Quarterly Report (10-q)

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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 September 30, 2022

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

For the transition period from ____________ to ___________

Commission File No. 000-55319

PHOENIX RISING COMPANIES

(Exact name of registrant as specified in its charter)

Nevada		46-1993448
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

641 10th Street

Cedartown, Georgia 30125

(Address of principal executive offices, zip code)

(844) 487-4636

(Registrant’s telephone number, including area code)

___________________________________________________________

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Indicate by check mark whether the issuer (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. 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 and post such files). Yes ☒ 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. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

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. ☒

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes☒ No ☐

APPLICABLE ONLY TO CORPORATE ISSUERS

As of December 21, 2022, there were ________ shares of common stock, $0.0001 par value per share, outstanding.

PHOENIX RISING COMPANIES

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED SEPTEMBER 30, 2022

INDEX

Index		Page

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements.	4

	Condensed Consolidated Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021.		4

	Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)		5

	Condensed Consolidated Statements of Shareholders’ Equity (Deficit) for Three and Nine Months ended September 30, 2022 and 2021, and the year ended December 31, 2021 (unaudited).		7

	Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2022 and 2021 (unaudited).		8

	Notes to Condensed Financial Statements (unaudited).		9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.		18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.		23

Item 4.	Controls and Procedures.		23

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings.		24

Item 1A.	Risk Factors.		24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.		24

Item 3.	Defaults Upon Senior Securities.		24

Item 4.	Mine Safety Disclosures.		24

Item 5.	Other Information.		24

Item 6.	Exhibits.		25

Signatures			26

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q of Phoenix Rising Companies, a Nevada corporation (the “Company”), contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include, among other things to fluctuations in commodities prices, the ability to obtain additional financing, the ability to obtain permits, licenses and approvals, as well as general industry and market conditions and growth rates and general economic conditions; and other factors discussed in the Company’s filings with the Securities and Exchange Commission (“SEC”).

Our management has included projections and estimates in this Form 10-Q, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

PHOENIX RISING COMPANIES

Condensed Consolidated Balance Sheets

(Unaudited)

	September 30,			December 31,
	2022			2021

ASSETS
Current Assets
Cash	$	22,402		$	101,876
Accounts receivable, net		7,661,417			9,318,431
Inventory		6,892,898			7,733,568
Other current assets		62,827			151,292
Total Current Assets		14,639,544			17,305,167

Goodwill		1,979,787			1,979,787
TOTAL ASSETS	$	16,619,331		$	19,284,954

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable	$	6,680,017		$	8,489,790
Accrued liabilities and other payables		203,144			131,197
Advance payment		1,715,613			1,814,499
Convertible notes, net of unamortized discounts		629,719			730,981
Due to related parties		41,840			24,193
Derivative liabilities		18,420,615			2,768,484
Tax payable		45,967			2,451
Total Current Liabilities		27,736,915			13,961,595

Convertible notes non-current, net of unamortized discounts		137,191			217,069
TOTAL LIABILITIES		27,874,106			14,178,664

COMMITMENTS AND CONTINGENCIES		-			-

SHAREHOLDERS’ EQUITY (DEFICIT)
Preferred stock, $0.0001 par value; 15,000,000 shares authorized; no shares issued and outstanding		-			-
Series A Preferred stock, $0.0001 par value; 1,500,000 shares designated; 1,500,000 shares issued and outstanding, respectively		150			150
Common stock, $0.0001 par value; 8,000,000,000 shares authorized; 1,049,877,433 and 169,127,299 shares issued and outstanding, respectively		104,987			16,912
Additional paid-in capital		48,250,633			45,317,109
Subscription receivable		(24,522,000	)		(24,522,000	)
Accumulated deficit		(34,531,290	)		(15,794,894	)
Accumulated other comprehensive income (loss)		(557,255	)		89,013
Total shareholders' equity (deficit)		(11,254,775	)		5,106,290
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)	$	16,619,331		$	19,284,954

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

Table of Contents

PHOENIX RISING COMPANIES

Condensed Consolidated Statements of Operations and Other Comprehensive Loss

(Unaudited)

	Three months ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021

Revenue	$	4,275,246		$	3,108,710		$	15,415,160		$	11,573,705
Cost of goods sold		4,262,151			3,094,289			15,176,719			11,514,851
Gross Profit		13,095			14,421			238,441			58,854

Operating Expenses
General and administrative		152,879			195,574			273,725			361,883
Professional fees		99,258			90,280			359,007			270,743
Total Operating Expenses		252,137			285,854			632,732			632,626

Loss from Operations		(239,042	)		(271,433	)		(394,291	)		(573,772	)

Other Income (Expense)
Other loss		-			(1,371	)		-			(14,172	)
Interest expense		(192,837	)		(246,930	)		(710,184	)		(867,607	)
Change in fair value of derivative liabilities		9,271,865			(1,572,875	)		(17,575,993	)		1,709,730
Total Other Income (Expense)		9,079,028			(1,821,176	)		(18,286,177	)		827,951

Income (Loss) Before Income Taxes		8,839,986			(2,092,609	)		(18,680,468	)		254,179
Provision for income taxes		(1,398	)		-			(55,928	)		-
Net Income (Loss)	$	8,838,588		$	(2,092,609	)	$	(18,736,396	)	$	254,179

Dividend on Series A Preferred Stock		-			-			-			-
Net income (loss) attributable to common stockholders	$	8,838,588		$	(2,092,609	)	$	(18,736,396	)	$	254,179

