UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2020March 31, 2021

or

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

For the transition period from __________ to __________

Commission File Number 000-54159

(347) 690-5187+86 1370-139-9692

(Registrant’s telephone number, including area code)

N/A

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 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. o☐ Yes     ☒ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒☐ Yes     o☒ 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. o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ☒ Yes     o☐ No

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

113,296,421date: 5,664,989 common shares issued and outstanding as of August 7, 2020.September 28, 2021.

FORM 10-Q

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

QIANSUI INTERNATIONAL GROUP CO. LTD.

UNAUDITED INTERIM FINANCIAL STATEMENTS

QIANSUI INTERNATIONAL GROUP CO. LTD.

ARIEL CLEAN ENERGY, INC.

BALANCE SHEETSBalance Sheets

(Unaudited)

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

QIANSUI INTERNATIONAL GROUP CO. LTD.

Statements Of Comprehensive Loss

ARIEL CLEAN ENERGY, INC.

STATEMENTS OF OPERATIONS

(Unaudited)

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

ARIEL CLEAN ENERGY, INC.QIANSUI INTERNATIONAL GROUP CO. LTD.

STATEMENTS OF SHAREHOLDERS’ DEFICITStatements of Changes in Stockholders’ Deficit

(Unaudited)

For the Six monthsThree Months Ended June 30, 2020March 31, 2021

For the Six monthsThree Months Ended June 30, 2019March 31, 2020

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

ARIEL CLEAN ENERGY, INC.QIANSUI INTERNATIONAL GROUP CO. LTD.

STATEMENTS OF CASH FLOWSStatements of Cash Flows

(Unaudited)

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

ARIEL CLEAN ENERGY, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTSQIANSUI INTERNATIONAL GROUP CO. LTD.

JUNE 30, 2020Notes to the Unaudited Financial Statements

March 31, 2021

NOTE 1 - DESCRIPTION OF BUSINESS, AND– GOING CONCERN

Ariel Clean Energy Inc. (“Ariel” or “the Company”) is currently seeking new business opportunities with established business entities for merger with or acquisition of a target business.

Going concernAND LIQUIDITY CONSIDERATIONS

The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company does not have material assets, nor does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern. The Company has an accumulated deficit of $291,364 as of March 31, 2021. The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts of and classification of liabilities that might be necessary in the event the company cannot continue in existence. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern.

The officers and directors have committed to advancing certain operating costs of the Company, including compliance costs for being a public company.

NOTE 2 -– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the resultresults of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited interim financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2019,2020, as filed with the SEC on July 6,September 23, 2021.

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. The estimates and judgments will also affect the reported amounts for certain expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

A novel strain of coronavirus (COVID-19) was first identified in December 2019, and subsequently declared a global pandemic by the World Health Organization on March 11, 2020. As a result of the outbreak, many companies have experienced disruptions in their operations and in markets served. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no material adverse impacts on the Company’s results of operations and financial position at March 31, 2021. The full extent of the future impacts of COVID-19 on the Company’s operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company, including the timing and ability of the Company to develop its business plan.

NOTE 3 - RELATED-PARTY TRANSACTIONS

NoteLoan Payable

Unpaid balances areDuring the three months ended March 31, 2021, a corporation controlled by the Company’s officer paid operating expenses totaling $7,033 on behalf of the Company. The loan is payable on demand, unsecured and accrues an annual interest rate of 12%. During the period ended March 31, 2021, the Company accrued interest of $737.

As of March 31, 2021 and December 31, 2020, the Company has recorded amounts due to related party of $21,461 and $14,427, and accrued interest payable of $737 and $0, respectively.

Promissory Note

On September 30, 2020, the Company issued a promissory note to the majority shareholder, sole officer and director of the Company, for principal of $76,060 and accrued interest of $9,169. The amount was originally due to a corporation controlled by the Company’s former officer of the Company. The promissory note is payable on demand and withaccrue an annual interest rate of 12%. For the sixthree months ended June 30,March 31, 2021, the Company accrued interest of $2,282. As of March 31, 2021 and December 31, 2020, and 2019, interest expense was $1,456 and $1,448, respectively.

