The following discussion and analysis of our results of operations and financial condition should be read together with our audited financial statements and the notes thereto, which are included elsewhere in this Report. Our financial statements have been prepared in accordance with U.S. GAAP.

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.

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



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We 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. The Company has been evaluating the optimal approaches to implement these plans, including through mergers and acquisitions of other travel agencies in China. The Company was assessing a number of potential merger targets in China during late 2019 and early 2020. This work has been suspended due to the COVID-19 pandemic outbreak as travel agencies throughout the world have been significantly impacted by this pandemic. The extent of the impact of COVID-19 pandemic on the Company's ability to execute on its business plans and initiatives will depend upon the developments of the pandemic, including the duration and spread of the COVID-19 and lockdown restrictions imposed by the respective global governments and oversight bodies, and tourists' confidence over local and oversea travels after the pandemic. All of these are factors are uncertain and cannot be easily estimated given the novelty of the coronavirus and the facts and the world is still going through the pandemic. Given the dynamic nature of pandemic situation, Company cannot reasonably estimate the impacts the COVID-19 on the timeline to implement its business plan. Until the Company is able to implement its business plan, the Company will remain a shell company.

Results of Operations for the Years Ended June 30, 2020 and 2019

Revenues

There was no revenue for the years ended June 30, 2020 and 2019, respectively.

General and Administrative Expense

During the years ended June 30, 2020 and 2019, we incurred $40,600 and $40,477 in general and administrative expenses, respectively. Our general and administrative expenses primarily consisted of audit fees, accounting fees, legal fees and filing fees, which are routine costs incurred as a public company.

Other Expense

During the years ended June 30, 2020 and 2019, we incurred $25,612 and $25,612 in interest expenses, respectively. The interest expenses were solely related to the note payable due to a related party.

Net Loss

As a result of the foregoing, we had a net loss of $66,212 and $66,089 for the years ended June 30, 2020 and 2019, respectively.

Liquidity and Capital Resources

Cash Flows from Operating Activities

Net cash used in operating activities was $42,578 for the year ended June 30, 2020, compared to net cash used in operating activities of $40,950 for the year ended June 30, 2019, representing a small increase of $1,628 in the net cash outflow in operating activities. Since we are a shell company, cash used in operating activities were fully funded by our controlling stockholder as is reflected in the accompanying statements of cash flows.

Cash Flows from Financing Activities

Net cash provided by financing activities for the year ended June 30, 2020 was $42,578 as compared to $40,950 for the year ended June 30, 2019, which represented the amounts contributed by the Company's principal stockholder to support the Company's operations.

As of June 30, 2020 and 2019, we had a total outstanding principal and accrued interest of $256,132 and $129,958, and $256,132 and $104,347, 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 majority stockholder will support our planned operations over the next 12 months.

In connection with our new 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 majority 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.

Commitments and Capital Expenditures

We presently have no material commitments for capital expenditures.



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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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