Other Comprehensive Income (Loss)
Foreign currency translation adjustments		(290,750	)		(8,730	)		(646,268	)		5,862
Total Comprehensive Income (Loss)	$	8,547,838		$	(2,101,339	)	$	(19,382,664	)	$	260,041

Basic Income (Loss) per Common Share	$	0.01		$	(0.01	)	$	(0.03	)	$	0.00
Diluted Loss per Common Share	$	(0.00	)	$	(0.01	)	$	(0.03	)	$	(0.00	)

Basic Weighted Average Common Shares Outstanding		872,518,967			140,380,861			540,676,561			135,783,678
Diluted Weighted Average Common Shares Outstanding		14,674,699,564			140,380,861			540,676,561			526,992,011

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

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PHOENIX RISING COMPANIES

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited)

Three and Nine months ended September 30, 2022


																		Accumulated
	Series A Preferred Stock				Common Stock				Additional									Other			Total
	Number of Shares		Amount		Number of Shares		Amount		Paid-in Capital			Subscription receivable			Accumulated Deficit			Comprehensive Income (loss)			Stockholders Deficit

Balance - December 31, 2021		1,500,000	$	150		169,127,299	$	16,912	$	45,317,109		$	(24,522,000	)	$	(15,794,894	)	$	89,013		$	5,106,290

Common stock issued for conversion of debt		-		-		140,688,306		14,069		375,356			-			-			-			389,425
Resolution of derivative liabilities		-		-		-		-		355,848			-			-			-			355,848
Net income		-		-		-		-		-			-			891,483			-			891,483
Other comprehensive income		-		-		-		-		-			-			-			13,101			13,101

Balance - March 31, 2022		1,500,000	$	150		309,815,605	$	30,981	$	46,048,313		$	(24,522,000	)	$	(14,903,411	)	$	102,114		$	6,756,147

Common stock issued for conversion of debt		-		-		217,041,695		21,704		217,408			-			-			-			239,112
Common stock issued for cashless exercised warrant		-		-		158,164,999		15,817		(15,817	)		-			-			-			-
Resolution of derivative liabilities		-		-		-		-		1,360,871			-			-			-			1,360,871
Net loss		-		-		-		-		-			-			(28,466,467	)		-			(28,466,467	)
Other comprehensive loss		-		-		-		-		-			-			-			(368,619	)		(368,619	)

Balance - June 30, 2022		1,500,000	$	150		685,022,299	$	68,502	$	47,610,775		$	(24,522,000	)	$	(43,369,878	)	$	(266,505	)	$	(20,478,956	)

Common stock issued for conversion of debt		-		-		157,862,534		15,786		133,414			-			-			-			149,200
Common stock issued for cashless exercised warrant		-		-		206,992,600		20,699		(20,699	)		-			-			-			-
Resolution of derivative liabilities		-		-		-		-		527,143			-			-			-			527,143
Net income		-		-		-		-		-			-			8,838,588			-			8,838,588
Other comprehensive loss		-		-		-		-		-			-			-			(290,750	)		(290,750	)

Balance - September 30, 2022		1,500,000	$	150		1,049,877,433	$	104,987	$	48,250,633		$	(24,522,000	)	$	(34,531,290	)	$	(557,255	)	$	(11,254,775	)

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Three and Nine months ended September 30, 2021

	Series A Preferred Stock				Common Stock				Additional									Accumulated Other			Total
	Number of Shares		Amount		Number of Shares		Amount		Paid-in Capital			Subscription receivable			Accumulated Deficit			Comprehensive Loss			Stockholders’ Deficit

Balance - December 31, 2020		1,500,000	$	150		121,169,368	$	12,117	$	42,434,390		$	(24,522,000	)	$	(26,145,758	)	$	(97,151	)	$	(8,318,252	)

Common stock issued for conversion of debt		-		-		9,900,730		990		253,460			-			-			-			254,450
Common stock issued for exercised cashless warrant		-		-		5,890,538		589		(589	)		-			-			-			-
Resolution of derivative liabilities		-		-		-		-		1,684,780			-			-			-			1,684,780
Net loss		-		-		-		-		-			-			(8,684,806	)		-			(8,684,806	)
Other comprehensive loss		-		-		-		-		-			-			-			(81,290	)		(81,290	)

Balance - March 31, 2021		1,500,000	$	150		136,960,636	$	13,696	$	44,372,041		$	(24,522,000	)	$	(34,830,564	)	$	(178,441	)	$	(15,145,118	)

Common stock issued for conversion of debt		-		-		2,965,440		297		96,723			-			-			-			97,020
Resolution of derivative liabilities		-		-		-		-		111,392			-			-			-			111,392
Net income		-		-		-		-		-			-			11,031,594			-			11,031,594
Other comprehensive income		-		-		-		-		-			-			-			95,882			95,882

Balance - June 30, 2021		1,500,000	$	150		139,926,076	$	13,993	$	44,580,156		$	(24,522,000	)	$	(23,798,970	)	$	(82,559	)	$	(3,809,230	)

Common stock issued for conversion of debt		-		-		2,084,113		208		80,912			-			-			-			81,120
Resolution of derivative liabilities		-		-		-		-		103,021			-			-			-			103,021
Net loss		-		-		-		-		-			-			(2,092,609	)		-			(2,092,609	)
Other comprehensive loss		-		-		-		-		-			-			-			(8,730	)		(8,730	)

Balance - September 30, 2021		1,500,000	$	150		142,010,189	$	14,201	$	44,764,089		$	(24,522,000	)	$	(25,891,579	)	$	(91,289	)	$	(5,726,428	)