Note payablethe Company has recorded outstanding principal of $76,060 and accrued interest at June 30, 2020payable of $13,810 and December 31, 2019 consist of the following:$11,528, respectively. 

The Company plans to pay the note payable and accrued interest as cash flows become available.

NOTE 4 – INCOME TAXES

Income tax expense was $0 for the three months ended March 31, 2021 and 2020.

As of January 1, 2021, the Company had no unrecognized tax benefits, and accordingly, the Company did not recognize interest or penalties during 2021 related to unrecognized tax benefits. There has been no change in unrecognized tax benefits during the three months ended March 31, 2021, and there was no accrual for uncertain tax positions as of March 31, 2021. Tax years from 2017 through 2020 remain subject to examination by major tax jurisdictions.

There is no income tax benefit for the losses for the three months ended March 31, 2021 and 2020, since management has determined that the realization of the net tax deferred asset is not assured and has created a valuation allowance for the entire amount of such benefits.

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

FORWARD LOOKING STATEMENTS

Except for historicalSome of the information in this reportsection contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statementsthat involve substantial risks and uncertainties, including, among other things,uncertainties. You can identify these statements regardingby forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words. You should read statements that contain these words carefully because they:

We believe it is important to communicate our business strategy,expectations. However, there may be events in the future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language.that we are not able to accurately predict or over which we have no control. Our actual results mayand the timing of certain events could differ significantlymaterially from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the “Description of Business - Risk Factors” section in our Annual Report on Form 10-K, as filed on July 6, 2020. You should carefully review the risks described in our Annual Report and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Although we believe that the expectations reflectedanticipated in these forward-looking statements are based on reasonable assumptions, there areas a numberresult of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.certain factors.

COVID-19 Uncertainties

The COVID-19 pandemic could have an impact on our ability to obtain financing to fund our operations or to find a merger or combination candidate. The Company is unable to predict the ultimate impact at this time.

All references in this Form 10-Q to the “Company,” “Ariel Clean Energy,” “Ariel,“Qiansui,” “we,” “us,” or “our” are to Ariel Clean Energy, Inc.Qiansui International Group Co. Ltd.

Our Current BusinessPlan of Operations

We are currently seeking newThe Company is a shell company as defined in Rule 12b-2 of the Exchange Act. Our principal business opportunitiesobjective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with establisheda business entities for merger with or acquisition of a target business. In certain instances, a target business may wish to become our subsidiary or may wish to contribute assets to us rather than merge. immediate, short-term earnings. The Company will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.

The Company currently does not engage in any business activities that provide cash flow. During the next twelve months we anticipate incurring costs related to:

We have not yet begun negotiations or entered into any definitive agreements for potential new business opportunities, and there can be no assurance thatbelieve we will be able to enter into any definitive agreements.

Any new acquisitionmeet these costs through use of funds in our treasury, through deferral of fees by certain service providers and additional amounts, as necessary, to be loaned to or business opportunitiesinvested in us by our stockholders, management or other investors. As of the date of the period covered by this report, the Company has no cash. There are no assurances that we may acquire will require additional financing. There can be no assurance, however, that wethe Company will be able to acquiresecure any additional funding as needed. Currently, however our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing necessary to enable usmeet our obligations and repay our liabilities arising from normal business operations when they come due. Our ability to pursuecontinue as a going concern is also dependent on our ability to find a suitable target company and enter into a possible reverse merger with such company. Management’s plan includes obtaining additional funds by equity financing through a reverse merger transaction and/or related party advances; however, there is no assurance of operation. If our company requires additional financing and we are unable to acquire such funds, our business may fail.funding being available.

