UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended SeptemberJune 30, 20172018

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

For the transition period from                     to                     

Commission File Number:  000-01900

Living 3D Holdings, Inc.

(Exact name of registrant as specified in its charter)

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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes  o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,“smaller reporting company,” and “a smaller reporting“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.  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes    x No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:  

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

(*) The Company has effected a 1:100 reverse stock split on December 2, 2016. All share and per share data in this report has been retroactively restated to reflect the reverse stock split.

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

(*) The Company has effected a 1:100 reverse stock split on December 2, 2016. All share and per share data in this report has been retroactively restated to reflect the reverse stock split.

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Living 3D Holdings, Inc.

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As a result, the Company accounted for the operations of Sugar on a retrospective basis in the Company’s consolidated financial statements from the inception date of Sugar on February 26, 2016. Accordingly, the consolidated balance sheet as of December 31, 2016, the consolidated statement of operations for the three and nine months ended September 30, 2016, the consolidated statement of changes in shareholders’ deficit for the year ended December, 31, 2016 and the consolidated statement of cash flows for the nine months ended September 30, 2016 have been retrospectively stated in this report to reflect Sugar’s accounts at their historical amount as of those dates.  

Sugar is engaged in computer software development with major operations in Hong Kong and Mainland China. The Company focuses on the research and development of e-commerce platform, mobile game and virtual reality application. The e-commerce platform seeks to integrate web application with product manufacturing which will increase the productivity and efficiency of the operation. Along with the ever increasingever-increasing usage of the internet, our O2O e-commerce platform is expected to bring in more business opportunities to the manufacturer.

With a view of diversifying its existing business, the Company has entered another share acquisition and exchange agreement (the "Share Acquisition and Exchange II") on December 4, 2017 with Hong Kong Cryptocurrency Exchange Limited (the “HKCCEX”), a company incorporated in Hong Kong Special Administrative Region on April 19, 2017. Under the Share Acquisition and Exchange II, the Company will issue an aggregate of 40,000,000 shares of its common stock at par value of $0.001 each to the shareholder of HKCCEX in exchange for all of the issued and outstanding stock of HKCCEX. The Share Acquisition and Exchange II was closed on December 28, 2017 and the 40,000,000 shares of the Company’s common stock were issued on the same day. As a result of the Share Acquisition and Exchange II, HKCCEX became the Company’s wholly-owned subsidiary. The acquisition of HKCCEX by the Company has been accounted for as business combination between entities under common control since the Company and HKCCEX are controlled by the same group of shareholders before and after the reorganization.

As a result, the Company accounted for the operations of HKCCEX on a retrospective basis in the Company’s consolidated financial statements from the inception date of HKCCEX on April 19, 2017. Accordingly, the consolidated statement of operations for the three and six months ended June 30, 2017 and the consolidated statement of cash flows for the six months ended June 30, 2017 have been retrospectively stated in this report to reflect HKCCEX’s accounts at their historical amount as of those dates.

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The Company, through its subsidiary, HKCCEX, a FinTech company, focuses on developing no-frills software solution that facilitate the wide spread adoption of cutting edge technological ideas.

For the sake of clarity, this report follows the English naming convention of first name followed by last name, regardless of whether an individual’s name is Chinese or English. For example, the name of our Chief Executive Office will be presented as "Man Wah Stephen Yip," even though, in Chinese, his name would be presented as "Yip Man Wah Stephen".

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF PRESENTATIONPREPARATION AND PRINCIPLES OF CONSOLIDATION

The consolidated financial statements are prepared in accordance with generally accepted accounting principles used in the United States of America. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in the consolidation.

Certain information and footnote disclosures normally included in financial statements prepared in conjunction with U.S. generally accepted accounting principles ("U.S. GAAP") have been condensed or omitted as permitted by the rules and regulations of the United States Securities and Exchange Commission ("SEC"), although. The accompanying unaudited consolidated financial statements should be read in conjunction with the Company believes that the disclosuresaudited consolidated financial statements and notes thereto contained in thisthe Company's latest annual report are adequate to makeon Form 10-K filed with the information presented not misleading.

