be experienced in the areas in which potential businesses will be investigated and in which the Company may make an acquisition or investment. However, it may become necessary for the Company to retain consultants or outside professional firms to assist management in evaluating potential investments.  The Company can give no assurance that it will be able to find suitable consultants or managers.  The Company has no policy regarding the use of consultants, however, if management, in its discretion, determines that it is in the best interests of the Company, management may seek consultants to review potential merger or acquisition candidates.  

It may be anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention, and substantial costs for accountants, attorneys and others.  Should a decision thereafter be made not to participate in a specific business opportunity, it is likely that costs already expended would not be recoverable.  It is likely, in the event a transaction should eventually fail to be consummated, for any reason, that the costs incurred by the Company would not be recoverable.  The Company’s officers and directors are entitled to reimbursement for all expenses incurred in their investigation of possible business ventures on behalf of the Company, and no assurance can be given that if the Company has available funds they will not be depleted in such expenses.  

Based on current economic and regulatory conditions, management believes that it is possible, if not probable, for a company like the Company, without many assets or many liabilities, to negotiate a merger or acquisition with a viable private company.

Liquidity and Capital Resources

As of June 30, 2019, the Company had $1,250 in current assets and $93,091 in current liabilities resulting in a negative working capital as of June 30, 2019 of $91,841. The Company has only incidental ongoing expenses primarily associated with maintaining its corporate status and maintaining the Company’s reporting obligations to the Securities and Exchange Commission. Although not required or under any contractual commitment, current management has indicated a willingness to help support the Company’s ongoing expenses through the purchase of securities of the Company or loans to the Company. Existing liabilities are related to loans by management to help fund ongoing expenses.

16

For the three and nine months ended June 30, 2019, the Company had $44,643 and $73,882, respectively in general and administrative expense related to maintaining its corporate status, and paying accounting and legal fees. Management anticipates only nominal continuing expenses related to investigating business opportunities and legal and accounting costs. For the three and nine months ended June 30, 2019, the Company had a net loss of $44,643 and $73,882, respectively, compared to a loss of $17,480 and $45,416, respectively for the three and nine months ended June 30, 2018.

The principal stockholder has undertaken to finance the Company in cash for a “reasonable” period of time for the Company to continue as a going concern, assuming that in such a period of time the Company would be able to restructure its business and restart on a revenue-generating operation to support its continuation. However, it is uncertain as for how long or to what extent such a period of time would be “reasonable”, and there can be no assurance that the financing from the principal stockholder will not be discontinued.

These uncertainties may result in adverse effects on continuation of the Company as a going concern. The accompanying financial statements do not include or reflect any adjustments that might result from the outcome of these uncertainties.

RESULTS OF OPERATIONS

The Company has not had any significant revenues. The Company continues to suffer a loss related to maintaining its corporate status and reporting obligations. For the three months and nine months ended June 30, 2019, the Company had a net loss of $44,643 and $73,882, respectively. The Company does not anticipate any revenue until it locates a new business opportunity.

Off Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements and it is not anticipated that the Company will enter into any off-balance sheet arrangements.

Forward-looking Statements

The Private Securities Litigation Reform Act of 1995 (the “Act”) provides a safe harbor for forward-looking statements made by or on behalf of our Company. Our Company and our representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this report and other filings with the Securities and Exchange Commission and in reports to our Company’s stockholders. Management believes that all statements that express expectations and projections with respect to future matters, as well as from developments beyond our Company’s control including changes in global economic conditions are forward-looking statements within the meaning of the Act. These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and business performance. There can be no assurance, however, that management’s expectations will necessarily come to pass. Factors that may affect forward-looking statements include a wide range of factors that could materially affect future developments and performance, including the following:

Changes in Company-wide strategies, which may result in changes in the types or mix of businesses in which our Company is involved or chooses to invest; changes in U.S., global or regional economic conditions; changes in U.S. and global financial and equity markets, including significant interest rate fluctuations, which may impede our Company’s access to, or increase the cost of, external financing for our operations and investments; increased competitive pressures, both domestically and internationally; legal and regulatory developments, such as regulatory actions affecting environmental activities; the imposition by foreign countries of trade

17

restrictions and changes in international tax laws or currency controls; adverse weather conditions or natural disasters, such as hurricanes and earthquakes; and labor disputes, which may lead to increased costs or disruption of operations.

