UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

For the quarterly period ended September 30, 2015

 For the transition period from ______to______.

Commission File Number: 021-165129

SAN LOTUS HOLDING INC.

(Exact name of registrant as specified in its charter)

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 x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (229.405 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 x   No o

Indicate by checkmark 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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso   Nox

As of September 30, 2015, 40,187,918 shares of the Registrant's common stock, $1 par value, were outstanding.

SAN LOTUS HOLDING INC.

FORM 10-Q

For the quarter ended June 30, 2015

TABLE OF CONTENTS

CAUTIONARY NOTE ON FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this "Report") contains "forward-looking statements." Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as "anticipate," "believe," "estimate," "intend," "could," "should," "would," "may," "seek," "plan," "might," "will," "expect," "predict," "project," "forecast," "potential," "continue," negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.  Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Report.

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

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

2

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

SAN LOTUS  HOLDING  INC. 

NOTES TO CONDENSED CONSOLIDATED  FINANCIAL  STATEMENTS 

(UNAUDITED)

NOTE 1-  NATURE  OF  OPERATIONS  AND  SUMMARY  OF  ACCOUNTING  POLICIES 

Basis of Presentation

As permitted by the rules and regulations of the Securities and Exchange Commission, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP") have been condensed or omitted. These consolidated financial statements should be read in conjunction with the Company's 2014 annual consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K/A for the year ended December 31, 2014.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company's interim financial statements. The results for such periods are not necessarily indicative of the results to be expected for the full year.

Nature of  Business 

San Lotus  Holding  Inc.,  a  company  in  the  developmental  stage  (the  "Company"  or  "San  Lotus"),  was  incorporated  on  June  21,  2011  in  the State of Nevada. 

The Company is in the initial stages of opening a travel agency in Taiwan through its wholly owned subsidiary, Green Forest Management Consulting Inc., a Taiwan company. The Company has not conducted business operations nor had revenues from operations since its inception. The Company's business plan is to desig and market global travel packages and affinity travel excursions through out the world, and develop a global travel and leisure agency business.

San Lotus changed our state of incorporation from the State of Nevada to the State of California (the "Conversion") on July 21, 2015.

The Company's year-end is December 31.

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of San Lotus Holding, Inc. and its subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.

Going Concern 

The accompanying consolidated financial statements were prepared on a going concern basis, which assumes the realization of assets and discharge of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, the Company had an accumulated deficit of $887,914 as of September 30, 2015.

The Company faces all the risks common to companies at the development stage, including capitalization and uncertainty of funding sources, high initial expenditure levels, uncertain revenue streams and difficulties in managing growth. The Company's losses raise substantial doubt about its ability to continue as a going concern. The Company's consolidated financial statements do not reflect any adjustments that might result from the outcome of this uncertainty.

The Company is currently addressing its liquidity issue by continually seeking investment capital through private placements of common stock and debt. The Company believes its current and future plans enable it to continue as a going concern. The Company's ability to achieve these objectives cannot be determined at this time. These consolidated financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities other than the normal course of business and at amounts which may differ from those in the accompanying consolidated financial statements.

Use of  Estimates 

The preparation of financial statements in conformity with U.S. 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 and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and  Cash  Equivalents 

Cash and  cash  equivalents  include  cash  and  all  highly  liquid  instruments  with  original  maturities  of  three  months  or  less. 

Property and Equipment 

Property and equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with estimated lives as follows:

As of  September 30, 2015,  the  Company's  property  and  equipment  consisted  of  the  following: 

Depreciation expenses  were  $19,224 for the  nine months ended  September 30, 2015. 

Stock Based  Compensation 

The Company  applies  the  fair  value  provisions  of  ASC  718,  Compensation-Stock  Compensation  ("ASC  718").  ASC  718  requires  the  recognition  of  compensation  expense,  using  a  fair-value  based  method,  for  costs  related  to  all  share-based  payments  including  stock  options.  ASC  718  requires  companies  to  estimate  the  fair  value  of  share-based  payment  awards  on  the  grant  date  using  an  option  pricing  model.  The  Company  does  not  have  any  awards  of  stock-  based  compensation  issued  and  outstanding  at  June  30, 2015.

Net Income (Loss) Per  Share 

The Company  has  adopted  Accounting  Standards  Codification  subtopic  260-10,  Earnings  Per  Share  ("ASC  260-10"),  which  specifies  the  computation,  presentation  and  disclosure  requirements  of  earnings  per  share  information.  Basic  earnings  per  share  have  been  calculated  based  upon  the  weighted  average  number  of  common  shares  outstanding.  Common  equivalent  shares  are  excluded  from  the  computation  of  the  diluted  loss  per  share  if  their  effect  would  be  anti-dilutive.  For  the  nine months period ended  September 30, 2015,  the  Company  did  not  have  any  common  equivalent  shares.   

