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

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

Registrant’s telephone number, including area code:~~(561) 900-3672~~+86 022-5982-4800

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

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.

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 ☒☐ No ☐☒

As of November ~~13, 2017,~~14, 2019, there were ~~5,599,388~~21,768,698 shares of the Company’s common stock issued and outstanding.

~~The accompanying notes are an integral part~~Note 1 – Nature of ~~the unaudited condensed interim financial statements.~~

~~The accompanying notes are an integral part of the unaudited condensed interim financial statements.~~

~~For the periods ended December 31, 2016~~business and ~~September 30, 2017 (Unaudited)~~

~~The accompanying notes are an integral part of the unaudited condensed interim financial statements.~~

TMSR Holding Company Limited (the “Company” or “TMSR”), formerly known as JM Global Holding Company ~~(the “Company,” “we” or “us” or “our”~~(“JM Global”) is, was a blank check company incorporated in Delaware on April 10, 2015. The Company was formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, exchangeable share transaction or other similar business transaction, one or more operating businesses or assets (“Business Combination”). ~~The Company has neither engaged in any operations nor generated any operating revenue to date. The Company’s sponsor is Zhong Hui Holding Limited,~~On June 20, 2018, TMSR completed a ~~Seychelles limited company (the “Sponsor”). The Company has selected December 31~~reincorporation and as ~~its fiscal year end.~~

The registration statement for the Company’s initial public offering (the “Public Offering”) (as described in Note 4) was declared effective by the United States Securities and Exchange Commission (“SEC”) on July 23, 2015. The Sponsor purchased, simultaneously with the closing of the Public Offering on July 29, 2015, 250,000 units at $10.00 per unit in a private placement for an aggregate price of $2,500,000. Each unit purchased is substantially identical to the units sold in the Public Offering, except that the Sponsor has agreed that it will not seek redemption of the stock contained within such units. In addition, the Sponsor purchased an aggregate of 3,000,000 units in the Public Offering. The Sponsor had agreed that it will not seek redemption of 1,000,000 shares of the 3,000,000 shares purchased in the Public Offering. In the event that the Company is unable to complete its initial Business Combination within the required time frame, the non-redeemable 1,000,000 Sponsor shares will be entitled to the liquidation rights described in the “Business Combination” section. In October 2017, the Company agreed to permit its Sponsor to redeem an additional 350,000 of the non-redeemable shares. As a result, the ~~number~~Company changed its state of ~~non-redeemable Sponsor shares was reduced~~incorporation from Delaware to ~~650,000 (See Note 10)~~Nevada. The Articles of Incorporation and Bylaws of TMSR Nevada became the governing instruments of the Company, resulting in a 2-for-1 forward stock split of the Company’s common stock (the “Forward Split). The Company initially had until July 29, 2017 to consummate its initial Business Combination. This date has now been extended to January 29, 2018 as described in Note 2 below. If the Company is unable to consummate its initial Business Combination within such time period, the Company will distribute the aggregate amount then on deposit in the Trust Account pro rata to its public shareholders by way of the redemption of their sharesReincorporation and will cease all operations except for the purposes of winding up of its affairs, as further described herein. In such event, the Company’s warrants will expire worthless. The Company expects the per share redemption price to be $10.00 per common share, without taking into account any interest earned on such funds. However, the Company may not be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of our public shareholders. In that case, it may be possible that the per-share value of the residual assets remaining available for distribution will be less than the price per Unit in the Public Offering.

Upon the closing of the Public Offering and the private placement, $50,000,000 was placed in a trust account (the “Trust Account”), with Continental Stock Transfer & Trust Company acting as trustee. A total of approximately $40.4 million remains in the Trust Account as of September 30, 2017 (See Note 7).

None of our Sponsor, stockholders, officers or directors, or third parties, are under any obligation to advance us funds, or to invest in us. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of our business plan, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all.

Additionally, the Company has until January 29, 2018 (See Note 2) to complete its initial business combination. If the Company has not completed its initial business combination by that time, the Company will distribute the aggregate amount then on deposit in the Trust Account, pro rata, to our public shareholders by way of redemption and cease all operations except for purposes of the winding up of our affairs.

These conditions raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

An amount equal to 100% of the gross proceeds of the Public Offering received on July 29, 2015 is held in a Trust Account invested in U.S. government securities meeting the conditions of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), having a maturity of 180 days or less or any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the 1940 Act, as determined by the Company until the earlier of (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account.

Other than the withdrawal of interest to pay taxes or for working capital, if any, none of the funds held in trust may be released until the earlier of: (i) the completion of the Business Combination; or (ii) the redemption of 100% of the outstanding public shares included in the units sold in the Public Offering if the Company is unable to complete the Business Combination within the required timeframe. On July 27, 2017, in connection with the Special Meeting (see Note 2), the Company and Continental entered into the Trust Amendment, pursuant to which the date on which to commence liquidation of the Trust Account established in connection with the Company’s initial Public Offering in the event the Company has not consummated a Business Combination was extended from July 29, 2017 to January 29, 2018.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering and the private placement, although substantially all of the net proceeds of the Public Offering and the private placement are intended to be generally applied toward consummating a Business Combination. There is no assurance that the Company will be able to successfully effect a Business Combination.

The Company, after signing a definitive agreement for the acquisition of one or more target businesses or assets, may decide to not submit the transaction for stockholder approval, unless otherwise required by law. The Company will proceed with a Business Combination if it isForward Split were approved by shareholders holding the board of directors. In the event that the Company is required to seek stockholder approval in connection with its initial Business Combination, the Company will proceed with a Business Combination only if a majority of the aggregate outstanding shares that are voted in favor of the Business Combination. In connection with such a vote, the Company will provide its stockholders with the opportunity to redeem their shares of common stock upon the consummation of its initial Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including any amounts representing interest earned on the Trust Account, less any interest released to the Company for working capital purposes or the payment of taxes, divided by the number of then outstanding shares of common stock ~~that were sold as part~~ of the Units in the Public Offering, which the Company refers to as its public shares, subject to the limitations described within the registration statement and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of a proposed Business Combination. These shares of common stock, excluding the 1,000,000 non-redeemable shares of the 3,000,000 shares purchased in the Public Offering by the Sponsor, are recorded at a redemption value as of September 30, 2017 and December 31, 2016 and classified as temporary equity upon the completion of the Public Offering, in accordance with ASC Topic 480 “Distinguishing Liabilities from Equity”. The Company subsequently agreed to permit its Sponsor to redeem an additional 350,000 of the 1,000,000 non-redeemable shares. However, in no event will the Company redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001.

~~The Company has until January 29,~~TMSR Delaware on June 1, 2018 (the “Combination Period”) to consummate its initial Business Combination. If the Company is unable to complete its initial Business Combination within the required timeframe the Company will (i) cease all operations except for the purposes of winding up of its affairs; (ii) distribute the aggregate amount then on deposit in the Trust Account, including a portion of the interest earned thereon which was not previously used for working capital, but net of any taxes,~~pro rata~~ to its public stockholders by way of redemption of its public shares (which redemption would completely extinguish such holders’ rights as stockholders, including the right to receive further liquidation distributions, if any); and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of its net assets to its remaining stockholders, as part of its plan of dissolution and liquidation; in the event of such distribution, it is possible that the per-share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per Unit in the Public Offering.

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) permits emerging growth companies to delay complying with new or revised financial accounting standards that do not yet apply to private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act). The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the ~~time private companies adopt the new or revised standard. This may make comparison~~Annual Meeting of its financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

On ~~July 27, 2017, at~~February 6, 2018, China Sunlong Environmental Technology Inc. (“China Sunlong”) consummated the ~~Special Meeting of Stockholders~~business combination (the ~~“Special Meeting”), the Company’s stockholders approved the following items: (i) an amendment (the “Extension Amendment”~~“Business Combination”) to the Company’s Certificate of Incorporation to extend the date by which the Company has to consummate a Business Combination (the “Extension”) from July 29, 2017 to January 29, 2018 (the “Extended Date”); and (ii) an amendment (the “Trust Amendment”) to the investment management trust agreement, dated July 23, 2015, by and between the Company and Continental Stock Transfer & Trust Company (“Continental”), to extend the date on which to commence liquidating the Trust Account in the event the Company has not consummated a Business Combination to the Extended Date. The Company received 98.3% of the affirmative vote of the Company’s outstanding shares of common stock to approve the Extension Amendment and the Trust Amendment. The purpose of the Extension was to allow the Company more time to complete a Business Combination.

~~Following redemptions of 963,112 of the Company’s shares in connection~~ with the Extension, a total of approximately $40.4 million remains in the Trust Account. On July 27, 2017, in connection with the Special Meeting, the Company and Continental entered into the Trust Amendment,JM Global pursuant to which the date on which to commence liquidation of the Trust Account established in connection with the Company’s initial Public Offering in the event the Company has not consummated a Business Combination was extended from July 29, 2017 to January 29, 2018.

~~On August 28, 2017, the Company entered into~~ a Share Exchange Agreement ~~with China Sunlong Environmental Technology, Inc., a Cayman Islands company (“CaymanCo”~~(the “Share Exchange Agreement”)~~, each~~ dated as of ~~CaymanCo’s shareholders (collectively, the “Sellers”), the Company’s sponsor,~~August 28, 2017 by and among (i) JM Global; (ii) Zhong Hui Holding ~~Limited,~~Limited; (iii) China Sunlong; (iv) each of the shareholders of China Sunlong named on Annex I of the Share Exchange Agreement (the “Sellers”); and (v) Chuanliu Ni, a Chinese citizen who is the Chief Executive Officer and director of China Sunlong, in the capacity as the representative for the Company’s stockholders prior to the closing of the Business Combination (as defined below) (the “Purchaser Representative”), and Chuanliu Ni, in the capacity as the representative for the Sellers (the “Seller Representative”), pursuant to which, among other things and subject to the terms and conditions contained therein, the Company will effect an acquisition of CaymanCo, which primarily conducts its business through its indirect wholly-owned subsidiaries, Hubei Shengrong Environmental Protection Energy-Saving Science and Technology Co. Ltd. (“Hubei Shengrong”) and Tianjin Commodity Exchange Company Limited (“TJComex” and collectively with CaymanCo and its subsidiaries, the “Sunlong”) by acquiring from the Sellers all outstanding equity interests of CaymanCo (the “Business Combination”).

~~2. EXTENSION, TRUST AMENDMENT AND AGREEMENT FOR BUSINESS COMBINATION~~ ~~(continued)~~

Sellers. Pursuant to the Share Exchange Agreement, JM Global acquired from the Sellers all of the issued and outstanding equity interests of China Sunlong in exchange for ~~all of the outstanding~~17,990,856 newly-issued shares of ~~Sunlong, the Company will issue a number of shares of our~~ common stock ~~(the “Exchange Shares”) at $10.00 per share based on an adjusted equity valuation~~ of ~~CaymanCo (the “Adjusted Equity Value”) determined by starting with a base valuation~~JM Global to the Sellers. 1,799,088 of ~~$92.0 million, deducting the amount of indebtedness (net of cash) of Sunlong as of~~these newly-issued shares are held in escrow for 18 months from the closing deducting the amount of unpaid transaction expenses incurred by Sunlong, and increasing (or decreasing if negative) such valuation to the extent that the net working capital (excluding indebtedness, cash and transaction expenses) of Sunlong as of the closing is greater than $26.55 million.. Ten percent (10%) of the Exchange Shares (“Escrow Shares”) will be deposited in escrow at the closingdate of the Business Combination ~~(which is also referred to herein~~ as a security for China Sunlong and the closing) and subject to forfeiture back to us (along with dividends and other earnings otherwise payable with respect to such Escrow Shares) in the event that the Purchaser Representative successfully brings anSellers’ indemnification ~~claim~~obligations under the Share Exchange Agreement on behalf of our shareholders. The Exchange Shares, including the Escrow Shares, will be allocated among the Sellers pro-rata based on each Seller’s ownership of CaymanCo prior to the Business Combination. The Exchange Shares will be subject to a lock-up as set forth in the Lock-Up Agreement as described elsewhere in the preliminary proxy statement filed with the Securities and Exchange Commission on October 11, 2017.

The Escrow Shares will be held in an escrow account maintained by a mutually agreed escrow agent (the “Escrow Agent”). While the Escrow Shares are held in escrow, any dividends and other distributions otherwise payable with respect to the Escrow Shares will be held back by JM Global and not paid until the Escrow Shares are released from escrow to the Sellers, but the Sellers will be entitled to vote the Escrow Shares.

~~The Business Combination will be~~Agreement. This transaction is accounted for as a “reverse merger” ~~in accordance with accounting principles generally accepted in~~and recapitalization at the U.S. Under this method of accounting, the Company will be treated as the “acquired” company for financial reporting purposes. This determination was primarily based on Sunlong comprising ongoing operationsdate of the ~~combined company, Sunlong’s senior management comprising the senior management~~consummation of the ~~combined company, and~~transaction since the shareholders of China Sunlong ~~stockholders having a~~owns the majority of the ~~voting power~~outstanding shares of JM Global immediately following the completion of the ~~combined company. For accounting purposes,~~transaction and JM Global’s operations was the operations of China Sunlong ~~will be~~following the transaction. Accordingly, China Sunlong was deemed to be the accounting acquirer in the transaction and ~~consequently,~~ the transaction ~~will be~~was treated as a recapitalization of China Sunlong. The financial statements of China Sunlong ~~(i.e.~~prior to February 6, 2018 are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the accompanying consolidated financial statements of JM Global.

China Sunlong is a holding company incorporated on August 31, 2015, under the laws of the Cayman Islands. China Sunlong has no substantive operations other than holding all of the outstanding share capital of Shengrong Environmental Protection Holding Company Limited (“Shengrong BVI”). Shengrong BVI is a holding company incorporated on June 30, 2015, under the laws of the British Virgin Islands. Shengrong BVI has no substantive operations other than holding all of the outstanding share capital of Hong Kong Shengrong Environmental Technology Limited (“Shengrong HK”). Shengrong HK is also a holding company holding all of the outstanding equity of Shengrong Environmental Protection Technology (Wuhan) Co., Ltd. (“Shengrong WFOE”).

The Company focuses on the industrial solid waste recycling and comprehensive utilization. The Company’s main products are high efficiency permanent magnetic separators and comprehensive utilization systems for industrial solid wastes. The Company’s headquarter is located in Hubei Province, in the People’s Republic of China (the “PRC” or “China”). All of the Company’s business activities are carried out by the wholly owned operating Chinese company, Hubei Shengrong Environmental Protection Energy-Saving Science and Technology Ltd. (“Hubei Shengrong”) prior to May 1, 2018.

On April 11, 2018, the Company, Shengrong WFOE and Hubei Shengrong, both of which are the Company’s indirectly owned subsidiaries (collectively “Purchasers”), entered into a Share Purchase Agreement (the “Purchase Agreement”) with Long Liao, Chunyong Zheng, Wuhan Modern Industrial Technology Research Institute, and Hubei Zhonggong Materials Group Co., Ltd. (collectively “Sellers” ) and Wuhan HOST Coating Materials Co., Ltd. (“Wuhan HOST”), a company incorporated in China engaging in the research, development, production and sale of coating materials. Pursuant to the Purchase Agreement, the Purchasers acquired all of the outstanding equity interests of Wuhan Host (the “Acquisition”). In exchange for the transfer of 100% equity interest of Wuhan Host, Purchasers shall pay a total consideration of $11.2 million (“Total Consideration”), of which $5.2 million or RMB equivalent shall be paid in cash (“Cash Consideration”) and $6.0 million shall be paid in shares of common stock (“Common Stock”), par value $0.0001, of TMSR (“Share Consideration”). The Parties agree the Share Consideration shall be an aggregate of 1,293,104 shares of common stock of which is based on the closing price of US$4.64 on March 27, 2018. The Share Consideration shall be issued in three equal installments, which shall be subject to lock-up of 12, 24 and 36 months, respectively. The Purchase Agreement contains representations, warranties and covenants customary for acquisitions of this type. The Acquisition closed on May 1, 2018. Starting on May 1, 2018, the Company’s business activities added the research, development, production and sale of coating materials.

On August 16, 2018, The Purchasers and the Sellers entered into a supplement agreement (“Supplement Agreement”), which modified the terms of consideration set forth in the Purchase Agreement entered between Purchasers and Sellers on April 11, 2018. Pursuant to the Supplement Agreement, in exchange for the transfer of 100% equity interest of Wuhan Host, Purchasers shall pay a total consideration of $11.2 million (“Total Consideration”), of which $6.5 million or RMB equivalent shall be paid in cash (“Cash Consideration”) and $4.7 million shall be paid in shares of common stock (“Common Stock”), par value $0.0001, of TMSR (“Share Consideration”). In the Supplement Agreement, both Purchasers and Sellers also agreed to delete the section 3.3 of the Share Purchase Agreement, a section that stipulates the Share Consideration shall be issued in three equal installments.

On March 31, 2017, China Sunlong completed its acquisition of 100% of the equity in TJComex International Group Corporation (“TJComex BVI”). At the closing of such acquisition, the selling shareholders of TJComex BVI received 5,935 shares (“Payment Shares”) of China Sunlong Common Stock valued at $926.71 per share for 100% of their equity in TJComex BVI. TJComex BVI owns 100% of the issued and outstanding capital ~~transaction involving~~stock of TJComex Hong Kong Company Limited (“TJComex HK”), a Hong Kong limited liability company, which owns 100% equity interest of Tianjin Corro Technological Consulting Co., Ltd. (“TJComex WFOE”), a wholly foreign owned enterprise incorporated under the ~~issuance~~laws of ~~stock by~~the PRC. Pursuant to certain contractual arrangements, TJComex WFOE controls Tianjin Commodity Exchange Co., Ltd. (“TJComex Tianjin”), a limited liability company incorporated under the law of the PRC. TJComex Tianjin is engaged in general merchandise trading business and related consulting services, and its headquarter is located in the city of Tianjin, PRC.

On April 2, 2018, the Company ~~for~~disposed of its subsidiary, TJComex BVI in consideration of (i) its minimum contribution to the ~~stock~~Company’s results of ~~Sunlong). Accordingly,~~operation and (ii) the ~~consolidated assets, liabilities~~unsatisfactory synergy between the TJComex BVI business and the rest of the Company’s business. The Company’s decision to dispose of TJComex BVI is to (i) improve the Company’s overall financial condition and results of operations, (ii) reduce the complexity of ~~Sunlong~~the Company’s business, (iii) focus the Company’s resources on the solid waste recycling business as well as developing environmental control business opportunities; and (iv) make it possible for the Company to pursue acquisition opportunities for more compatible businesses. TJComex BVI was disposed to Chuanliu Ni, a Chinese citizen who is the director of China Sunlong.

As of April 2, 2018, the net assets of TJComex BVI were $16,598 and is being recorded as a loss from disposal of subsidiary in the consolidated financial statements for the period ending December 31, 2018. As TJComex BVI operating revenue was less than 1% of the Company’s revenue and the disposal did not constitute a strategic shift that will have a major effect on the Company’s operations and financial results, the results of operations for TJComex BVI were not reported as discontinued operations under the guidance of Accounting Standards Codification 205.

On October 10, 2017, Hubei Shengrong established a wholly owned subsidiary, Fujian Shengrong Environmental Protection Energy-Saving Science and Technology Ltd. (“Fujian Shengrong”), with registered capital of RMB 10,000,000 (approximately USD 1,518,120). Fujian Shengrong has no operations prior to May 30, 2018. On May 30, 2018, Hubei Shengrong and two unrelated entities entered into certain Capital Transfer and Contribution Agreement pursuant to which these two entities shall contribute cash of approximately USD 5.0 million (RMB 32.0 million) into Fujian Shengrong and Hubei Shengrong shall contribute approximately USD 1.3 million (RMB 8.0 million) which is the consideration for certain technology consulting services to be provided by Hubei Shengrong to the two entities. Upon completion of the contribution, the total registered capital of Fujian Shengrong increased to RMB 40.0 million (approximately USD 6.3 million) and Hubai Shengrong owns 20% and the two entities collectively own 80% of the equity interest of Fujian Shengrong. In August, 2018, Hubei Shengrong transferred 20% equity interest of Fujian Shengrong to Shengrong WFOE. The Company will account for the investment in Fujian Shengrong using the cost method. Since Shengrong WFOE did not provide any cash contribution to Fujian Shengrong or technology services, the investment balance under the cost method investment on March 31, 2019 is $0.

On November 30, 2018, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”) with Jirong Huang and Qihuang Wang (collectively “Sellers”) and Jiangsu Rong Hai Electric Power Fuel Co., Ltd. (“Rong Hai”), a company incorporated in China engaging in the sale of fuel materials and harbor cargo handling services. Pursuant to the Purchase Agreement, TMSR shall issue an aggregate of 4,630,000 shares of TMSR’s common stock to the Rong Hai Shareholders, in exchange for Rong Hai Shareholders’ agreement to enter into, and their agreement to cause Rong Hai to enter into, certain VIE Agreements (the “Rong Hai VIE Agreements”) with Shengrong WFOE, through which Shengrong WFOE shall have the right to control, manage and operate Rong Hai in return for a service fee approximately equal to 100% of Rong Hai’s net income (“Acquisition”). On November 30, 2018, Shengrong WFOE, the Company’s indirectly owned subsidiary, entered into a series of VIE Agreements with Rong Hai and the Rong Hai Shareholders. The VIE Agreements are designed to provide Shengrong WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Rong Hai, including absolute rights to control the management, operations, assets, property and revenue of Rong Hai. Rong Hai has the necessary license to carry out coal trading business in China. The Acquisition closed on November 30, 2018. Starting on November 30, 2018, the Company’s business activities added coal wholesales and sales of coke, steels, construction materials, mechanical equipment and steel scrap, of which business activities are carried out in Nantong, Jiang Su Province, PRC.