This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not required for smaller reporting companies.

Item 4. Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining disclosure controls and procedures for the Company.

(a) Evaluation of Disclosure Controls and Procedures

Our management evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our President and Principal Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected but we believe the controls and procedures do provide a reasonable assurance.

(b) Changes in the Company’s Internal Controls Over Financial Reporting

There have been no changes in internal control over financial reporting that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the internal control over financial reporting.

18

Part II - Other Information

Item 1. Legal Proceedings

There are no legal proceedings, which are pending or have been threatened against us or any of our officers, directors or control persons of which management is aware.

Item 1A. Risk Factors

Not applicable to smaller reporting companies.

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

Recent Sales of Unregistered Securities

We have not sold any restricted securities during the nine months ended June 30, 2019.

Use of Proceeds of Registered Securities

None; not applicable.

Purchases of Equity Securities by Us and Affiliated Purchasers

During the nine months ended June 30, 2019, we have not purchased any equity securities nor have any officers or directors of the Company.

Item 3. Defaults Upon Senior Securities

We are not aware of any defaults upon senior securities. Management has indicated they do not, at this time, intend to pursue the defaults.

Item 4. Mine Safety Disclosures

None; not applicable.

Item 5. Other Information

On May 13, 2019, the Company appointed Kong Xiao Jun and Liu Yang as directors of the Company.  Also on May 13, 2019, the Company appointed Kong Xiao Jun as its Chief Executive Officer and Chief Financial Officer.  With the merger of Trafalgar Resources, Inc. with and into the Company, the Company’s initial director and President, Yunsi Liu, will remain a director and President.

Kong Xiao Jun

On May 13, 2019, the Company’s board of directors appointed Mr. Kong Xiao Jun, age 46, as its Chief Executive Officer, Chief Financial Officer, and as director to hold office until the next annual meeting of shareholders and until his successor is duly elected and qualified or until his resignation or removal.

Mr. Kong currently serves as the Chief Executive Officer of Guangdong HY Capital Management CO., LTD and has served in that role since 2011.  Previously, Mr. Kong was the Executive Director of the Asia Aluminum Group from 2007 through 2011.  Mr. Kong has experience in leading large-scale M&A and investment projects in different industries such as agriculture, film and media, and cultural tourism.

19

Mr. Kong holds a bachelor degree in accounting from Southwestern University of Finance and Economics in Chengdu, Sichuan, China. He is also qualified as Chinese Certified Public Accountant, Certified Tax Agent, US Chartered Financial Analyst, and Fellow of the Institute of Financial Accountants UK.

The Board of Directors appointed Mr. Kong in recognition of the importance of his abilities to assist the Company in expanding its business and the contributions he can make to its strategic direction.

The Company has not entered into any compensation arrangements with Mr. Kong.

Liu Yang

On May 13, 2019, the Company’s board of directors appointed Ms. Liu Yang, age 33, as a director to hold office until the next annual meeting of shareholders and until her successor is duly elected and qualified or until her resignation or removal.

Ms. Liu currently serves as the Investment Director of Guangdong HY Capital Management CO., LTD and has served in that role since 2015.   Ms. Liu has experience in  M&A and investment projects in different industries such as consumer goods, agriculture, cultural tourism, and education.

Ms. Liu holds a bachelor degree in Economics from Southern China University of Technology in Guangzhou, Guangdong, China. 

