10-Q 1 form10-q.htm

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 September 30, 2017

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

For the transition period from ______________ to ______________

Commission File Number: 333-192272

ASIA EQUITY EXCHANGE GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada

46-3366428

(State or other jurisdiction

of incorporation or organization)

(IRS Employer

Identification No.)

Suite 2501A, Skyline Tower,

39 Wang Kwong Road, Kowloon Bay, Hong Kong

(Address of principal executive offices)

(+852 2818 2998)

(Registrant’s telephone number, including area code)

Not Applicable

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

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 past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No [ ]

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

	Large accelerated filer [ ]		Accelerated filer [ ]

	Non-accelerated filer [ ]		Smaller reporting company [X]
	(Do not check if a smaller reporting company)

	Emerging growth company [X]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided in 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 [ ] No [X]

The number of shares outstanding of each of the issuer’s classes of common stock, as of November 18, 2017 is as follows:

Class of Securities		Shares Outstanding
Common Stock, $0.001 per value		[ 114,600,000]

ASIA EQUITY EXCHANGE GROUP, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2017

TABLE OF CONTENTS

		PAGE
	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21

Item 4.	Controls and Procedures	21

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	22

Item 1A.	Risk Factors	22

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22

Item 3.	Other Information	22

Item 4.	Exhibits	22

Special Note Regarding Forward Looking Statements

In addition to historical information, this report contains forward-looking statements. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will,” or similar expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market and industry segment growth; any projections of earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those identified in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

Use of Terms

Except as otherwise indicated by the context and for the purposes of this report only, references in this report to:

●	“Company”, “we”, “us” and “our” are to the combined business of Asia Equity Exchange Group, Inc., a Nevada corporation, and its consolidated subsidiaries;

●	“AEEGCL” are to our Samoa subsidiary, Asian Equity Exchange Group Co., Ltd;

●	“AEEX HK” are to AEEX (HK) International Finance Services Limited (formerly known as Yinfu International Enterprise Limited), a company formed in Hong Kong;

●	“AACCL” are to Asian & American Consultant (Shenzhen) Co., Ltd., (formerly known as Yinfu Guotai Investment Consultant (Shenzhen) Co., Ltd.), our PRC subsidiary;

●	“China” and “PRC” are to the People’s Republic of China;

●	“RMB” are to Renminbi, the legal currency of China;

●	“U.S. dollar”, “$” and “US$” are to the legal currency of the United States;

●	“SEC” are to the United States Securities and Exchange Commission;

●	“Securities Act” are to the Securities Act of 1933, as amended; and

●	“Exchange Act” are to the Securities Exchange Act of 1934, as amended

SPECIAL NOTE REGARDING REVERSE STOCK SPLIT

Effective July 31, 2017, we completed a reverse stock split in which each one (1) share of common stock of the Company was automatically combined and converted into one tenth (0.10) of a share of common stock at the one-for-10 reverse split ratio. All share numbers and per share information in this Report on Form 10-Q have been adjusted to give effect to this reverse stock split, unless otherwise indicated or unless the context suggests otherwise.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ASIA EQUITY EXCHANGE GROUP, INC. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016

ASIA EQUITY EXCHANGE GROUP, INC.

Condensed Balance Sheets (Unaudited)

	September 30, 2017			December 31, 2016
ASSETS
Current Assets
Cash and cash equivalents	$	277,395		$	55,360
Prepaid expenses		6,692			5,554
Other receivable		867,386			669
Rental deposit		41,347			34,708
Total current assets	$	1,192,820		$	96,291
Fixed assets, net of accumulated depreciation		10,589			34,220
Intangible assets, net of amortization		5,523			6,013
Other non-current assets		1,648			3,604
TOTAL ASSETS	$	1,210,580		$	140,128

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities	$	17,329		$	171,795
Income taxes payable		190,637			-
Other payables		440,656			-
Amount due to a director		-			423,686
TOTAL LIABILITIES	$	648,622		$	595,481

STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, 1,000,000 shares authorized; par value $0.001, none issued and outstanding		-			-
Common stock, 300,000,000 shares authorized; par value $0.001, 114,600,000 shares issued and outstanding		114,600			114,600
Capital deficiency		(182,234	)		(182,234	)
Retained earnings (Accumulated deficit)		642,567			(387,719	)
Foreign currency translation adjustment		(12,975	)		-
Total Stockholders’ Equity (Deficit)		561,958			(455,353	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	1,210,580		$	140,128

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

ASIA EQUITY EXCHANGE GROUP, INC.