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

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PHOENIX RISING COMPANIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended
	September 30,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(18,736,396	)	$	254,179
Adjustments to reconcile net loss to net cash from operating activities:
Amortization of debt discount		504,788			753,902
Change in fair value of derivative liabilities		17,575,993			(1,709,730	)
Penalty interest		-			31,500
Changes in operating assets and liabilities:
Accounts receivable		695,987			(5,295,866	)
Inventories		-			544,100
Other current assets		87,560			125,230
Accounts payable		(970,282	)		5,633,394
Advance payment		106,287			(842,772	)
Tax payable		47,313			3,065
Accrued liabilities and other payable		228,975			40,796
Net cash provided by (used in) operating activities		(459,775	)		(462,202	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible notes		305,750			586,000
Repayment of convertible notes		(50,428	)		-
Loans from related parties		20,235			-
Repayments of loans from related parties		-			(107,538	)
Net cash provided by financing activities		275,557			478,462

Effects on changes in foreign exchange rate		104,744			482

Net change in cash		(79,474	)		16,742
Cash - beginning of period		101,876			185,948
Cash - end of period	$	22,402		$	202,690

Supplemental Cash Flow Disclosures
Cash paid for interest	$	5,696		$	-
Cash paid for income taxes	$	-		$	1,824

Non-Cash Investing and Financing Activity:
Common stock issued for conversion of debt	$	1,999,928		$	1,609,819
Common stock issued for exercised cashless warrant	$	1,021,671		$	721,964
Derivative liability recognized as debt discount	$	320,000		$	503,500

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

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PHOENIX RISING COMPANIES

Notes to the Condensed Consolidated Financial Statements

September 30, 2022

(Unaudited)

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Phoenix Rising Companies. (“we,” “us,” “our,” the “Company “PRCX”) is a Nevada corporation incorporated on June 25, 2012 under the name Resort Savers, Inc. On May 28, 2020, the Company’s corporate name was changed to Phoenix Rising Companies. It is based in Puchong, Malaysia. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is December 31.

The Company makes investments and acquisitions into sound, transparent markets and industries throughout the world. The Company is principally engaged in the trading of oil, gas and lubricant. From January 1, 2020, the Company deconsolidated the operations in nutrition and health products.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company prepares its condensed consolidated financial statements in accordance with rules and regulations of the U.S. Securities and Exchange Commission (SEC) and generally accepted accounting principles (“GAAP”) in the United States of America. The accompanying consolidated financial statements have been prepared in accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X and presented in United States dollars.

In the opinion of the Company’s management, the accompanying unaudited interim consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2022 and the results of operations and cash flows for the periods presented. The results of operations for the nine months ended September 30, 2022 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited interim consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on September 30, 2022.

Principles of Consolidation

At September 30, 2022, the principal subsidiaries of the Company were listed as follows:

Entity Name

Acquisition

Date

Ownership

Jurisdiction

Investments

Held By

Nature of

Operation

Fiscal

Year

Xing Rui International Investment Holding Group Co., Ltd. (“Xing Rui”)

December 22, 2014

100

Seychelles

PRCX

Holding Company

January 31

Xing Rui International Investment Group Ltd. (“Xing Rui HK”)

December 22, 2014

100

Hong Kong, the PRC

Xing Rui

Holding Company

January 31

Huaxin Changrong (Shenzhen) Technology Service Co., Ltd. (“Huaxin”) *

August 27, 2015

100

the PRC

Xing Rui

Holding Company

December 31

Beijing Yandong Tieshan Oil Products Co., Ltd. (“Tieshan Oil”) *

May 16, 2018

100

the PRC

Huaxin

Trading of oil products

December 31

*	The English names used are translated only.

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These condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated upon the consolidation.

Use of Estimates and Assumptions

The preparation of condensed consolidated 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 revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

Foreign Currency Translation and Re-measurement

The Company translates its foreign operations to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”.

The Company’s functional currency and reporting currency is the U.S. dollar, and our subsidiaries’ functional currency is the Chinese Yuan Renminbi (“CNY”), and Hong Kong Dollar (“HKD”).

The Company translates the foreign subsidiaries’ records into U.S. dollar as follows:

	·	Assets and liabilities at the rate of exchange in effect at the balance sheet date
	·	Equities at historical rate
	·	Revenue and expense items at the average rate of exchange prevailing during the period

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents, and accounts receivable. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company also reviews its accounts receivable in a timely manner. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

Tieshan Oil

During the nine months ended September 30, 2022 and 2021, three customers accounted for 64% of revenues (28%, 19% and 17%) and two customers accounted for 100% of revenues (75% and 25%), respectively.

During the nine months ended September 30, 2022 and 2021, one vendor accounted for 100% of total purchases and two vendor accounted for 100% of total purchases, respectively.

As of September 30, 2022 and December 31, 2020, two customers accounted for 100% (97% and 3%) and one customer accounted for approximately 1000% of accounts receivable, and four vendors accounted for 100% (33%, 28%, 20%, and 18%) and three vendors accounted for approximately 99% of accounts payable, respectively.