The Board of Directors appointed Ms. Liu as one of its directors in recognition of her abilities to assist the Company in expanding its business and the contributions she can make to its strategic direction.

The Company has not entered into any compensation arrangements with Ms. Liu.

Yunsi Liu

On January 15, 2019, prior to the Merger, the Company’s board of directors appointed Ms. Yunsi Liu, age 31, as its President, and as director to hold office until the next annual meeting of shareholders and until her successor is duly elected and qualified or until her resignation or removal.

Ms. Liu currently serves as the General Manager of Dray Alliance (a venture-backed, technology startup in the trucking industry) and has served in that role since 2019; concurrently, she is the Managing Partner of Craft and Swan, LLC. Previously, Ms. Liu served in executive capacities for various startups in the Southern California region.  Ms. Liu has experience in finance, management, and operations. 

Ms. Liu graduated from the University of Pennsylvania with a Bachelor of Science in Economics degree from the Wharton School, and a Bachelor of Arts in Philosophy degree from the College of Arts and Sciences. 

The Board of Directors appointed Ms. Liu in recognition of the importance of her abilities to assist the Company in expanding its business and the contributions she can make to its strategic direction.

The Company has not entered into any compensation arrangements with Ms. Liu. 

20

Item 6. Exhibits

Exhibits No.

31.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

21

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 

China Foods Holdings Ltd.
Dated:  August 16, 2019	By:	/s/ Kong Xiao Jun
		Kong Xiao Jun
		Chief Executive Officer & Chief Financial Officer

22

EX-31

Exhibit 31   

EX-32

Converted by EDGARwiz

XML

Document and Entity Information - shares	9 Months Ended
	Jun. 30, 2019	Aug. 15, 2019
Details
Registrant CIK	0001310630
Fiscal Year End	--09-30
Registrant Name	China Foods Holdings Ltd.
SEC Form	10-Q
Period End date	Jun. 30, 2019
Tax Identification Number (TIN)	84-1735478
Number of common stock shares outstanding		5,252,309
Filer Category	Non-accelerated Filer
Current with reporting	Yes
Interactive Data Current	Yes
Shell Company	true
Small Business	true
Emerging Growth Company	false
Entity File Number	001-32522
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	Suite 3102, Everbright Center, 108 Gloucester Road
Entity Address, City or Town	Wanchai
Entity Address, Country	HK
Entity Address, Postal Zip Code	00000
City Area Code	852
Local Phone Number	3618-8608
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Document Quarterly Report	true
Document Transition Report	false

XML

BALANCE SHEETS - USD ($)	Jun. 30, 2019	Sep. 30, 2018
CURRENT ASSETS
Cash	$ 0	$ 0
Prepaid expenses	1,250	0
TOTAL CURRENT ASSETS	1,250	0
TOTAL ASSETS	1,250	0
CURRENT LIABILITIES
Accrued expenses	5,133	3,959
Income taxes payable	100	100
Amount due to a related party	87,858	14,000
TOTAL CURRENT LIABILITIES	93,091	18,059
LONG-TERM LIABILITIES
TOTAL LIABILITIES	93,091	18,059
STOCKHOLDERS' DEFICIT
Common stock $0.0001 par value, 100,000,000 shares authorized, 5,252,309 shares issued and outstanding	525	137,413
Additional paid-in capital	136,988	0
Other reserve	350,547	350,547
Accumulated deficit	(579,901)	(506,019)
TOTAL STOCKHOLDERS' DEFICIT	(91,841)	(18,059)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 1,250	$ 0

XML

BALANCE SHEETS - Parenthetical - $ / shares	Jun. 30, 2019	Sep. 30, 2018
Details
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	100,000,000	100,000,000
Common Stock, Shares, Issued	5,252,309	5,252,309
Common Stock, Shares, Outstanding	5,252,309	5,252,309