Condensed Statements of Operation and Comprehensive Loss

(Unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30
	2017		2016			2017			2016

REVENUE	$	1,116,148	$	507,142		$	1,766,038		$	507,142
Cost of Sales		-		361,688			-			361,688
Net Revenue	$	1,116,148	$	145,454		$	1,766,038		$	145,454
OPERATING EXPENSES

General and administrative expenses		205,439		154,417			464,536			508,735
Professional fees		14,273		-			56,266			-
Other operating expenses		5,244		-			8,571			-
Total Operating Expenses		224,956		154,417			529,373			508,735
Income tax credit		-		-			-			4,114
Net profit from operations		891,192		(8,963	)		1,236,665			(359,167	)

Other expenses
Profit (Loss) on disposal of fixed assets		7		-			(11,627	)		-
Foreign currency translation adjustment		-		(905	)		-			(1,598	)
Total other expenses		7		(905	)		(11,627	)		(1,598	)

Profit (loss) before provision for income taxes		891,199		(9,868	)		1,225,038			(360,765	)

Provision for income taxes		190,810		-			194,752			-

Net Profit (loss)	$	700,389	$	(9,868	)	$	1,030,286		$	(360,765	)

Basic and diluted earnings (loss) per common share	$	0.006	$	( 0.00	)	$	0.009		$	( 0.00	)

Weighted average number of common shares outstanding – basic and diluted		114,600,000		112,835,164			114,600,000			106,417,582

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

ASIA EQUITY EXCHANGE GROUP, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For the Nine Months Ended
	September 30, 2017			September 30, 2016

CASH FLOWS FROM OPERATING ACTIVITIES
Net Profit	$	1,030,286		$	(359,167	)
Changes in operating activities:
Depreciation and amortization	$	9,908		$	8,793
Loss on disposal of equipment		11,627			-
Prepaid Expenses		(1,138	)		(27,067	)
Other receivables		(873,356	)		(5,675	)
Accounts payable and accrued liabilities		(137,496	)		(11,287	)
Advances from a director		-			367,634
Income taxes payable		190,637
Net Cash Generated From (Used In) Operating Activities		230,468			(26,769	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of intangible asset		-			(7,403	)
Purchases of property and equipment		(1,864	)		(75,350	)
Net receipt from liquidation of fixed assets		6,406			-
Net Cash Generated from (Used In) Investing Activities	$	4,542		$	(82,753	)

CASH FLOWS FROM FINANCING ACTIVITIES
Advances to a related party		-			(4,496	)
Advances from a related party		-			120,736
Net Cash Generated From Financing Activities	$	-		$	116,240

Effect of foreign exchange rate		(12,975	)		(671	)

Net increase in cash and cash equivalents		222,035			6,047
Cash and cash equivalents, beginning of period		55,360			22,655
Cash and cash equivalents, end of period	$	277,395		$	28,702
Supplemental Cash Flow Disclosure:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	4,024		$	1,561
Non-cash financing activities:

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

ASIA EQUITY EXCHANGE GROUP, INC.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Asia Equity Exchange Group, Inc. (the “Company” or “AEEX”) is a Nevada corporation incorporated on July 15, 2013, under the name “I In The Sky, Inc.”. The Company filed a name change to AEEX with the state of Nevada on July 22, 2015. It is based in Hong Kong, the People’s Republic of China. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year ends on December 31.

