The following discussion and analysis of our results of operations and financial condition should be read together with our unaudited condensed financial statements and the notes thereto, which are included elsewhere in this report and our Annual Report on Form 10-K for the year ended June 30, 2020 (the "Annual Report") filed with SEC. Our financial statements have been prepared in accordance with U.S. GAAP. In addition, our financial statements and the financial information included in this report reflect our organizational transactions and have been prepared as if our current corporate structure had been in place throughout the relevant periods.





Overview

We were incorporated under the name "Highlight Networks, Inc." in the state of Nevada on June 21, 2007. Our original business plan was to engage in the business of planning, development and operation of both private and public access wireless broadband networks using WiFi (IEEE 802.11) and WiMAX (IEEE 802.16) wireless technologies. In 2013, we commenced a new business venture in recycling, refining, metals trading and assisting in metal recovery, with a focus on precious metals refining from electronic waste.

On June 5, 2015, we experienced a change of control as a result of the purchase of 98% of our issued and outstanding capital stock from Infanto Holding Corp. by Legacy International Holdings Group, LLC and Allied Crown Enterprises Limited. Our then operating subsidiary, EZ Recycling, Inc., was spun off and as a result we reverted to the shell company status.

On January 29, 2018, pursuant to a stock purchase agreement dated January 26, 2018, Xiamen Lutong International Travel Agency Co., Ltd. purchased 57,000,000 shares of our common stock from our then majority stockholder, Jose R. Mayorquin, representing 98% of the voting securities of our company. Following this change of control, we changed our name to Xiamen Lutong International Travel Agency Co., Ltd. and changed our business plan to engage in travel businesses in the People's Republic of China (the "PRC").

From June 2015 to date, we had no business operations, revenues or assets and have been a shell company as defined by Rule 405 of the Securities Act.

We plan to offer packaged tours and other travel-related services in the PRC, initially in Fujian province, with a focus on developing, promoting and executing organized tours through our travel service stores. The packaged tours offer the benefits of pre-arranged itineraries, transportations, accommodations, entertainments, meals and tour guide services and cover domestic as well as international destinations.

We plan to offer our travel products and services through our travel service stores as well as our website.

We also plan to offer other travel-related services comprised mainly of sales of tourist attraction tickets, visa application services, financial services, hotel booking services, air ticketing services, train ticketing services, bus ticketing services, car rental services and insurance services. We will earn a commission or service fee on these services.

We are presently evaluating the optimal corporate and legal structures in China necessary to establish our business there and as a U.S. publicly listed and reporting company. We are also assessing the impact of the COVID-19 epidemic in China and globally on our business plans. We may establish our business in whole or in part by acquiring existing businesses or assets owned by our majority stockholder or his affiliates. We do not have an established timetable to implement these plans, and until we do, we will remain a shell company.





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Results of Operations for the Three and Nine Months Ended March 31, 2021 and 2020





Revenues

There was no revenue for the three and nine months ended March 31, 2021 and 2020.

General and Administrative Expense

During the three months ended March 31, 2021 and 2020, we incurred $7,588 and $6,500 of general and administrative expenses, respectively. During the nine months ended March 31, 2021 and 2020, we incurred $23,463 and $23,948 of general and administrative expenses, respectively. Our general and administrative expenses primarily consisted of auditor fees, accounting fees and legal fees, which are routine costs associated with a public company for financial reporting requirements.





Other Expense

During the three months ended March 31, 2021 and 2020, we incurred $6,403 and $6,403 of interest expenses, respectively. During the nine months ended March 31, 2021 and 2020, we incurred $19,209 and $19,209 of interest expenses, respectively. The interest expenses were solely related to the note payable due to a related party.





Net Loss

For the three months ended March 31, 2021 and 2020, we had a net loss of $13,991 and $12,903, respectively. For the nine months ended March 31, 2021 and 2020, we had a net loss of $42,672 and $43,157, respectively.

Liquidity and Capital Resources

Cash Flows from Operating Activities

Net cash used in operating activities was $32,576 for the nine months ended March 31, 2021, compared to net cash used in operating activities of $30,480 for the same period ended March 31, 2020. Since we are a shell company, cash used in operating activities were fully funded by our principal stockholder as is reflected in the accompanying condensed statements of cash flows.

Cash Flows from Financing Activities

Net cash provided by financing activities for the nine months ended March 31, 2021 and 2020 was $32,576 and $30,480, respectively, which represented the amounts contributed by our principal stockholder to support our operations.

As of March 31, 2021, we had a total outstanding principal and accrued interest of $256,132 and $149,168, respectively, due to Longhai. The unsecured promissory note bears an interest of 10% per annum and is payable on demand.

Our future capital requirements will depend on numerous factors, including, but not limited to, the establishment and development of our travel services in China. We have relied on financing from our principal stockholder and expect to continue to depend on financing from our principal stockholder to meet our current minimal operating expenses. As we are a start-up company, our operating expenses are limited and discretional based on the availability of its funds. Management believes that the financing from our principal stockholder will continue to support our planned operations over the next 12 months.

In connection with our business plan, management anticipates operating expenses and capital expenditures relating to: (i) developmental expenses associated with a start-up business and (ii) marketing expenses will be funded primarily by debt or equity financings from our principal stockholder. However, there is no assurance that such funds will be available or available on acceptable terms. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.





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Commitments and Capital Expenditures

We presently have no material commitments for capital expenditures.

Critical Accounting Policies Involving Management Estimates and Assumptions

Our discussion and analysis of our financial condition and results of operations is based on our financial statements. In preparing our financial statements in conformity with U.S. GAAP, we must make a variety of estimates that affect the reported amounts and related disclosures.

Deferred Tax Valuation Allowance

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements 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. Valuation allowances are established when necessary to reduce deferred tax assets to the amount more likely than not to be realized. Income tax expense is the total of tax payable for the period and the change during the period in deferred tax assets and liabilities.

Off-Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet financial arrangements.

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