XML

Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Details
Income	$ 0	$ 0	$ 0	$ 0
Cost of Sales	0	0	0	0
Gross Profit	0	0	0	0
Operating expenses:
General and administrative	44,643	10,430	73,882	25,066
Total operating expenses	44,643	10,430	73,882	25,066
Operating loss	(44,643)	(10,430)	(73,882)	(25,066)
Interest expense to a related party	0	(7,050)	0	(20,350)
Loss before income taxes	(44,643)	(17,480)	(73,882)	(45,416)
Provision for income taxes	0	0	0	0
Net loss	$ (44,643)	$ (17,480)	$ (73,882)	$ (45,416)
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	5,252,309	5,251,309	5,252,309	5,251,309

XML

Statement of Stockholders' Deficit - USD ($)	Common Stock	Additional Paid-in Capital	Other Additional Capital	Retained Earnings	Total
Shares, Outstanding	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 137,413	$ 0	$ 0	$ (443,261)	$ (305,848)
Shares, Outstanding, Beginning Balance at Sep. 30, 2017	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Sep. 30, 2017	$ 137,413	0	0	(443,261)	(305,848)
Shares, Outstanding	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 137,413	0	0	(443,261)	(305,848)
Net loss	$ 0	0	0	(12,651)	(12,651)
Shares, Outstanding, Ending Balance at Dec. 31, 2017	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Dec. 31, 2017	$ 137,413	0	0	(455,912)	(318,499)
Shares, Outstanding, Beginning Balance at Sep. 30, 2017	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Sep. 30, 2017	$ 137,413	0	0	(443,261)	(305,848)
Shares, Outstanding	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 137,413	0	0	(443,261)	(305,848)
Net loss					(45,416)
Shares, Outstanding, Ending Balance at Jun. 30, 2018	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2018	$ 137,413	0	0	(488,678)	(351,265)
Shares, Outstanding	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 137,413	0	0	(455,912)	(318,499)
Shares, Outstanding, Beginning Balance at Dec. 31, 2017	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2017	$ 137,413	0	0	(455,912)	(318,499)
Shares, Outstanding	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 137,413	0	0	(455,912)	(318,499)
Net loss	$ 0	0	0	(15,286)	(15,286)
Shares, Outstanding, Ending Balance at Mar. 31, 2018	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2018	$ 137,413	0	0	(471,198)	(333,785)
Shares, Outstanding	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 137,413	0	0	(471,198)	(333,785)
Shares, Outstanding	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 137,413	0	0	(471,198)	(333,785)
Net loss	$ 0	0	0	(17,480)	(17,480)
Shares, Outstanding, Ending Balance at Jun. 30, 2018	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2018	$ 137,413	0	0	(488,678)	(351,265)
Shares, Outstanding	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 137,413	0	0	(488,678)	(351,265)
Shares, Outstanding	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 137,413	0	350,547	(506,019)	(18,059)
Shares, Outstanding, Beginning Balance at Sep. 30, 2018	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Sep. 30, 2018	$ 137,413	0	350,547	(506,019)	(18,059)
Shares, Outstanding	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 137,413	0	350,547	(506,019)	(18,059)
Net loss	$ 0	0	0	(5,766)	(5,766)
Shares, Outstanding, Ending Balance at Dec. 31, 2018	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Dec. 31, 2018	$ 137,413	0	350,547	(511,785)	(23,825)
Shares, Outstanding, Beginning Balance at Sep. 30, 2018	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Sep. 30, 2018	$ 137,413	0	350,547	(506,019)	(18,059)
Shares, Outstanding	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 137,413	0	350,547	(506,019)	(18,059)
Net loss					(73,882)
Shares, Outstanding, Ending Balance at Jun. 30, 2019	5,252,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2019	$ 525	136,988	350,547	(579,901)	(91,841)
Shares, Outstanding	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 137,413	0	350,547	(511,785)	(23,825)
Shares, Outstanding, Beginning Balance at Dec. 31, 2018	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2018	$ 137,413	0	350,547	(511,785)	(23,825)
Merger transaction	$ (136,888)	136,988	0	0	100
Shares, Outstanding	5,251,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 137,413	0	350,547	(511,785)	(23,825)
Net loss	$ 0	0	0	(23,473)	(23,473)
Shares, Outstanding, Ending Balance at Mar. 31, 2019	5,252,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2019	$ 525	136,988	350,547	(535,258)	(47,198)
Shares, Outstanding	5,252,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 525	136,988	350,547	(535,258)	(47,198)
Merger transaction	1,000
Shares, Outstanding	5,252,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 525	136,988	350,547	(535,258)	(47,198)
Net loss	$ 0	0	0	(44,643)	(44,643)
Shares, Outstanding, Ending Balance at Jun. 30, 2019	5,252,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2019	$ 525	136,988	350,547	(579,901)	(91,841)
Shares, Outstanding	5,252,309
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 525	$ 136,988	$ 350,547	$ (579,901)	$ (91,841)