SEC. The accompanying unaudited interim consolidated financial statements reflect all adjustments of a normal and recurring nature which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or for the fiscal year taken as a whole. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements as reported in the Form 10-K for the fiscal year ended December 31, 2017, have been omitted.

B. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTSRECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Accounts receivableThe Company accounts for revenue arising from contracts with customers in accordance with Accounting Standards Update (ASU or Update) No. 2014-09, Revenue from Contracts with Customers (“ASC 606”), which was adopted on January 1, 2018 using the full retrospective method. The adoption of ASC 606 did not impact the Company’s previously reported financial statements in any prior period nor did it result in a cumulative effect adjustment to retained earnings.

Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are recognizedperformance obligations and carried at original invoiceassesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount less an allowance for any uncollectible amounts. An estimate for doubtful account is made when collection of the full amount becomes questionable.transaction price, which is allocated to the respective performance obligation, when the performance obligation is satisfied.

C. PROPERTY AND EQUIPMENT

(a)Measurement 

The Company’s property and equipment consists primarilyGenerally, the Company has two revenue streams from its operations. 1) Revenue derived from the provision of a motor vehicle andwebsite, game or advertising design services which is initially recognized at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses.

(b)Depreciation 

Depreciation of motor vehicle is calculated usinga point in time when the straight-line method to allocate its depreciable amount over its estimated useful life of three years.

      D. FOREIGN CURRENCY TRANSLATION

services have been

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Living 3D Holdings, Inc. maintains its booksdelivered and accounting recordsthe customer has obtained control of promised services. 2) Revenue derived from the contracts with customers to grant the right to use the web base trading system of cryptocurrency in United States Dollars with the United States Dollars being the functional currency. Sugar Technology Group Holdings Corporation and its wholly owned subsidiary maintain their books and accounting records in Hong Kong Dollars with the Hong Kong Dollars being the functional currency. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date.

The exchange rates used for the foreign currency translation were as follows (USD$1=HKD):

A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

F. IMPAIRMENT OF LONG-LIVED ASSETS

The Company reviews its long lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment losscommission based on the fair valuetrading transactions of the assets.

G. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Management believes that none ofend users which is recognized at a point in time when the recently adopted accounting pronouncements will have a material effect on the Company’s financial position, results of operations, or cash flows.cryptocurrency trading transactions occur. 

NOTE 3 – GOING CONCERN

The Company first generated revenue in 2010 and is still in the early stages of establishing a market for the products it sells. The Company has a working capital deficit of $293,186$613,703 as of SeptemberJune 30, 20172018 and has only generated $1,845 oflimited cash flow from operations for the ninesix months ended SeptemberJune 30, 2017.2018. The Company incurred netsuffered recurring losses of $51,089 for the nine months ended September 30, 2017.from operations. The Company is primarily funded by its Chief Executive Officer ("CEO") and principal shareholder. The Company will have to raise additional capital, including through the sale of equity securities, to support its operation and expansion.

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These conditions and uncertainties raise substantial doubt as to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 – RELATED PARTY TRANSACTIONS

The related parties consist of the following:

Man Wah Stephen Yip, the Company’s CEO, a director and principal shareholder;

So Ka Yan, the Company’s Secretary, a director, principal shareholder and the wife of Man Wah Stephen Yip;

Wai Tak Edward Lau, the Company’s director;

Due to Related Parties

Due to related parties consists of the following:

The amounts due to related parties represent loans borrowed fromexpenses paid on behalf and advances received to support the related parties.operation of the Company. They are unsecured, bear no interest and are repayable on demand. During the nine months ended September 30, 2017, Man Wah Stephen Yip and So Ka Yan paid expenses in the amount of $22,336 and $13,765, respectively, on behalf of the Company to support the Company’s operations. The Company repaid $2,000 and $192 in May 2017 and July 2017, respectively, to So Ka Yan. On May 19, 2016, the Company purchased property and equipment in the amount of $4,718 and So Ka Yan made the payment on behalf of the Company.

Office Furnished by Related Party

The Company’s office in Hong Kong consists of approximately 400 square feet located at Room S, 2/F, Block D East Sun Industrial Center, 16 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong. This office is furnished to the Company by the CEO at no charge.