On December 27, 2018, the Company, entered into an Equity Purchase Agreement (the “EPA”) with Hopeway International Enterprises Limited., a private limited company duly organized under the laws of British Virgin Islands (the “Hopeway” or “Purchaser”). Pursuant to the EPA, Shengrong WOFE shall sell 100% equity interests in Hubei Shengrong to the Purchaser in exchange for the Purchaser’s agreement (“Consideration”) to irrevocably forfeit and cancel 8,523,320 shares of common stock of the Company (the “Shares”), constituting all the shares owned by the Purchaser. The transaction contemplated by the EPA is hereby referred as Disposition. The Company’s decision to dispose of Hubei Shengrong is due to the planning mandates of Wuhan Municipal Government 2018 which manufactures should move away from city’s downtown area. Therefore, due to the policy change, Hubei Shengrong is forced to close the existing facility, relocate and build a new facility, which is expected to take approximately 7-8 years. As a result, Hubei Shengrong will not be able to keep the production running and will generate no income in the foreseeable future. Management believed it is very difficult, if possible at all, to continue manufacturing of solid waste recycling systems. As such, the Company has been actively seeking to dispose Hubei Shengrong while retaining the research and development and sale of solid waste recycling systems business. Upon closing of the Disposition, the Purchaser will become the ~~historical financial statements~~sole shareholder of Hubei Shengrong and as a result, assume all assets and obligations of Hubei Shengrong except the research and development team and intellectual property rights in connection with the solid waste recycling systems business shall be assigned to Shengrong WFOE as part of the ~~combined company,~~Disposition. As Shengrong WFOE has significant continuing involvement in the sale of solid waste recycling systems business and the processed industrial waste materials trading business, this restructuring did not constitute a strategic shift that will have a major effect on the Company’s ~~assets, liabilities~~operations and financial results. Therefore, the results of operations ~~will be~~for Hubei Shengrong were not reported as discontinued operations under the guidance of Accounting Standards Codification 205.

The accompanying consolidated ~~with Sunlong beginning~~financial statements reflect the activities of TMSR and each of the following entities:

Rong Hai is controlled through contractual agreements in lieu of direct equity ownership by the Company or any of its subsidiaries. Such contractual arrangements consist of a series of five agreements, consulting services agreement, equity pledge agreement, call option agreement, voting rights proxy agreement, and operating agreement (collectively the “Contractual Arrangements”, which were signed on November 30, 2018).

Material terms of each of the ~~acquisition date.~~ Rong Hai VIE Agreements are described below:

~~The Share Exchange Agreement contains~~Pursuant to the consulting services agreement between Rong Hai and Shengrong WFOE dated November 30, 2018, Shengrong WFOE has the exclusive right to provide consulting services to Rong Hai relating to Rong Hai’s business, including but not limited to business consulting services, human resources development, and business development. Shengrong WFOE exclusively owns any intellectual property rights arising from the performance of this agreement. Shengrong WFOE has the right to determine the service fees based on Rong Hai’s actual operation on a ~~number of representations and warranties made by the Company,~~quarterly basis.

This consulting services agreement shall take effect on the ~~one hand,~~date of execution of this consulting services agreement and ~~Sunlong, on the other hand, made for the benefit of the other, which~~this consulting services agreement shall be in ~~certain cases are subject~~full force and effective until Rong Hai’s valid operation term expires. Shengrong WFOE may, at its discretion, decide to ~~specified exceptions and qualifications contained in the Share Exchange Agreement~~renew or in information provided pursuant to certain disclosure schedules to the Share Exchange Agreement. The representations and warranties are customary for transactions similar to the Business Combination. Each representation, warranty, covenant, undertaking and agreement contained in the Share Exchange Agreement will expire as of, and will not survive, the consummation of the Business Combination.terminate this consulting services agreement.

Under the equity pledge agreement among Shengrong WFOE, Rong Hai and the shareholders of Rong Hai dated November 30, 2018, the shareholders pledged all of their equity interests in Rong Hai to ~~Closing~~

~~The obligation~~Shengrong WFOE to guarantee Rong Hai’s performance of relevant obligations and indebtedness under the consulting services agreement. In addition, the shareholders of Rong Hai have completed the registration of the ~~parties~~equity pledge under the agreement with the competent local authority. If Rong Hai breaches its obligation under the consulting services agreement, Shengrong WFOE, as pledgee, will be entitled to ~~complete~~certain rights, including the ~~Business Combination is subject~~right to sell the ~~fulfillment of certain closing conditions, including, among others: (i) the approval by the Company’s shareholders of the election of certain directors to serve as directors~~pledged equity interests.

This equity pledge agreement shall take effect on its board of directors (ii) the expiration or termination of the regulatory waiting periods under any applicable antitrust laws and the receipt of any other required governmental and regulatory approvals and consents, (iii) the entrance by the applicable parties into the Escrow Agreement, the Lock-Up Agreement, the Non-Competition and Non-Solicitation Agreement and the Registration Rights Agreement, (iv) no material adverse effect shall have occurred with respect to the other party (or with respect to CaymanCo, its subsidiaries) since the date of ~~the Share Exchange Agreement (v) the approval by the Company’s shareholders~~execution of ~~the election of certain directors to serve as directors on its board of directors, (vi) that upon the closing,~~this equity pledge agreement and ~~after giving effect to the redemptions, the Company has at least $5,000,001 in net tangible assets (excluding the assets and liabilities of Sunlong), and (vii) that the net working capital of Sunlong~~this equity pledge agreement shall be ~~at least $22,000,000.~~

~~2. EXTENSION, TRUST AMENDMENT AND AGREEMENT FOR BUSINESS COMBINATION~~ ~~(continued)~~in full force and effective until Rong Hai and Shengrong WFOE’s satisfaction of all contractual obligations and settlement of all secured indebtedness. Upon Shengrong WFOE’s request, Rong Hai shall extend its operation period to sustain the effectiveness of this equity pledge agreement.

~~The Share Exchange Agreement may be terminated under certain customary~~Under the call option agreement among Shengrong WFOE, Rong Hai and ~~limited circumstances~~the shareholders of Rong Hai dated November 30, 2018, each of the shareholders of Rong Hai irrevocably granted to WFOE or its designee an option to purchase at any time, to the extent permitted under PRC law, all or a portion of his equity interests in Rong Hai. Also, Shengrong WFOE or its designee has the right to acquire any and all of its assets of Rong Hai. Without Shengrong WFOE’s prior ~~to closing, including~~written consent, Rong Hai’s shareholders cannot transfer their equity interests in Rong Hai, and Rong Hai cannot transfer its assets. The acquisition price for the shares or assets will be the minimum amount of consideration permitted under the PRC law at the time of the exercise of the option.

This call option agreement shall take effect on the date of execution of this call option agreement. Rong Hai and Shengrong WFOE shall not terminate this call option agreement under any circumstances for any reason unless it is early terminated by ~~either party if the transactions contemplated~~Shengrong WFOE or by the ~~Share Exchange Agreement have not been completed by January 29, 2018;~~requirements under the applicable laws. This call option agreement shall be terminated provided that ~~the party seeking~~all equity interest or assets under this option is transferred to ~~terminate shall not have breached in any material respect~~Shengrong WFOE or its obligations in any manner that has proximately caused the failure to consummate the Business Combination. If the Share Exchange Agreement is terminated, all further obligations of the parties under the Share Exchange Agreement will terminate and will be of no further force and effect (except that certain obligations related to public announcements, confidentiality, termination and termination fees, waiver against trust, and certain general provisions will continue in effect), and neither the Company nor Sunlong will have any further liability to any other party thereto except for liability for liability for any fraud claims or willful breach of the Merger Agreement prior to such termination. In the event that JM Global terminates the Share Exchange Agreement for a breach by CaymanCo or the Sellers, CaymanCo will be required to pay to JM Global as liquidated damages a termination fee equal to $500,000, plus transaction expenses incurred by JM Global and its affiliates, provided that CaymanCo and the Sellers will not be relieved of liability for any fraud claims or willful breach of the Share Exchange Agreement prior to such termination.designee.

~~The Business Combination also calls for additional agreements, including,~~Under the voting rights proxy agreement among ~~others, the Escrow Agreement, the Non-competition Agreements, the Lock-Up Agreements,~~Shengrong WFOE and the ~~Registration Rights Agreement,~~shareholders of Rong Hai dated November 30, 2018, each shareholder of Rong Hai irrevocably appointed Shengrong WFOE as ~~described elsewhere~~its attorney-in-fact to exercise on such shareholder’s behalf any and all rights that such shareholder has in respect of his equity interests in Rong Hai, including but limited to the ~~preliminary proxy statement filed~~power to vote on its behalf on all matters of Rong Hai requiring shareholder approval in accordance with the ~~Securities~~articles of association of Rong Hai.

The voting rights proxy agreement shall take effect on the date of execution of this voting rights proxy agreement and ~~Exchange Commission on October 11, 2017.~~remain in effect indefinitely for the maximum period of time permitted by law in consideration of Shengrong WFOE.

Pursuant to the operating agreement among Shengrong WFOE, Rong Hai and the shareholders of Rong Hai dated November 30, 2018, Rong Hai and the shareholders of Rong Hai agreed not to enter into any transaction that could materially affect Rong Hai’s assets, obligations, rights or operations without prior written consent from Shengrong WFOE, including but not limited to the amendment of the articles of association of Rong Hai. Rong Hai and its shareholders agree to accept and follow our corporate policies provided by Shengrong WFOE in connection with Rong Hai’s daily operations, financial management and the employment and dismissal of Rong Hai’s employees. Rong Hai agreed that it should seek guarantee from Shengrong WFOE first if any guarantee is needed for Rong Hai’s performance of any contract or loan in the course of its business operation.

This operating agreement shall take effect on the date of execution of this operating agreement and this operating agreement shall be in full force and effective until Rong Hai’s valid operation term expires. Either party of Shengrong WFOE and Rong Hai shall complete approval or registration procedures for the extension of its business term three months prior to the expiration of its business term, for the purpose of the maintenance of the effectiveness of this operating agreement.

All the Rong Hai VIE Agreements became effective immediately upon their execution.

The accompanying unaudited ~~interim~~condensed consolidated financial statements ~~are presented~~have been prepared in ~~U.S. dollars in conformity~~accordance with accounting principles generally accepted in the United States of America ~~(‘‘GAAP’’~~(“U.S. GAAP”) for ~~interim~~ information pursuant to the rules and in accordance with the instructions to Form 10-Q and Article 8 and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying financial statements do not include allregulations of the ~~information and notes required by GAAP for a complete financial statement presentation.~~Securities Exchange Commission (“SEC”). These ~~financial statements should be read in conjunction with the Company’s annual Form 10-K filing. In the opinion of management, the interim~~unaudited consolidated financial statements reflect all adjustments ~~(consisting~~that are, in the opinion of ~~normal, recurring adjustments) that are~~management, necessary for a fair ~~presentation~~statement of the ~~financial position,~~ results ~~of operations and cash flows~~ for the interim periods presented. These adjustments are of a normal, recurring nature. Certain disclosures included in the annual financial statements have been condensed or omitted from these financial statements as they are not required for interim financial statements under U.S. GAAP and the rules of the Securities and Exchange Commission. Interim results are not necessarily indicative of results to be expected for athe full year. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s annual report on Form 10-K for the year ended December 31, 2018, filed with the Securities and ~~pursuant to the rules and regulations of the SEC.~~Exchange Commission on April 1, 2019.

The ~~Company complies with accounting and disclosure requirements~~unaudited condensed financial statements of FASB ASC Topic 260, “Earnings Per Share.” Net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding for the period. At September 30, 2017, the Company ~~did not have any dilutive securities~~include the accounts of TMSR and ~~other contracts that could, potentially, be exercised or converted into common stock~~its wholly owned subsidiaries and ~~then share in the earnings of the Company. As a result, diluted loss per common share is the same as basic loss per common share for the periods presented.~~

~~September 30, 2017~~VIE. All intercompany transactions and balances are eliminated upon consolidation.

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times may exceed the Federal Depository Insurance Corporation coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature.

The preparation of unaudited condensed consolidated 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~~disclosures of contingent assets and liabilities atas of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the ~~reporting period.~~periods presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include the useful lives of intangible assets, deferred revenues and plant and equipment, impairment of long-lived assets, collectability of receivables, inventory valuation allowance, present value of lease liabilities and realization of deferred tax assets. Actual results could differ from ~~those~~these estimates.

The reporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of income accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Translation adjustments included in accumulated other comprehensive loss amounted to $1,705,416 and $720,693 as of September 30, 2019 and December 31, 2018, respectively. The balance sheet amounts, with the exception of shareholders’ equity at September 30, 2019 and December 31, 2018 were translated at 7.14 RMB and 6.88 RMB to $1.00, respectively. The shareholders’ equity accounts were stated at their historical rate. The average translation rates applied to statement of income accounts for the nine months ended September 30, 2019 and 2018 were 6.86 RMB and 6.81 RMB, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet.

The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions.

Accounts receivable include trade accounts due from customers. An allowance for doubtful accounts may be established and recorded based on management’s assessment of potential losses based on the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As of September 30, 2019 and December 31, 2018, $818,089 and $732,846 were recorded for allowance for doubtful accounts, respectively.

Inventories are comprised of raw materials and work in progress and are stated at the lower of cost or net realizable value using the first-in-first-out method in Shengrong WFOE and weighted average method in Wuhan HOST and Rong Hai. Management reviews inventories for obsolescence and cost in excess of net realizable value at least annually and records a reserve against the inventory when the carrying value exceeds net realizable value. As of September 30, 2019 and December 31, 2018, no obsolescence and cost in excess of net realizable value were recorded for allowance.

Prepayments are funds deposited or advanced to outside vendors for future inventory or services purchases. As a standard practice in China, many of the Company’s vendors require a certain amount to be deposited with them as a guarantee that the Company will complete its purchases on a timely basis. This amount is refundable and bears no interest. The Company has legally binding contracts with its vendors, which require any outstanding prepayments to be returned to the Company when the contract ends.

Plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method after consideration of the estimated useful lives of the assets and estimated residual value. The estimated useful lives and residual value are as follows:

The cost and related accumulated depreciation and amortization of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives.

In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842).” The new standard requires lessees to recognize lease assets (right of use) and lease obligations (lease liability) for leases previously classified as operating leases under generally accepted accounting principles on the balance sheet for leases with terms in excess of 12 months. The standard is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The impact of the adoption on January 1, 2019 increased the right-of-use assets and lease liabilities by approximately $ 308,725.

Intangible assets represent land use rights and patents, and they are stated at cost, less accumulated amortization. Research and development costs associated with internally developed patents are expensed when incurred. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets. All land in the PRC is owned by the government; however, the government grants “land use rights.” The Company has obtained the rights to use various parcels of land. The patents have finite useful lives and are amortized using a straight-line method that reflects the estimated pattern in which the economic benefits of the intangible asset are to be consumed. The Company amortizes the cost of the land use rights and patents, over their useful life using the straight-line method. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. The estimated useful lives are as follows:

Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill is immediately written off to its fair value and the loss is recognized in the consolidated statements of income. Impairment losses on goodwill are not reversed. As of September 30, 2019 and December 31, 2018, no impairment of goodwill was recognized.

Long-lived assets, including plant, equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of September 30, 2019 and December 31, 2018, no impairment of long-lived assets was recognized.

The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, notes receivable, accounts receivable, other receivables, prepayments, accounts payable, other payables and accrued liabilities, customer deposits, short term loans and taxes payable to approximate their fair values because of their short term nature.

The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow:

Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest.

In Shengrong WFOE, customer deposits represent amounts advanced by customers on product orders. Generally, the Company requires 3% to 10% advanced deposits from the customers upon the signing of the sales contracts. At various stages of the sales contract execution, the Company generally collects certain amounts of advanced deposits from the customers based on the approximate amount of cash flows needed at each stage. Customer deposits are reduced when the related sale is recognized in accordance with the Company’s revenue recognition policy.

In Wuhan HOST, customer deposits represent amounts advanced by customers on product orders. Generally, the Company requires 95% to 100% advanced deposits from the customers upon signing of the sales contracts. A few customers with good credit history are not required to make any deposit. Customer deposits are reduced when the related sale is recognized in accordance with the Company’s revenue recognition policy.

On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (ASC 606) using the modified retrospective method for contracts that were not completed as of January 1, 2018. This did not result in an adjustment to retained earnings upon adoption of this new guidance as the Company’s revenue, other than retainage revenues, was recognized based on the amount of consideration we expect to receive in exchange for satisfying the performance obligations. However, the impact of the Company’s retainage revenue was not material as of the date of adoption, and as a result, did not result in an adjustment.

The core principle underlying the revenue recognition ASU is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are primarily recognized at a point in time except for the retainage revenues where the retainage periods are recognized over the retainage period, usually is a period of twelve months.

The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue. Upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and confirmed that there were no differences in the pattern of revenue recognition except its retainage revenues.

An entity will also be required to determine if it controls the goods or services prior to the transfer to the customer in order to determine if it should account for the arrangement as a principal or agent. Principal arrangements, where the entity controls the goods or services provided, will result in the recognition of the gross amount of consideration expected in the exchange. Agent arrangements, where the entity simply arranges but does not control the goods or services being transferred to the customer, will result in the recognition of the net amount the entity is entitled to retain in the exchange.

Revenue from equipment and systems, revenue from coating and fuel materials, and revenue from trading and others are recognized at the date of goods delivered and title passed to customers, when a formal arrangement exists, the price is fixed or determinable, the Company has no other significant obligations and collectability is reasonably assured. Such revenues are recognized at a point in time after all performance obligations are satisfied under the new five-step model. In addition, training service revenues are recognized when the services are rendered and the Company has no other obligations, and collectability is reasonably assured. These revenues are recognized at a point in time.

Prior to January 1, 2018, the Company allowed its customers to retain 5% to 10% of the contract price as warranty retainage during the retainage period of 12 months to guarantee product quality. Retainage is considered as a payment term included as a part of the contract price, and was recognized as revenue upon the shipment of products. Due to nature of the retainage, the Company’s policy is to record revenue the full value of the contract without VAT, including any retainage, since the Company has experienced insignificant warranty retainage claims historically. Due to the infrequent and insignificant amount of warranty retainage claims, the ability to collect retainage was reasonably assured and was recognized at the time of shipment. On January 1, 2018, upon the adoption of ASU 2014-09 (ASC 606), revenues from product warranty retainage are recognized over the retainage period over 12 months. For the nine months ended September 30, 2019, less than 5% of our retainage revenues were recognized in our consolidated revenues and included in the Company’s equipment and systems revenues in the accompanying statements of income and comprehensive income.

Payments received before all of the relevant criteria for revenue recognition are recorded as customer deposits.

Starting from July 2016, in the normal course of the Company’s trading of industrial waste materials business, the Company directly purchases the processed industrial waste materials from the Company’s suppliers under the Company’s specifications and drop ships the materials directly to the Company’s customers. The Company would inspect the materials at its customers’ site, during which inspection it temporarily assumes legal title to the materials, and after which inspection legal title is transferred to its customers. In these situations, the Company generally collects the sales proceed directly from the Company’s customers and pay for the inventory purchases to the Company’s suppliers separately. The determination of whether revenues should be reported on a gross or net basis is based on the Company’s assessment of whether it is the principal or an agent in the transaction. In determining whether the Company is the principal or an agent, the Company follows the new accounting guidance for principal-agent considerations. Since the Company is the primary obligor and is responsible for (i) fulfilling the processed industrial waste materials delivery, (ii) controlling the inventory by temporarily assume legal title to the materials after inspecting the products from our vendors before passing the materials to our customers, and (iii) bearing the back-end risk of inventory loss with respect to any product return from the Company’s customers, the Company has concluded that it is the principal in these arrangements, and therefore report revenues and cost of revenues on a gross basis.

Research and development expenses include salaries and other compensation-related expenses paid to the Company’s research and product development personnel while they are working on R&D projects, as well as raw materials used for the R&D projects. R&D expenses incurred by the Company are included in the selling, general and administrative expenses and totaled $ 351,794 and $ 156,259 for the nine months ended September 30, 2019 and 2018, respectively.

The Company ~~complies~~accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the ~~accounting and reporting requirements of FASB ASC Topic 740, “Income Taxes”,~~results for the fiscal year as adjusted for items, which ~~requires an~~are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred taxes is accounted for using the asset and liability ~~approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for~~method in respect of temporary differences arising from differences between the ~~financial statement and tax bases~~carrying amount of assets and liabilities ~~that will result~~ in ~~future~~the consolidated 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 ~~or deductible amounts, based on enacted~~temporary differences. Deferred tax ~~laws and rates applicable~~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 tax is calculated using 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 is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. 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. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.

An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company incurred no such penalties and interest for the nine months ended September 30, 2019 and 2018. As of September 30, 2019, the Company’s PRC tax returns filed for 2015, 2016 and 2017 remain subject to examination by any applicable tax authorities.

Basic earnings per share are computed by dividing income available to common shareholders of the Company by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares. 9,079,348 and 10,500,000 of outstanding warrants which is equivalent to convertible of 4,539,674 and 5,250,000 common shares were excluded from the diluted earnings per share calculation due to its antidilutive effect for the nine months ended September 30, 2019 and 2018, respectively. 824,000 of outstanding options were excluded from the diluted earnings per share calculation due to its antidilutive effect for the nine months ended September 30, 2019 and 2018.

In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the ~~differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred~~effect of the change in the U.S. federal corporate income tax ~~assets to~~rate in the ~~amount expected to be realized.~~

~~FASB ASC Topic 740 prescribes a recognition threshold~~Tax Cuts and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.Jobs Act is recognized. The Company ~~recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits as~~does not believe the adoption of ~~September 30, 2017. No amounts were accrued for~~this ASU would have a material effect on the payment of interest and penalties at September 30, 2017. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.Company’s unaudited condensed consolidated financial statements.

The Company may be subject to potential examination by U.S. federal, U.S. states or foreign jurisdiction authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with U.S. federal, U.S. state and foreign tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2017 and December 31, 2016.

~~At September 30, 2017 and December 31, 2016, substantially all of the assets held in the Trust Account were held in U.S. Treasury Bills.~~

Accrued expenses represent amounts the Company owes to its vendors for services that have been provided but not paid for, state franchise tax as well as an affiliate of the Sunlong advanced to the Company for paying the Company’s working capital. These advances are non-interest bearing, unsecured and payable on demand. At September 30, 2017 and December 31, 2016 there was approximately $214,000 and $83,000, respectively, accrued for state franchise tax and third party advance in the Company’s accrued expenses.