Earnings Per Share of Common Stock

The Company has adopted ASC Topic 260, ”Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying consolidated financial statements, basic earnings per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

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NOTE 3 - GOING CONCERN

The Company’s condensed consolidated financial statements are prepared using GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet had sufficient revenues to cover its operating cost, and requires additional capital to commence its operating plan. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about its ability to continue as a going concern.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company include: sales of equity instruments; traditional financing, such as loans; and obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 – ACCOUNTS RECEIVABLE

The Company has performed an analysis on all of its accounts receivable and determined that all amounts are collectible by the Company. As such, all accounts receivables are reflected as a current asset and no allowance for bad debt has been recorded as of September 30, 2022 and December 31, 2021. As at September 30, 2022 and December 31, 2021, the Company had accounts receivable of $7,661,417 and $9,318,431, respectively.

NOTE 5 – INVENTORIES

Inventories at September 30, 2022 and December 31, 2021 consist of the following:

	September 30,		December 31,
	2022		2021

Finished goods	$	6,892,898	$	7,733,568

NOTE 6 – CONVERTIBLE NOTE

At September 30, 2022 and December 31, 2021, convertible loans consisted of the following:

	September 30,			December 31,
	2022			2021
Convertible Notes - originated in November 22, 2019	$	-		$	4,064
Convertible Notes - issued during fiscal year 2020		566,336			605,000
Convertible Notes - issued during fiscal year 2021		-			508,750
Convertible Notes - issued during fiscal year 2022		213,050			-
Total convertible notes payable		779,386			1,117,814
Less: Unamortized debt discount		(12,476	)		(169,764	)
Total convertible notes		766,910			948,050
Less: current portion of convertible notes		629,719			730,981
Long-term convertible notes	$	137,191		$	217,069

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For the nine months ended September 30, 2022 and 2021, the interest expense on convertible notes was $205,396 and $82,206, and amortization of discount of $504,788 and $753,902, respectively. As of September 30, 2022 and December 31, 2021, the accrued interest was $168,936 and $125,722, respectively.

Conversion

During the nine months ended September 30, 2022, the Company converted notes with principal amounts and accrued interest of $777,737 into 515,592,535 shares of common stock. The corresponding derivative liability at the date of conversion of $1,222,191 was credited to additional paid in capital.

Convertible Notes – Issued during year ended December 31, 2022

During the nine months ended September 30, 2022, the Company issued a total principal amount of $333,250 convertible notes for cash proceeds of $305,750. The terms of convertible note are summarized as follows:

	·	Term: a range from 12 months to18 months;
	·	Annual interest rates: 8% - 12%;
	·	Convertible at the option of the holders at any time after 180 days from issuance or event of default
	·	Conversion prices are based on discounted (35% discount) lowest trading prices of the Company’s shares during various periods prior to conversion.

Convertible Notes – Issued during year ended December 31, 2021

During the year ended December 31, 2021, the Company issued a total principal amount of $743,500 convertible note for cash proceeds of $688,500. The terms of convertible note are summarized as follows:

	·	Term: a range from 12 months to 18 months;
	·	Annual interest rates: 8%;
	·	Convertible at the option of the holders at any time or 180 days from issuance
	·	Conversion prices are based on discounted (35% - 40% discount) lowest trading prices of the Company’s shares during various periods prior to conversion.

Convertible Notes – Issued during the year ended December 31, 2020

During the year ended December 31, 2020, the Company issued a total principal amount of $1,034,750 convertible note for cash proceeds of $912,000. The terms of convertible note are summarized as follows:

	·	Term: a range from 9 months to 18 months;
	·	Annual interest rates: 8% - 13%;
	·	Convertible at the option of the holders at any time or 180 days from issuance;
	·	Conversion prices are based on discounted (10% - 50% discount) lowest trading prices of the Company’s shares during various periods prior to conversion.
	·	Certain note allows the principal amount will increase by $15,000 and the discount rate of conversion price will decrease by 20% if the conversion price is less than $0.10 or $0.01. As a result, the discount rate of conversion price changed from 50% to 70% and the Company recognized the penalty of $15,000 and recorded principal amount of $15,000.

The Company determined that the conversion feature met the definition of a liability in accordance with ASC Topic No. 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Stock” and therefore bifurcated the embedded conversion option once the note becomes convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and amortized to interest expense over the term of the note.

The Company valued the conversion feature and warrant using the Black Scholes valuation model. The fair value of the derivative liability for all warrant and the notes that became convertible, including the notes issued in prior years, during the nine months ended September 30, 2022 amounted to $547,535. $320,000 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $227,535, was recognized as a “day 1” derivative loss.

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NOTE 7 – WARRANTS

A summary of activity regarding warrants issued as follows:

	Warrants Outstanding
				Weighted Average		Contractual life
	Shares			Exercise Price		(in years)

Outstanding, December 31, 2021		245,366,811		$	0.0069		3.37
Granted		-			-		-
Reset feature		13,637,490,376			0.0001		3.34
Exercised		(385,965,234	)		0.0001		3.14
Forfeited/canceled		-			-		-
Outstanding, September 30, 2022		13,496,891,953		$	0.0001		2.91

Exercisable warrant at September 30, 2022		13,496,891,953		$	0.0001		2.91

The Company determined that the warrants qualify for derivative accounting due to the reset feature of warrants, which led to no explicit limit to the number of shares to be delivered upon future settlement of the exercised warrants.

Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of the warrants at September 30, 2022 for those warrants for which the quoted market price was in excess of the exercise price (“in-the-money” warrants). The intrinsic value of the warrants as of September 30, 2022 is $16,161,592.