The Company has another office which is situated at 10th Floor, Si Toi Commercial Building, 32 Queen Street, Sheung Wan, Hong Kong. This office is furnished to the Company by Wai Tak Edward Lau, who was newly appointed as a director of the Company on February 7, 2018, at no charge.

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Service Provided by Related Party

Harris Yeung, a personal assistant of CEO, provided non-compensated book keeping service to the Company during the six months ended June 30, 2018 and for the year ended December 31, 2017.

NOTE 5 – CONCENTRATION OF CREDIT RISKS AND MAJOR CUSTOMERS

The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows:

For the ninesix months ended SeptemberJune 30, 2018, customer B and E accounted for 85% and 15% of the total revenue, respectively.

For the six months ended June 30, 2017, customer A and B accounted for 64%80% and 36%20% of total revenue respectively. For the nine months ended September 30, 2016, customer C and D accounted for 70% and 30% of total revenue, respectively.

At SeptemberJune 30, 2018, customer B and E accounted for 85% and 15 % of the accounts receivable, respectively. At December 31, 2017, customer B and D accounted for 41% and 59% of the accounts receivable. receivable, respectively.

For the six months ended June 30, 2018, the Company’s cost of revenue primarily consisted of amortization of website development costs. For the six months ended June 30, 2017, all the cost of revenue is related to fees paid to one subcontractor.

At June 30, 2018 and December 31, 2016, customer D2017, the same subcontractor accounted for 100% of account receivable.

For the nine months ended September 30, 2017, subcontractor A accounted for 100% of cost of revenue. For the nine months ended September 30, 2016, subcontractor B accounted for 100% of cost of revenue.

At September 30, 2017, subcontractor A accounted for 100% of account payable. There was no balance of account payable as of December 31, 2016.

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NOTE 6 – INCOME TAXES

Living 3D Holdings, Inc. is incorporated in the State of Nevada, United States and is subject to US Corporate

Income Tax (“CIT”) on the taxable income in accordance with the relevant US income tax laws. No provision for income taxes in the US has been made as the Company had no US taxable income for the nine months period ended September 30, 2017 and 2016.

Sugar Technology Group Holdings Corporation is registered in the BVI and under the current laws of the BVI is not subject to income taxes.

XYZMILL.COM Limited is registered in Hong Kong and Hong Kong profits tax is calculated at 16.5% of the estimated assessable profit for the period.

No provision for income taxes has been made as XYZMILL.COM Limited suffered loss from inception of May 9, 2016 through September 30, 2017.

A reconciliation of the income tax computed at the U.S. statutory rate and the Company's provision for income tax is as follows:

Accounting for Uncertainty in Income Taxes

The Company adopted the provisions of Accounting for Uncertainty in Income Taxes. The provision clarify the accounting for uncertainty in income taxes recognized in an Enterprise's financial statements in accordance with the standard "Accounting for Income Taxes,", and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The provisions of Accounting for Uncertainty in Income Taxes also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

The Company has evaluated and concluded that there are no significant uncertain tax positions required recognition in its consolidated financial statements.

The Company may from time to time be assessed interest or penalties by major tax jurisdictions.  In the event it receives an assessment for interest and/or penalties, it will be classified in the consolidated financial statements as tax expense.

NOTE 7 – SHAREHOLDERS’ DEFICIT

On October 19, 2016, the Company filed a Certificate of Amendment with the Secretary of State of the State of

Nevada to effect a 1-for-100 reverse stock split of its common stock and an increase of its authorized shares of common stock from 90,000,000 to 290,000,000.

Effective on the opening of business on December 2, 2016, the Financial Industry Regulatory Authority granted market effectiveness to the 1-for-100 reverse stock split.

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The Company’s capital accounts have been retroactively restated to reflect the reverse stock split for all periods presented.

On January 4, 2017, the Company issued an aggregate of 30,000,000 shares of its common stock at par value of $0.001 each to all of the shareholders of Sugar in exchange for all of the issued and outstanding stock of Sugar. The shares were recorded at par value with a decrease $30,000 to additional paid-in capital as the transaction was accounted for as business combination between entities under common control.

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customizing product requirementspart of the web based trading system and specifications in order to enhance the power of product display in business advertisingmanagement protocol, and special operational environments.