The Company’s original business plan was to manufacture and market low cost GPS tracking devices and software to businesses and families. However, this business was not successful and the Company had no revenues generated from its business until April 12, 2016 when it completed the reverse acquisition of Asian Equity Exchange Group Co., Ltd (“AEEGCL”).

On November 30, 2015, the Company executed a Sale and Purchase Agreement (the “Purchase Agreement”) to acquire 100% of the shares and assets of AEEGCL (the “Acquisition”). Pursuant to the Purchase Agreement, the Company issued one billion (1,000,000,000) shares of common stock to the former owners of AEEGCL. The closing of the Acquisition took place on April 12, 2016. As a result, AEEGCL became a wholly-owned subsidiary of the Company and the business of AEEGCL became current business of the Company. The Company had a total of 146,000,000 shares of common stock outstanding immediately prior to the closing of the Acquisition. After the closing of the Acquisition, the Company had a total of 1,146,000,000 shares of common stock outstanding, with the former owners of AEEGCL owning 87.3% of the total issued and outstanding shares of the Company’s common stock.

AEEGCL was incorporated under the laws of Samoa on May 29, 2015. It offers an international equity assistance and information service platform designed to provide equity investment financing information and public relationship services to enterprises in Asia, particularly China. AEEGCL owns 100% of AEEX (HK) International Financial Services Limited (formerly known as Yinfu International Enterprise Limited, “AEEX HK”), a Hong Kong corporation incorporated on December 22, 2014. AEEX HK owns 100% of Asian & American Consultant (Shenzhen) Co., Ltd. (formerly known as Yinfu Guotai Investment Consultant (Shenzhen) Co., Ltd., “AACCL”), a corporation incorporated in the People’s Republic of China (the “PRC”) on April 15, 2015. Both AEEX HK and AACCL are engaged in the provision of investment and corporate management consultancy services.

The acquisition of AEEGCL and its subsidiaries by the Company was accounted for as a reverse merger because on a post-merger basis, the former shareholders of AEEGCL held a majority of the outstanding common stock of the Company on a voting and fully-diluted basis. As a result, AEEGCL is deemed to be the acquirer for accounting purposes. Accordingly, the consolidated financial statement data presented are those of AEEGCL, recorded at the historical basis of AEEGCL, for all periods prior to the Company’s acquisition of AEEGCL on April 12, 2016, and the financial statements of the historical operations of the consolidated companies from the effective date of the closing of the Acquisition.

Reverse Stock Split

Before the Effective Date, the Company was authorized to issue 3,000,000,000 shares of Common Stock and had 1,146,000,000 shares of Common Stock issued and outstanding. Simultaneously with the Reverse Stock Split, the Company decreased its authorized Common Stock to 300,000,000 shares. As a result of the Reverse Stock Split, the Company currently has 114,600,000 shares of Common Stock issued and outstanding (subject to adjustment due to the effect of rounding fractional shares into whole shares).

The Reverse Stock Split does not have any effect on the stated par value of the Common Stock and the Company’s authorized preferred stock of 1,000,000 shares which will remain unchanged. Immediately after the Reverse Stock Split, each stockholder’s percentage ownership interest in the Company and proportional voting power remain virtually unchanged except for minor changes and adjustments resulting from rounding fractional shares into whole shares. The rights and privileges of the holders of shares of Common Stock are substantially unaffected by the Reverse Stock Split.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

The interim condensed consolidated financial information as of September 30, 2017 and for the nine-month period ended September 30, 2017 and 2016 have been prepared without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures, which are normally included in consolidated financial statements prepared in accordance with U.S. GAAP have not been included. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited financial statements of AEEX for the year ended December 31, 2016.

In the opinion of management, all adjustments (which include all significant normal and recurring adjustments) necessary to present a fair statement of the Company’s interim condensed consolidated financial position as of September 30, 2017, its interim condensed consolidated results of operations and cash flows for the three and nine-month periods ended September 30, 2017 and 2016, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.

Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries (collectively, the “Group”). All significant inter-company balances and transactions within the Group have been eliminated upon consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.