NOTE 8 – DERIVATIVE LIABILITIES

The Company analyzed the conversion option for derivative accounting consideration under ASC 815, “Derivatives and Hedging, and hedging,” and determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of September 30, 2022. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note and warrant is estimated using the Black-Scholes valuation model. The following weighted-average assumptions were used in the nine months ended September 30, 2022 and the year ended December 31, 2021:

	Nine Months Ended		Year ended
	September 30,		December 31,
	2021		2021
Expected term	0.12 - 3.41 years		0.09 - 4.47 years
Expected average volatility	186% - 468%		162% - 363%
Expected dividend yield		-		-
Risk-free interest rate	0.28% - 4.25%		0.02% - 0.97%

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The following table summarizes the changes in the derivative liabilities during the nine months ended September 30, 2022:

Fair Value Measurements Using Significant Observable Inputs (Level 3)

Balance - December 31, 2021	$	2,768,484
Addition of new derivatives recognized as debt discounts		320,000
Addition of new derivatives recognized as loss on derivatives		227,535
Settled on issuance of common stock		(2,243,862	)
loss on change in fair value of the derivative		17,348,458
Balance - September 30, 2022	$	18,420,615

The following table summarizes the (gain) loss on derivative liability included in the income statement for the nine months ended September 30, 2022 and 2021, respectively.

	Nine Months Ended
	September 30,
	2022		2021
Day one loss due to derivative liabilities on convertible notes	$	227,535	$	366,907
Change in fair value of the derivative liabilities		17,348,458		(2,076,637	)
	$	17,575,993	$	(1,709,730	)

NOTE 9 - STOCKHOLDERS’ DEFICIT

The capitalization of the Company consists of the following classes of capital stock as of September 30, 2022:

Preferred Stock

The Company has authorized 15,000,000 shares of preferred stock with a par value of $0.0001 per share. The Board of Directors are authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes. No shares of preferred stock have been issued.

Series A Preferred Stock

The Company is designated to issue 1,500,000 shares of Series A Preferred Stock at a par value of $0.0001. The Series A Preferred Stock shall have liquidation preference over any other class of stock and voting rights on the basis of one hundred votes for each shares of Series A Preferred Stock. The Preferred Stock can be converted to common stock, at a conversion rate of 100 common shares for each preferred stock.

As at September 30, 2022 and December 31, 2021, the Company had 1,500,000 preferred shares issued and outstanding.

Common Stock

On February 9, 2022, the Company filed a Certificate of Amendment to its Articles of Incorporation, increasing its authorized shares of common stock from 1,000,000,000 shares to 8,000,000,000 shares.

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The Company has authorized 8,000,000,000 shares of common stock with a par value of $0.0001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

During the nine months ended September 30, 2022, the Company issued common shares as follows

	·	515,592,535 shares of common stock for conversion of debt
	·	365,157,599 shares of common stock for cashless exercise of warrant

As at September 30, 2022 and December 31, 2021, the Company had 1,049,877,433 and 169,127,299 common shares issued and outstanding, respectively.

Subscription receivable

On February 24, 2020, the Company entered into a Purchase Agreement (the “Agreement”) with Mr. Liu FaKuan (“Seller”), the sole owner of Henan Wandi Mining Product Development Co., Ltd. (“Wandi”), a corporation organized in the People’s Republic of China (“PRC”), pursuant to which the Company will effect an acquisition of Wandi by acquiring from the Seller all outstanding equity interests of Wandi. Wandi owns 49% of a coal mine known as You Zhou Shenhuo Kuanfa Mining Company Ltd., (the “Mine”), with Zhengshou Yshong Coal Industry Co., Ltd. (a State-owned enterprise) owning the remaining 51% of the Mine.

Pursuant to the Agreement, the Company issued 60,000,000 restricted common shares of stock of the Company to the Seller, valued at $24,522,000. The obligations of the parties to complete the acquisition is subject to the fulfillment (or, in some cases waiver) of due diligence and certain closing conditions. Upon closing of the acquisition Seller shall transfer to Company 100% of the issued and outstanding equity interests of Wandi, which will then become a wholly owned subsidiary of the Company.

As of September 30, 2022, the Company does not have control of Wandi. As a result, the Company determined not to consolidate Wandi and recorded share issuance for acquisition of Wandi as a subscription receivable for $24,522,000, until the common shares of Wandi are delivered.

NOTE 10 – RELATED PARTY TRANSACTIONS

During the nine months ended September 30, 2022 and 2021, the Company borrowed $20,235 and $0 from our related parties and repaid $0 and $107,538 to our related parties, respectively.

As of September 30, 2022 and December 31, 2021, the Company recorded amounts due to related parties of $41,840 and $24,193, respectively. The loan is non-interest bearing and due on demand.

NOTE 11 - SEGMENTED INFORMATION

At September 30, 2022, the Company operates in one industry segment, oil and gas, and two geographic segments with China being where majority current assets and equipment are located.