~~Due to affiliate represents entity costs and offering costs paid by an affiliate on behalf of the Company. These advances are non-interest bearing, unsecured and payable on demand.~~

As discussed in Note 5, 4,000,000 of the 5,000,000 shares of common stock sold as part of the units in the Public Offering contain a redemption feature which allows for the redemption of common stock under the Company’s liquidation or tender offer/stockholder approval provisions. In accordance with ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides that in no event will it redeem its Public Shares in an amount that would cause its net tangible assets (stockholders’ equity) to be less than $5,000,001. As described in Note 2, in connection with the Extension, 963,112 of the Company’s outstanding shares of common stock were redeemed in July, 2017. Accordingly, at September 30, 2017 and December 31, 2016, 3,036,888 and 4,000,000 Public Shares were classified outside of permanent equity at its redemption value, respectively. In addition to the 4,000,000 common stock with a redemption feature, the Company subsequently agreed to permit its Sponsor to redeem an additional 350,000 of the non-redeemable shares. As a result, the Company has a total of 3,386,888 shares of redeemable common stock as of the date of this report.

~~Management~~ does not believe ~~that any~~other recently issued but not yet effective accounting ~~pronouncements,~~standards, if currently adopted, would have a material effect on the Company’s ~~interim~~unaudited condensed consolidated balance sheets, statements of income and comprehensive income and statements of cash flows.

On April 2, 2018, the Company disposed of its subsidiary, TJComex BVI, in consideration of (i) its minimum contribution to the Company’s results of operation and (ii) the unsatisfactory synergy between the TJComex BVI business and the rest of the Company’s business. The Company’s decision to dispose TJComex BVI is to (i) improve the Company’s overall financial ~~statements.~~condition and results of operations, (ii) reduce the complexity of the Company’s business, (iii) focus the Company’s resources on the solid waste recycling business as well as developing environmental control business opportunities; and (iv) make it possible for the Company to pursue acquisition opportunities for more compatible business. TJComex BVI was disposed to Chuanliu Ni, a Chinese citizen who is the Chief Executive Officer and director of China Sunlong, for no consideration.

As of April 2, 2018, the net assets of TJComex BVI were $16,598 and will be recorded as a loss from disposal of subsidiary in the consolidated financial statements for the year ended December 31, 2018. As TJComex BVI operating revenue was less than 1% of the Company’s revenue and the disposal did not constitute a strategic shift that will have a major effect on the Company’s operations and financial results, the results of operations for TJComex BVI were not reported as discontinued operations under the guidance of Accounting Standards Codification 205.

On April 11, 2018, the Company, Shengrong WFOE and Hubei Shengrong, both of which are the Company’s indirectly owned subsidiaries (collectively “Purchasers”), entered into a Share Purchase Agreement (the “Purchase Agreement”) with Long Liao, Chunyong Zheng, Wuhan Modern Industrial Technology Research Institute, and Hubei Zhonggong Materials Group Co., Ltd. (collectively “Sellers” ) and Wuhan HOST Coating Materials Co., Ltd. (“Wuhan HOST”), a company incorporated in China engaging in the research, development, production and sale of coating materials. Pursuant to the Purchase Agreement, the Purchasers acquired all of the outstanding equity interests of Wuhan Host (the “Acquisition”). In exchange for the transfer of 100% equity interest of Wuhan Host, Purchasers shall pay a total consideration of $11.2 million (“Total Consideration”), of which $ 5.2 million or RMB equivalent shall be paid in cash (“Cash Consideration”) and $6.0 million shall be paid in shares of common stock (“Common Stock”), par value $0.0001, of TMSR (“Share Consideration”). The Parties agree the Share Consideration shall be an aggregate of 1,293,104 shares of common stock of which is based on the closing price of US$4.64 on March 27, 2018. The Share Consideration shall be issued in three equal installments, which shall be subject to lock-up of 12, 24 and 36 months, respectively. The Purchase Agreement contains representations, warranties and covenants customary for acquisitions of this type. The Acquisition closed on May 1, 2018.

The Company’s acquisition of Wuhan HOST was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of Wuhan HOST based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. Other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed, plant and equipment, and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense.

The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Wuhan HOST based on a valuation performed by an independent valuation firm engaged by the Company:

Approximately $7.5 million of goodwill arising from the acquisition consists largely of synergies expected from combining the operations of the Company and Wuhan HOST. None of the goodwill is expected to be deductible for income tax purposes.

On November 30, 2018, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”) with Jirong Huang and Qihuang Wang (collectively “Sellers”) and Jiangsu Rong Hai Electric Power Fuel Co., Ltd. (“Rong Hai”), a company incorporated in China engaging in the sale of fuel materials and harbor cargo handling services. Pursuant to the SPA, TMSR shall issue an aggregate of 4,630,000 shares of TMSR’s common stock to the Rong Hai Shareholders, in exchange for Rong Hai Shareholders’ agreement to enter into, and their agreement to cause Rong Hai to enter into, certain VIE Agreements (the “Rong Hai VIE Agreements”) with Shengrong WFOE, through which Shengrong WFOE shall have the right to control, manage and operate Rong Hai in return for a service fee approximately equal to 100% of Rong Hai’s net income (“Acquisition”). On November 30, 2018, Shengrong WFOE, the Company’s indirectly owned subsidiary, entered into a series of VIE Agreements with Rong Hai and the Rong Hai Shareholders. The VIE Agreements are designed to provide WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Rong Hai, including absolute rights to control the management, operations, assets, property and revenue of Rong Hai. Rong Hai has the necessary license to carry out coal trading business in China. The Acquisition closed on November 30, 2018.

The Company’s acquisition of Rong Hai was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of Rong Hai based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. Other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed, plant and equipment, and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense.

The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Rong Hai based on a valuation performed by an independent valuation firm engaged by the Company:

Approximately $7.3 million of goodwill arising from the acquisition consists largely of synergies expected from combining the operations of the Company and Rong Hai. None of the goodwill is expected to be deductible for income tax purposes.

On December 27, 2018, the Company, entered into an Equity Purchase Agreement (the “EPA”) with Hopeway International Enterprises Limited., a private limited company duly organized under the laws of British Virgin Islands (the “Hopeway” or “Purchaser”). Pursuant to the EPA, Shengrong WOFE shall sell 100% equity interests in Hubei Shengrong to the Purchaser in exchange for the Purchaser’s agreement (“Consideration”) to irrevocably forfeit and cancel 8,523,320 shares of common stock of the Company (the “Shares”), constituting all the shares owned by the Purchaser. The transaction contemplated by the EPA is hereby referred as Disposition. The Company’s decision to dispose of Hubei Shengrong is due to the planning mandates of Wuhan Municipal Government 2018 which manufactures should move away from city’s downtown area. Therefore, due to the policy change, Hubei Shengrong is forced to close the existing facility, relocate and build a new facility, which is expected to take approximately 7-8 years. As a result, Hubei Shengrong will not be able to keep the production running and will generate no income in the foreseeable future. Management believed it is very difficult, if possible at all, to continue manufacturing of solid waste recycling systems. As such, the Company has been actively seeking to dispose Hubei Shengrong while retaining the research and development and sale of solid waste recycling systems business. Upon closing of the Disposition, the Purchaser will become the sole shareholder of Hubei Shengrong and as a result, assume all assets and obligations of Hubei Shengrong except the research and development team and intellectual property rights in connection with the solid waste recycling systems business shall be assigned to Shengrong WFOE as part of the Disposition. As Shengrong WFOE has significant continuing involvement in the sale of solid waste recycling systems business and the processed industrial waste materials trading business, the results of operations for Hubei Shengrong were not reported as discontinued operations under the guidance of Accounting Standards Codification 205.

Hopeway is jointly owned by Ms. Jiazhen Li, the Company’s chief executive officer, and Mr. Xiaonian Zhang, the Company’s president and director. As Hopeway is a related party under common control with the Company under Ms. Li and Mr. Zhang, no gain or loss are recognized in this disposition and the net consideration of the transaction are recognized as addition to capital as opposed to a gain. Total fair value of the consideration of the cancelled 8,523,320 shares of common stock was determined by using the average closing stock price of the Company held by Hopeway during the period from February 6, 2018 to December 27, 2018 at $3.56 per share.

As of December 27, 2018, the net assets of Hubei Shengrong and reconciliation of reduction of capital are as follows:

On November 30, 2018, Shengrong WFOE entered into Contractual Arrangements with Rong Hai and its shareholders upon executing of the “Purchase Agreement”. The significant terms of these Contractual Arrangements are summarized in “Note 1 - Nature of business and organization” above. As a result, the Company classifies Rong Hai as VIE.

A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Shengrong WFOE is deemed to have a controlling financial interest and be the primary beneficiary of Rong Hai because it has both of the following characteristics:

(1) The power to direct activities at Hong Hai that most significantly impact such entity’s economic performance, and

(2) The obligation to absorb losses of, and the right to receive benefits from Hong Hai that could potentially be significant to such entity.

Accordingly, the accounts of Hong Hai are consolidated in the accompanying financial statements pursuant to ASC 810-10, Consolidation. In addition, their financial positions and results of operations are included in the Company’s consolidated financial statements beginning on November 30, 2018.

Depreciation expense for the nine months ended September 30, 2019 and 2018 amounted to $ 288,928 and $259,390, respectively.

Amortization expense for the nine months ended September 30, 2019 and 2018 amounted to $ 137,330 and $220,335, respectively.

The Company has one patent that expires in 2019. In the event that the Company is unable to renew the patent, its’ future results of operations may be materially adversely affected.

The changes in the carrying amount of goodwill by business units are as follows:

The above payables represent interest free loans and advances. These loans and advances are unsecured and due on demand.

In January 2018, the Company obtained an unsecured loan from an unrelated third party in the amount of $144,841 (RMB 1,000,000) due on August 21, 2020 with no interest. On March 11, 2019, the Board granted an aggregate of 72,785 shares of restricted common stock, with a fair value of $144,841, determined using the closing price of $1.99 on March 11, 2019, to repay the debt the Company owed to this unrelated third party.

Interest expense for the three months ended September 30, 2019 and 2018 amounted to $ 4,113 and $ 40,594, respectively, and for the nine months ended September 30, 2019 and 2018 amounted to $ 21,719 and $ 135,328, respectively.

TMSR was organized in the state of Delaware in April 2015 and re-incorporated in the state of Nevada in June 2018. TMSR’s U.S. net operating loss for the six months ended September 30, 2019 amounted to approximately $756,000. As of September 30, 2019, TMSR’s net operating loss carry forward for United States income taxes was approximately $805,000. The net operating loss carry forwards are available to reduce future years’ taxable income through year 2038. Management believes that the realization of the benefits from these losses appears uncertain due to the Company’s operating history and continued losses in the United States. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset to reduce the asset to zero. Management reviews this valuation allowance periodically and makes changes accordingly.

On December 22, 2017, the “Tax Cuts and Jobs Act” (“The 2017 Tax Act”) was enacted in the United States. Under the provisions of the Act, the U.S. corporate tax rate decreased from 34% to 21%. The 2017 Tax Act imposed a global intangible low-taxed income tax (“GILTI”), which is a new tax on certain off-shore earnings at an effective rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits. The Company determined that there are no impact of GILTI for the nine months ended September 30, 2019 and 2018, which the Company believes that it will be imposed a minimum tax rate of 10.5% and to the extent foreign tax credits are available to reduce its US corporate tax, which may result in no additional US federal income tax being due.

China Sunlong is incorporated in the Cayman Islands and are not subject to tax on income or capital gains under current Cayman Islands law. In addition, upon payments of dividends by China Sunlong to its shareholders, no Cayman Islands withholding tax will be imposed.

Shengrong BVI is incorporated in the British Virgin Islands and are not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed.

Shengrong HK is incorporated in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax law, Shengrong HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.

Shengrong WFOE, Wuhan HOST and Rong Hai are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), Chinese enterprises are subject to income tax at a rate of 25% after appropriate tax adjustments.

Under the Income Tax Laws of the PRC, companies are subject to income tax at a rate of 25%. However, Wuhan Host obtained the “high-tech enterprise” tax status in 2016, which reduced its statutory income tax rate to 15% from 2016 to 2019. Tax savings resulted from the reduced statutory income tax rate amounted to $2,102 and $103,481 for the three months ended September 30, 2019 and 2018, respectively, and amounted to $20,924 and $269,284 for the nine months ended September 30, 2019 and 2018, respectively. Tax savings resulted from the reduced statutory income tax rate that increased the Company’s earnings per share by $0.00 and $0.00 for the three months ended September 30, 2019 and 2018, respectively, and increased the Company’s earnings per share by $0.00 and $0.01 for the nine months ended September 30, 2019 and 2018, respectively.

Bad debt allowances must be approved by the Chinese tax authority prior to being deducted as an expense item on the tax return.

Enterprises or individuals who sell commodities, engage in repair and maintenance or import and export goods in the PRC are subject to a value added tax in accordance with PRC laws. The value added tax (“VAT”) standard rates are 6% to 17% of the gross sales price and changed to 6% to 16% of gross sales starting in May 2018. The VAT standard rates changed to 6% to 13% of the gross sales prices starting in April 2019. A credit is available whereby VAT paid on the purchases of semi-finished products or raw materials used in the production of the Company’s finished products can be used to offset the VAT due on sales of the finished products and services.

Effective January 1, 2019, the Company adopted ASU 2016-02, “Leases” (Topic 842), and elected the package of practical expedients that does not require us to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. The Company adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. The impact of the adoption on January 1, 2019 increased the right-of-uses and lease liabilities by approximately $298,000.

The Company had an office lease agreement with a 5-year lease term starting in December 2016 until December 2021 and another office lease agreement with a 5-year lease term starting in January 2018 until January 2023. Upon adoption of ASU 2016-02, the Company recognized lease labilities of approximately $298,000, with corresponding Right-of-use (“ROU”) assets of the same amount based on the present value of the future minimum rental payments of the new lease, using an effective interest rate of 4.75%, which is determined using an incremental borrowing rate.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

For the three months ended September 30, 2019 and 2018, rent expenses amounted to $ 25,665 and $ 18,004, respectively.

For the nine months ended September30, 2019 and 2018, rent expenses amounted to $ 76,994 and $ 70,148, respectively.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and accounts receivable. As of September 30, 2019 and December 31, 2018, no cash were deposited with various financial institutions located in the U.S. As of September 30, 2019 and December 31, 2018, $1,413,856 and $680,709 and were deposited with various financial institutions located in the PRC, respectively. As of September 30, 2019 and December 31, 2018, $ 352 and $7,823 were deposited with one financial institution located in Hong Kong, respectively. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.

Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances.

For the three months ended September 30, 2019, two customers accounted for 31.1% and 24.0% of the Company’s revenues. For the three months ended September 30, 2018, three customers accounted for 20.6%, 18.8% and 10.6% of the Company’s revenues.

For the nine months ended September 30, 2019, four customers accounted for 17.6%, 17.3%, 13.2% and 10.5% of the Company’s revenues. For the nine months ended September 30, 2018, two customers accounted for 40.2% and 25.1% of the Company’s revenues.

As of September 30, 2019, one customer accounted for 49.9% of the Company’s accounts receivable; and four customer accounted for 19.0%, 16.5%, 15.6% and 14.2% of the Company’s Customer Advances. As of December 31, 2018, two customers accounted for 41.1% and 13.4% of the Company’s accounts receivable.

For the three months ended September 30, 2019, three suppliers accounted for 19.1%, 16.9% and 16.5% of the Company’s total purchases. For the three months ended September 30, 2018, one supplier accounted for 70.1% of the Company’s total purchases.

For the nine months ended September 30, 2019, three suppliers accounted for 22.4%, 11.5% and 10.7% of the Company’s total purchases. For the nine months ended September 30, 2018, one supplier accounted for 67.9% of the Company’s total purchases.

As of September 30, 2019, two suppliers accounted for 35.1% and 29.3% of the Company’s prepayments; and one suppliers accounted for 13.9% of the Company’s total accounts payable. As of December 31, 2018, three suppliers accounted for 44.2%, 15.5% and 13.9% of the Company’s total prepayments; and four suppliers accounted for 27.4%, 26.5%, 12.5% and 11.9% of the Company’s total accounts payable.

The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by Shengrong WFOE only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the accompanying unaudited condensed consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of Shengrong WFOE.

Shengrong WFOE, Wuhan HOST, Rong Hai are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, Shengrong WFOE may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at its discretion. Wuhan HOST and Rong Hai may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by State Administration of Foreign Exchange.

As of September 30, 2019 and December 31, 2018, Shengrong WFOE, Wuhan HOST, and Rong Hai, collectively attributed $0 of retained earnings for their statutory reserves as they have accumulated losses.

As a result of the foregoing restrictions, Shengrong WFOE, Wuhan Host and Rong Hai are restricted in their ability to transfer their net assets to the Company. Foreign exchange and other regulation in the PRC may further restrict Shengrong WFOE, Wuhan Host and Rong Hai from transferring funds to China Sunlong in the form of dividends, loans and advances. As of September 30, 2019 and December 31, 2018, amounts restricted are the net assets of Shengrong WFOE, Wuhan Host and Rong Hai which amounted to $ 3,302,254 and $2,347,967, respectively.

On June 1, 2018, the Company’s shareholder approved a 2 for 1 stock split of the Company’s common stock at the Annual Meeting of Shareholders. The stock split was effected on June 20, 2018, pursuant to the completion of the reincorporation from Delaware to Nevada. All shares and per share amounts used herein and in the accompanying consolidated financial statements have been retroactively restated to reflect the stock split.

On June 23, 2018, the Company issued an aggregate of 26,693 shares of the Company’s common stock, par value $0.0001 per share, to certain non-U.S. purchasers at a purchase price of $5.00 per share for an aggregate offering price of $133,335 pursuant to certain securities purchase agreement dated April 20, 2018 and June 22, 2018. The issuances were pursuant to the exemption from registration under Regulation S promulgated under the Securities Act of 1933, as amended.

On February 12, 2019, the Company’s warrant holders converted 294,971 of the Company’s warrants into 52,077 shares of the Company’s common stock using cashless exercises method.

On February 20, 2019, the Company’s warrant holders converted 415,355 of the Company’s warrants into 54,826 shares of the Company’s common stock using cashless exercises method.

On March 11, 2019, the Board granted an aggregate of 131,330 shares of restricted common stock, with a fair value of $261,347, determined using the closing price of $1.99 on March 11, 2019, to repay the debt the Company owed to two unrelated third parties. As the carrying value of the debt equaled to the fair value of the 131,330 common shares at $1.99 per share, no gain or loss were recognized upon this debt settlement.

On March 15, 2019, the Board granted an aggregate of 142,530 shares of restricted common stock, with a fair value of $290,761, determined using the closing price of $2.04 on March 15, 2019, to repay the debt the Company owed to one unrelated third party. As the carrying value of the debt equaled to the fair value of the 142,530 common shares at $2.04 per share, no gain or loss were recognized upon this debt settlement.

On April 4, 2019, the Company entered into certain securities purchase agreement with certain “non-U.S. Persons” as defined in Regulation S of the Securities Act of 1933, as amended pursuant to which the Company agreed to sell 1,492,000 shares of its common stock, par value $0.0001 per share, at a per share purchase price of $2.00. The net proceeds to the Company from this offering were approximately $2.9 million.

On July 29, 2015, the Company sold ~~5,000,000~~10,000,000 units at a purchase price of ~~$10.00~~$5.00 per unit (“Public Units”) in ~~the Public Offering.~~its initial public offering. Each Public Unit consists of one share of the Company’s common stock, $0.0001 par value, and one ~~common stock purchase~~ warrant. The Company did not register the shares of common stock issuable upon exercise of the warrants at the time of the Public Offering. However, the Company has agreed to use its best efforts to file and have an effective registration statement covering the shares of common stock issuable upon exercise of the warrants, to maintain a current prospectus relating to those shares of common stock until the earlier of the date the warrants expire or are redeemed and, the date on which all of the warrants have been exercised and to qualify the resale of such shares under state blue sky laws, to the extent an exemption is not available. Each warrant will entitle the holder to purchase one-half of one share of common stock at an exercise price of ~~$5.75~~$2.88 per half share ($~~11.50~~5.75 per whole share). Warrants may be exercised only for a whole number of shares of common stock. No fractional shares will be issued upon exercise of the warrants. The warrants will become exercisable on ~~the later of (a)~~ 30 days after the consummation of its initial Business Combination ~~or (b) 12 months from the closing of the Public Offering.~~with China Sunlong on February 6, 2018. The warrants will expire at 5:00 p.m., New York time, five years after the consummation of its initial Business Combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the Trust Account.February 5, 2023. The warrants will be redeemable by the Company at a price of $0.01 per warrant upon 30 days prior written notice after the warrants become exercisable, only in the event that the last sale price of the common stock equals or exceeds ~~$24.00~~$12.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which notice of redemption is given.

The ~~Company paid an upfront underwriting discount of $1,250,000 (approximately 2.5%~~sponsor of the ~~gross proceeds of the Public Offering) to the underwriters at~~Company purchased, simultaneously with the closing of the Public ~~Offering. The amount was charged~~Offering on July 29, 2015, 500,000 units at $5.00 per unit in a private placement for an aggregate price of $2,500,000. Each unit purchased is substantially identical to the ~~additional paid~~units sold in ~~capital account.~~the Public Offering.