Intangible Assets

Intangible assets consist of computer software and are recorded at cost. Amortization is calculated using the straight-line method over the estimated useful life of the computer software, which is 5 years.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The useful lives are as follows:

	Office equipment 5 years
	Motor vehicles 5 years

Maintenance and repairs are charged to operations as incurred. Expenditures which substantially increase the useful lives of the related assets are capitalized. When properties are disposed of the related costs and accumulated depreciation are removed from the accounts and any gain or loss is reported in the period the transaction takes place.

Indefinite Lived Intangible Assets

The Company tests its indefinite-lived intangible assets for impairment at least annually (as of December 31) and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in the Company’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in legal factors or in the business climate of its segments; unanticipated competition; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of the indefinite-lived intangible assets and the Company’s consolidated financial results.

Impairment of Long-lived Assets

The long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. During the periods presented, the Company did not impair any plant and equipment.

Income Tax

The Company accounts for income taxes under the provisions of ASC Topic 740 “Accounting for Income Taxes.” Under ASC Topic 740, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

The provision for income tax is based on the results for the period as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized.

Deferred income taxes are calculated at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

ASC Topic 740 also prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken, or for one expected to be taken, in a tax return. ASC Topic 740 also provides guidance related to, among other things, classification, accounting for interest and penalties associated with tax positions, and disclosure requirements. Any interest and penalties accrued related to unrecognized tax benefits will be recorded as tax expense.

Fair Value of Financial Instruments

The Company follows ASC 820, “Fair Value Measurements and Disclosures,” which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy based on the three levels of inputs, of which the first two are considered observable and the last is considered unobservable, is used to measure fair value:

Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources such as quoted prices in active markets for identical assets or liabilities.

Level 2: Observable inputs (other than Level 1 quoted prices) such as quoted prices active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar as or liabilities, or other inputs that are observable or can be corroborated by observable market data.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The carrying values of our financial instruments, including cash and cash equivalents, balances with directors and related parties, other receivables and other payables approximate their fair value due to the short maturities of these financial instruments. The Company did not have financial assets or liabilities that are measured at fair value on a recurring basis as of September 30, 2017 or December 31, 2016.

Revenue Recognition

The Company recognizes revenue from the sale of products and services in accordance with ASC 605, “Revenue Recognition.” Revenue will be recognized only when all of the following criteria are met: persuasive evidence for an agreement exists, delivery has occurred or services have been provided, the price or fee is fixed or determinable, and collection is reasonably assured.

Earnings Per Share

The Company has adopted ASC Topic 260, “Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net profit (loss) by the weighted average number of shares of common stock outstanding during the period. As of September 30, 2017 and December 31, 2016, there was no dilutive security outstanding.

Comprehensive Income

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

Segment Reporting

ASC Topic 280, “Segment Reporting,” requires the use of the “management approach” model for segment reporting. This is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Management determined that the Company’s operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in one business segment: the operations of an equity information service platform designed to provide equity investment financing information to all enterprises in Asia.

Foreign Currency Translation

The accompanying consolidated financial statements are presented in United States Dollar (USD). The functional currency of the Company is USD. The functional currency of AEEGCL, AEEX HK and AACCL are USD, Hong Kong Dollar (HKD) and Renminbi (RMB), respectively. The translation rates are as follows:

	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017		2016
Average HKD: US$ exchange rate in the period		0.1280		0.1289		0.1284		0.1288
Spot HKD: US$ exchange rate as at the period end		0.1280		0.1289		0.1280		0.1289
Average RMB: US$ exchange rate in the period		0.1492		0.1501		0.1469		0.1520
Spot RMB: US$ exchange rate as at the period end		0.1507		0.1500		0.1507		0.1500

Economic and Political Risk

The Company’s major operations are conducted in the PRC. Accordingly, the political, economic, and legal environments in the PRC, as well as the general state of the PRC’s economy may influence the Company’s business, financial condition, and results of operations.

The Company’s major operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, and legal environment. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.