At September 30, 2022 and December 31, 2021, segment assets and liabilities were as follows:

September 30, 2022	Holding Company			Oil and gas		Total Consolidated
Assets
Current assets	$	52,652		$	14,586,892	$	14,639,544
Non-current assets		1,979,787			-		1,979,787
Liabilities
Current liabilities		19,406,501			8,330,414		27,736,915
Long term liabilities		137,191			-		137,191
Net assets	$	(17,511,253	)	$	6,256,478	$	(11,254,775	)

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December 31, 2021	Holding Company			Oil and gas		Total Consolidated
Assets
Current assets	$	201,429		$	17,103,738	$	17,305,167
Non-current assets		1,979,787			-		1,979,787
Liabilities
Current liabilities		3,720,085			10,241,510		13,961,595
Long term liabilities		217,069			-		217,069
Net assets	$	(1,755,938	)	$	6,862,228	$	5,106,290

For the nine months ended September 30, 2022 and 2021, segment revenue and net income (loss) were as follows:

Nine Months Ended September 30, 2022	Holding Company			Oil and gas			Total Consolidated
Revenue	$	-		$	15,415,160		$	15,415,160
Cost of goods sold		-			(15,176,719	)		(15,176,719	)
Operating expenses		(493,111	)		(139,621	)		(632,732	)
Other expenses		(18,286,177	)		-			(18,286,177	)
Provision for income taxes		-			(55,928	)		(55,928	)
Net income (loss)	$	(18,779,288	)	$	42,892		$	(18,736,396	)

Nine Months Ended September 30, 2021	Holding Company			Oil and gas			Total Consolidated
Revenue	$	-		$	11,573,705		$	11,573,705
Cost of goods sold		-			(11,514,851	)		(11,514,851	)
Operating expenses		(593,973	)		(38,653	)		(632,626	)
Other income (expenses)		842,123			(14,172	)		827,951
Provision for income taxes		-			-			-
Net income	$	248,150		$	6,029		$	254,179

For the three months ended September 30, 2022 and 2021, segment revenue and net income (loss) were as follows:

Three Months Ended September 30, 2022	Holding Company			Oil and gas			Total Consolidated
Revenue	$	-		$	4,275,246		$	4,275,246
Cost of goods sold		-			(4,262,151	)		(4,262,151	)
Operating expenses		(134,489	)		(117,648	)		(252,137	)
Other income		9,079,028			-			9,079,028
Provision for income taxes		-			(1,398	)		(1,398	)
Net income (loss)	$	8,944,539		$	(105,951	)	$	8,838,588

Three Months Ended September 30, 2021	Holding Company			Oil and gas			Total Consolidated
Revenue	$	-		$	3,108,710		$	3,108,710
Cost of goods sold		-			(3,094,289	)		(3,094,289	)
Operating expenses		(267,948	)		(17,906	)		(285,854	)
Other expenses		(1,819,805	)		(1,371	)		(1,821,176	)
Provision for income taxes		-			-			-
Net loss	$	(2,087,753	)	$	(4,856	)	$	(2,092,609	)

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NOTE 12 – EARNINGS (LOSS) PER SHARES

Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the periods. Diluted net income per common share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the periods. Common equivalent shares consist of convertible preferred stock and convertible notes that are computed using the if-converted method, and outstanding warrants that are computed using the treasury stock method.

	Three months ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Numerator:
Net income (loss)	$	8,838,588		$	(2,092,609	)	$	(18,736,396	)	$	254,179
Change in fair value of derivative liabilities		(9,271,865	)		-			-			(1,709,730	)
Interest on convertible debts		11,009			-			-			(146,153	)
Net loss - diluted	$	(422,268	)	$	(2,092,609	)	$	(18,736,396	)	$	(1,601,704	)

Denominator:
Weighted average common shares outstanding		872,518,967			140,380,861			540,676,561			135,783,678
Effect of dilutive shares
Series A Preferred Stock		150,000,000			-			-			150,000,000
Convertible notes		1,057,491,880			-			-			22,344,299
Warrants		12,594,688,718			-			-			218,864,034
Diluted		14,674,699,564			140,380,861			540,676,561			526,992,011

Net income per common share:
Basic	$	0.01		$	(0.01	)	$	(0.03	)	$	0.00
Diluted	$	(0.00	)	$	(0.01	)	$	(0.03	)	$	(0.00	)

For the nine months ended September 30, 2022 and three months ended September 30, 2021, the convertible instruments are anti-dilutive and therefore, have been excluded from earnings (loss) per share.

NOTE 13 – SUBSEQUENT EVENTS

Subsequent to September 30, 2022, the Company issued common shares as follows;

	·	91,029,412 shares issued for conversion of debt of $61,900
	·	56,931,200 shares issued for cashless exercise of warrant

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Results of Operations

Our operations for the three and nine months ended September 30, 2022 and 2021are outlined below:

Three months ended September 30, 2022 compared to three months ended September 30, 2021

	Three months ended
	September 30,					Change
	2022		2021			Amount
Revenue	$	4,275,246	$	3,108,710		$	1,166,536
Cost of goods sold	$	4,262,151	$	3,094,289		$	1,167,862
Gross profit	$	13,095	$	14,421		$	(1,326	)
Operating expenses	$	252,137	$	285,854		$	(33,717	)
Other income (expense)	$	9,079,028	$	(1,821,176	)	$	10,900,204
Provision for income taxes	$	1,398	$	-		$	1,398
Net income (loss)	$	8,838,588	$	(2,092,609	)	$	10,931,197

The revenue for the nine months ended September 30, 2022 increased by $1,166,536 to $4,275,246 compared with the same period in 2021. The increase is mainly due to certain marketing recovery.

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Cost of goods sold for the three months ended September 30, 2022 increased by $1,167,862 to $4,262,151 compared with the same period in 2021. The increase is mainly due to an increase in revenue in this period.

Operating expenses for the three months ended September 30, 2022 decreased by $33,717 to $252,137 compared with the same period in 2021. The decrease is mainly due to a decrease in general and administrative expenses.

Other income for the three months ended September 30, 2022 increased by $10,900,204 to other income of $9,079,028 from other expense compared with the same period in 2021. The increase in other income is mainly due to change in fair value of derivative liabilities related to convertible notes and warrants.