Through innovative and reliable provision of products and services as well as collaborationwe conduct thorough training sessions with our strategic partners,customers to ensure compliance and also the Company is embarking on the following new strategic directions:documentation and consequences of non-compliance.

*Enabling enterprises to fully exploit the power and capacity of 3D technology;

*Satisfying the full range of media display in business advertising and business operation;

*Enabling a truly integrated solution for 3D applications and powerful display specially customized for business requirements and operations; and

*Developing and delivering a comprehensive, low cost media content development and productivity environment.

We market our 3D technologies and products under our Living 3D brand in the PRC.

With the change in the Company’s control in December 2015, the Company redefined its business from 3D technology development to computer software development with major operations in Hong Kong and Mainland China. The Company focuses on the research and development of e-commerce platform, mobile game and virtual reality application. Our e-commerce platform seeks to integrate web application with product manufacturing which will increase the productivity and efficiency of the operation. Along with the ever increasing usage of the internet, our O2O (O2O stands for “online to offline.” It's a term used to describe a variety of e-commerce services that provide online information, services, or discounts to consumers that enhance their offline shopping experiences.) e-commerce platform is expected to bring in more business opportunities to the manufacturer.

Recent Development.  On December 30, 2016,4, 2017, the Company entered into a share acquisition and exchange agreement (the "Share Acquisition and Exchange"Exchange II") with Sugar Technology Group Holdings Corporation,HKCCEX, a company incorporated in the British Virgin Islands (the “BVI”) on February 26, 2016 and has a wholly owned subsidiary of XYZMILL.COM Limited, which was incorporated on May 9, 2016. Sugar Technology Group Holdings Corporation and its subsidiary are collectively referred as Sugar.Hong Kong Special Administrative Region.  Under the Share Acquisition and Exchange II, the Company will issueissued an aggregate of 30,000,00040,000,000 shares of its common stock at par value of $0.001 each to allthe sole shareholder of the shareholders of SugarHKCCEX in exchange for all of the issued and outstanding stock of Sugar.HKCCEX.  The Share Acquisition and Exchange II was closed on January 5, 2017 and the 30,000,000 shares of the Company’s common stock were issued on January 4,December 28, 2017. As a result of the Share Acquisition and Exchange SugarII, HKCCEX became the Company’s wholly-owned subsidiary.

Sugar engages in computer software development with major operations in Hong Kong and Mainland China. SugarThe Company, through its subsidiary, HKCCEX, a FinTech company, focuses on developing no-frills software solution that facilitate the research andwide spread adoption of cutting edge technological ideas.  

The Company’s development of e-commerce platform, mobile gamethe web based trading system on cryptocurrency was fully completed in January 2018 and virtual reality application. The e-commerce platform seeksthe Company granted customers the right to integrate web application with product manufacturing which will increaseuse the productivity and efficiency of the operation. Along with the ever increasing usage of the internet, our O2O e-commerce platform is expected to bring in more business opportunities to the manufacturer. trading system starting April 2018.

The following discussion summarizes the material changes in our results of operations and our financial condition for the three and ninesix months ended SeptemberJune 30, 20172018 and SeptemberJune 30, 2016.2017. The Consolidated Statements of Operations is included in the Financial Statements attached to this report. Please refer to the Consolidated Statements of Operations.

Results of Operations for the three months ended SeptemberJune 30, 20172018 and 20162017

Results from Operations

Revenues.Revenue.  For the three months ended SeptemberJune 30, 20172018 and September 30, 2016,2017, revenues were $1,667$460 and $4,308$1,282 respectively, a decrease of $2,641.$822. The decreaserevenue for the three months ended June 30, 2018 represented commission earned on the trading of cryptocurrency by the end users on our web based trading system, whereas the revenue for the three months ended June 30, 2017 was derived from website development.

Since our business development efforts in revenue was attributablethe computer software, and in particular the e-commerce trading platform were not sufficiently mature to render us as a commercially viable player in that industry, the Company has slowed down the related activities and shifted its business from the research and development of e-commerce trading platform to the decrease in sales. development of the web based trading system on cryptocurrency.