Concentration of Credit Risk

Cash includes cash at banks and demand deposits in accounts maintained with banks within the PRC. Total cash in these banks as of September 30, 2017 amounted to $277,272, none of which is covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks to its cash in bank accounts.

The Company performs ongoing credit evaluations of customers and has not experienced any material losses to date. The Company has not experienced any significant difficulty in collecting its accounts receivable in the past and is not aware of any financial difficulties of its major customers.

Net Profit (Loss) Per Share of Common Stock

The Company has adopted ASC Topic 260, “Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net profit by the weighted average number of shares of common stock outstanding during the period.

The following table sets forth the computation of basic earnings per share, for the period ended September 30, 2017 and 2016:

	Three months ended					Nine months ended
	September 30, 2017		September 30, 2016			September 30, 2017		September 30, 2016
Net profit (loss)	$	700,389	$	(9,868	)	$	1,030,286	$	(360,765	)

Weighted average common shares issued and outstanding (basic and diluted)		114,600,000		112,835,164			114,600,000		110,641,758

Net profit (loss) per common share, basic and diluted	$	0.006	$	(0.000	)	$	0.009	$	(0.000	)

Advertising Costs

The Company follows ASC 720, “Advertising Costs,” and expenses costs as incurred. No advertising costs were incurred for the three and nine months ended September 30, 2017.

Related Parties

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. See note 8.

Commitments and Contingencies

The Company follows ASC 450-20, “Loss Contingencies,” to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no commitments or contingencies as of September 30, 2017.

Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s consolidated financial statements.

NOTE 3 – PREPAID EXPENSES

The amounts of $6,692 and $5,554 as at September 30, 2017 and December 31, 2016, respectively, were paid to the OTC Markets for their annual services.

NOTE 4 – OTHER RECEIVABLE

	September 30, 2017		December 31, 2016

Other receivable	$	114,021	$	669
Due from Shenzhen Shangyuan Electronic Commerce Co., Ltd		753,365		-
	$	867,386	$	669

The amount due from Shenzhen Shangyuan Electronic Commerce Co., Ltd, a non-related party of the Company, is unsecured, non-interest bearing and has no fixed term of repayment.

NOTE 5 – INTANGIBLE ASSETS

	September 30, 2017			December 31, 2016

Computer software	$	7,338		$	7,020
Accumulated amortization		(1,815	)		(1,007	)
	$	5,523		$	6,013

NOTE 6 – FIXED ASSETS

	September 30, 2017			December 31, 2016

Office equipment	$	20,345		$	18,799
Motor vehicle	$	-		$	28,110
		20,345			46,909
Accumulated depreciation		(9,756	)		(12,689	)
	$	10,589		$	34,220

NOTE 7 – INCOME TAXES PAYABLE

	September 30, 2017		December 31, 2016

Income taxes payable	$	190,637	$	-
Total		190,637		-

NOTE 8 – OTHER PAYABLES

	September 30, 2017		December 31, 2016

Salaries and wages accrued to employees	$	17,329	$	8,100
Accrued charges to third parties	$	7,901	$	166,643
Others (Note 9)	$	432,755	$	(3,965	)
		457,985		170,778

NOTE 9 – RELATED PARTY TRANSACTIONS

Mr. Jun Liu (“Mr. Liu”), who resigned as chairman, a member of the board of directors and the position as the president and Chief Executive Officer of the Company on September 8, 2017, advanced the Company $444,118 as of September 30, 2017 compared with $423,686 as of December 31, 2016. The amount due to Mr. Liu, which has been reclassified as other payables (Note 8) as of September 30, 2017, is unsecured, interest free and has no fixed terms of repayment.

NOTE 10 – EQUITY

Preferred Stock

The Company has authorized 1,000,000 preferred shares with a par value of $0.001 per share. The Board of Directors are authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes. As of September 30, 2017, the Company does not have any issued shares of preferred stock and has not designated any shares for issuance.