Impairment of  Long-Lived  Assets 

The Company  has  adopted  Accounting  Standards  Codification  subtopic  360-10,  Property,  Plant  and  Equipment  ("ASC  360-10").  ASC  360-10  requires  that  long-lived  assets  and  certain  identifiable  intangibles  held  and  used  by  the  Company  be  reviewed  for  impairment  whenever  events  or  changes  in  circumstances  indicate  that  the  carrying  amount  of  an  asset  may  not  be  recoverable.  The  Company  evaluates  its  long  lived  assets  for  impairment  annually  or  more  often  if  events  and  circumstances  warrant.  Events  relating  to  recoverability  may  include  significant  unfavorable  changes  in  business  conditions,  recurring  losses,  or  a  forecasted  inability  to  achieve  break-even  operating  results  over  an  extended  period.  The  Company  evaluates  the  recoverability  of  long-lived  assets  based  upon forecasted  undiscounted  cash  flows.  Should  impairment  in  value  be  indicated,  the  carrying  value  of  intangible  assets  will  be  adjusted,  based  on  estimates  of  future  discounted  cash  flows  resulting  from  the  use  and  ultimate  disposition  of  the  asset.  ASC 360-10  also  requires  assets  to  be  disposed  of  be  reported  at  the  lower  of  the  carrying  amount  or  the  fair  value  less  costs  to  sell.  Management has  determined  that  no  impairments  of  long-lived  assets  currently  exist. 

Income Taxes 

The company accounts  for  income  taxes  in  accordance  with  ASC  740,  Income  Taxes,  which  requires  that  the  Company  recognize  deferred  tax  liabilities  and  assets  based  on  the  differences  between  the  financial  statement    carrying amounts  and  the  tax  basis  of  assets  and  liabilities,  using  enacted  tax  rates  in  effect  in  the  years  the  differences  are  expected  to  reverse.Deferred  income  tax  benefit  (expense)  results  from  the  change  in  net  deferred  tax  assets  or  deferred  tax  liabilities. 

A valuation  allowance  is  recorded  when,  in  the  opinion  of  management,  it  is  more  likely  than  not  that  some  or  all  of  any  deferred  tax  assets  will  not  be  realized. 

Translation Adjustment

The Company's financial statements are presented in the U.S. dollar ($), which is the Company's reporting currency, while its functional currency is New Taiwan Dollar (NTD). Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the statements of operations. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange prevailing at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the statements of operations.

In accordance with ASC 830, Foreign Currency Matters, the Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from RMB into U.S. dollar are recorded in stockholders' equity as part of accumulated other comprehensive income. The exchange rates used for financial statements in accordance with ASC 830, Foreign Currency Matters, are as follows:

September 30, 2015                                                        Average Rate for the period                                 Exchange Rate at period end

New Taiwan Dollar     NTD                                                                      31.595                                      NTD                         33.128 

United States dollar ($)       $                                                                  1.000                                        $                              1.000 

December 31, 2014                                                        Average Rate for the period                                 Exchange Rate at period end

New Taiwan Dollar     NTD                                                                      30.680                                      NTD                         31.7180 

United States dollar ($)       $                                                                  1.000                                        $                              1.000 

Statement of  Cash  Flows 

Cash flows  from  the  Company's  operations  are  based  upon  the  local  currencies.  As  a  result,  amounts  related  to  assets  and  liabilities  reported  on  the  statement  of  cash  flows  will  not  necessarily  agree  with  changes  in  the  corresponding  balances  on  the  balance  sheet. 

Recently Issued  Accounting  Pronouncements 

In September 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-16, "Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments" ("ASU 2015-16"), which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU 2015-16 is effective for fiscal years, and interim reporting periods within those fiscal years, beginning after December 15, 2015. The Company is currently evaluating the impact of the adoption of this guidance on the Consolidated Financial Statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The standard provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. On July 9, 2015, FASB voted to defer the effective date of ASU 2014-09 by one year. The guidance would be effective for annual and interim reporting periods beginning after December 15, 2018 and early adoption is permitted. We are currently assessing the impact that adoption of ASU 2014-09 will have on our financial position, results of operations or cash flows.

NOTE 2- INCOME TAXES

San Lotus has not yet realized income as of the date of this report, and no provision for income taxes has been made.

As of September 30, 2015, there were no deferred tax assets or liabilities.

NOTE 3- RELATED  PARTY  TRANSACTIONS 

In December 2014, our wholly-owned subsidiary, Green Forest, a Taiwanese corporation, entered into a land sale agreement with Yu Chien-Yang, our vice president to sell him 29,332.7000 square meters of land located in the Xinhua Section of Xinpi Township, Pingtun County, Taiwan. Green Forest sold the Land for NTD$53,238,851 (US$1,815,414.60) and Mr. Yu transferred his 1,815,415 shares of common stock in San Lotus Holding Inc. to the Company. The shares were retired as treasury stock.