XML

Statements of Cash Flows - USD ($)	9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net loss	$ (73,882)	$ (45,416)
Increase in accrued expenses	1,174	4,000
(Increase) decrease in prepaid expenses	(1,250)	2,499
Increase in Interest payable	0	20,350
Decrease in income taxes payable	0	(100)
Increase in amount due to a related party	73,958	0
Net cash used in operating activities	0	(18,667)
Cash flows from investing activities	0	0
NET CASH FROM FINANCING ACTIVITIES:
Net cash provided by financing activites	0	20,000
Proceeds from issuance of notes payable, related party	0	20,000
Net decrease in cash and cash equivalents	0	1,333
CASH, at beginning of period	0	15,140
CASH, at end of period	0	16,473
Supplemental disclosure of cash flow information
Interest paid	0	0
Taxes paid	$ 100	$ 100

XML

Nature of Operations and Basis of Presentation

9 Months Ended

Jun. 30, 2019

Notes

Nature of Operations and Basis of Presentation

NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

China Foods Holdings Ltd. (the "Company") was incorporated in Delaware on January 10, 2019.  On January 23, 2019, the Company entered into an Agreement and Plan of Merger (the “Agreement”) with Trafalgar Resources, Inc., a Utah corporation (“Trafalgar”).  Pursuant to the Agreement, the Company merged with Trafalgar (the “Merger”) with the Company as the surviving entity.  Prior to the Merger, Trafalgar had not commenced operations that had resulted in significant revenue and Trafalgar’s efforts had been devoted primarily to activities related to raising capital and attempting to acquire an operating entity.

Prior to the Merger, Trafalgar’s majority stockholder who owns 5,000,000 shares (approximately 95.2%) of the 5,251,309 outstanding shares of Trafalgar’s common stock, par value $0.0001, signed a written consent approving the Merger and the related transactions. Such approval and consent were sufficient under Utah law and Trafalgar’s Bylaws to approve the Merger.  The boards of directors and shareholders of the Company and Trafalgar approved the Merger.

Pursuant to the Merger, each share of Trafalgar’s common stock was converted into one share of the Company’s common stock.  After the Merger, HY (HK) Financial Investments Co, Ltd. owns 5,000,000 shares of common stock of the Company.

The Merger was effective on March 13, 2019.  

Basis of Presentation

The unaudited condensed financial statements present the balance sheets, statements of operations, statements of shareholders' deficit and statements of cash flows of the Company. These unaudited condensed financial statements are presented in the United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States.

Unaudited Financial Statements

The accompanying unaudited condensed financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SFC, including the instruction to Form 10-Q and Article 8 of Regulation S-X. In the opinion of Management, all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results for the nine months ended June 30, 2019, have been made. Operating results for the nine months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending September 30, 2019. They do not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.

NOTE 2 – SIGNIFICANT ACCOUTING POLICIES

Net Loss per Common Share

Loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.  There are no such common stock equivalents outstanding as of June 30, 2019.