Common Stock

As of the date of this Report on Form 10-Q, the Company has authorized 300,000,000 common shares with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

On July 8, 2015, the Board of Directors authorized a ten for one (10:1) forward stock split, which was effectuated upon the filing of our amended Articles of Incorporation. The amended Articles of Incorporation were filed with the state of Nevada on July 22, 2015. Accordingly, the Company’s outstanding number of shares of common stock increased from 14,600,000 to 146,000,000. All relevant information relating to numbers of shares and per share information have been retrospectively adjusted to reflect the forward stock split for all periods presented.

On November 30, 2015, the Company executed a Sale and Purchase Agreement (the “Purchase Agreement”) to acquire 100% of the shares and assets of AEEGCL (the “Acquisition”). Pursuant to the Purchase Agreement, the Company issued one billion (1,000,000,000) shares of common stock to the owners of AEEGCL. The Company had a total of 146,000,000 shares of common stock outstanding immediately prior to Closing. After the Closing, the Company had a total of 1,146,000,000 shares of common stock outstanding, with the AEEGCL Stockholders owning 87.3% of the total issued and outstanding shares of the Company’s common stock.

On July 21, 2017, the Board of Directors approved a reverse stock split of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a ratio of 1-for-10 (the “Reverse Stock Split”) as of July 31, 2017 (the “Effective Date”). Before the Effective Date, the Company was authorized to issue 3,000,000,000 shares of Common Stock and had 1,146,000,000 shares of Common Stock issued and outstanding. Simultaneously with the Reverse Stock Split, the Company decreased its authorized Common Stock to 300,000,000 shares. As a result of the Reverse Stock Split, the Company currently has 114,600,000 shares of Common Stock issued and outstanding (subject to adjustment due to the effect of rounding fractional shares into whole shares) and an amount of $1,031,400 will be reclassified from Common Stock to additional paid-in capital. All relevant information relating to numbers of shares and per share information have been retrospectively adjusted to reflect the reverse stock split for all periods presented.

As of September 30, 2017, the Company had 114,600,000 shares of common stock issued and outstanding.

NOTE 11 – COMMITMENTS AND CONTINGENCIES

The Company has no known commitments or contingencies as of September 30, 2017. From time to time the Company may become a party to litigation matters involving claims against the Company. Management believes that it is adequately insured for its operations and there are no current matters that would have a material effect on the Company’s financial position or results of operations.

NOTE 12 - SUBSEQUENT EVENTS

On October 30, 2017, Ms. Yue Ming resigned as a member of the board of directors (the “Board”) and from the position as Chief Financial Officer of the Company, effective immediately. On the same day, the Board appointed Mr. Yau Chit Man Samuel as a member of the Board and Chief Financial Officer of the Company to fill the vacancy created by the departure of Ms. Ming.

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

The following management’s discussion and analysis should be read in conjunction with our financial statements and the notes thereto and the other financial information appearing elsewhere in this report. Our financial statements are prepared in US. Dollars and in accordance with U.S. GAAP.

Overview of Our Business

We offer an international equity assistance and information service platform designed to provide equity investment financing information and public relation services to enterprises in Asia, particularly China.

We generated revenue of $1,766,038 and $507,142 for the nine months ended September 30, 2017 and 2016, respectively. We had a net profit of $1,030,286 and a net loss of $360,765 in the third quarter of 2017 and 2016, respectively. As of September 30, 2017, we had retained earnings of $642,567 and net assets of $561,958.

Results of Operations

Comparison of Three Months Ended September 30, 2017 and 2016

	Three Months Ended September 30,					Change
	2017		2016			$			%
Revenue	$	1,116,148		507,142			609,006			120
Cost of Sales		-		361,688			(361,688	)		100
Gross Profit		1,116,148		145,454			970,694			667

General and administrative expenses		205,439		154,417			51,022			33
Professional fees		14,273		-			14,273			100
Total other expenses		5,244		-			5,244			100
Income tax credit		-		-			-			-
Loss on abandonment of fixed assets		7		-			7			100
Foreign currency translation adjustment		-		(905	)		905			100
Profit before income taxes		891,199		(9,868	)		901,067			9,131
Provision for income taxes		190,810		-			190,810			100
Net profit (net loss)	$	700,389	$	(9,868	)		710,257			7,198

Revenue. Our revenue increased by 120% from $507,142 for the three months ended September 31, 2016 to $1,116,148 for the three months ended September 31, 2017, primarily due to the increase in our business and continuous recognition of revenue upon completion of customer service contracts in accordance with our accounting policy.