Net income for the three months ended September 30, 2022 was $8,838,588 compared to net loss of $2,092,609 in the same period in 2021. The change is mainly due to change in fair value of derivative liabilities related to convertible notes and warrants.

For the three months ended September 30, 2022 and 2021 our results of operations segment, are as follows:

Three Months Ended September 30, 2022	Holding Company			Oil and gas			Total Consolidated
Revenue	$	-		$	4,275,246		$	4,275,246
Cost of goods sold		-			(4,262,151	)		(4,262,151	)
Operating expenses		(134,489	)		(117,648	)		(252,137	)
Other income		9,079,028			-			9,079,028
Provision for income taxes		-			(1,398	)		(1,398	)
Net income (loss)	$	8,944,539		$	(105,951	)	$	8,838,588

Three Months Ended September 30, 2021	Holding Company			Oil and gas			Total Consolidated
Revenue	$	-		$	3,108,710		$	3,108,710
Cost of goods sold		-			(3,094,289	)		(3,094,289	)
Operating expenses		(267,948	)		(17,906	)		(285,854	)
Other expenses		(1,819,805	)		(1,371	)		(1,821,176	)
Provision for income taxes		-			-			-
Net loss	$	(2,087,753	)	$	(4,856	)	$	(2,092,609	)

Holding Company

	Three months ended
	September 30,					Change
	2022		2021			Amount
Revenue	$	-	$	-		$	-
Cost of goods sold	$	-	$	-		$	-
Gross profit	$	-	$	-		$	-
Operating expenses	$	134,489	$	267,948		$	(133,459	)
Other income (expense)	$	9,079,028	$	(1,819,805	)	$	10,898,833
Provision for income taxes	$	-	$	-		$	-
Net income (loss)	$	8,944,539	$	(2,087,753	)	$	11,032,292

Operating expense mainly consists of professional fees for ongoing regulatory requirements and general and administrative expense. The decrease in operating expense is primarily due to a decrease in rent expense.

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Other income (expense) mainly consists of interest expense and change in fair value of derivative liability from convertible notes and warrants.

Oil and Gas

	Three months ended
	September 30,						Change
	2022			2021			Amount
Revenue	$	4,275,246		$	3,108,710		$	1,166,536
Cost of goods sold	$	4,262,151		$	3,094,289		$	1,167,862
Gross profit	$	13,095		$	14,421		$	(1,326	)
Operating expenses	$	117,648		$	17,906		$	99,742
Other expense	$	-		$	(1,371	)	$	1,371
Provision for income taxes	$	1,398		$	-		$	1,398
Net loss	$	(105,951	)	$	(4,856	)	$	(101,095	)

The increase in revenue is primarily due to certain marketing recovery. The increase in cost of goods sold is primarily due to an increase in revenue. The percentage of gross profit is 0.3% in 2022 and 0.5% in 2021.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021

	Nine Months Ended
	September 30,					Change
	2022			2021		Amount
Revenue	$	15,415,160		$	11,573,705	$	3,841,455
Cost of goods sold	$	15,176,719		$	11,514,851	$	3,661,868
Gross profit	$	238,441		$	58,854	$	179,587
Operating expenses	$	632,732		$	632,626	$	106
Other income (expense)	$	(18,286,177	)	$	827,951	$	(19,114,128	)
Provision for income taxes	$	(55,928	)	$	-	$	(55,928	)
Net income (loss)	$	(18,736,396	)	$	254,179	$	(18,990,575	)

The revenue for the nine months ended September 30, 2022 increased by $3,841,455 to $15,415,160 compared with the same period in 2021. The increase is mainly due to finding new customer in 2022 and the effects of COVID-19 causing a decrease in demand and consequently the pricing in prior year period.

Cost of goods sold for the nine months ended September 30, 2022 increased by $3,661,868 to $15,176,719 compared with the same period in 2021. The increase is mainly due to an increase in revenue in this period.

Operating expenses for the nine months ended September 30, 2022 increased by $106 to $632,732 compared with the same period in 2021.

Other expense for the nine months ended September 30, 2022 increased by $19,114,128 to other expense of $18,286,177 from other income compared with the same period in 2021. The increase in other expense is mainly due to change in fair value of derivative liabilities related to convertible notes and warrants.

Net loss for the nine months ended September 30, 2022 was $18,736,396 compared to net income of $254,179 in the same period in 2021. The change is mainly due to change in fair value of derivative liabilities related to convertible notes and warrant.

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For the nine months ended September 30, 2022 and 2021 our results of operations segment, are as follows:

Nine Months Ended September 30, 2022	Holding Company			Oil and gas			Total Consolidated
Revenue	$	-		$	15,415,160		$	15,415,160
Cost of goods sold		-			(15,176,719	)		(15,176,719	)
Operating expenses		(493,111	)		(139,621	)		(632,732	)
Other expenses		(18,286,177	)		-			(18,286,177	)
Provision for income taxes		-			(55,928	)		(55,928	)
Net income (loss)	$	(18,779,288	)	$	42,892		$	(18,736,396	)

Nine Months Ended September 30, 2021	Holding Company			Oil and gas			Total Consolidated
Revenue	$	-		$	11,573,705		$	11,573,705
Cost of goods sold		-			(11,514,851	)		(11,514,851	)
Operating expenses		(593,973	)		(38,653	)		(632,626	)
Other income (expenses)		842,123			(14,172	)		827,951
Provision for income taxes		-			-			-
Net income	$	248,150		$	6,029		$	254,179

Holding Company

	Nine Months Ended
	September 30,					Change
	2022			2021		Amount
Revenue	$	-		$	-	$	-
Cost of goods sold	$	-		$	-	$	-
Gross profit	$	-		$	-	$	-
Operating expenses	$	493,111		$	593,973	$	(100,862	)
Other income (expense)	$	(18,286,177	)	$	842,123	$	(19,128,300	)
Provision for income taxes	$	-		$	-	$	-
Net income (loss)	$	(18,779,288	)	$	248,150	$	(19,027,438	)

Other income (expense) mainly consists of interest expense and change in fair value of derivative liability from convertible notes and warrant.

