The following discussion and analysis of financial condition and results of operations relates to the operations and financial condition reported in the unaudited condensed financial statements of the Company for the three and nine months ended January 31, 2022 and 2021 should be read in conjunction with such financial statements and related notes included in this report. Except for the historical information contained herein, the following discussion, as well as other information in this report, contain "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the "safe harbor" created by those sections. Actual results and the timing of the events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the "Forward-Looking Statements" set forth elsewhere in this Quarterly Report on Form 10-Q.





Overview

Liaoning Shuiyun Qinghe Rice Industry Co., Ltd. ("Shuiyun Qinghe", "we", "our" or "the Company") (formerly knowns as Arbor Entech Corporation and Evergreen International Corp., respectively) started as a wood products company that had been in business since 1980. Our business fluctuated over the years. We were almost wholly dependent on sales to The Home Depot, Inc. On September 2, 2003, we terminated our business relationship with Home Depot due to increased difficulties in transacting business with such company on a profitable basis. These difficulties included Home Depot's prohibition against price increases, despite increases in our costs of production, a diminution in the Home Depot territories to which we were allowed to sell our products, and Home Depot's demands regarding returns of ordered products that we were unwilling to accede to for economic reasons.

On June 22, 2018, the Company entered into a Stock Purchase Agreement (the "SPA") with a third party (the "Purchaser") and certain selling stockholders, including the Company's controlling stockholders (all of the selling stockholders, collectively, the "Sellers"). Pursuant to the SPA, the Purchaser agreed to acquire approximately 98.75% of the Company's issued and outstanding common stock (the "Shares"). The transaction contemplated by the SPA was subject to various conditions, including payment of a cash dividend to the Company's stockholders and the Company's changing its name and ticker symbol as per the direction of the Purchaser.

On July 6, 2018, the Board of Directors of the Company (i) declared a cash dividend in an aggregate amount of $181,996, or an average of $0.024760 per share, payable to stockholders of record on July 16, 2018, and (ii) approved an amendment to the Company's Certificate of Incorporation to change the Company's name to Evergreen International, Corp., which amendment was filed with the Secretary of State of the State of Delaware on July 13, 2018 and became effective on July 20, 2018.

On July 27, 2018, the transaction contemplated by the SPA closed and the Purchaser acquired the Shares for a cash consideration of $325,000. The consummation of the transactions contemplated by the SPA resulted in a change of control of the Company.

On October 20, 2020, Jianguo Wei, our former Chief Executive Officer, President, Treasurer and Director, entered into an Acquisition Agreement with Shanghai Yuyue Enterprise Management Consulting Co., Ltd. ("SYEM") pursuant to which Mr. Wei agreed to sell all 7,258,750 shares held by Tan Ying Lok, constituting approximately 98.75% of the Company, to SYEM for aggregate cash consideration of $200,000. Mr. Wei was authorized to enter into the Acquisition Agreement on behalf of Mr. Lok pursuant to an Authorization Letter dated October 20, 2020. The acquisition consummated on October 20, 2020, and the parties are in the process of transferring the securities to SYEM. The transfer is expected to be completed in the near future.

In connection with the sale of securities to SYEM, Mr. Jianguo Wei resigned from all his positions with the Company, and Mr. He Baobing and Mr. Cui Weiming were appointed as the Company's Directors as well as Chief Executive Officer and Chief Financial Officer, respectively, effective October 20, 2020.

On October 22, 2020, the Board and the majority stockholder took action by written consent to approve an amendment to the Company's Articles of Incorporation to change its corporate name to Liaoning Shuiyun Qinghe Rice Industry Co., Ltd. and to change the ticker symbol of the Common Stock to SYQH. These changes were completed in February 2021.

Currently, the Company only possesses minimal assets and liabilities with no substantial business operations. There were no revenue or positive cash flows for the nine months ended January 31, 2022. The Company's management efforts are focused on seeking out a new and profitable operating business with strong growth potential. Unless and until the Company's successful acquisition of an operating business, we expect our expenses to consist of legal fees, accounting fees, and administrative costs related to maintaining a public company.





                                       9

Critical Accounting Policies and Significant Judgments and Estimates

The Securities and Exchange Commission ("SEC") issued disclosure guidance for "critical accounting policies." The SEC defines "critical accounting policies" as those that require the application of management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

Our significant accounting policies are described in the Notes to these unaudited condensed financial statements. Currently, based on the Company's limited activity, we do not believe that there are any accounting policies that require the application of difficult, subjective or complex judgments.





Results of Operations

Since we discontinued our wood products business in 2003, we have had no revenues, including during the three-month and nine-month periods ended January 31, 2022 and 2021.

Three and Nine Months Ended January 31, 2022 Compared to the Three and Nine Months Ended January 31, 2021

Operating Expenses. Our operating expenses primarily consisted of fees and expenses related to complying with our ongoing SEC reporting requirements, which have consisted of accounting fees, legal service charges, transfer agent fees, and filing fees etc.

For the three months ended January 31, 2022, total operating expenses amounted to $11,006 as compared to $29,273 for the three months ended January 31, 2021, a decrease of $18,267 or 62.4%. For the nine months ended January 31, 2022, total operating expenses amounted to $64,189 as compared to $49,293 for the nine months ended January 31, 2021, an increase of $14,896 or 30.2%. The increase was primarily due to an increase in accounting fees and legal service charges.

Net Loss. During the three months ended January 31, 2022 and 2021, we had net loss of $11,006 and $29,273, respectively. During the nine months ended January 31, 2022 and 2021, we had net loss of $64,189 and $49,293, respectively.

Liquidity and Capital Resources

At January 31, 2022, we did not have any cash, while, we had liabilities of $131,393, and had a working capital deficit of $131,393. We expect to incur continued losses during the remainder of fiscal 2022, possibly even longer.

For the nine months ended January 31, 2022, net cash used in operating activities amounted to $785. We expect to require working capital of approximately $50,000 over the next 12 months to meet our financial obligations.

We are a shell company with no revenue generating activities. We anticipate that our operating activities will generate negative net cash flow during the remaining fiscal year of 2022. The success of our business plan is dependent upon the availability of additional capital resources on terms satisfactory to management as we are not generating sufficient revenues from our business operations. Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions and stockholder advances. There can be no assurance that we can raise such additional capital resources on satisfactory terms. We believe that our current cash and other sources of liquidity discussed above are adequate to support operations for at least the next 12 months. We anticipate continuing to rely on equity sales of our common shares and shareholder advances in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our plan of operations.

Off-Balance Sheet Arrangements

We do not have any transactions, agreements or other contractual arrangements that constitute off-balance sheet arrangements.


                                       10

© Edgar Online, source Glimpses