The Company sold to the underwriter (and/or its designees), for $100, as additional compensation, an option to purchase up to a total of ~~400,000~~800,000 units exercisable at ~~$10.00~~$5.00 per unit (or an aggregate exercise price of $4,000,000) upon the closing of the Public Offering. Since the option is not exercisable until the earliest on the closing the initial Business Combination, the option will effectively represent the right to purchase up to ~~400,000~~800,000 shares of common stock and ~~400,000~~800,000 warrants to purchase ~~200,000~~400,000 shares at ~~$11.50~~$5.75 per full share for an aggregate maximum amount of $6,300,000. The units issuable upon exercise of this option are identical to those issued in the Public Offering. ~~(See Note 6).~~

In April 2015, the Sponsor purchased 1,504,688 shares of the Company’s common stock (the “Founder Shares”) for $25,000, or $0.01662 per share, which included an aggregate of 192,188 Founder Shares that were subject to forfeiture by the Sponsor to the extent that the overallotment option was not exercised by the underwriter. In June 2015, our Sponsor transferred 164,063 Founder Shares to each of Tim Richerson, our Chief Executive Officer, and Peter Nathanial, our President, as well as 3,000 Founder Shares to each of Messrs. Jetta and Qu, our independent directors. These 334,126 Founder Shares were not subject to forfeiture in the event the underwriter’s overallotment option was not exercised in full. The Founder Shares are identical to the shares of common stock included in the Units sold in the Public Offering, except that (1) the founder shares are subject to certain transfer restrictions, as described in more detail below, and (2) our initial stockholders have agreed: (i) to waive their redemption rights with respect to their founder shares in connection with the consummation of a Business Combination and (ii) to waive their redemption rights with respect to their founder shares if we fail to complete our Business Combination within the required timeframe. However, our initial stockholders will be entitled to redemption rights with respect to any public shares they hold by way of public market purchase if we fail to consummate a Business Combination within such time period. If we submit our initial Business Combination to our public stockholders for a vote, our initial stockholders have agreed to vote their shares and any public shares held in favor of our initial Business Combination. The initial stockholders own founder shares equal to 20.0% of the Company’s issued and outstanding shares (not including the placement shares).

On September 8, 2015, the Sponsor forfeited 192,188 Founder Shares since the overallotment was not exercised, so that the initial stockholders owned 20.0% of the Company’s issued and outstanding shares of common stock (not including the placement shares).

Our initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares until one year after our initial Business Combination (the “lock up”). Notwithstanding the foregoing, if the last sale price of our common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial Business Combination, or if we consummate a transaction after our initial Business Combination which results in our stockholders having the right to exchange their shares for cash or property, the Founder Shares will be released from the lock-up.

The Sponsor purchased an aggregate of 3,000,000 units in the Public Offering. The Sponsor has agreed that it will not seek redemption of 1,000,000 shares included in such units. Subsequent to September 30, 2017, the Company agreed to permit the Sponsor to redeem an additional 350,000 of such non-redeemable shares, such that the Sponsor may redeem up to an aggregate of 2,350,000 shares on the same terms as the Public Shares.

In July 2015, the Sponsor purchased 250,000 placement units, each consisting of one share of common stock and one warrant to purchase one-half of one share of common stock at a price of $5.75 per half share, at a price of $10.00 per unit ($2,500,000 in the aggregate,) in a private placement that occurred simultaneously with the completion of the Public Offering. In addition, possible working capital loans by our Sponsor, management team, their affiliates and other third parties may be converted into warrants of the post-business combination entity at a price of $0.50 per warrant (a maximum of 1,000,000 warrants if up to $500,000 is loaned and that amount is converted into warrants). The placement warrants, and the loan warrants, if any, are (or will be) identical to the warrants sold in the Public Offering, except that, if held by our Sponsor or its permitted assigns, they (a) may be exercised for cash or on a cashless basis; (b) are not subject to being called for redemption and (c) they (including the common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the consummation of our initial Business Combination. The Sponsors have agreed that the warrants purchased will not be sold or transferred until 30 days following consummation of a Business Combination, subject to certain limited exceptions. If the Company does not complete a Business Combination, then the proceeds will be part of the liquidating distribution to the public stockholders and the warrants issued to the initial stockholders will expire worthless.

The private placement warrants and the common shares issuable upon exercise of the private placement warrants will not be transferable, assignable or salable until 30 days after the consummation of our initial Business Combination and the placement warrants will be non-redeemable so long as they are held by our Sponsor or its affiliates or designees. If the private placement warrants are held by someone other than the Sponsor, or its respective permitted transferees, the private placement warrants will be redeemable by us and exercisable by such holders on the same basis as the warrants included in the Units sold in the Public Offering.

For the period from April 10, 2015 (inception) through December 31, 2016, the Company’s Sponsor advanced to us a total, net of repayments, of $140,500 which has been used for the payment of costs associated with the Public Offering. These advances are non-interest bearing, unsecured and due on demand. Total amounts due to the sponsor were $140,500 at September 30, 2017 and December 31, 2016, respectively.

For the period from April 10, 2015 (inception) through December 31, 2016, an officer of the Company advanced us approximately $53,000 for expenses related to the Public Offering. These advances were repaid as of December 31, 2016.

In order to finance transaction costs in connection with an intended initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we consummate an initial Business Combination, we would repay such loaned amounts. In the event that the initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment, other than the interest income earned thereon. Up to $1,000,000 of such loans may be convertible into warrants of the post Business Combination entity at a price of $0.50 per warrant at the option of the lender. The warrants would be identical to the placement warrants. The terms of such loans by our Sponsors, officers and directors, if any, have not been determined and no written agreements exist with respect to such loans.

~~The underwriter was entitled to an underwriting discount of two and a half percent (2.5%), which was paid in cash.~~

The Company sold to the underwriter (and/or its designees), for $100, as additional compensation, an option to purchase up to a total of 400,000 units exercisable at $10.00 per unit (or an aggregate exercise price of $4,000,000) upon the closing of the Public Offering. Since the option is not exercisable until the earliest on the closing of our initial Business Combination, the option will effectively represent the right to purchase up to 400,000 shares of common stock and 400,000 warrants to purchase 200,000 shares at $11.50 per full share for an aggregate maximum amount of $6,300,000. The units issuable upon exercise of this option are identical to those offered in the Public Offering. This option may be exercised during the five-year period from the date of the Public Offering commencing on the later of the consummation of an initial Business Combination and the one-year anniversary of the date of the Public Offering. The Company accounts for the fair value of the unit purchase option, net of the receipt of the $100 cash payment, as an expense of the Public Offering resulting in a charge directly to stockholders’ equity. The Company estimates the fair value of this unit purchase option is approximately $2.02 per unit (for a total fair value of approximately $669,114) using a Black-Scholes option-pricing model. The fair value of the unit purchase option granted to the underwriter is estimated as of the date of grant using the following assumptions: (1) expected volatility of 11.15%, (2) risk-free interest rate of 1.36% and (3) expected life of 5 years. Because the Company’s units do not have a trading history, the volatility assumption is based on information currently available to management. The volatility assumption was calculated using the average volatility of exchange-traded funds tracking various indices, which are representative of the sectors on which the company intends to focus for the initial business transaction, including: Fidelity Select Consumer Staples Portfolio, Rydex Consumer Products Fund, Icon Consumer Staples, Putnam Global Consumer Fund, and Vanguard Consumer Staples ETF. The Company believes that the volatility estimate is a reasonable benchmark to use in estimating the expected volatility of the units. Although an expected life of five years was used in the calculation, if the Company does not consummate a Business Combination within the prescribed time period and it liquidates, the option will become worthless. The unit purchase option may be exercised for cash or on a “cashless” basis, at the holder’s option, such that the holder may use the appreciated value of the unit purchase option (the difference between the exercise prices of the unit purchase option and the underlying warrants and the market price of the Units and underlying shares of common stock) to exercise the unit purchase option without the payment of cash.

A total of $50,000,000, which includes $47,500,000 of the net proceeds from the Public Offering and $2,500,000 from the sale of the Private Warrants, has been placed in the Trust Account. As of September 30, 2017 and December 31, 2016, the balance in the Trust Account was $40,434,721 and $50,109,326, respectively.

As of September 30, 2017, the Company’s Trust Account consisted of $40,329,255 in U.S. Treasury Bills, $65,385 in accrued interest and $40,081 in cash. As of December 31, 2016, the Company’s Trust Account consisted of $49,940,597 in U.S. Treasury Bills, $5,400 in accrued interest and $163,329 in cash. The Company classifies its U. S. Treasury and equivalent securities as held-to-maturity in accordance with FASB ASC 320 “Investments - Debt and Equity Securities”. Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying September 30, 2017 and December 31, 2016 balance sheets and adjusted for the amortization or accretion of premiums or discounts.

~~The carrying amount, excluding interest income, gross unrealized holding gains and fair value of held-to-maturity securities at September 30, 2017 and December 31, 2016 are as follows:~~

As discussed in Note 2, the Trust Amendment extended the date on which to commence liquidating the Trust Account in the event the Company has not consummated a Business Combination from July 29, 2017 to January 29, 2018. In July, 2017, 963,112 of the Company’s outstanding shares of common stock were redeemed which left approximately $40.4 million in the Trust Account at September 30, 2017.

The Company complies with ASC 820, “Fair Value Measurement”, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The following table’s present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2017, and December 31, 2016, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability:

As discussed in Note 2, the Trust Amendment extended the date on which to commence liquidating the Trust Account in the event the Company has not consummated a Business Combination from July 29, 2017 to January 29, 2018. In connection with the Extension, 963,112 of the Company’s outstanding shares of common stock were redeemed in July 2017, which left approximately $40.4 million in the Trust Account.

On October 30, 2015, the Company entered into a twelve-month consulting agreement (the “Agreement”) with FirsTrust China Ltd. (the “Consultant”), pursuant to which the Consultant agreed to provide advisory services relating to potential business combination transactions and the Company agreed to pay the Consultant a monthly fee of $20,000, payable quarterly in advance. In addition, the Company agreed to issue to the Consultant 20,000 restricted shares of the Company’s common stock upon the closing of the Company’s initial Business Combination. The Company estimated the fair value of the shares issuable to the Consultant to be $195,200 and has fully expensed the amount as of December 31, 2016. The Consultant was entitled to piggy-back registration rights relating to such shares similar to the piggy-back registration rights granted to the Company’s initial stockholders. During the year ended December 31, 2016, the Company recorded $150,134 in its consulting expenses.

On June 10, 2016, the Company and the Consultant entered into a termination agreement, pursuant to which the Company and Consultant mutually agreed to terminate the Agreement in exchange for a $60,000 termination fee. Further, the Consultant agreed that the Company shall have no further obligations to the Consultant, including but not limited to the Company’s obligation to issue shares to the Consultant upon the closing of the Company’s initial Business Combination. Accordingly, the Company wrote off the unamortized $65,066 prepaid consulting expenses.

The Company agreed to permit its Sponsor to redeem an additional 350,000 of the non-redeemable shares and resulted in a total of 4,350,000 shares of redeemable common stock (see Note 3). As described in Note 2, in connection with the Extension, there were redemptions of 963,112 of the Company’s shares of common stock. Accordingly, at September 30, 2017 and December 31, 2016, 3,036,888 and 4,000,000 Public Shares were classified outside of permanent equity at its redemption value, respectively. In addition to the 4,000,000 common stock with a redemption feature, the Company subsequently agreed to permit its Sponsor to redeem an additional 350,000 of the non-redeemable shares. As a result, the Company has a total of 3,386,888 shares of redeemable common stock as of the date of this report.

The Company is authorized to issue 15,000,000 shares of common stock with a par value of $0.0001 per share. Holders of the Company’s common stock are entitled to one vote for each share of common stock. At September 30, 2017 and December 31, 2016, there were 5,599,388 and 6,562,500 shares of common stock issued and outstanding (including 3,036,888 and 4,000,000 shares of common stock subject to redemption, respectively), respectively.

The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share. At September 30, 2017 and December 31, 2016, there were no shares of preferred stock issued and outstanding. The rights privileges, restrictions and conditions of the preferred shares have not been determined.

In July 2016, the board of directors of the Company appointed two new directors. In August 2016, the ~~Sponsor~~sponsor of the Company granted an option to each of the two new directors to acquire ~~6,000~~12,000 shares of common stock at a price of ~~$9.79~~$4.90 per share vested immediately and exercisable commencing six months after closing of the initial Business Combination and expiring five years from the closing of the initial Business Combination.

The aforementioned warrants and options are deemed to be effective on February 6, 2018, the date of the consummation of its initial business combination with China Sunlong, as the Company was deemed to be the accounting acquiree in the transaction and the transaction was treated as a recapitalization of China Sunlong.

The Company ~~estimates~~may be subject to certain legal proceedings, claims and disputes that arise in the ~~fair value~~ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity.

On February 27, 2013, Wuhan HOST entered into a contract to purchase land use rights for a parcel of land in E Zhou City, Hubei, China, for $1,212,478. The Company has paid to the local government $781,349, a balance of $431,129 has not been paid; however, the government has already issued to the Company all the necessary certificates transferring title of the ~~purchase options at $15,546 using a Black-Scholes option-pricing model and recorded $15,546 as compensation expenses accordingly~~land use rights for the ~~year ended December 31, 2016.~~parcel of land to the Company, and has not taken action to collect any remaining unpaid balance. If the government determines that it wishes to collect an unpaid balance, the total cost to the Company would be $431,129.

~~In addition~~The Company follows ASC 280, Segment Reporting, which requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance. The Company’s chief operating decision maker evaluates performance and determines resource allocations based on a number of factors, the ~~4,000,000 common stock~~primary measure being income from operations of the four operating entities: Shengrong China, Wuhan Host, Rong Hai, and TJComex Tianjin. TJComex Tianjin was disposed in April 2018.

The Company’s operations currently encompass three business segments. The Company also has a separate business segments prior to April 2018. Such reportable segments are consistent with ~~a redemption feature,~~the way the Company ~~subsequently agreed to permit~~manages its ~~Sponsor to redeem an additional 350,000~~business, with each segment operating under separate management and producing discrete financial information. The accounting principles applied at the operating division level in determining income from operations is generally the same as those applied at the unaudited condensed consolidated financial statement level.

The operation and products of the ~~non-redeemable shares~~three existing segments and ~~resulted in a total of 4,350,000 shares of redeemable common stock. As a result, the Company has a total of 3,386,888 shares of redeemable common stock~~one disposed segment are as ~~of the date of this report.~~follow:

~~In October 2017, an affiliate of the Sunlong further advanced approximately $30,000 to the Company for working capital purposes. The advance is non-interest bearing, unsecured and due on demand.~~

In October 2017, Zhong Hui Holding Limited sold an aggregate of 170,000 founder shares to the Company’s CEO and President at the purchase price of $0.017 per share, pursuant to the Securities Assignment Agreement dated October 11, 2017.

The following represents results of divisional operations:

	For the Three Months ended					For the Nine Months ended
	September 30,					September 30,
	2019			2018		2019			2018
Revenues:
Hubei Shengrong and Shengrong WFOE	$	668,714		$	1,529,805	$	3,640,256		$	17,245,786
Wuhan HOST		2,293,321			1,544,466		6,457,240			2,653,187
Rong Hai		3,774,628			-		16,699,178			-
TJComex Tianjin		-			-		-			653
Consolidated revenues	$	6,736,663		$	3,074,271	$	26,796,674		$	19,899,626

Gross profit:
Hubei Shengrong and Shengrong WFOE	$	505,269			944,627	$	2,267,973			3,005,742
Wuhan HOST		382,933			374,757		853,957			814,411
Rong Hai		95,522			-		418,694			-
TJComex Tianjin		-			-		-			653
Consolidated gross profit	$	983,724		$	1,319,384	$	3,540,624		$	3,820,806

Income (loss) from operations:
Hubei Shengrong and Shengrong WFOE	$	413,748		$	131,744	$	1,750,834		$	3,485,607.00
Wuhan HOST		(17,941	)		134,728		3,539			411,855.15
Rong Hai		(97,937	)		-		46,135			-
TJComex Tianjin		-			-		-			(38,340	)
TMSR, China Sunlong, Shengrong BVI and Shengrong HK		(104,877	)		32,383		(731,883	)		(109,830.00	)
Consolidated (loss) income from operations	$	192,993		$	298,855	$	1,068,625		$	3,749,293

Net income (loss):
Hubei Shengrong and Shengrong WFOE	$	308,721		$	105,811	$	1,445,109		$	2,806,027.00
Wuhan HOST		(5,766	)		103,307		11,579			352,151.15
Rong Hai		(63,622	)		-		38,211			-
TJComex Tianjin		-			-		-			(38,340	)
TMSR, China Sunlong, Shengrong BVI and Shengrong HK		(104,877	)		32,383		(731,883	)		(109,830.00	)
Consolidated net (loss) income	$	134,456		$	241,501	$	763,016		$	3,010,009

Depreciation and amortization:
Hubei Shengrong and Shengrong WFOE	$	19,542		$	112,931	$	104,797		$	294,497
Wuhan HOST		98,383			22,978		314,069			68,933
Rong Hai		1,681			-		7,392			-
TJComex Tianjin		-			58,148		-			116,296
Consolidated depreciation and amortization	$	119,606		$	194,056	$	426,258		$	479,725

Interest expense:
Hubei Shengrong and Shengrong WFOE	$	-		$	47,829	$	-		$	135,328
Rong Hai		4,113			-		21,719			-
Consolidated interest expense	$	4,113		$	47,829	$	21,719		$	135,328

Capital expenditures:
Wuhan HOST	$	(200	)	$	3,242	$	16,596		$	3,570
Consolidated capital expenditures	$	(200	)	$	3,242	$	16,596		$	3,570

The following represents assets by division as of:

Total assets as of	September 30, 2019		December 31, 2018
Hubei Shengrong and Shengrong WFOE	$	5,013,107	$	2,301,663
Wuhan HOST		17,384,234		16,612,376
Rong Hai		13,080,109		13,859,965
TJComex Tianjin		-		-
TMSR, China Sunlong, Shengrong BVI and Shengrong HK		71,520		78,973
Total Assets	$	35,548,969	$	32,852,977

Note 18 – Subsequent events

The Company has analyzed its operations subsequent to September 30, 2019 to the date these condensed consolidated financial statements were issued, and has determined that it does not have any material events to disclose.

ITEM 2. TMSR HOLDING COMPANY LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS

~~References to the “Company,” “us” or “we” refer to JM Global Holding Company.~~ The following discussion and analysis of the ~~Company’s~~results of our operations and financial condition ~~and results of operations~~ should be read in conjunction with ~~the interim~~our unaudited condensed financial statements, and the notes ~~thereto contained~~to those unaudited condensed financial statements that are included elsewhere in this ~~quarterly report on Form 10-Q (“Report”). Certain information contained~~Report. All monetary figures are presented in ~~the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.~~U.S. dollars, unless otherwise indicated.

~~Note Regarding Forward-Looking Statements~~

~~All statements other than statements of historical fact included in this Report including, without limitation, statements under “Management’s~~Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of ~~Financial Condition~~significant customers or suppliers; fluctuations and ~~Results of Operations” regarding the Company’s financial position,~~difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ~~plans~~ability to protect technology; the risk of foreign currency exchange rate; and objectives of management for future operations, are forward looking statements. When used in this Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relateother risks that might be detailed from time to us or the Company’s management, identify forward looking statements. Such forward looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward looking statements as a result of certain factors detailedtime in our filings with the Securities and Exchange ~~Commission (the “SEC”).~~Commission.

~~The following discussion~~Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and ~~analysis~~factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations ~~should be read in conjunction with the financial statements~~ and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.prospects.

Overview

~~We are~~TMSR Holding Company Limited (the “Company” or “TMSR”), formerly known as JM Global Holding Company (“JM Global”), was a blank check company incorporated in Delaware on April 10, 2015. The Company was formed for the purpose of ~~effecting~~acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, exchangeable share transaction or other similar business ~~combination with~~transaction, one or more operating businesses or ~~entities. We~~assets (“Business Combination”). On June 20, 2018, TMSR consummated ~~our initial public offering on July 29, 2015. We are currently in~~ the ~~process~~reincorporation. As a result, the Company changed its state of ~~evaluating~~incorporation from Delaware to Nevada, and ~~identifying targets for~~implemented a business combination. We are evaluating acquisition opportunities and, at any given time, may be in various stages of due diligence or preliminary discussions with respect to a number of potential acquisitions. From time to time, we may enter into non-binding letters of intent, but we are currently not subject to any definitive agreement with respect to any business combination. However, we cannot assure you that we will identify any suitable target candidates or, if identified, that we will be able to complete the acquisition of such candidates on favorable terms or at all. We intend to effectuate our initial business combination using cash from the proceeds2-for-1 forward stock split of the ~~Public Offering~~Company’s common stock (the “Forward Split). The reincorporation and Forward Split were approved by shareholders holding the ~~private placement~~majority of the ~~placement units, our capital~~outstanding shares of common stock ~~debt or a combination~~ of ~~these as~~TMSR on June 1, 2018 at the ~~consideration to be paid in our initial business combination.~~Annual Meeting of Shareholders.

~~The issuance of additional shares of our stock in a business combination:~~

	●	~~may significantly dilute the equity interest of investors in our initial public offering;~~

	●	~~may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;~~

	●	could cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

	●	~~may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and~~

	●	~~may adversely affect prevailing market prices for our common stock and/or warrants.~~

~~Similarly, if we issue debt securities, it could result in:~~

	●	~~default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;~~

	●	acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

	●	~~our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand and the lender demands payment;~~

	●	~~limitations on our ability to obtain additional financing if the debt security contains covenants restricting our ability to incur debt;~~

	●	~~our inability to pay dividends on our common stock due to covenants limiting or prohibiting dividends;~~

	●	using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce, or possibly eliminate, the funds available for use as dividends on our common stock, expenses, capital expenditures, acquisitions and other general corporate purposes;

	●	~~limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate.~~

As indicated in the accompanying financial statements, at September 30, 2017, we had approximately $3,000 in cash. We expect to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete our initial business combination will be successful.