The Company is still in the early stage of development and its sales fluctuate. The Company has granted the right to use its web based trading system to a customer in the middle of April 2018 and managed to generate minimal income therefrom. Management believes that the revenue of the Company will increase substantially when more customers can be acquired in the later part of the year.

Cost of Revenue. The Company incurred no cost of revenue for the three months ended SeptemberJune 30, 20172018 amounted to $16,132 represented substantially the amortization of its web based trading system. The Company started to amortize its web based trading system since January 2018 over a period of three years. As the Company has put into use and 2016.  Thegranted the right to use the web based trading system to its customer in April 2018, the company has classified the amortization as the cost of revenue primarily represented fee paid to subcontractor oninstead of general and administrative expenses as in the design of software for sale. There wasfirst quarter in 2018.

The Company incurred no such salecost of revenue for the three months ended SeptemberJune 30, 2017 and 2016.2017.

Gross Profit. For the three months ended SeptemberJune 30, 2017,2018, the gross profit was $1,667$(15,672) compared with $4,308$1,282 for the same period in 2016.2017. The decrease was because of the decreaseincrease in sales.cost of revenue as discussed above.

Management is of the opinion that the web based trading system has not been fully utilized and that the gross profit will improve gradually over time when the Company can acquire more customers in the later part of the year.

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General and Administrative Expenses.  For the three months ended SeptemberJune 30, 20172018 and September 30, 2016,2017, general and administrative expenses were $11,567$21,084 and $19,400,$57,817 respectively, a decrease of $7,833.$36,733. The decrease in such expenses was primarily attributable to the decrease in motor vehicle running expenses andconsultancy fee for the discount given bydevelopment of the Company’s attorney onweb based trading system of cryptocurrency as all the fee chargedcosts at the planning stage were expensed as incurred. No such costs were incurred during the three months ended SeptemberJune 30, 2017. No such discount was given by the Company’s attorney for the three months ended September 30, 2016.2018.

Net Loss.  For the three months ended SeptemberJune 30, 2018, the net loss was $(36,756) and, for the same period ended June 30, 2017, the net loss was $(9,900)$(56,535), a decrease of $19,779. The decrease of net loss between the periods was explained by the decrease in the general and administrative expenses which was partially offset by the increase in cost of revenue as discussed above.

Results of Operations for the six months ended June 30, 2018 and 2017

Results from Operations

Revenue.  For the six months ended June 30, 2018 and 2017, revenues were $3,024 and $6,538 respectively, a decrease of $3,514. The decrease in revenue was attributable to the decrease in sales. The Company has shifted to the business of the development of a web based trading system which was granted to a customer the right to use in April 2018. The Company has managed to generate minimal revenue therefrom. As the Company’s business in cryptocurrency web based trading system is still in the early stage of development and its sales fluctuate. Management believes that the revenue of the Company will increase substantially when some more customers can be acquired in the later part of the year.

Cost of Revenue. The cost of revenue for the six months ended June 30, 2018 and June 30, 2017 amounted to $16,132 and $5,128 respectively, an increase of $11,004. The increase in the cost of revenue can mainly be attributable to the increase in the amortization of the web based trading system which was put into operation in April 2018, details of which has been discussed above.

Gross Profit. For the six months ended June 30, 2018, the gross profit was $(13,108) compared with $1,410 for the same period in 2017. The decrease was because of the increase in cost of revenue.

General and Administrative Expenses.  For the six months ended June 30, 2018 and 2017, general and administrative expenseswere $54,554 and $82,304, respectively, a decrease of $27,750.The decrease in such expenses was primarily attributable to the decrease in consultancy fee for the development of the web based trading system of cryptocurrency as all the costs at the planning stage were expensed as incurred. No such costs were incurred during the six months ended June 30, 2018. This decrease was partially offset by the increase in the amortization of our web based trading system in cryptocurrency. The web based trading system is to be amortized over a period of three years on a straight-line method, starting from January 2018 when it is ready for use. The amortization has been allocated to the cost of revenue starting April 2018 when the web based trading system was put into use. No such expense was incurred for the six months ended of June 30, 2017.