General and administrative expenses. General and administrative expenses increased to $205,439, or 18% of revenue for the three months ended September 30, 2017, as compared to $154,417 for the same period of 2016, representing an increase of $51,022.

The rental expense of $88,366 for the third quarter of 2017 accounted for 43% of total operating expenses, as compared to $64,438 for the same period in 2016. The increase of $23,927 was primarily due to the increase of monthly rent in our PRC office. The salary expense of $60,273 for the three months ended September 30, 2017 accounted for 29% of total operating expenses, as compared to $28,113 for the same period in 2016. The increase of $32,160 was mainly due to the gradual increase in number of employees to cope with our business expansion.

Income tax expense. For the three months ended September 30, 2017, income tax expense was $190,810 compared to $Nil for the same period in 2016. The increase was resulted from the increase of revenue and operating profit for the three months ended September 30, 2017.

Net (loss) profit. As a result of industry growth and our effective marketing activities, we are able to utilize online platform to grow our revenue in the third quarter of 2017. For the three months ended September 30, 2017, we recorded net income of $700,389, as compared to a net loss of $9,868 for the same period of last year.

Comparison of Nine Months Ended September 30, 2017 and 2016

The following tables set forth key components of our results of operations for the periods indicated, both in dollars and as a percentage of net revenues.

	Nine Months Ended September 30,						Change
	2,017			2,016			$			%
Revenue	$	1,766,038		$	507,142			1,258,896			248
Cost of Sales		-			361,688			(361,688	)		100
Gross Profit		1,766,038			145,454			1,620,584			1114
General and administrative expenses		464,536			508,735			(44,199	)		-9
Professional fees		56,266			-			56,266			100
Total other expenses		8,571			-			8,571			100
Income tax credit		-			4,114			(4,114	)		-100
Loss on abandonment of fixed assets		(11,627	)					(11,627	)		100
Foreign currency translation adjustment		-			(1,598	)		1,598			100
Profit before income taxes		1,225,038			(360,765	)		1,585,803			440
Provision for income taxes		194,752			-			194,752			100
Net profit (net loss)	$	1,030,286		$	(360,765	)		1,391,051			386

Revenue. Our Company has generated revenue of $1,766,038 and $507,142 during the nine months ended September 30, 2017 and 2016, respectively. The increase was primarily due to the increase in our business and continuous recognition of revenue upon completion of customer service contracts in accordance with our accounting policy.

General and administrative expenses. General and administrative expenses decreased to $464,536, or 26% of revenue, for the nine months ended September 30, 2017, as compared to $508,735, for the same period in 2016, representing a decrease of $44,199, or 9%. This was mainly attributable to the exercise of more efficient cost control measures.

The consulting fees expense for the first nine months of 2017 were $1,507, compared to $97,680 for the comparative period in 2016, representing a decrease of $96,173. This was primarily due to the expense on business survey conducted in 2016.

Income tax expense. For the nine months ended September 30, 2017, income tax expense was $194,752 compared to $Nil for the same period in 2016. The increase was resulted from the increased revenue and operating profit for the nine months ended September 30, 2017.

Net (loss) profit. As a result of the increase in our business operations and continuous recognition of revenue from the completion of customer service contracts, we recorded a net profit of $1,030,286 for the nine months ended September 30, 2017, compared to a net loss of $360,765 for the same period in 2016.

Liquidity and Capital Resources

We have financed our liquidity requirements primarily from funding from Mr. Jun Liu, our former President and Chief Executive Officer and operating income.