~~Agreement for Business Combination~~

~~On August 28, 2017, JM Global Holding Company (“JM Global” or the “Company”) entered into a Share Exchange Agreement with~~ China Sunlong Environmental Technology Inc. (“China Sunlong”) is a holding company incorporated on August 31, 2015, under the laws of the Cayman Islands. China Sunlong has no substantive operations other than holding all of the outstanding share capital of Shengrong Environmental Protection Holding Company Limited (“Shengrong BVI”). Shengrong BVI, a business company incorporated in the British Virgin Islands with limited liability on June 30, 2015, is a holding company for Hong Kong Shengrong Environmental Technology Limited, a Hong Kong registered company (“Shengrong HK”) incorporated on September 25, 2015, which in turn owns 100% of the issued and outstanding equity interests in Shengrong Environmental Protection Technology (Wuhan) Co., Ltd., a ~~Cayman Islands company~~Wholly Foreign-Owned Enterprise registered in Hubei, China (“~~CaymanCo”~~Shengrong WFOE”), ~~each of CaymanCo’s shareholders (collectively, the “Sellers”), the Company’s sponsor, Zhong Hui Holding Limited,~~which in ~~the capacity as the representative for the Company’s stockholders prior to the closing~~turn, since March 2016, has owned 100% of the ~~Business Combination (as defined below) (the “Purchaser Representative”),~~issued and ~~Chuanliu Ni,~~outstanding equity interests in the capacity as the representative for the Sellers (the “Seller Representative”), pursuant to which, among other things and subject to the terms and conditions contained therein, the Company will effect an acquisition of CaymanCo, which primarily conducts its business through its indirect wholly-owned subsidiaries, Hubei Shengrong Environmental Protection Energy-Saving Science and Technology Co. Ltd., a registered company in Hubei, China (“Hubei Shengrong”) ~~and Tianjin Commodity Exchange Company Limited (“TJComex” and collectively with CaymanCo~~. We refer to Shengrong BVI and its consolidated subsidiaries collectively as “China Sunlong” or the ~~“Sunlong”~~“Company”.

Hubei Shengrong was formed in 2009. Since inception, the company has been focused on the research, development, production and sale of an array of solid waste recycling systems for the mining and industrial sectors in the PRC. Hubei Shengrong’s waste recycling systems provide end users in these markets with a cleaner alternative to traditional waste disposal by significantly reducing solid waste disposed into the environment, and enables end users to extract value from valuable metals and other industrial waste materials in waste disposals.

On February 6, 2018, China Sunlong Environmental Technology Inc. (“China Sunlong”) ~~by acquiring from~~consummated the ~~Sellers all outstanding equity interests of CaymanCo~~business combination (the “Business Combination”).

with JM Global pursuant to a Share Exchange Agreement (the “Share Exchange Agreement”) dated as August 28, 2017 by and among (i) JM Global; (ii) Zhong Hui Holding Limited; (iii) China Sunlong; (iv) each of the shareholders of China Sunlong named on Annex I of the Share Exchange Agreement (the “Sellers”); and (v) Chuanliu Ni, a Chinese citizen who was the Chief Executive Officer and director of China Sunlong, in the capacity as the representative for the Sellers. Pursuant to the Share Exchange Agreement, JM Global acquired from the Sellers all of the issued and outstanding equity interests of China Sunlong in exchange for ~~all of the outstanding~~8,995,428 newly-issued shares of ~~Sunlong,~~common stock of JM Global to the ~~Company will issue a number of~~Sellers. The 899,544 shares of our common stock (the “Exchange Shares”) at $10.00 per share based on an adjusted equity valuation of CaymanCo (the “Adjusted Equity Value”) determined by starting with a base valuation of $92.0 million, deducting the amount of indebtedness (net of cash) of Sunlong as ofthese newly-issued shares would be held in escrow for 18 months from the closing deducting the amount of unpaid transaction expenses incurred by Sunlong, and increasing (or decreasing if negative) such valuation to the extent that the net working capital (excluding indebtedness, cash and transaction expenses) of Sunlong as of the closing is greater than $26.55 million.. Ten percent (10%) of the Exchange Shares (“Escrow Shares”) will be deposited in escrow at the closingdate of the Business Combination ~~(which is also referred to herein~~ as a security for China Sunlong and the closing) and subject to forfeiture back to us (along with dividends and other earnings otherwise payable with respect to such Escrow Shares) in the event that the Purchaser Representative successfully brings anSellers’ indemnification ~~claim~~obligations under the Share Exchange Agreement on behalf of our shareholders. The Exchange Shares, including the Escrow Shares, will be allocated among the Sellers pro-rata based on each Seller’s ownership of CaymanCo prior to the Business Combination. The Exchange Shares will be subject to a lock-up as set forth in the Lock-Up Agreement as described elsewhere in the preliminary proxy statement filed with the Securities and Exchange Commission on October 11, 2017.

~~The Business Combination will be~~Agreement. This transaction was accounted for as a “reverse merger” ~~in accordance with accounting principles generally accepted in~~and recapitalization at the U.S. Under this method of accounting, the Company will be treated as the “acquired” company for financial reporting purposes. This determination was primarily based on Sunlong comprising ongoing operationsdate of the ~~combined company, Sunlong’ s senior management comprising the senior management~~consummation of the ~~combined company, and~~transaction since the shareholders of China Sunlong ~~stockholders having a~~owned the majority of the ~~voting power~~outstanding shares of JM Global immediately following the completion of the ~~combined company. For accounting purposes,~~transaction and JM Global’s operations became the operations of China Sunlong ~~will be~~following the transaction. Accordingly, China Sunlong was deemed to be the accounting acquirer in the transaction and ~~consequently,~~ the transaction ~~will be~~was treated as a recapitalization of ~~Sunlong (i.e.~~China Sunlong.

On October 10, 2017, Hubei Shengrong established a fully owned subsidiary, Fujian Shengrong Environmental Protection Energy-Saving Science and Technology Ltd. (“Fujian Shengrong”), with registered capital of approximately USD 1,518,120 (RMB 10,000,000), to be fully funded by October 10, 2019. Prior to the Company executing the ownership transfer and capital contribution agreement (“Agreement”) on May 30, 2018, Fujian Shengrong had no operations prior to May 30, 2018. Fujian Shengrong was a shell company. On May 30, 2018, Hubei Shengrong signed an Agreement with two unrelated entities for which Hubei Shengrong transferred 80% ownership interest in Fujian Shengrong to these two entities. In return, these two entities were required to contribute cash of approximately USD 5.0 million (RMB 32.0 million) into Fujian Shengrong to acquire the 80% ownership interest and Hubei Shengrong was required to provide approximately USD 1.3 million (RMB 8.0 million) worth of technology services for the Company as a contribution, or 20% of investment, for a total of USD 6.3 million (RMB 40.0 million). As a result, the total investment was changed to 20%, the Company accounted for the investment in Fujian Shengrong using the cost method. Due to that Hubei Shengrong did not provide any cash contribution or technology services to Fujian Shengrong, the investment balance under the cost method investment on December 31, 2018 was $0.

On April 2, 2018, the Company disposed of its subsidiary, TJComex International Group Corporation (“TJComex BVI”), a ~~capital transaction involving~~British Virgin Islands corporation, in consideration of (i) its minimum contribution to the ~~issuance~~Company’s results of ~~stock by~~operation, and (ii) the ~~Company for~~unsatisfactory synergy between the ~~stock~~TJComex BVI business and the rest of ~~Sunlong). Accordingly,~~ the ~~consolidated assets, liabilities~~Company’s business. The Company’s made the decision to dispose TJComex BVI to (i) improve the Company’s overall financial condition and results of operations, (ii) reduce the complexity of ~~Sunlong~~the Company’s business, (iii) focus the Company’s resources on the solid waste recycling business as well as developing environmental control business opportunities; and (iv) make it possible for the Company to pursue acquisition opportunities for more compatible business. TJComex BVI was transferred to Chuanliu Ni, a Chinese citizen who is the director of China Sunlong. As of April 2, 2018, the net assets of TJComex BVI were valued at $16,598, which was recorded as a loss from the disposal of a subsidiary in the December 31, 2018 consolidated financial statements. As TJComex BVI’s operating revenue was less than 1% of the Company’s revenue and the disposal did not constitute a strategic shift that would have a major effect on the Company’s operations and financial results, the results of operations for TJComex BVI were not reported as discontinued operations under the guidance of Accounting Standards Codification 205.

On April 11, 2018, the Company, Shengrong WFOE and Hubei Shengrong, both of which are the Company’s indirectly owned subsidiaries (collectively “Purchasers”), entered into a Share Purchase Agreement (the “Purchase Agreement”) with Long Liao, Chunyong Zheng, Wuhan Modern Industrial Technology Research Institute, and Hubei Zhonggong Materials Group Co., Ltd. (collectively “Sellers” ) and Wuhan HOST Coating Materials Co., Ltd. (“Wuhan HOST”), a company incorporated in China engaged in the research and development, production and sale of coating materials. Pursuant to the Purchase Agreement, the Purchasers acquired all of the outstanding equity interests of Wuhan Host (the “Acquisition”). In exchange for the transfer of 100% equity interest of Wuhan Host, Purchasers paid a total consideration of $11.2 million (“Total Consideration”), of which $ 5.2 million or RMB equivalent was paid in cash (“Cash Consideration”) and $6.0 million was paid in shares of common stock (“Common Stock”), par value $0.0001, of TMSR (“Share Consideration”). The Parties agreed the Share Consideration was 1,293,104 shares of common stock based on the closing price of US$4.64 on March 27, 2018. The Share Consideration would be issued in three equal installments, and subject to lock-ups of 12, 24 and 36 months, respectively. The acquisition was closed on May 1, 2018, since when the Company’s business activities added research, development, production and sale of coating materials.

On August 16, 2018, the Company, Shengrong WFOE and Hubei Shengrong, both of which are the Company’s indirectly owned subsidiaries (collectively “Purchasers”), and Long Liao, Chunyong Zheng, Wuhan Modern Industrial Technology Research Institute, and Hubei Zhonggong Materials Group Co., Ltd. and Wuhan HOST Coating Materials Co., Ltd. (“Wuhan HOST”) (collectively “Sellers” ), entered into a supplement agreement (“Supplement Agreement”), which modified the terms of consideration set forth in the Share Purchase Agreement entered between Purchasers and Sellers on April 11, 2018. Pursuant to the Supplement Agreement, in exchange for the transfer of 100% equity interest of Wuhan Host, Purchasers shall pay a total consideration of $11.2 million (“Total Consideration”), of which $ 6.5 million or RMB equivalent shall be paid in cash (“Cash Consideration”) and $4.7 million shall be paid in shares of common stock (“Common Stock”), par value $0.0001, of TMSR (“Share Consideration”). In the Supplement Agreement, both Purchasers and Sellers also agreed to delete the section 3.3 of the Share Purchase Agreement, a section that stipulates the Share Consideration shall be issued in three equal installments.

On November 30, 2018, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”) with Jirong Huang and Qihuang Wang (collectively “Sellers”) and Jiangsu Rong Hai Electric Power Fuel Co., Ltd. (“Rong Hai”), a company incorporated in China engaging in the sale of fuel materials and harbor cargo handling services. Pursuant to the SPA, TMSR shall issue an aggregate of 4,630,000 shares of TMSR’s common stock to the Rong Hai Shareholders, in exchange for Rong Hai Shareholders’ agreement to enter into, and their agreement to cause Rong Hai to enter into, certain VIE Agreements (the “Rong Hai VIE Agreements”) with Shengrong WFOE, through which WFOE shall have the right to control, manage and operate Rong Hai in return for a service fee approximately equal to 100% of Rong Hai’s net income (“Acquisition”). On November 30, 2018, Shengrong WFOE, the Company’s indirectly owned subsidiary, entered into a series of VIE Agreements with Rong Hai and the Rong Hai Shareholders. The VIE Agreements are designed to provide WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Rong Hai, including absolute rights to control the management, operations, assets, property and revenue of Rong Hai. Rong Hai has the necessary license to carry out coal trading business in China. The Acquisition closed on November 30, 2018. Starting on November 30, 2018, the Company’s business activities added coal wholesales and sales of coke, steels, construction materials, mechanical equipment and steel scrap, of which business activities are carried out in Nantong, Jiang Su Province, PRC.

On December 27, 2018, the Company, entered into an Equity Purchase Agreement (the “EPA”) with Hopeway International Enterprises Limited., a private limited company duly organized under the laws of British Virgin Islands (the “Hopeway” or “Purchaser”). Pursuant to the EPA, Shengrong WOFE shall sell 100% equity interests in Hubei Shengrong to the Purchaser in exchange for the Purchaser’s agreement (“Consideration”) to irrevocably forfeit and cancel 8,523,320 shares of common stock of the Company (the “Shares”), constituting all the shares owned by the Purchaser. The transaction contemplated by the EPA is hereby referred as Disposition. The Company’s decision to dispose of Hubei Shengrong is due to the Wuhan Municipal Government’s policy change that Hubei Shengrong is forced to close the existing facility, relocate and build a new facility, which is expected to take approximately 7-8 years. As a result, Hubei Shengrong will not be able to keep the production running and will generate no income in the foreseeable future. Management believed it is very difficult, if possible at all, to continue manufacturing of solid waste recycling systems. As such, the Company has been actively seeking to dispose Hubei Shengrong while retaining the research and development and sale of solid waste recycling systems business. Upon closing of the Disposition, the Purchaser will become the ~~historical financial statements~~sole shareholder of Hubei Shengrong and as a result, assume all assets and obligations of Hubei Shengrong except the research and development team and intellectual property rights in connection with the solid waste recycling systems business shall be assigned to Shengrong WFOE as part of the ~~combined company,~~Disposition. As Shengrong WFOE has significant continuing involvement in the sale of solid waste recycling systems business and the ~~Company’s assets, liabilities and~~processed industrial waste materials trading business, the results of operations ~~will be consolidated with Sunlong beginning on~~for Hubei Shengrong were not reported as discontinued operations under the ~~acquisition date.~~guidance of Accounting Standards Codification 205.

Key Factors that Affect Operating Results

Management has observed the trends and uncertainties of government efforts to control the industrial solid wastes discharge, which we believe may have a direct impact on our operations in the near future.

Although the PRC economy has grown in recent years, the pace of growth has slowed, and even that rate of growth may not continue. According to the National Bureau of Statistics in China (“NBS”), the annual rate of growth in the PRC declined from 7.7% in 2013 to 7.4% in 2014, 6.9% in 2015, 6.7% in 2016, and 6.9% in 2017 and dropped to 6.6% in 2018. The ~~Share Exchange Agreement contains~~expected growth rate in 2019 will be 6.2%. A further slowdown in overall economic growth, an economic downturn or recession or other adverse economic developments in the PRC may materially reduce the demand for the combined company’s selling of coating and fuel materials and may have a ~~number~~materially adverse effect on its business.

Our operating subsidiaries are incorporated, and our operations and assets are primarily located, in China. Accordingly, our results of ~~representations~~operations, financial condition and ~~warranties made~~prospects are affected by China’s economic and regulation conditions in the following factors: (a) an economic downturn in China or any regional market in China; (b) economic policies and initiatives undertaken by the ~~Company, on the one hand, and Sunlong, on the other hand, made for the benefit of the other, which in certain cases are subject to specified exceptions and qualifications contained~~Chinese government; (c) changes in the ~~Share Exchange Agreement~~Chinese or ~~in information provided pursuant to certain disclosure schedules to the Share Exchange Agreement. The representations~~regional business or regulatory environment affecting our customers; and ~~warranties are customary for transactions similar to the Business Combination. Each representation, warranty, covenant, undertaking and agreement contained~~(e) Changes in the ~~Share Exchange Agreement will expire as~~Chinese government policy on industrial solid waste. Unfavorable changes could affect demand for services that we provide and could materially and adversely affect the results of ~~and will not survive, the consummation of the Business Combination.~~

The obligation of the parties to complete the Business Combination is subject to the fulfillment of certain closing conditions, including, among others: (i) the approval by the Company’s shareholders of the election of certain directors to serve as directors on its board of directors (ii) the expiration or termination of the regulatory waiting periods under any applicable antitrust laws and the receipt of any other required governmental and regulatory approvals and consents, (iii) the entrance by the applicable parties into the Escrow Agreement, the Lock-Up Agreement, the Non-Competition and Non-Solicitation Agreement and the Registration Rights Agreement, (iv) no material adverse effect shall have occurred with respect to the other party (or with respect to CaymanCo, its subsidiaries) since the date of the Share Exchange Agreement (v) the approval by the Company’s shareholders of the election of certain directors to serve as directors on its board of directors, (vi) that upon the closing, and after giving effect to the redemptions,operations. Although the Company has ~~at least $5,000,001~~generally benefited from China’s economic growth and the policies to encourage the improvement of reducing of solid waste discharge, the Company is also affected by the complexity, uncertainties and changes in ~~net tangible assets (excluding~~ the ~~assets~~Chinese economic conditions and ~~liabilities of Sunlong), and (vii) that~~regulations governing the ~~net working capital of Sunlong shall be at least $22,000,000.~~mining industry.

~~The Share Exchange Agreement may be terminated under certain customary~~Our recycling systems and ~~limited circumstances at any time prior to closing, including by either party if the transactions contemplated~~equipment operations are largely affected by the ~~Share Exchange Agreement have not been completed by January 29, 2018; provided that~~testing result of installed solid waste recycling systems and equipment. If an installed solid waste recycling system or equipment cannot meet the ~~party seeking to terminate shall not have breached in any material respect its obligations in any manner that has proximately caused~~acceptance standards stated on the ~~failure to consummate~~sales contract, which usually include the ~~Business Combination. If the Share Exchange Agreement is terminated, all further obligations~~outlook of the ~~parties under~~systems and equipment, the ~~Share Exchange Agreement~~recycled rate of low magnetic catalysts and the physical and chemical index of low magnetic catalysts, then we need to adjust the systems and equipment until their performance meets the acceptance standards. Only after the testing results meet the standards, the products can be considered delivered and title passed to customers, and we can recognize sales.

Our fuel materials, mainly coal, operations are largely affected by the following aspects. First, the PRC’s macroeconomic growth is not as fast as expected; the slowdown of economic growth will ~~terminate~~affect the demand of the market, and the reduction of coal consumption by enterprises will affect the sales of coal and directly affect our earnings. Second, the coal market price fluctuation will also affect our sales revenue; because Jiangsu Rong Hai has long-term and stable customers, the price fluctuations will affect the cost of purchasing coal and thus affect our revenue. Third, the risk of price fluctuation in the shipping industry. The fluctuation of shipping price will also directly affect the fluctuation of coal market price, thus affecting our income. Fourth, we have long-term and stable customers and continues to rely on a small number of customers from 2009 to 2018. Losing our major customers will have a significant impact on our results of operations. In addition, the payment situation of these customers will be of no further force and effect (except that certain obligations related to public announcements, confidentiality, termination and termination fees, waiver against trust, and certain general provisions will continue in effect), and neither the Company nor Sunlongaffected by abnormal market changes, which will have any further liability to any other party thereto except for liability for liability for any fraud claims or willful breach of the Merger Agreement prior to such termination. In the event that JM Global terminates the Share Exchange Agreement for a ~~breach by CaymanCo or the Sellers, CaymanCo will be required to pay to JM Global as liquidated damages a termination fee equal to $500,000, plus transaction expenses incurred by JM Global~~negative impact on our business recovery accounts and ~~its affiliates, provided that CaymanCo and the Sellers will not be relieved of liability for any fraud claims or willful breach of the Share Exchange Agreement prior to such termination.~~

The Business Combination also calls for additional agreements, including, among others, the Escrow Agreement, the Non-competition Agreements, the Lock-Up Agreements, and the Registration Rights Agreement, as described elsewhere in the preliminary proxy statement filed with the Securities and Exchange Commission on October 11, 2017.cash flow.

Results of Operations

~~We have neither engaged in any operations nor generated any revenues to date. For the period from April 10, 2015 (inception) through~~Three Months Ended September 30, ~~2017, we had a net loss of $1,163,602 and incurred costs of $1,862,816 related to our initial public offering which have been charged to stockholders’ equity.~~2019 vs. September 30, 2018

										Percentage
	2019			2018			Change			Change
Revenues – Equipment and systems	$	668,714		$	506,988		$	161,726			31.9	%
Revenues – Coating and fuel materials		6,075,560			1,544,466			4,531,094			293.4	%
Revenues – Trading and others		(7,611	)		1,022,817			(1,030,428	)		(100.7	)%
Total revenues		6,736,663			3,074,271			3,662,392			119.1	%
Cost of Revenues – Equipment and systems		163,445			176,570			(13,125	)		(7.4	)%
Cost of Revenues – Coating and fuel materials		5,593,258			1,169,709			4,423,549			378.2	%
Cost of Revenues – Trading and others		(3,764	)		702,676			(706,440	)		(100.5	)%
Total cost of revenues		5,752,939			2,048,955			3,703,984			180.8	%
Gross profit		983,724			1,025,316			(41,592	)		(4.1	)%
Operating expenses (income)		786,894			708,690			78,204			11.0	%
(Loss) Income from operations		196,830			316,626			(119,796	)		(37.8	)%
Other expense, net		(3,837	)		(17,771	)		13,934			(78.4	)%
Provision for income taxes		58,537			57,354			1,183			2.1	%
Net income	$	134,456		$	241,501		$	(107,045	)		(44.3	)%

Revenues

The Company’s ~~entire activity~~revenue consists of solid waste recycling systems and equipment revenue, coating and fuel materials revenue, and trading and others revenue. Total revenues increased by approximately $3.6 million, or approximately 119.1%, to approximately $6.7 million for the three months ended September 30, 2019, compared to approximately $3.1 million for the three months ended September 30, 2018. The overall increase in total revenue was attributable to the increased sales of coating materials after the acquisition of Wuhan HOST and increased sales of fuel materials after the acquisition of Rong Hai and offset by the decreased sales of solid waste recycling systems and equipment and trading industrial waste materials.

Equipment and Systems Revenue

Revenue of solid waste recycling systems and equipment increased by approximately $0.2 million, or 31.9%, to $0.7 million for the three months ended September 30, 2019, compared to approximately $0.5 million for the three months ended September 30, 2018. The increase in revenues was due to the increase of unit price impact. As we restructured Shengrong WFOE, we were in the process of searching for the suitable vendors to produce our products in 2019 and to continue on our solid waste recycling equipment and systems business. Once the suitable vendors are located, we expect our revenues will be on a rise again.