Income Taxes

The Company accounts for income taxes pursuant to FASB ASC 740-10-05, “Accounting for Income Taxes”. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets will be reflected on the balance sheet when it is determined that it is more likely than not that the asset will be realized. A valuation allowance has currently been recorded to reduce our deferred tax asset to $0.

Fair Value of Financial Instruments

The Company estimates the fair value of financial instruments using the available market information and valuation methods. The Company’s financial instruments consist of accounts payable and amount due to a related party. The carrying amount of these financial instruments approximated fair value due to the length of maturity or interest rates that approximate prevailing market rates.

Use of estimates

The presentation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities. Certain significant accounting policies that contain subjective management estimates and assumptions include those related to going concern and valuation allowance on deferred income tax. Operating results in the future could vary from the amounts derived from management’s estimates or assumptions.

Recently Issued Accounting Pronouncements

The Company has reviewed Accounting Standards Updates (“ASU”) through ASU No. 2018-05, which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company's financial position or results of operations upon adoption.

XML

Going Concern

9 Months Ended

Jun. 30, 2019

Notes

Going Concern

NOTE 3 - GOING CONCERN

As shown in the accompanying financial statements, the Company had a deficit working capital and an accumulated deficit incurred through June 30, 2019 which raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. Management intends to seek new capital from a related party to provide needed funds.

XML

Related Party Transactions

9 Months Ended

Jun. 30, 2019

Notes

Related Party Transactions

NOTE 4:  RELATED PARTY TRANSACTIONS

All the twelve notes owed to Anthony Brandon Escobar, the former president of the Company (the “Former President”), have been waived during the year ended September 30, 2018. An aggregated principal and interest of $ $350,547 has been waived, while the Former President closed Company bank accounts and drew the cash $13,392.

XML

Income Taxes

9 Months Ended

Jun. 30, 2019

Notes

Income Taxes

NOTE 5: INCOME TAXES

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Income tax periods 2016, 2017 and 2018 are open for examination by taxing authorities.

The income tax expense (benefit) for the period ended June 30, 2019 differs from the amount computed using the federal statutory rates as follows:

	Nine months Ended June 30, 2019	Nine months Ended June 30, 2018
Income tax expense (benefit) at Federal tax rate of 21% for 2018 and 35% for 2017	$      (15,515)	$     (11,225)
Effect of rate changes on deferred tax assets and valuation allowance	-	6,358
Valuation allowance	15,515	4,867
Total	-	-

On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the Tax Act) was enacted into law including a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We are required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, remeasuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. The Company does not have any foreign earnings and therefore, we do not anticipate the impact of a transition tax. We have remeasured our U.S. deferred tax assets at a statutory income tax rate of 21%. Since the Tax Act was passed late in the fourth quarter of 2017, and ongoing guidance and accounting interpretation are expected over the next 12 months, we consider the accounting of any transition tax, deferred tax re-measurements, and other items to be incomplete due to the forthcoming guidance and our ongoing analysis of final year-end data and tax positions. We expect to complete our analysis within the measurement period in accordance with SAB 118.

Deferred tax assets for the quarter ended June 30, 2019 are comprised primarily of the following:

	June 30, 2019
Net Operating Loss Carryforward	74,574
Valuation Allowance	(74,574)
Total deferred tax asset	$      -

At June 30, 2019, the Company’s had a net operating loss carry forward of approximately $389,900 that may be offset against future taxable income through 2038.  These losses will start to expire in the year 2019 through 2038.  No tax benefit has been reported in the financial statements because the Company believes that it is more likely than not that the carryforwards will expire unused.  The utilization of future losses may be limited under various provisions of the Internal Revenue Code pertaining to continuity of business operations limits and substantial changes in ownership. Accordingly, the potential tax benefits of the loss carryforwards are offset by a valuation allowance of the same amount.  The valuation allowance decreased during the period ended June 30, 2019 by approximately $6,358. Deferred tax assets related to operating loss carryforwards increased approximately $48,816 and related party interest decreased by approximately $20,350, respectively, due to the Tax Act.