Oil and Gas

	Nine Months Ended
	September 30,					Change
	2022		2021			Amount
Revenue	$	15,415,160	$	11,573,705		$	3,841,455
Cost of goods sold	$	15,176,719	$	11,514,851		$	3,661,868
Gross profit	$	238,441	$	58,854		$	179,587
Operating expenses	$	139,621	$	38,653		$	100,968
Other expense	$	-	$	(14,172	)	$	14,172
Provision for income taxes	$	55,928	$	-		$	55,928
Net income	$	42,892	$	6,029		$	36,863

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The increase in revenue is primarily due to finding new customer and the effects of COVID-19 which caused a decrease in demand and consequently the pricing in prior period. The increase in cost of goods sold is primarily due to an increase in revenue. The percentage of gross profit is 2.0% in 2022 and 0.5% in 2021.

Liquidity and Capital Resources

The following table provides selected financial data about our Company as of September 30, 2022 and December 31, 2021, respectively.

Working Capital

The following table provides selected financial data about our Company as of September 30, 2022 and December 31, 2021, respectively.

	September 30,			December 31,		Change
	2022			2021		Amount
Cash	$	22,402		$	101,876	$	(79,474	)

Current Assets	$	14,639,544		$	17,305,167	$	(2,665,623	)
Current Liabilities	$	27,736,915		$	13,961,595	$	13,775,320
Working Capital Deficiency	$	(13,097,371	)	$	3,343,572	$	(16,440,943	)

The increase in working capital deficiency was primarily attributed to an increase in current liabilities and a decrease in current asset. The decrease in current assets was primarily attributed to a decrease in accounts receivable and inventory. The increase in current liabilities was primarily attributed to an increase in derivative liabilities from convertible notes and warrant.

Cash Flow

	Nine Months Ended
	September 30,						Change
	2022			2021			Amount
Cash Flows used in operating activities	$	(459,775	)	$	(462,202	)	$	2,427
Cash Flows provided by investing activities	$	-		$	-		$	-
Cash Flows provided by financing activities	$	275,557		$	478,462		$	(202,905	)
Effects on changes in foreign exchange rate	$	104,744		$	482		$	104,262
Net change in cash during period	$	(79,474	)	$	16,742		$	(96,216	)

Cash Flow from Operating Activities

During the nine months ended September 30, 2022, our Company used $459,775 in operating activities, compared to $462,202 during the nine months ended September 30, 2021.

Cash Flow from Investing Activities

During the nine months ended September 30, 2022 and 2021, we did not have any investing acuities.

Cash Flow from Financing Activities

During the nine months ended September 30, 2022 and 2021, our Company received $275,557 and $478,462 from financing activities, respectively. For the nine months ended September 30, 2022, the Company received $305,750 from convertible notes and $20,235 from loans from related parties, and repaid convertible notes for $50,428. For the nine months ended September 30, 2021, the Company received $586,000 from convertible notes, and repaid $107,538 to related parties.

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Critical Accounting Policies and Estimates

The preparation of consolidated financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates, and such differences may be material.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 3.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and out Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of September 30 2021, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules, regulations and forms, and (ii) that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has concluded there were no significant changes in our internal controls over financial reporting that occurred during this quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company is not currently subject to any legal proceedings. From time to time, the Company may become subject to litigation or proceedings in connection with its business, as either a plaintiff or defendant. There are no such pending legal proceedings to which the Company is a party that, in the opinion of management, is likely to have a material adverse effect on the Company’s business, financial condition or results of operations.

ITEM 1A. RISK FACTORS

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

ITEM 5. OTHER INFORMATION.

None.

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ITEM 6. EXHIBITS.

(a) The following Exhibits, as required by Item 601 of Regulation SK, are attached or incorporated by reference, as stated below.

Number		Description

3.1.1		Articles of Incorporation (1)
3.1.2		Certificate of Amendment (2)
3.1.3		Certificate of Amendment (4)
3.1.4		Certificate of Amendment (5)
3.2		Amended and Restated Bylaws (3)
31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH*		Inline XBRL Taxonomy Extension Schema Document.
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*		Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

_______________

*Submitted, not filed.

(1)	Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-187437), filed with the Securities and Exchange Commission on March 22, 2019.
(2)	Incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 001-55319), filed with the Securities and Exchange Commission on May 13, 2016.
(3)	Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 001-55319), filed with the Securities and Exchange Commission on July 9, 2018.
(4)	Incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 001-55319), filed with the Securities and Exchange Commission on June 1, 2021.
(5)	Incorporated by reference to the Registrant’s preliminary Information Statement on Schedule 14C (File No. 001-55319), filed with the Securities and Exchange Commission on March 10, 2022.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PHOENIX RISING COMPANIES

Date: December 22, 2022	By:	/s/ Ding-Shin “DS” Chang
	Name:	Ding-Shin “DS” Chang
	Title:	President and Chief Executive Officer (principal executive officer)