Our revenues from ~~April 10, 2015 (inception) through~~solid waste recycling systems and equipment on numbers of units sold and built and its average selling price are summarized as follows:

	For the three months ended September 30, 2019		For the three months ended September 30, 2018		Change		Change (%)

Solid waste recycling equipment sold		1		1		0		0
Average selling price	$	580,358	$	506,988	$	73,370		14.5

During the three months ended September 30, 2019, we sold 1 units of solid waste recycling equipment with an average selling price of $580,358 per unit as compared to 1 units sold with an average selling price of $506,988 during the three months ended September 30, 2018. The increase in units sold of 0 units or 0% during the three months ended September 30, 2019 as compared to the same period in 2018 were mainly due to that Shengrong WFOE were in the process of searching for the suitable vendors to produce our products in 2019 and to continue on our solid waste recycling equipment and systems business after the restructuring of Hubei Shengrong.

Coating and Fuel Revenue

During the three months ended September 30, 2019, we sold 846,908 kilograms of coating materials with an average selling price of approximately $2.7 per kilogram and sold 53,256 tons of coal with an average selling price of approximately $70.88 per ton. During the three months ended September 30, 2018, we sold 567,009 kilograms of coating materials with an average selling price of approximately $2.72 per kilogram. We had not yet acquired Rong Hai by September 30, 2018, so no coal business operations during the third quarter in 2018.

Trading and Others Revenue

Revenues of trading of industrial waste materials and other general merchandises decreased by approximately $1.0 million or 100.7%, to approximately $(8,000) for the three months ended September 30, 2019, compared to approximately $1.0 million for the three months ended September 30, 2018. The decrease in revenues was attributable to the decreased amount of industrial waste materials traded. Our revenues from trading of industrial waste materials and others revenues are summarized as follows:

	For the three months ended September 30, 2019			For the three months ended September 30, 2018		Change			Change (%)

Acid Hydrolysis Titanium Dioxide	$	-		$	293,018		(293,018	)		(100.0	)
Petroleum FCC Catalyst		-			293,018		(293,018	)		(100.0	)
Ilmenite Tailings		-			187,191		(187,191	)		(100.0	)
Copper Smelting Tailings		-			249,59		(249,59	)		(100.0	)
Others revenues		(7,611	)		-		(7,611	)		(100.0	)
Total	$	(7,611	)	$	1,022,817	$	(1,030,428	)		(100.7	)

Our total sold quantity of each kind of industrial waste materials and their average selling price are summarized as follows:

	For the three months ended September 30, 2019		For the three months ended September 30, 2018		Change			Change (%)

Acid Hydrolysis Titanium Dioxide (quantity in tons)		-		225		(225	)		(100.0	)
Average selling price	$	-	$	1,302	$	(1,302	)		(100.0	)
Petroleum FCC Catalyst (quantity in tons)		-		225		(225	)		(100.0	)
Average selling price	$	-	$	1,302	$	(1,302	)		(100.0	)
Ilmenite Tailings (quantity in tons)		-		225		(225	)		(100.0	)
Average selling price	$	-	$	832	$	(832	)		(100.0	)
Copper Smelting Tailings (quantity in tons)		-		225		(225	)		(100.0	)
Average selling price	$	-	$	1,109	$	1,109	)		(100.0	)

Starting from July ~~29, 2015,~~2016, we commenced our industrial waste materials trading business, pursuant to which we directly order the processed industrial waste materials from our suppliers of industrial waste materials, then under our specifications per contract, drop ship the processed industrial waste materials directly to our customers. We inspect the materials at our industrial waste materials customers’ site, during which inspection we temporarily assume legal title to the materials, and after which inspection legal title is transferred to the customers. In these situations, we generally collect the sales proceed directly from our customers and pay for the inventory purchases to our suppliers separately.

We started our trading of industrial waste materials business mainly due to the opportunity that existed in the marketplace, as the end users of our solid waste recycling equipment, also referred to as our equipment end users, while in the process of using our solid waste recycling equipment to clean and extract waste from mines and job sites, may also extract and separate certain valuable metals from other industrial waste materials. We recognize that there is a market for these metals and waste materials and as a result, we connect our equipment end users who sell the byproduct of materials they produce to our industrial waste materials suppliers who have the capability of processing such solid waste materials into powder and directly ship such products to our industrial waste materials customers. This type of trading business is related to our solid waste recycling systems and equipment business because the end users of our solid waste recycling equipment only use our equipment to extract the valuable metals and chemicals for their needs. These end users do not need the residual materials generated as a byproduct of extraction and considered to be industrial waste materials. As a result, we believe our industrial waste material trading business is sustainable as long as our solid waste recycling system and equipment business is sustainable. We strongly believe our solid waste recycling system and equipment business is sustainable because of upcoming favorable energy conservation and emission reduction target-setting policies mandated by the PRC government. Notwithstanding the foregoing, this is a new line of our business that is still in the development stage.

Approximately two to three weeks prior to shipment, our suppliers of industrial waste materials will physically process the industrial waste materials at the locations of the equipment end users. These end users are located in different provinces of China, such as Hubei, Sichuan, Jiangsu and Zhejiang. After our industrial waste material suppliers have processed the industrial waste materials per our specifications, they will drop ship the materials by truck, which takes approximately 1 to 5 days, directly to our industrial waste materials customers in the city of Wuhan, Hubei province, for our inspection before being inspected and accepted by our customers.

During the three months ended September 30, 2019, the decrease of revenues from trading industrial waste materials was due to the fact that we did not generate any revenues from trading industrial waste materials as compared to an aggregate of 900 tons of Ilmenite Tailings and Copper Smelting Tailings during the same period in 2018. Our trading of industrial waste materials are dependent on the progress of our recycling equipment end users and when they are able to sell those industrial waste materials to our suppliers to process the waste. During the three months ended September 30, 2019, we had less resources to trade the aforementioned industrial waste materials as compared to the same period in 2018 as the enterprises who has the resources of the industrial waste materials were closed for production during the year ended December 31, 2018 and during the three months ended September 30, 2019 due to inspection from the environment group of the Chinese government until the enterprises were able to pass the environmental inspection, which reduced the resource for our trading of industrial waste material. In addition, Shengrong WFOE were in the process of searching for the suitable vendors to produce our products in 2019 and to continue on our solid waste recycling equipment and systems business after the restructuring of Hubei Shengrong, which we currently do not have new resource to acquire the industrial waste material. As a result, we did not generate any trading revenue in the third quarter of 2019. Once the suitable vendors are located, we expect our revenues will be on a rise again.

We do not believe that we have any competitors to compete with us in the trading of industrial waste materials as their equipment are not as sophisticated as our equipment to extract value from valuable metals and other industrial waste materials. As a result, we do not believe that other potential competitors will have the source of obtaining the industrial waste materials to compete in this business.

Our customers who order the industrial waste materials from us are able to manufacture from these processed industrial waste materials and turned them into variety of materials used for decoration, such as plastic wood, interior wall decorative panels and stone plastic imitation wood flooring. The decoration materials made from these processed industrial waste materials are much cheaper than using other environmental friendly raw materials, and generally have better qualities. We evaluate prices of similar raw materials for construction and then set a price with these two customers. We believe our customers might be able to obtain government support and grant for using these industrial waste materials products.

In addition, environment risk does not appears to be applied to us since we are assisting the end users of our solid waste recycling equipment to reduce their solid waste discharge and we did not create any environment effect or risk.

Our other revenues decreased by approximately $1.0 million, or 100.7%, to approximately $(8000) for the three months ended September 30, 2019 as compared to $1.0 million for the three months ended September 30, 2018. The decrease was mainly due to the restructuring of Hubei Shengrong.

Cost of Revenues

The Company’s cost of revenues consists of cost of solid waste recycling systems and equipment revenue, cost of coating and fuel materials revenue, and cost of trading and others revenue. Total cost of revenues increased by approximately $3.7 million, or approximately 180.8% to approximately $5.8 million for the three months ended September 30, 2019, compared to approximately $2.0 million for the same period in 2018. Our total cost of revenues increased was because coating and fuel materials generally have a lower profit margin than solid waste recycling equipment and systems.

Cost of Equipment and Systems Revenue

Cost of solid waste recycling systems and equipment revenue decreased by approximately $13,000, or 7.4% to $0.2 million for the three months ended September 30, 2019, compared to approximately $0.2 million for the same period in 2018. The decrease in cost of solid waste recycling systems and equipment revenue was in ~~preparation for our initial public offering, which was consummated on July 29, 2015. Since that date,~~line with the decreased sales volume of solid waste recycling equipment and systems.

Cost of Coating and Fuel Materials Revenue

During the three months ended September 30, 2019, we ~~have engaged in a search for a business combination. Our operating costs since then include our search for~~sold 846,908 kilograms of coating materials with an ~~initial business combination and are largely associated with our governance and public reporting, consulting fees, and state franchise taxes~~average unit cost of approximately ~~$1,488,000 through~~$2.3 per kilogram and sold 53,256 tons of coal with an average unit cost of approximately $69.2 per ton. During the three months ended September 30, ~~2017. Investment income~~2018, we sold 567,009 kilograms of coating materials with an average unit cost of approximately ~~$336,000 represents~~$1.2 per kilogram ..We had not yet acquired Rong Hai by September 30, 2018, as a result, no coal business operations during the ~~realized~~third quarter in 2018.

Cost of Trading and ~~unrealized appreciation on our investment~~Others Revenue

Cost of trading of industrial waste materials and others revenue decreased by approximately $0.7 million or 199%, to approximately $(4,000) for the three months ended September 30, 2019, compared to $0.7 million for the same period in ~~U.S. treasury bills since our initial public offering.~~2018. The decrease was in line with the decrease in revenues of trading of industrial waste materials and other general merchandises. Our cost of revenues from trading of industrial waste materials and others revenues are summarized as follows:

	For the three months ended September 30, 2019			For the three months ended September 30, 2018		Change			Change (%)
Industrial waste materials trading
Acid Hydrolysis Titanium Dioxidec	$	-		$	195,345	$	(195,345	)		(100.0	)
Petroleum FCC Catalyst		-			195,345		(195,345	)		(100.0	)
Ilmenite Tailings		-			124,794		(124,794	)		(100.0	)
Copper Smelting Tailings		-			187,192		(187,192	)		(100.0	)
Others cost of revenues		(3,764	)		-		(3,764	)		(100.0	)
Total	$	(3,764	)	$	702,676	$	(706,440	)		(199	)

Our total sold quantity of each kind of industrial waste materials and their average purchasing price are summarized as follows:

	For the three months ended September 30, 2019		For the three months ended September 30, 2018		Change			Change (%)

Acid Hydrolysis Titanium Dioxide (quantity in tons)		-		225		(225	)		(100.0	)
Average unit cost	$	-	$	868	$	(868	)		(100.0	)
Petroleum FCC Catalyst (quantity in tons)		-		225		(225	)		(100.0	)
Average unit cost	$	-	$	868	$	(868	)		(100.0	)
Ilmenite Tailings (quantity in tons)		-		225		(225	)		(100.0	)
Average unit cost	$	-	$	555	$	(555	)		(100.0	)
Copper Smelting Tailings (quantity in tons)		-		225		(225	)		(100.0	)
Average unit cost	$	-	$	832	$	(832	)		(100.0	)

Gross Profit

The Company’s gross profit decreased by approximately $42,000, or 4.1%, to approximately $1.0 million during the three months ended September 30, 2019, from approximately $1.0 million for the three months ended September 30, 2018. For the three months ended September 30, ~~2017,~~2019 and 2018, the Company’s gross margin was approximately 14.6% and 33.4%, respectively. The decrease in gross margin was primarily due to the increase of sales volume of coating and fuel materials as they have a smaller gross margin than solid waste recycling equipment and systems, which in turn, decreased our gross margin percentage from 33.4% for the three months ended September 30, 2018 to 14.6% for the three months ended September 30, 2019.

Operating Expenses (Income)

The Company’s operating ~~costs included our search~~expenses (income) include selling, general and administrative (“SG&A”) expenses, and recovery of doubtful accounts.

SG&A expenses increased by approximately $0.6 million, by approximately 259.6%, from approximately $0.2 million for ~~an initial business combination~~the three months ended September 30, 2018 to approximately $0.8 million for the three months ended September 30, 2019. The increase was attributable to the restructuring of Hubei Shengrong and ~~are largely associated with our governance and public reporting, due diligence consulting fees and legal fees~~acquisition of Rong Hai.

We provided a recovery of doubtful accounts of approximately ~~$371,000~~$38,000 during the three months ended September 30, 2019. At the beginning of 2017, we were trying to expand our trading of industrial waste materials business and gaining market shares by granting a 30 days credit term of the revenue to our customers. We did not collect our accounts receivable per credit term as expected. As a result, we started to assess the potential losses and provide provision of allowances on the accounts receivable during the three months ended September 30, 2019.

Income (loss) from Operations

As a result of the foregoing, income from operations for the three months ended September 30, 2019 was approximately $0.2 million, a decrease of approximately $0.12 million, or approximately 37.8%, from approximately $0.32 million income from operations for the three months ended September 30, 2018. As a percentage of total revenues, income from operations changed to approximately 2.9% during the three months ended September 30, 2019 from approximately 10.3% income from operations during the same period in 2018. The decrease was mostly driven by the increase of revenues from the lower profit margin products, coating and fuel materials and the decrease of revenues from the higher profit margin products, solid waste recycling equipment and systems as discussed above.

Other Expense

The Company’s other expense consists of interest income, interest expense and other income expense, net. The Company’s other expense was approximately $3,000 during the three months ended September 30, 2019, an decrease of approximately $14,000, or approximately 78.4%, as compared to other income of approximately $17,000 during the same period in 2018. The decrease of other income was mainly attributable to the decrease of interest expense of approximately $37,000 during the three months ended September 30, 2019 after the restructuring of Shengrong WFOE where our bank loans were held.

Provision for Income Taxes

The Company’s provision for income tax was approximately $0.06 million during the three months ended September 30, 2019, compared to approximately $0.06 million for the same period in 2018. The increase is mainly due to increased nondeductible expense. As a result the effective tax rate increased from 19.2% for the three months ended September 30, 2018 to 30.3% for the three months ended September 30, 2019.

Net Income (Loss)

As a result of the foregoing, net income decreased by approximately $0.1 million, or 44.3%, to approximately $0.1 million net income for the three months ended September 30, 2019, from approximately $0.2 million net income for the same period in 2018.

Nine Months Ended September 30, 2019 vs. September 30, 2018

									Percentage
	2019		2018			Change			Change
Revenues – Equipment and systems	$	3,640,256	$	15,393,627		$	(11,753,371	)		(76.4	)%
Revenues – Coating and fuel materials		22,524,732		2,653,187			19,871,545			749.0	%
Revenues – Trading and others		631,686		1,852,812			(1,221,126	)		(65.9	)%
Total revenues		26,796,674		19,899,626			6,897,048			34.7	%
Cost of Revenues – Equipment and systems		1,372,283		12,944,978			(11,572,695	)		(89.4	)%
Cost of Revenues – Coating and fuel materials		21,571,468		1,838,776			19,732,692			1073.1	%
Cost of Revenues – Trading and others		312,299		1,295,066			(982,767	)		(75.9	)%
Total cost of revenues		23,256,050		16,078,820			7,177,230			44.6	%
Gross profit		3,540,624		3,820,806			(280,182	)		(7.3	)%
Operating expenses (income)		2,487,700		(19,854	)		2,507,554			12630.0	%
(Loss) Income from operations		1,052,924		3,840,660			(2,787,736	)		(72.6	)%
Other income (expense), net		15,701		(91,367	)		107,068			117.2	%
Provision for income taxes		305,609		739,284			(433,675	)		(58.7	)%
Net income	$	763,016	$	3,010,009		$	(2,246,993	)		(74.7	)%

Revenues

The Company’s revenue consists of solid waste recycling systems and equipment revenue, coating and fuel materials revenue, and trading and others revenue. Total revenues increased by approximately $6.9 million, or approximately 34.7%, to approximately $26.8 million for the nine months ended September 30, 2019, compared to approximately $19.9 million for the nine months ended September 30, 2018. The overall increase in total revenue was attributable to the increased sales of coating materials after the acquisition of Wuhan HOST and increased sales of fuel materials after the acquisition of Rong Hai and offset by the decreased sales of solid waste recycling systems and equipment and trading industrial waste materials.

Equipment and Systems Revenue

Revenue of solid waste recycling systems and equipment decreased by approximately $11.8 million, or 76.4%, to $3.6 million for the nine months ended September 30, 2019, compared to approximately $15.4 million for the nine months ended September 30, 2018. The decrease in revenues was due to the decrease of solid waste recycling equipment and systems orders. As we restructured Hubei Shengrong, we were in the process of searching for the suitable vendors to produce our products in 2019 and to continue on our solid waste recycling equipment and systems business. As a result, Shengrong WFOE did not generate any new waste recycling system infrastructure revenue in the first three quarters of 2019. Our revenues from solid waste recycling systems and equipment on numbers of units sold and built and its average selling price are summarized as follows:

	For the nine months ended September 30, 2019		For the nine months ended September 30, 2018		Change			Change (%)

Solid waste recycling equipment sold		6		7		(1	)		(14.3	)%
Average selling price	$	580,358	$	525,035	$	55,323			10.5	%
Solid waste recycling system infrastructure sold		-		3		(3	)		(100.0	)%
Average selling price	$	-	$	3,906,128	$	(3,906,128	)		(100.0	)%

During the nine months ended September 30, 2019, we sold 6 units of solid waste recycling equipment with an average selling price of $580,358 per unit as compared to 7 units sold with an average selling price of $525,035 during the nine months ended September 30, 2018. The decrease in units sold of 1 units or 14.3% during the nine months ended September 30, 2019 as compared to the same period in 2018 were mainly due to that Shengrong WFOE were in the process of searching for the suitable vendors to produce our products in 2019 and to continue on our solid waste recycling equipment and systems business after the restructuring of Hubei Shengrong.

During the nine months ended September 30, 2019, we did not sell any solid waste recycling system infrastructure as compared to 3 units sold with an average selling price of $3,906,128 during the nine months ended September 30, 2018. The decrease in units sold of 3 units or 100.0% during the nine months ended September 30, 2019 as compared to the same period in 2018 were mainly due to that Shengrong WFOE were in the process of searching for the suitable vendors to produce our products in 2019 and to continue on our solid waste recycling equipment and systems business after the restructuring of Hubei Shengrong.

Coating and Fuel Revenue

During the nine months ended September 30, 2019, we sold 2,522,176 kilograms of coating materials with an average selling price of approximately $ 2.6 per kilogram and sold 203,990 tons of coal with an average selling price of approximately $78.77 per ton. During the nine months ended September 30, 2018, we sold 1,057,544 kilograms of coating materials with an average selling price of approximately $2.51 per kilogram. We had not yet acquired Rong Hai by September 30, 2018, so no coal business operations during the third quarter in 2018.

Trading and Others Revenue

Revenues of trading of industrial waste materials and other general merchandises decreased by approximately $1.2 million or 65.9%, to approximately $632,000 for the nine months ended September 30, 2019, compared to approximately $1.9 million for the nine months ended September 30, 2018. The decrease in revenues was attributable to the decreased amount of industrial waste materials traded during the nine months ended September 30, 2019 as compared to the same period in 2018. Our revenues from trading of industrial waste materials and others revenues are summarized as follows:

	For the nine months ended September 30, 2019		For the nine months ended September 30, 2018		Change			Change (%)
Acid Hydrolysis Titanium Dioxide	$	-	$	293,018		(293,018	)		(c100.0	)
Petroleum FCC Catalyst		-		293,018		(293,018	)		(100.0	)
Ilmenite Tailings		-		542,625		(542,625	)		(100.0	)
Copper Smelting Tailings		-		723,500		(723,500	)		(100.0	)
Others revenues		631,686		651		631,035			(96933.2	)
Total	$	631,686	$	1,852,812		(1,221,126	)		(65.9	)

Our total sold quantity of each kind of industrial waste materials and their average selling price are summarized as follows:

	For the nine months ended September 30, 2019		For the nine months ended September 30, 2018		Change			Change (%)

Acid Hydrolysis Titanium Dioxide (quantity in tons)		-		225		(225	)		(100	)
Average selling price	$	-	$	1,302	$	(1,302	)		(100	)
Petroleum FCC Catalyst (quantity in tons)		-		225		(225	)		(100	)
Average selling price	$	-	$	1,302	$	(1,302	)		(100	)
Ilmenite Tailings (quantity in tons)		-		625		(625	)		(100	)
Average selling price	$	-	$	868	$	(868	)		(100	)
Copper Smelting Tailings (quantity in tons)		-		625		(625	)		(100	)
Average selling price	$	-	$	1,158	$	(1,158	)		(100	)

Starting from July 2016, we commenced our industrial waste materials trading business, pursuant to which we directly order the processed industrial waste materials from our suppliers of industrial waste materials, then under our specifications per contract, drop ship the processed industrial waste materials directly to our customers. We inspect the materials at our industrial waste materials customers’ site, during which inspection we temporarily assume legal title to the materials, and after which inspection legal title is transferred to the customers. In these situations, we generally collect the sales proceed directly from our customers and pay for the inventory purchases to our suppliers separately.

During the nine months ended September 30, 2019, the decrease of revenues from trading industrial waste materials was due to the fact that we did not generate any revenues from trading industrial waste materials as compared to an aggregate of 1,700 tons of Ilmenite Tailings and Copper Smelting Tailings during the same period in 2018. Our trading of industrial waste materials are dependent on the progress of our recycling equipment end users and when they are able to sell those industrial waste materials to our suppliers to process the waste. During the nine months ended September 30, 2019, we had less resources to trade the aforementioned industrial waste materials as compared to the same period in 2018 as the enterprises who has the resources of the industrial waste materials were closed for production during the year ended December 31, 2018 and during the nine months ended September 30, 2019 due to inspection from the environment group of the Chinese government until the enterprises were able to pass the environmental inspection, which reduced the resource for our trading of industrial waste material. In addition, Shengrong WFOE were in the process of searching for the suitable vendors to produce our products in 2019 and to continue on our solid waste recycling equipment and systems business after the restructuring of Hubei Shengrong, which we currently do not have new resource to acquire the industrial waste material. As a result, we did not generate any trading revenue in the second quarter of 2019. Once the suitable vendors are located, we expect our revenues will be on a rise again.