Net Loss.  For the six months ended June 30, 2018, the net loss was $(67,662) and, for the same period ended SeptemberJune 30, 2016,2017, the net loss was $(15,092)$(80,894), a decrease of $5,192.$13,232. The decrease of net loss between the periods was explained by the decrease in general and administrative expenses as discussed above.

Results of Operations for the nine months ended September 30, 2017 and 2016

Results from Operations

Revenues.  For the nine months ended September 30, 2017 and September 30, 2016, revenues were $8,205 and $14,436 respectively, a decrease of $6,231. The revenues for the nine months ended September 30, 2017 are mainly derived from advertisement development and website development whereas the revenue for the nine months ended September 30, 2016which was mainly generated from website design and development. Moreover, the Company is still in the early stage of development and its sales fluctuate.

Cost of Revenue. The Company’s cost of revenue decreased to $5,128 from $6,282 in the period ended September 30, 2017 compared to the same period in 2016. The decrease was due to the decrease in sales.

Gross Profit. For the nine months ended September 30, 2017, the gross profit was $3,077 compared with $8,154 for the same period in 2016. The decrease was because of the decrease in sales.

General and Administrative Expenses.  For the nine months ended September 30, 2017 and September 30, 2016, general and administrative expenseswere $54,166 and $44,825, respectively, an increase of $9,341.The increase in such expenses was primarily attributable to the increase auditor’s remuneration and the increase in motor vehicle running expenses.

Net Loss.  For the nine months ended September 30, 2017, the net loss was $(51,089) and, for the same period ended September 30, 2016, the net loss was $(36,671), an increase of $14,418.  The increase of net loss between the periods was explainedpartially offset by the increase in general and administrative expenses and the decrease in salescost of revenue as discussed above.

Liquidity and Capital Resources.  Cash and cash equivalents as of SeptemberJune 30, 20172018 and December 31, 20162017 were $320$2,968 and $667$50,668 respectively. The decrease was mainly attributable by the repayments to related party. There were no substantial movements in the funds used in operating activities as merely all the expenses of the Company were paid by Man Wah Stephen Yip and So Ka Yan on behalf of the Company.

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Liquidity and Capital Resources

Current and Expected Liquidity

Historically, we have financed operations primarily through the issuance of debt.  In the near future, as additional capital is needed, we expect to rely primarily on loans from our major shareholder and the sale of equity securities.  We financed operations by increasing the amount due to related parties to $132,328 at September 30, 2017 from $98,419 at December 31, 2016, an increase of $33,909.  The increase is due principally to professional fees paid by related parties on behalf of the Company for the services rendered in the period of 2017.

Our cash flows provided by operating activities increased by $691$2,783 from $1,154$1,846 at SeptemberJune 30, 20162017 to $1,845$4,629 at SeptemberJune 30, 2017,2018, due principally to the increasedecrease in accounts receivable of $2,949, account payable of $5,128,$4,233, and an increase in accrued liabilities and other payables of $ 49,57641,659 offset by the net loss of $51,089.

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Our cash flows used in financing activities increased by $51,611, from $718 at June 30, 2017 to $52,329 at June 30, 2018, due principally to an increase in repayments to related party of $116,772 offset by the increase in proceeds from related party of $64,443.

We will require substantial additional capital to develop a market for 3D products, the O2O e-commerce platformweb based trading system in cryptocurrency and implement our business plan.  We plan to pursue financing from private investors and institutions in and outside the PRC.  We do not have any commitments for additional financing. Such new financing could include equity, which would likely be dilutive to our shareholders, or debt, which would likely restrict our ability to borrow from other sources.  In addition, such securities may contain rights, preferences or privileges senior to the rights of our current shareholders.

There can be no assurance that additional funds will be available on terms acceptable to us or at all.  If adequate funds are not available, we may have to materially curtail our operations.  Any inability to raise adequate funds could have a material adverse effect on our business, results of operation and financial condition.

Due to the uncertainties related to these matters, there exists substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should we be unable to continue as a going concern.

Capital Commitments

We had no material commitments for capital expenditures.

Off-Balance Sheet Arrangements

There were no off-balance sheet arrangements as of SeptemberJune 30, 2017.2018.