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Nature of Operations and Basis of Presentation (Policies)

9 Months Ended

Jun. 30, 2019

Policies

Basis of Presentation

Basis of Presentation

The unaudited condensed financial statements present the balance sheets, statements of operations, statements of shareholders' deficit and statements of cash flows of the Company. These unaudited condensed financial statements are presented in the United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States.

Unaudited Financial Statements

The accompanying unaudited condensed financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SFC, including the instruction to Form 10-Q and Article 8 of Regulation S-X. In the opinion of Management, all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results for the nine months ended June 30, 2019, have been made. Operating results for the nine months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending September 30, 2019. They do not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.

Net Loss Per Share of Common Stock

NOTE 2 – SIGNIFICANT ACCOUTING POLICIES

Net Loss per Common Share

Loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.  There are no such common stock equivalents outstanding as of June 30, 2019.

Income Taxes

Income Taxes

The Company accounts for income taxes pursuant to FASB ASC 740-10-05, “Accounting for Income Taxes”. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets will be reflected on the balance sheet when it is determined that it is more likely than not that the asset will be realized. A valuation allowance has currently been recorded to reduce our deferred tax asset to $0.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company estimates the fair value of financial instruments using the available market information and valuation methods. The Company’s financial instruments consist of accounts payable and amount due to a related party. The carrying amount of these financial instruments approximated fair value due to the length of maturity or interest rates that approximate prevailing market rates.

Use of Estimates

Use of estimates

The presentation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities. Certain significant accounting policies that contain subjective management estimates and assumptions include those related to going concern and valuation allowance on deferred income tax. Operating results in the future could vary from the amounts derived from management’s estimates or assumptions.

New Accounting Pronouncements

Recently Issued Accounting Pronouncements

The Company has reviewed Accounting Standards Updates (“ASU”) through ASU No. 2018-05, which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company's financial position or results of operations upon adoption.

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Income Taxes (Tables)

9 Months Ended

Jun. 30, 2019

Tables/Schedules

Schedule of Components of Income Tax Expense (Benefit)

	Nine months Ended June 30, 2019	Nine months Ended June 30, 2018
Income tax expense (benefit) at Federal tax rate of 21% for 2018 and 35% for 2017	$      (15,515)	$     (11,225)
Effect of rate changes on deferred tax assets and valuation allowance	-	6,358
Valuation allowance	15,515	4,867
Total	-	-

Schedule of Deferred Tax Assets and Liabilities

	June 30, 2019
Net Operating Loss Carryforward	74,574
Valuation Allowance	(74,574)
Total deferred tax asset	$      -

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Nature of Operations and Basis of Presentation (Details) - USD ($)	9 Months Ended
	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018
Details
Majority Stockholder Shares	5,000,000
Common Stock, Shares, Outstanding	5,252,309	5,251,309	5,252,309
Deferred Tax Assets, Valuation Allowance, Current	$ 0

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Related Party Transactions (Details) - USD ($)	9 Months Ended
	Jun. 30, 2019	Sep. 30, 2018
Details
Other reserve	$ 350,547	$ 350,547
Related Party Transaction, Amounts of Transaction	$ 13,392

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Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Details
Income Tax Expense (benefit)			$ (15,515)	$ (11,225)
Effect of rate changes on deferred tax assets and valuation allowance			0	6,358
Valuation allowance	$ 6,358		15,515	4,867
Provision for income taxes	0	$ 0	0	0
Net Operating Loss Carryforward	74,574		74,574
Valutation allowance	(74,574)		(74,574)
Total deferred tax asset	0		0
NOL Carryforward			389,900
Change in valuation allowance	$ 48,816		48,816
Increase in Interest payable			$ 0	$ 20,350