As of September 30, 2017, we had cash and cash equivalents of $277,395. Our total current assets were $1,192,820 and our total current liabilities were $648,622. For the nine months ended September 30, 2017, we had net profit of $1,030,286, retained earnings of $642,567 and net equity of $561,958 as of September 30, 2017.

We plan to fund the operations through equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital and other cash requirements. In addition, there can be no assurance that we will be successful in obtaining any financing at terms satisfactory to us, or any financing at all.

	Nine Months Ended September 30,
	2017			2016

Net Cash (Used In) Provided By Operating Activities	$	230,468		$	(26,769	)
Net Cash (Used In) Provided By Investing Activities		4,542			(82,753	)
Net Cash Provided By Financing Activities		-			116,240
Effect of foreign exchange rate		(12,975	)		(671	)
Net increase in cash and cash equivalents		222,035			6,047
Cash and cash equivalents, beginning of period		55,360			22,655
Cash and cash equivalents, end of period	$	277,395		$	28,702

Operating Activities

Net cash provided by operating activities was $230,468 in the nine months ended September 30, 2017, as compared to net cash used in operating activities of $26,769 in the same period in 2016. The increase of net cash provided by operating activities was attributed to our net profit. During the nine months ended September 30, 2017, we received $1,760,556 from the provision of services to our customers. At the same time, we paid $124,531 for salary, $12,627 for taxes and government charges, and $971,113 for other operating activities.

Investing Activities

During the nine months ended September 30, 2017 and 2016, the Company has cash inflow of $4,543 and outflow of $82,753 in investing activities, respectively.

Financing Activities

During the nine months ended September 30, 2017, the Company has no cash used in or generated from financing activities.

Off-Balance Sheet Transactions

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

Item 4. Controls and Procedures.

As required by Rule 13a-15 under the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2017. Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating and implementing possible controls and procedures.

Management conducted its evaluation of disclosure controls and procedures under the supervision of our chief executive officer and our chief financial officer. Based upon, and as of the date of this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ineffective as of September 30, 2017 because of the following material weaknesses that our management identified in our internal control over financial reporting as of September 30, 2017:

	1.	Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.

	2.	Insufficient Written Policies & Procedures: We have insufficient written policies and procedures for accounting and financial reporting. We have an inadequate financial statement closing process.

	3.	We do not have independent directors or an audit committee.

Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel, (3) prepare and implement sufficient written policies and checklists for financial reporting and closing processes, and (4) may consider appointing outside directors and audit committee members in the future.

We intend to complete the remediation of the material weaknesses discussed above as soon as practicable but we can give no assurance that we will be able to do so. Designing and implementing an effective disclosure controls and procedures is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to devote significant resources to maintain a financial reporting system that adequately satisfies our reporting obligations. The remedial measures that we have taken and intend to take may not fully address the material weakness that we have identified, and material weaknesses in our disclosure controls and procedures may be identified in the future. Should we discover such conditions, we intend to remediate them as soon as practicable. We are committed to taking appropriate steps for remediation, as needed.

Changes in internal control over financial reporting

Except for the matters described above, there were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2017 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. We are currently not aware of any legal proceedings or claims that would require disclosure under Item 103 of Regulation S-K. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

Item 1A. Risk Factors.

Not applicable.

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

None.

Item 3. Other Information.

None.

Item 4. Exhibits.

The following exhibits are filed as part of this report or incorporated by reference:

Exhibit No.		Description

31.1		Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certifications of Principle Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		Interactive data files pursuant to Rule 405 of Regulation S-T.

SIGNATURES

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

Dated: November 20, 2017

	ASIA EQUITY EXCHANGE GROUP, INC.

	/s/ Xiangyu Wang
	Xiangyu Wang
	Chief Executive Officer (Principal Executive Officer)

/s/ Yau Chit Man Samuel

Yau Chit Man Samuel

Chief Financial Officer

(Principal Financial and Accounting Officer)

EXHIBIT INDEX

Exhibit No.		Description

31.1		Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		Interactive data files pursuant to Rule 405 of Regulation S-T