Critical Accounting Policies and Estimates

Accounting Estimates.  The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. 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 revenue and expenses during the reporting period. Actual results when ultimately realized could differ from those estimates.

Fair Value of Financial Instruments.  The carrying amounts of financial instruments, including cash, other receivables, accounts payable and accrued expenses,liabilities and other payables, approximates their fair value due to the relatively short-term nature of these instruments.

Management believes it is not practical to determine the fair value of due to related party because the transactions cannot be assumed to have been consummated at arm’s length, the terms are not deemed to be market

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terms, there are no quoted values available for these instruments, and an independent valuation would not be practical due to the lack of data regarding similar instruments, if any, and the associated potential costs.

Property and Equipment.   The Company’s property and equipment consists primarily of a motor vehicle and is initially recognized at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses. Depreciation of motor vehicle is calculated using the straight-line method to allocate its depreciable amount over its estimated useful life of three years.

Revenue Recognition.  WeThe Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the significant risks and rewards of ownership have been transferredCompany satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer, including factors such as when persuasive evidencecustomer. At contract inception, once the contract is determined to be within the scope of an arrangement exists, deliveryASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service has been performed, the sales price is fixed and determinable, and collectability is probable.distinct. The Company then recognizes salesas revenue the amount of the transaction price, which is allocated to the respective performance obligation, when the merchandiseperformance obligation is shipped, title has passedsatisfied.

Website Development Costs. The Company accounts for website development costs in accordance with Accounting Standards Codification 350-50 “Website Development Costs”. Accordingly, all costs incurred in the planning stage are expensed as incurred, costs incurred in the website application and infrastructure development stage that meet specific criteria are capitalized and costs incurred in the day to day operation of the website are expensed as incurred.

All capitalized costs associated with the website will be subject to straight-line amortization over its expected useful life of three years when the website is ready for its intended use.

The Company reviews its website development costs for impairment whenever events or changes in circumstances indicate that the carrying amount of the website development costs may no longer be recoverable. When these events occur, the Company measures impairment by comparing the carrying value of the website development costs to the customers orestimated undiscounted future cash flows expected to result from the serviceuse of the website development costs and their eventual disposition. If the sum of the expected undiscounted cash flow is provided, and collectability is reasonably assured.less than the carrying amount of the website development costs, the Company would recognize an impairment loss based on the fair value of the website development costs.

Foreign Currency Translation. Living 3D Holdings, Inc. maintains its booksThe reporting currency of the Company is the USD. The functional currency of Sugar and accounting records in United States Dollars withHKCCEX is the United States Dollars beingHong Kong Dollar (“HKD”). For financial reporting purposes, the functional currency.financial statements of Sugar Technology Group Holdings Corporation and its wholly owned subsidiary maintain their books and accounting recordsHKCCEX which are prepared in Hong Kong Dollars with the Hong Kong Dollars being the functional currency. Transactions denominated in foreign currenciesDollar are translated into the functional currency at the exchange rates prevailing on the transaction dates.  Assets and liabilities denominated in foreign currenciesUnited States Dollars. Balance sheet accounts are translated intousing the functional currency at theclosing exchange rates prevailingrate in effect at the balance sheet date.  date and income and expense accounts are translated using the average exchange rate prevailing during the reporting period. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. Adjustments resulting from the translation, if any, are included in accumulated other comprehensive income (loss) in the owners' equity

We follow FASB ASC 80-30, "Foreign Currency Translation", for both the translation and re-measurement of balance sheet and income statement items into U.S. dollars.  Resulting translation adjustments are reported as a

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separate component of accumulated comprehensive income (loss) in shareholders' equity.

Income Taxes.  Income tax expense is based on reported income before income taxes. We account for income taxes using the liability method.  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that includes the enactment date.  A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not

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expected to be realized.  

Related Parties.  A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company.  Related parties also include principal shareholders of the Company, its management, members of the immediate families of principal shareholders of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.  A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

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financial reporting; and (iii) appoint additional independent directors that can serve as members of an audit committee. The remediation efforts will be largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting during the quarter ended SeptemberJune 30, 20172018 that have materially affected or are reasonably likely to materially affect, such controls.

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PART II – OTHER INFORMATION

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Not applicable.

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