Our other revenues increased by approximately ~~$95,000~~$ 631,035, or 96933.2%, to approximately $ 631,686 for the nine months ended September 30, 2019 as compared to $651 for the nine months ended September 30, 2018. The increase was mainly due to the fact that we included nine month harbor cargo handling revenue after the acquisition of Rong Hai and the revenue is more than TJComex’s other revenue made during the nine months ended September 30, 2018.

Cost of Revenues

The Company’s cost of revenues consists of cost of solid waste recycling systems and equipment revenue, cost of coating and fuel materials revenue, and cost of trading and others revenue. Total cost of revenues increased by approximately $7.2 million, or approximately 44.6% to approximately $23.3 million for the nine months ended September 30, 2019, compared to approximately $16.1 million for the same period in ~~investment income.~~2018. Our total cost of revenues increased was because coating and fuel materials generally have a lower profit margin than solid waste recycling equipment and systems.

Cost of Equipment and Systems Revenue

Cost of solid waste recycling systems and equipment revenue decreased by approximately $11.6 million, or 89.4% to $1.4 million for the nine months ended September 30, 2019, compared to approximately $12.9 million for the same period in 2018. The decrease in cost of solid waste recycling systems and equipment revenue was in line with the decreased sales volume of solid waste recycling equipment and systems.

Cost of Coating and Fuel Materials Revenue

During the nine months ended September 30, 2019, we sold 2,522,176 kilograms of coating materials with an average unit cost of approximately $2.2 per kilogram and sold 203,990 tons of coal with an average unit cost of approximately $78.3 per ton. During the nine months ended September 30, 2018, we sold 1,057,544 kilograms of coating materials with an average unit cost of approximately $ 1.74 per kilogram . We had not yet acquired Rong Hai by September 30, 2018, as a result, no coal business operations during the second quarter in 2018.

Cost of Trading and Others Revenue

Cost of trading of industrial waste materials and others revenue decreased by approximately $1 million or 75.9%, to approximately $0.3 million for the nine months ended September 30, 2019, compared to $1.3 million for the same period in 2018. The decrease was in line with the decrease in revenues of trading of industrial waste materials and other general merchandises. Our cost of revenues from trading of industrial waste materials and others revenues are summarized as follows:

	For the nine months ended September 30, 2019		For the nine months ended September 30, 2018		Change			Change (%)
Industrial waste materials trading
Acid Hydrolysis Titanium Dioxide	$	-	$	195,345	$	(195,345	)		(100.0	)
Petroleum FCC Catalyst		-		195,345		(195,345	)		(100.0	)
Ilmenite Tailings		-		361,750		(361,750	)		(100.0	)
Copper Smelting Tailings		-		542,626		(542,626	)		(100.0	)
Others cost of revenues		312,299		-		312,299			100.0
Total	$	312,299	$	1,295,066	$	(982,767	)		(75.9	)

Our total sold quantity of each kind of industrial waste materials and their average purchasing price are summarized as follows:

	For the nine months ended September 30, 2019		For the nine months ended September 30, 2018		Change			Change (%)

Acid Hydrolysis Titanium Dioxide (quantity in tons)		-		225		(225	)		(100.0	)
Average unit cost	$	-	$	868	$	(c868	)		(100.0	)
Petroleum FCC Catalyst (quantity in tons)		-		225		(225	)		(100.0	)
Average unit cost	$	-	$	868	$	(868	)		(100.0	)
Ilmenite Tailings (quantity in tons)		-		625		(625	)		(100.0	)
Average unit cost	$	-	$	579	$	(579	)		(100.0	)
Copper Smelting Tailings (quantity in tons)		-		625		(625	)		(100.0	)
Average unit cost	$	-	$	868	$	(868	)		(100.0	)

Gross Profit

The Company’s gross profit decreased by approximately $0.3 million, or 7.3%, to approximately $3.5 million during the nine months ended September 30, 2019, from approximately $3.8 million for the nine months ended September 30, 2018. For the nine months ended September 30, ~~2017,~~2019 and 2018, the Company’s gross margin was approximately 13.2% and 19.2%, respectively. The decrease in gross margin was primarily due to the increase of sales volume of coating and fuel materials as they have a smaller gross margin than solid waste recycling equipment and systems, which in turn, decreased our ~~operating costs included our search~~gross margin percentage from 19.2% for an initial business combination and are largely associated with our governance and public reporting, due diligence consulting fees and legal fees of approximately $615,000 and we recorded approximately $278,000 in investment income. For the three months ended September 30, 2016, our operating costs included our search for an initial business combination and are largely associated with our governance and public reporting, director fees and consulting fees of approximately $96,000 and we recorded approximately $18,000 in investment income. For the nine months ended September 30, ~~2016, our~~2018 to 13.2% for the nine months ended September 30, 2019. The gross margin of coating and fuel materials was approximately 4.2% for the nine months ended September 30, 2019.

Operating Expenses (Income)

The Company’s operating ~~costs included our search~~expenses (income) include selling, general and administrative (“SG&A”) expenses, and recovery of doubtful accounts.

SG&A expenses decreased by approximately $0.1 million, by approximately 5.0%, from approximately $2.4 million for ~~an initial business combination and are largely associated with our governance and public reporting, director fees and consulting fees of~~the nine months ended September 30, 2018 to approximately $513,000 and we recorded approximately $53,000 in investment income. We may need to raise additional capital through loans or additional investments from our sponsor, stockholders, officers, directors, or third parties. In order to fund transaction costs in connection with an intended initial business combination, our sponsor, members of our management team or their affiliates or other third parties may loan us additional amounts, provided any such loans will not have any claim on$2.2 million for the proceeds held in the trust account unless such proceeds are released to us upon completion of an initial business combination. If we do not consummate an initial business combination, we may use a portion of any working capital held outside the trust account to repay such loaned amounts; however, no proceeds from the trust account may be used for such repayment, other than interest income earned thereon. If such funds are insufficient to repay the loan amounts, the unpaid amounts would be forgiven. Any part or all of such loans may be converted into additional warrants at $0.50 per warrant (a maximum of 1,000,000 warrants if up to $500,000 is loaned and that amount is converted into warrants) of the post-business combination entity at the option of such parties.nine months ended September 30, 2019. The ~~warrants would be identical~~decrease was attributable to the ~~placement warrants issued to our sponsor. None~~restructuring of our sponsors, stockholders, officers or directors, or third parties, are under any obligation to advance us funds, or to invest in us. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of our business plan, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. These conditions raise substantial doubt about our ability to continue as a going concern.Hubei Shengrong.

We ~~are an emerging growth company as defined in~~provided a provision for doubtful accounts of approximately $0.3 million during the ~~JOBS Act. As an emerging growth company,~~nine months ended September 30, 2019. At the beginning of 2017, we ~~have elected, pursuant~~were trying to ~~Section 107(b)~~expand our trading of industrial waste materials business and gaining market shares by granting a 30 days credit term of the JOBS Act, to take advantage of the extended transition period provided in Securities Act Section 7(a)(2)(B) for complying with new or revised accounting standards. We will therefore delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. We may take advantage of this extended transition period until the earlier of the date we (i) are no longer an “emerging growth company” or (ii) affirmatively and irrevocably opt out of the extended transition period provided in Securities Act Section 7(a)(2)(B). As such, our financial statements may not be comparable to companies that comply with public company effective dates.

~~Upon the issuance of a new or revised accounting standard that applies~~revenue to our ~~financial statements~~customers. We did not collect our accounts receivable per credit term as expected. As a result, we started to assess the potential losses and ~~has a different effective date for public and private companies, we will disclose~~provide provision of allowances on the ~~date on which adoption is required for non-emerging growth companies and~~accounts receivable during the ~~date on which we will adopt the recently-issued accounting standard.~~

~~Liquidity and Capital Resources~~

~~As of~~nine months ended September 30, 2017, we had cash of $2,799. Subsequent to September 30, 2017, an affiliate of the Sunlong advanced us approximately $30,000. Until the consummation of our initial public offering on July 29, 2015, the Company’s only source of liquidity was an initial purchase of our shares of common stock and a series of advances made by an affiliate of the Company. These advances are non-interest bearing and unsecured. On July 29, 2015, we consummated our initial public offering of 5,000,000 units at a price of $10.00 per unit. Simultaneously with the consummation of our initial public offering, we consummated the private sale of 250,000 placement units to our sponsor. Each private placement unit consists of one share of common stock and one warrant to purchase one-half of one share of common stock at a price of $5.75 per half share, at a price of $10.00 per unit ($2,500,000 in the aggregate). We received net proceeds from our initial public offering and the private placement of approximately $50,650,000, net of the underwriting commissions and fees of $1,250,000 and offering costs and other expenses of approximately $600,000. $50,000,000 of the proceeds of our initial public offering and the private placement have been deposited in the trust account and are not available to us for operations (except amounts designated to pay taxes and working capital from the interest accrued). At September 30, 2017, we had approximately $3,000 of cash available outside of the trust account to fund our activities to search for an initial business combination. An affiliate of Sunlong orally agreed to fund the Company’s working capital needs through its Extension.

As of September 30, 2017, $40,434,721 was held in the Trust Account and we had cash outside of trust of $2,799 and $92,061 in accounts payable, $176,970 other payable, $37,369 accrued expenses and $140,500 due to affiliates. Through September 30, 2017, the Company had withdrawn $43,485 from interest earned on the trust proceeds and $9,631,120 upon redemption of 963,112 shares of common stock. Subsequent to September 30, 2017 and as of the date of this report, the Company withdrew approximately $28,000 from interest earned on the trust proceeds. Furthermore, no amounts are payable to the underwriters of our initial public offering in the event of a business combination.2019.

~~Off-Balance Sheet Arrangements~~Income (loss) from Operations

As a result of the foregoing, income from operations for the nine months ended September 30, ~~2017, we did not have any off-balance sheet arrangements~~2019 was approximately $1.1 million, a decrease of approximately $2.8 million, or approximately 72.6%, from approximately $3.8 million income from operations for the nine months ended September 30, 2018. As a percentage of total revenues, income from operations changed to approximately 3.9% during the nine months ended September 30, 2019 from approximately 19.3% income from operations during the same period in 2018. The decrease was mostly driven by the increase of revenues from the lower profit margin products, coating and fuel materials and the decrease of revenues from the higher profit margin products, solid waste recycling equipment and systems as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.discussed above.

~~Contractual Obligations~~

~~We do not have any long term debt, capital lease obligations, operating lease obligations or purchase obligations.~~

~~Critical Accounting Policies~~

~~Basis of presentation~~Other Income (Expense)

The ~~accompanying~~Company’s other income (expense) consists of interest income, interest expense and other income (expense), net. The Company’s other income was approximately $16,000 during the nine months ended September 30, 2019, an increase of approximately $107,000, or approximately 117.2%, as compared to other expense of approximately $91,000 during the same period in 2018. The increase of other income was mainly attributable to the decrease of interest expense of approximately $113,000 during the nine months ended September 30, 2019 after the restructuring of Shengrong WFOE where our bank loans were held.

Provision for Income Taxes

The Company’s provision for income tax was approximately $0.3 million during the nine months ended September 30, 2019, compared to approximately $0.7million for the same period in 2018. The decrease in provision for income taxes is in line with the decrease in income before income taxes. Under the Income Tax Laws of the PRC, companies are generally subject to income tax at a rate of 25%. However, the Company’s 100% subsidiary, Wuhan Host obtained the same status in 2016, which reduced their statutory income tax rate to 15%. Wuhan Host’s “high-tech enterprise” status can reduce its statutory income rate to 15% from 2016 to 2019. However, we have incurred approximately $0.3 million of non-deductible expenses for income tax purpose, as a result the effective tax rate increased from 19.7% for the six months ended September 30, 2018 to 28.6% for the nine months ended September 30, 2019.

Net Income

As a result of the foregoing, net income decreased by approximately $2.2 million, or 74.7%, to approximately $0.8 million net income for the nine months ended September 30, 2019, from approximately $3.0 million net income for the same period in 2018.

Critical Accounting Policies and Estimates

The preparation of the unaudited ~~interim~~condensed financial statements ~~are presented in U.S. dollars~~ in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of ~~America (‘‘GAAP’’) for interim information~~commitments and in accordance with the instructions to Form 10-Q and Article 8 and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying financial statements do not include all of the information and notes required by GAAP for a complete financial statement presentation. These financial statements should be read in conjunction with the Company’s annual Form 10-K filing. In the opinion of management, the interim financial statements reflect all adjustments (consisting of normal, recurring adjustments)contingencies, if any. We have identified certain accounting policies that are ~~necessary~~significant to the preparation of our unaudited condensed consolidated financial statements. These accounting policies are important for ~~a fair presentation~~an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial ~~position,~~conditions and results of operations and ~~cash flows for the interim periods presented. Interim results are not necessarily indicative of results for~~require management’s difficult, subjective, or complex judgment, often as a ~~full year and pursuant to the rules and regulations~~result of the ~~SEC.~~need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our unaudited condensed consolidated financial statements.

~~Net loss per common share~~Accounts receivable, net

Inventories

Inventories are comprised of raw materials, work in progress and finished goods and are stated at the lower of cost or net realizable value using the first-in-first-out method in Shengrong WFOE and weighted average method in Wuhan HOST and Rong Hai. Management reviews inventories for obsolescence and cost in excess of net realizable value at least annually and records a reserve against the inventory when the carrying value exceeds net realizable value.

Prepayments

Prepayments are funds deposited or advanced to outside vendors for future inventory purchases. As a standard practice in China, many of the Company’s vendors require a certain amount to be deposited with them as a guarantee that the Company will complete its purchases on a timely basis. This amount is refundable and bears no interest. The Company has legally binding contracts with its vendors, which require any outstanding prepayments to be returned to the Company when the contract ends.

Fair value measurement

The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by us. The Company ~~complies with~~considers the carrying amount of cash, notes receivable, accounts receivable, other receivables, prepayments, accounts payable, other payables and accrued liabilities, customer deposits, short term loans and taxes payable to approximate their fair values because of their short term nature.

The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding for the period. At September 30, 2017, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted loss per common share is the samefair value measures. The three levels are defined as ~~basic loss per common share for the periods presented.~~follow:

23●

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

●

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

~~Concentration of credit risk~~

●

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

Financial instruments ~~that potentially subject~~included in current assets and current liabilities are reported in the ~~Company to concentration~~consolidated balance sheets at face value or cost, which approximate fair value because of ~~credit risk consist~~the short period of ~~cash accounts in a financial institution which, at times may exceed~~time between the ~~Federal Depository Insurance Corporation coverage~~origination of ~~$250,000. The Company has not experienced losses on these accounts~~such instruments and ~~management believes the Company is not exposed to significant risks on such accounts.~~their expected realization and their current market rates of interest.

~~Fair value of financial instruments~~Revenue recognition

~~The fair value~~On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (ASC 606) using the modified retrospective method for contracts that were not completed as of January 1, 2018. This did not result in an adjustment to retained earnings upon adoption of this new guidance as the Company’s revenue, other than warranty revenues, was recognized based on the amount of consideration we expect to receive in exchange for satisfying the performance obligations. However, the impact of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature.

~~Use of estimates~~

The preparation of financial statements in conformity with 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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~Income taxes~~

The Company complies with the accounting and reporting requirements of FASB ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

FASB ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits as of September 30, 2017. No amounts were accrued for the payment of interest and penalties at September 30, 2017. The Company is currentlywarranty revenue was not ~~aware of any issues under review that could result in significant payments, accruals or~~ material ~~deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.~~

~~Cash and cash equivalents~~

~~Cash and securities held in Trust Account~~

~~At September 30, 2017 and December 31, 2016, substantially all of the assets held in the Trust Account were held in U.S. Treasury Bills.~~

~~Accrued expenses and due to affiliate~~

~~Due to affiliate represents entity costs and offering costs paid by an affiliate on behalf of the Company. These advances are non-interest bearing, unsecured and payable on demand.~~

~~Redeemable common stock~~

The core principle underlying the revenue recognition ASU is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are primarily recognized at a point in time except for the warranty revenues where the warranty periods are recognized over the warranty period, usually is a period of twelve months.

Prior to January 1, 2018, the Company allowed its customers to retain 5% to 10% of the contract price as retainage during the warranty period of 12 months to guarantee product quality. Retainage is considered as a payment term included as a part of the contract price, and was recognized as revenue upon the shipment of products. Due to nature of the retainage, the Company’s policy is to record revenue the full value of the contract without VAT, including any retainage, since the Company has experienced insignificant warranty claims historically. Due to the infrequent and insignificant amount of warranty claims, the ability to collect retainage was reasonably assured and was recognized at the time of shipment. On January 1, 2018, upon the adoption of ASU 2014-09 (ASC 606), revenues from product warranty are recognized over the warranty period over 12 months.

Payments received before all of the relevant criteria for revenue recognition are recorded as customer deposits.

Gross versus Net Revenue Reporting

Recently ~~issued accounting standards~~Issue Accounting Pronouncements

~~Management does~~In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. We do not believe ~~that any~~the adoption of this ASU would have a material effect on our consolidated financial statements.

We do not believe other recently issued but not yet effective accounting ~~pronouncements,~~standards, if currently adopted, would have a material effect on our consolidated balance sheets, statements of income and comprehensive income and statements of cash flows.

Liquidity and Capital Resources

The Company has funded working capital and other capital requirements primarily by equity contributions, loans from shareholders, cash flow from operations, short term bank loans, loans from third parties and cash received from JM Global Holding Company through the reverse capitalization. Cash is required to repay debts and pay salaries, office expenses, income taxes and other operating expenses. As of September 30, 2019, our net working capital was approximately $0.8 million, over 34% of the Company’s current liabilities was from other payables – related parties due to major shareholders. Removing these liabilities, the Company had net working capital of $5.1 million and is expected to continuing generate cash flow from operations in the twelve months period.

We believe that current levels of cash and cash flows from operations will be sufficient to meet its anticipated cash needs for at least the next twelve months from the date the consolidated financial ~~statements.~~statements to be issued. However, it may need additional cash resources in the future if it experiences changed business conditions or other developments, and may also need additional cash resources in the future if it wishes to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements exceed the Company’s amounts of cash and cash equivalents on hand, the Company may seek to issue debt or equity securities or obtain additional credit facility.

The following summarizes the key components of the Company’s cash flows for the nine months ended September 30, 2019 and 2018.

	For the Nine Months ended September 30,
	2019			2018

Net cash used in operating activities	$	(1,586,869	)	$	(1,915,772	)
Net cash (used in) provided by investing activities		(16,596	)		1,744,711
Net cash provided by provided by financing activities		2,473,930			676,404
Effect of exchange rate change on cash		(175,730	)		(77,982	)
Net change in cash	$	694,735		$	427,361

As of September 30, 2019 and December 31, 2018, the Company had cash in the amount of $1,421,472 and $726,737, respectively. As of September 30, 2019 and December 31, 2018, $1,413,856 and $680,709 and were deposited with various financial institutions located in the PRC, respectively. As of September 30, 2019 and December 31, 2018, $352 and $7,823 were deposited with one financial institution located in Hong Kong, respectively.

Operating activities

Net cash used in operating activities was approximately $1.6 million for the nine months ended September 30, 2019, as compared to approximately $1.9 million net cash used in operating activities for the nine months ended September 30, 2018. Net cash used in operating activities was mainly due to approximately $0.4 million of depreciation expense of plant and equipment and amortization expense of intangible assets, the increase of approximately $1.0 million accounts payable, the increase of approximately $0.6 million taxes payable, the decrease of approximately $1.7 million other payables and accrued liabilities, and the increase of approximately $0.7 million of customer deposits. Net cash used in operating activities for the nine months ended September 30, 2019 was mainly offset by approximately $0.8 million of net income from our operations, the increase of approximately $0.6 million of notes receivable as our customers used more notes receivable for payment which we needs to wait approximately 3 to 6 months to deposit the notes, the increase of approximately $2.6 million of accounts receivable as we granted more receivables to customers with good credit history, the decrease of approximately $0.2 million of other receivables, the increase of approximately $1.0 million of prepayments , and the decrease of approximately $0.5 million of inventories.

Investing activities

Net cash used in investing activities was approximately $17,000 for the nine months ended September 30, 2019, as compared to approximately $1.7million net cash provided by investing activities for the nine months ended September 30, 2018. Net cash used in investing activities for the nine months ended September 30, 2019 was due to approximately $17,000 spending on purchase of equipment.

Financing activities

Net cash provided by financing activities was approximately $2.5 million for the nine months ended September 30, 2019, as compared to approximately $0.7 million net cash provided by financing activities for the nine months ended September 30, 2018. Net cash provided by financing activities for the nine months ended September 30, 2019 was due to approximately $2.5 million proceeds from issuance of common stock.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~All activity~~Credit Risk

Credit risk is one of the most significant risks for the Company’s business.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and accounts receivable. Cash held at major financial institutions located in the PRC are not insured by the government. While we believe that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.

Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risk. Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. The Company manages credit risk through ~~September 30, 2017 relates~~in-house research and analysis of the Chinese economy and the underlying obligors and transaction structures. To minimize credit risk, the Company normally require prepayment from the customers prior to begin production or delivery products. The Company identifies credit risk collectively based on industry, geography and customer type. This information is monitored regularly by management.

In measuring the credit risk of our sales to our ~~formation~~customers, the Company mainly reflects the “probability of default” by the customer on its contractual obligations and considers the current financial position of the customer and the ~~preparation for our Initial Public Offering. We did not have any financial instruments that were~~exposures to the customer and its likely future development.

Liquidity Risk

The Company is also exposed to ~~market risks~~liquidity risk which is risk that it is unable to provide sufficient capital resources and liquidity to meet its commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, the Company will turn to other financial institutions and the owners to obtain short-term funding to meet the liquidity shortage.

Inflation Risk

The Company is also exposed to inflation risk. Inflationary factors, such as increases in raw material and overhead costs, could impair our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses as a percentage of sales revenue if the selling prices of our products do not increase with such increased costs.