Management of our company believes that there are benefits to being a reporting company with a class of securities quoted on the OTC Markets, such as: (i) the ability to use registered securities to acquire assets or businesses; (ii) increased visibility in the financial community; (iii) the facilitation of borrowing from financial institutions; (iv) potentially improved trading efficiency; (v) potential stockholder liquidity; (vi) potentially greater ease in raising capital subsequent to an acquisition; (vii) potential compensation of key employees through stock awards or options; (viii) potentially enhanced corporate image; and (ix) a presence in the United States’ capital market.

WeThe Company may seekconsider acquiring a business opportunity with entities that havewhich has recently commenced operations, is a developing company in need of additional funds for expansion into new products or entities who wish to utilize the public marketplace to raise additional capital in order to expand business development activities,markets, is seeking to develop a new product or service, or for other corporate purposes. Weis an established business which may acquire assetsbe experiencing financial or operating difficulties and establish wholly-owned subsidiariesis in various businesses or acquire existing businesses as subsidiaries.

need of additional capital. In implementingthe alternative, a structure for a particular business acquisition or opportunity, we may become a party to a merger, consolidation, reorganization, joint venture or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. Upon the consummation of a transaction, it is anticipated that our sole officer and director will continue to manage the Company; however, it is possible that with any business combination new management will be appointed.may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which desires to establish a public trading market for its shares while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.

As of the date hereof, we haveOur management has not entered into any formal written agreements forwith any party regarding a business combination. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or opportunity. Whenassess all significant risks. Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.

We will not acquire or merge with any such agreemententity which cannot provide audited financial statements at or within a reasonable period of time after closing of the proposed transaction. We are subject to all the reporting requirements included in the Exchange Act. Included in these requirements is reached, we intendour duty to disclose such an agreement by filingfile audited financial statements as part of our Form 8-K to be filed with the Securities and Exchange Commission upon consummation of a currentmerger or acquisition, as well as our audited financial statements included in our annual report on Form 8-K.10-K. If such audited financial statements are not available at closing, or within time parameters necessary to insure our compliance with the requirements of the Exchange Act, or if the audited financial statements provided do not conform to the representations made by the target business, the closing documents may provide that the proposed transaction will be voidable at the discretion of our present management.

We anticipateA business combination with a target business will normally involve the transfer to the target business of the majority of our common stock, and the substitution by the target business of its own management and board of directors.

The Company anticipates that the selection of a business opportunity in which to participatecombination will be complex and without certaintyextremely risky. Because of success. Business opportunitiesgeneral economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Business opportunities that we believe are in the best interests of our company may be scarce, or we may be unable to obtain the ones that we want. We can provide no assurance that we will be able to locate compatible business opportunities.

Currently, weWe do not havecurrently intend to retain any entity to act as a source“finder” to identify and analyze the merits of revenue. We are not able to fund our cash requirements through our current operations. We have been reliant on our majority shareholder, SeaMorri Financial Partners, LLC, to provide financial contributions and services to keep the company operating. Further, we believe that our company may have difficulties raising capital from other sources until we locate a prospective business combination candidate through which we can pursue our plan of operation. If we are unable to secure adequate capital to continue our acquisition efforts, our shareholders may lose some or all of their investment and our business may fail. We currently have no written or oral agreement from our majority shareholder to continue to provide financial contributions.potential target businesses.

Results of Operations

The Company has not conducted any active operations during the quarter ended June 30, 2020.March 31, 2021. No revenue has been generated by the Company within such period. It is unlikely the Company will have any revenues unless it is able to effect an acquisition or merger with an operating company, or purchase assets which are currently producing income, of which there can be no assurance. It is management’s assertion that these circumstances may hinder the Company’s ability to continue as a going concern. The Company’s plan of operation for the next twelve months shall be to locate suitable acquisition candidates.

For the Threethree months ended June 30, 2020March 31, 2021 compared to three months ended June 30, 2019.March 31, 2020.