Foreign Currency Risk

A majority of the Company’s operating activities and a significant portion of the Company’s assets and liabilities are denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples’ Bank of China (“PBOC”) or other authorized financial institutions at ~~September 30, 2017.~~exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, ~~2017.~~2019. Based upon ~~his~~their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were not effective.

~~During the most recently completed fiscal quarter, there has been~~There were no ~~change~~changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that ~~has~~have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

Factors that could cause our actual results to differ materially from those in this report are any of the risks described in our annual report and Form 10-K filed with the SEC on March 28, 2017. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Report, there have been no material changes to the risk factors disclosed in our annual report and Form 10-K filed with the SEC on March 28, 2017, except we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.Not applicable for smaller reporting companies.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None.~~On April 4, 2019, the Company entered into certain securities purchase agreement (the “SPA”) with certain “non-U.S. Persons” (the “Purchasers”) as defined in Regulation S of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to which the Company agreed to sell 1,492,000 shares of its common stock, par value $0.0001 per share, at a per share purchase price of $2.00. The net proceeds to the Company from this offering were approximately $2.9 million.

The shares issued in the SPA are exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Regulation S promulgated thereunder.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

Exhibit Number		Description
10.1**		Share Exchange Agreement, dated as of August 28, 2017, by and among JM Global Holding Company, Zhong Hui Holding Limited, in the capacity as the Purchaser Representative thereunder, China Sunlong Environmental Technology, Inc., the shareholders of China Sunlong Environmental Technology, Inc., and Chuanliu Ni, in the capacity as the Seller Representative thereunder.
10.2**31.1		Form of Registration Rights Agreement, by and among JM Global Holding Company, Zhong Hui Holding Limited, in the capacity as the Purchaser Representative, and shareholders of China Sunlong Environmental Technology, Inc. named as Investors therein.
10.3**		Form of Lock-Up Agreement, by and among JM Global Holding Company, Zhong Hui Holding Limited, in the capacity as the Purchaser Representative, and shareholders of China Sunlong Environmental Technology, Inc.
10.4**		Form of Non-Competition and Non-Solicitation Agreement, by and among certain shareholders of China Sunlong Environmental Technology, Inc. and certain other associated persons and entities for the benefit of JM Global Holding Company, Zhong Hui Holding Limited, in the capacity as the Purchaser Representative, and China Sunlong Environmental Technology, Inc.
10.5*		~~Side Letter, dated as of October 10, 2017, by and among JM Global Holding Company, the Reporting Persons and Cantor Fitzgerald & Co.~~
31.1*		Certification of the Chief Executive Officer ~~and~~required by Rule 13a-14(a) or Rule 15d-14(a).
31.2		Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).
~~32.1#~~32.1		Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
32.2		Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
101.INS*101.INS		XBRL Instance Document
101.SCH*101.SCH		XBRL Taxonomy Extension Schema
101.CAL*101.CAL		XBRL Taxonomy Extension Calculation Linkbase
101.DEF*101.DEF		XBRL Taxonomy Extension Definition Linkbase
101.LAB*101.LAB		XBRL Taxonomy Extension Label Linkbase
101.PRE*101.PRE		XBRL Taxonomy Extension Presentation Linkbase

~~Filed herewith.~~

~~Furnished herewith.~~

~~Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on September 1, 2017.~~

SIGNATURES

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

	~~JM GLOBAL~~TMSR HOLDING COMPANY LIMITED

Date: November 14, ~~2017~~2019	By:	/s/ ~~Tim Richerson~~Yimin Jin
	Name:	~~Tim Richerson~~Yimin Jin
	Title:	Chief Executive Officer and ~~Chief Financial Officer~~Co-Chairman of the Board
		(Principal Executive ~~Officer and~~ ~~Principal Financial and Accounting~~ Officer)

2751

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~☒	Smaller reporting company	☒
		Emerging growth company	☒

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001	TMSR	Nasdaq Capital Market
Warrants to purchase one-half of one share of Common Stock	TMSRW	OTC Pink

		Page
PART I.	FINANCIAL INFORMATION	1

ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	1
	~~Condensed Interim Balance Sheets at September 30, 2017 (unaudited) and December 31, 2016~~	1
	~~Condensed Interim Statements of Operations for the three and nine months ended September 30, 2017 (unaudited) and September 30, 2016 (unaudited)~~	2
	~~Condensed Interim Statements of Stockholders’ Equity for the periods ended December 31, 2016 and September 30, 2017 (unaudited)~~	3
	~~Condensed Interim Statements of Cash Flows for the periods ended September 30, 2017 and September 30, 2016 (unaudited)~~	4
	~~Notes to Condensed Interim Financial Statements (unaudited)~~	5

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	1932

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2548

ITEM 4.	CONTROLS AND PROCEDURES	2549

PART II.	OTHER INFORMATION	2650

ITEM 1.	LEGAL PROCEEDINGS	2650

ITEM 1A.	RISK FACTORS	2650

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	2650

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	2650

ITEM 4.	MINE SAFETY DISCLOSURES	2650

ITEM 5.	OTHER INFORMATION	2650

ITEM 6.	EXHIBITS	2650

	September 30,			December 31,
	2019			2018
	(Unaudited)
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	1,421,472		$	726,737
Notes receivable		824,486			251,513
Accounts receivable, net		6,584,610			4,191,246
Other receivables, net		87,509			265,833
Other receivable - related party		-			40,707
Inventories		1,419,447			1,965,433
Prepayments		3,058,369			2,218,148
Total current assets		13,395,893			9,659,617

PLANT AND EQUIPMENT, NET		5,285,662			5,761,332

RIGHT-OF-USE ASSETS		234,689			-

OTHER ASSETS
Goodwill		13,821,630			14,339,050
Intangible assets, net		2,555,905			2,790,095
Other assets		4,204			97,020
Deferred tax assets		250,986			205,863
Total other assets		16,632,725			17,432,028

Total assets	$	35,548,969		$	32,852,977

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES
Short term loans - bank	$	-		$	508,832
Third party loan		-			144,841
Accounts payable		2,467,639			1,448,623
Other payables and accrued liabilities		2,152,392			2,755,126
Other payables - related parties		4,269,842			6,092,286
Customer deposits		2,951,652			2,338,336
Lease liabilities - current		126,888			-
Taxes payable		580,381			55,749
Total current liabilities		12,548,794			13,343,793

OTHER LIABILITIES
Third party loan - noncurrent		140,135			145,381
Lease liabilities - noncurrent		181,837			-
Total other liabilities		321,972			145,381

Total liabilities		12,870,766			13,489,174

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS’ EQUITY
Preferred stock, $0.0001 par value, 20,000,000 shares authorized, no shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively					-
Common stock, $0.0001 par value, 200,000,000 shares authorized, 21,768,698 and 19,895,935 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively*		2,177			1,990
Additional paid-in capital		8,350,766			4,814,846
Statutory reserves		-			-
Retained earnings		16,030,676			15,267,660
Accumulated other comprehensive loss		(1,705,416	)		(720,693	)
Total shareholders’ equity		22,678,203			19,363,803

Total liabilities and shareholders’ equity	$	35,548,969		$	32,852,977

	For the Nine Ended September 30, 2018
	Preferred Stock				Common Stock				Additional		Retained Earnings					Accumulated Other
	Shares		Amount		Shares		Amount		Paid-in Capital		Statutory Reserves		Unrestricted			Comprehensive Income (Loss)			Total
BALANCE, January 1, 2018		-	$	-		17,990,856	$	1,799	$	10,591,492	$	2,137,815	$	13,817,668		$	701,217		$	27,249,991
Reverse capitalization		-		-		4,758,774		476		7,453,773		-		-			-			7,454,249
Net income		-		-		-		-		-		-		3,010,009			-			3,010,009
Issuance of common stock for cash		-		-		26,693		3		133,332		-		-			-			133,335
Issuance of common stock for acquisition		-		-		1,012,932		101		4,699,899		-		-			-			4,700,000
Statutory reserve		-		-		-		-		-		121,517		(121,517	)		-			-
Foreign currency translation		-		-		-		-		-		-		-			(2,572,115	)		(2,572,115	)
BALANCE, September 30, 2018 (Unaudited)		-	$	-		23,789,255	$	2,379	$	22,878,496	$	2,259,332	$	16,706,160		$	(1,870,898	)	$	39,975,469

	For the Nine Ended September 30, 2019
	Preferred Stock				Common Stock				Additional			Retained Earnings				Accumulated Other
									Paid-in			Statutory				Comprehensive
	Shares		Amount		Shares		Amount		Capital			Reserves		Unrestricted		Income (Loss)			Total
BALANCE, January 1, 2019		-		-		19,895,935		1,990		4,814,846			-		15,267,660		(720,693	)		19,363,803
Net income		-		-		-		-		-			-		763,016		-			763,016
Conversion of warrants into common stock		-		-		106,903		11		(11	)		-		-		-			-
Issuance of common stock for debt settlement		-		-		131,330		13		261,334			-		-		-			261,347
Issuance of common stock for debt settlement		-		-		142,530		14		290,747			-		-		-			290,761
Issuance of common stock for cash		-		-		1,492,000		149		2,983,850			-		-		-			2,983,999
Foreign currency translation		-		-		-		-		-			-		-		(984,723	)		(984,723	)
BALANCE, September 30, 2019 (Unaudited)		-	$	-		21,768,698	$	2,177	$	8,350,766		$	-	$	16,030,676	$	(1,705,416	)	$	22,678,203

	September 30, 2017			December 31, 2016
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	2,799		$	150,306
Prepaid assets		22,622			15,580
Total current assets		25,421			165,886

Trust account (See Note 7)		40,434,721			50,109,326

Total assets	$	40,460,142		$	50,275,212
LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:
Accounts payable	$	92,061		$	19,922
Accrued expenses		214,339			82,647
Due to affiliates		140,500			140,500
Total current liabilities		446,900			243,069

Common stock subject to possible redemption: 3,036,888 and 4,000,000 shares (at a redemption value of approximately $10 per share) at September 30, 2017 and December 31, 2016, respectively (See Note 3)		30,368,880			40,000,000
Commitments and contingencies

STOCKHOLDERS’ EQUITY:
Preferred stock, $0.0001 par value, 1,000,000 shares authorized; none issued and outstanding
Common stock, $0.0001 par value, 15,000,000 shares authorized; 2,562,500 shares issued and outstanding (excluding 3,036,888 and 4,000,000 shares subject to redemption) at September 30, 2017 and December 31, 2016, respectively (See Note 3)		256			256
Additional paid-in capital		10,807,708			10,807,708
Accumulated deficit		(1,163,602	)		(775,821	)
Total stockholders’ equity		9,644,362			10,032,143
Total liabilities and stockholders’ equity	$	40,460,142		$	50,275,212

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

Revenue	$	-		$	-		$	-		$	-

Operating expenses		371,161			96,174			615,384			512,981

Loss from operations		(371,161	)		(96,174	)		(615,384	)		(512,981	)

Interest income		94,560			17,513			227,603			53,497
Net loss attributable to common stock (excluding shares subject to possible redemption)	$	(276,601	)	$	(78,661	)	$	(387,781	)	$	(459,484	)

Basic and diluted net loss per share	$	(0.11	)	$	(0.03	)	$	(0.15	)	$	(0.18	)

Weighted average number of common stock outstanding
Basic and diluted (excluding shares subject to possible redemption)		2,562,500			2,562,500			2,562,500			2,562,500

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

Cash flows from operating activities:
Net loss	$	(387,781	)	$	(459,484	)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issuable for consulting fees					97,600
Stock-based compensation for director fees					15,546
Changes in operating assets and liabilities
Increase in prepaid expenses		(7,042	)		(3,882	)
Increase (decrease) in accounts payable		72,139			(26,970	)
Increase in accrued expenses		131,692			18,077
Net cash used in operating activities		(190,992	)		(359,113	)

Cash flows from investing activities:

Withdrawal from Trust Account upon redemption of 963,112 shares		9,631,120
Interest income withdrawal (reinvested) in Trust Account		43,485			(53,497	)
Net cash provided by (used in) investing activities		9,674,605			(53,497	)

Cash flows from financing activities:
Redemption of 963,112 shares		(9,631,120	)		-
Net cash used in financing activities		(9,631,120	)		-

Net change in cash		(147,507	)		(412,610	)
Cash, beginning of period		150,306			623,044

Cash, end of period	$	2,799		$	210,434

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Non-cash operating and financing activities
Payments made directly to a vendor by an affiliate of China Sunlong Environmental Technology, Inc.	$	30,000		$	-
Cancellation of common stock issued for future services included in unamortized prepaid expenses	$	-		$	65,066

Name	Background		Ownership
China Sunlong	●	A Cayman Islands company	100% owned by the Company
Shengrong BVI	● ●	A British Virgin Island company Incorporated on June 30, 2015	100% owned by China Sunlong
Shengrong HK	● ●	A Hong Kong company Incorporated on September 25, 2015	100% owned by Shengrong BVI
Shengrong WFOE	●	A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”)	100% owned by Shengrong HK
	● ● ● ●	Incorporated on March 1, 2016 Registered capital of USD 12,946 (HKD100,000), fully funded Purchase and sales of high efficiency permanent magnetic separator and comprehensive utilization system Trading of processed industrial waste materials
Hubei Shengrong²	● ●	A PRC limited liability company Incorporated on January 14, 2009	100% owned by Shengrong WFOE
	●	Registered capital of USD 4,417,800 (RMB 30,000,000), fully funded
	● ●	Production and sales of high efficiency permanent magnetic separator and comprehensive utilization system. Trading of processed industrial waste materials
Wuhan HOST	● ● ●	A PRC limited liability company Incorporated on October 27, 2010 Registered capital of USD 750,075 (RMB 5,000,000), fully funded	100% owned by Shengrong WFOE
	●	Research, development, production and sale of coating materials.
Shanghai Host Coating Materials Co., Ltd. (“Shanghai HOST”)	● ● ●	A PRC limited liability company Incorporated on December 11, 2014 Registered capital of USD 3,184,371 (RMB 20,000,000), to be fully funded by November 2024
	●	No operations and no capital contribution has been made as of December 31, 2018	80% owned by Wuhan HOST

Wuhan HOST Coating Materials Xiaogan Co., Ltd. (“Xiaogan HOST”)	● ● ● ●	A PRC limited liability company Incorporated on December 25, 2018 Registered capital of USD 11,595,379 (RMB 80,000,000), to be fully funded by December 2028 No operations and no capital contribution has been made as of December 31, 2018	90% owned by Wuhan HOST
Jiangsu Rong Hai Electric Power Fuel Co., Ltd. (“Rong Hai”)	● ● ● ●	A PRC limited liability company Incorporated on May 20, 2009 Registered capital of USD 3,171,655 (RMB 20,180,000), fully funded Coal wholesales and sales of coke, steels, construction materials, mechanical equipment and steel scrap	VIE of Shengrong WFOE
TJComex BVI¹	● ●	A British Virgin Island company Incorporated on March 8, 2016	100% owned by China Sunlong
TJComex HK¹	● ●	A Hong Kong company Incorporated on March 19, 2014	100% owned by TJComex BVI
TJComex WFOE¹	●	A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”)	100% owned by TJComex HK
	●	Incorporated on March 10, 2004
	●	Registered capital of USD 200,000
TJComex Tianjin¹	● ●	A PRC limited liability company Incorporated on November 19, 2007	100% owned by TJComex WFOE
	●	Registered capital of USD 7,809,165 (RMB 55,000,000)
	●	General merchandise trading business and related consulting services

	Useful Life	Estimated Residual Value
Building	5 – 20 years		5	%
Office equipment and furnishing	5 years		5	%
Production equipment	3-10 years		5	%
Automobile	5 years		5	%
Leasehold improvements	Shorter of the remaining lease terms or estimated useful lives		0	%

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2019			2018		2019		2018
Revenues – Equipment and systems	$	668,714		$	506,988	$	3,640,256	$	15,393,627
Revenues – Trading and others		(7,611	)		1,022,817		631,686		1,852,812
Revenues –Coating and fuel materials		6,075,560			1,544,466		22,524,732		2,653,187
Total revenues	$	6,736,663		$	3,074,271	$	26,796,674	$	19,899,626

	Fair Value
Cash	$	276,626
Other current assets		6,763,767
Plant and equipment		6,499,268
Other noncurrent assets		2,139,987
Goodwill		7,544,008
Total asset		23,223,656
Total liabilities		(12,023,656	)
Net asset acquired	$	11,200,000

	Fair Value
Cash	$	717,056
Other current assets		5,980,230
Plant and equipment		28,875
Other noncurrent assets		116,655
Goodwill		7,307,470
Total asset		14,150,286
Total liabilities		(4,890,286	)
Net asset acquired	$	9,260,000

	December 27, 2018
CURRENT ASSETS
Cash and cash equivalents	$	47,994
Accounts receivable, net		9,410,436
Accounts receivable - related party, net		761,794
Other receivables		48,718
Other receivable - related party		2,158
Inventories		5,332,990
Prepayments		31,793,810
Total current assets		47,397,900

PLANT AND EQUIPMENT, NET		203,992

OTHER ASSETS
Other assets		7,269
Deferred tax assets		780,550
Total other assets		787,819

Total assets	$	48,389,711

CURRENT LIABILITIES
Short term loans - bank	$	2,180,708
Accounts payable		95,854
Other payables and accrued liabilities		156,498
Other payables - related parties		507,183
Customer deposits		347,853
Taxes payable		16,602,841
Total current liabilities		19,890,937

OTHER LIABILITIES
Deferred rent liabilities		30,763
Total other liabilities		30,763

Total liabilities	$	19,921,700

Total net assets	$	28,468,011
Total consideration		(30,362,135	)
Currency translation adjustment		900,281
Total addition to paid-in-capital	$	993,843

	For the nine months ended September 30,
	2019

Operating revenues	$	16,699,178
Gross profit		418,694
Income from operations		46,135
Net income	$	38,211

	September 30, 2019			December 31, 2018

Accounts receivable	$	7,402,699		$	4,924,092
Less: Allowance for doubtful accounts		(818,089	)		(732,846	)
Total accounts receivable, net	$	6,584,610		$	4,191,246

	September 30, 2019			December 31, 2018

Beginning balance	$	732,846		$	6,674,834
Beginning balance from Wuhan HOST		260,764			218,152
Beginning balance from Rong Hai		472,082			469,000
Depositing ending balance of Hubei Shengrong		-			(5,203,666	)
Addition		116,151			411,261
Recovery					(1,020,125	)
Exchange rate effect		(30,908	)		(816,610	)
Ending balance	$	818,089		$	732,846

	September 30, 2019		December 31, 2018

Raw materials	$	306,992	$	1,965,175
Work in progress		1,072		258
Finished Goods		1,111,383		-
Total inventories	$	1,419,447	$	1,965,433

	September 30, 2019			December 31, 2018

Building	$	5,423,055		$	5,626,071
Production equipment		936,348			954,845
Office equipment and furniture		56,970			59,102
Automobile		201,513			209,057
Subtotal		6,617,887			6,849,075
Less: accumulated depreciation and amortization		(1,332,225	)		(1,087,743	)
Total	$	5,285,662		$	5,761,332

	September 30, 2019			December 31, 2018

Land use rights	$	1,427,685		$	1,481,130
Patents		3,486,463			3,616,981
Software		9,855			10,224
Less: accumulated amortization		(2,368,098	)		(2,318,240	)
Net intangible assets	$	2,555,905		$	2,790,095

Twelve months ending September 30,	Estimated amortization expense

2020	$	169,494
2021		166,726
2022		166,558
2023		166,558
2024		166,172
Thereafter		1,720,397
Total	$	2,555,905

Name of related party	Relationship	September 30, 2019		December 31, 2018

Xiaonian Zhang	Shareholder of the Company	$	-	$	40,707

	For the three months ended September 30, 2019			For the three months ended September 30, 2018

Current	$	104,959		$	129,030
Deferred		(46,422	)		(71,676	)
Total provision for income taxes	$	58,537		$	57,354

	September 30, 2019			December 31, 2018

Net operating losses carried forward – U.S.	$	169,097		$	10,396
Net operating losses carried forward – PRC		-			-
Bad debt allowance		250,986			205,863
Valuation allowance		(169,097	)		(10,396	)
Deferred tax assets, net	$	250,986		$	205,863

	September 30, 2019		December 31, 2018

VAT taxes payable	$	287,815	$	24,436
Income taxes payable		292,411		13,114
Other taxes payable		155		18,199
Total	$	580,381	$	55,749

Twelve months ended September 30,	Operating lease amount
2020	$	123,392
2021		98,714
2022		76,347
2023		23,711
Total lease payments		322,164
Less: interest		(13,439	)
Present value of lease liabilities	$	308,725

	Held-To-Maturity	Carrying Amount		Accrued Interest		Fair Value
September 30, 2017	U.S. Treasury Bills	$	40,329,255	$	65,386	$	40,394,641

December 31, 2016	U.S. Treasury Bills	$	49,940,597	$	5,400	$	49,945,997

	Description	Total Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Assets:
September 30, 2017	Cash and U.S. Treasury Bills held in Trust Account	$	40,434,721	$	40,394,641	$	-	$	-

December 31, 2016	Cash and U.S. Treasury Bills held in Trust Account	$	50,109,326	$	49,945,997	$	-	$	-

				Exercisable Into			Weighted		Average Remaining
	Warrants			Number of			Average		Contractual
	Outstanding			Shares			Exercise Price		Life
December 31, 2018		10,500,000			5,250,000		$	5.75		4.41
Granted/Acquired		-			-		$	-		-
Forfeited		-			-		$	-		-
Exercised		(1,420,652	)		(710,326	)	$	-		-
September 30, 2019		9,079,348			4,539,674		$	5.75		3.40

					Average
			Weighted		Remaining
	Options		Average		Contractual
	Outstanding		Exercise Price		Life
December 31, 2018		824,000	$	5.00		4.41
Granted/Acquired		-	$	-		-
Forfeited		-	$	-		-
Exercised		-	$	-		-
September 30, 2019		824,000	$	5.00		3.40

	3.	Rong Hai: Coal wholesales and sale of coke, steels, construction materials, mechanical equipment and steel scrap.

	4.	TJComex Tianjin: General merchandise trading business and related consulting services (disposed in April 2018).