As the titles to Land in Miaoli County, Taiwan have not been transferred to Green Forest by the end of 2014 as stipulated in sales agreement, Green Forest cancelled the December 2013, March 2014 and August 2014 land purchase transactions in accordance with terms of the sales agreement whereby the Company is not obligated to pay any termination costs. The shares issued in connection with these cancelled deals were retired as treasury stock.

On March 31, 2015, our wholly-owned subsidiary, Green Forest, a Taiwanese corporation, entered into a land purchase agreement with Yu, Chien-Yang , our vice president to acquire 35,251 square meters of land in Dataoping Section of Zaoqiao Township, Miaoli County, and 41,184 square meters of land in Laotianliao Section of Touwu Township, Miaoli County, Taiwan, all of which is 76,435 square meters for NTD$192,060,000 (US$6,195,484). The Purchase Price was paid for through Green Forest's issuance of a promissory note payable to the Seller. On the same date, the Company entered into a stock purchase agreement for the issuance of 6,195,484 shares of its common stock, par value $1 per share, at a purchase price of $1 per share, to the seller and their designees pursuant to stock purchase agreement.

In July 2015, the Company sold the condominium unit in Glendale, California to its CEO, Chih-Ying ChenTseng for a total selling price of $487,355.

On August 14, 2015, the Company entered into and closed on a stock purchase agreement (the "Stock Purchase Agreement") with Chih-Ying ChenTseng, our CEO and director for the acquisition of  XO EXPERIENCE INC. ("XO") to acquire all of the issued and outstanding common stock of XO in exchange for US$1.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date of the acquisition:

NOTE 4- COMMON  STOCK 

On September  17,  2013,  the  Company  issued  30,706,452  shares  of  common  stock  to  noteholders  at  a  price  of  $0.1  per  share  for  an  aggregate  amount  of  $3,070,645. 

On October 29, 2013,  the  Company  issued  18,154,146  shares  of  common  stock  to  noteholders  at  a  price  of  $0.1per share  for  an  aggregate  amount  of  $1,815,415. 

On December 27, 2013,  the  Company  issued  33,426,757  shares  of  common  stock  to  a noteholder  at  a  price  of  $0.2021  per  share  for  an  aggregate  amount  of  $6,755,547. 

On March 13, 2014, the  Company  issued  139,364,582  shares  of  common  stock  to  a noteholder  at  a  price  of  $0.2021  per  share  for  an  aggregate  amount  of  $28,165,582.

On August 11, 2014, the  Company  issued  397,935,544  shares  of  common  stock  to  a noteholder  at  a  price  of  $0.2804 per  share  for  an  aggregate  amount  of  $111,581,127.

On August 11, 2014, the  Company  issued  202,660,931  shares  of  common  stock  to  a noteholder  at  a  price  of  $0.2021 per  share  for  an  aggregate  amount  of  $40,957,774.

On March 9, 2015, The Company wholly-owned subsidiary, Green Forest, a Taiwanese corporation, has terminated the land purchase agreement dated December 27, 2013, March 13, 2014 and August 11, 2014 because the Land Seller has not conveyed to Green Forest the entire titles to the Land. Concurrently with the termination of the land purchase agreement, we have discharged all our obligations we assumed from the promissory note, and the Shares issued under the stock purchase agreements shall be cancelled from the record in our transfer agent, Computershare Inc. and Computershare Trust Company, N.A.

On July 1, 2015, the  Company  issued 29,464,575 shares  of  common  stock  to  a noteholder  at  a  price  of  $1 per  share  for  an  aggregate  amount  of  $29,464,575. 

NOTE 5- SUBSEQUENT EVENT

The Company has evaluated the effects of events and transactions through the date of this filing that have occurred subsequent to September 30, 2015. The Company does not believe there were any material subsequent events during this period that would have required further recognition or disclosure in the unaudited consolidated financial statements included in this report.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation

This Quarterly Report on Form 10-Q contains "forward-looking" statements as such term is defined in the Private Securities Litigation Reform Act of 1995.  These forward-looking statements consist of information relating to the Company that is based on the beliefs of the Company's management as well as assumptions made by and information currently available to the Company's management. When used in this report, the words "anticipate," "believe," "estimate," "expect" and "intend" and words or phrases of similar import, as they relate to the Company or Company management, are intended to identify forward-looking statements. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitation, competitive factors, general economic conditions, customer relations, relationships with vendors, the interest rate environment, governmental regulation and supervision, seasonality, distribution networks, product introductions and acceptance, technological change, changes in industry practices, onetime events and other factors described herein and in other filings made by the Company with the Securities and Exchange Commission. Based upon changing conditions, should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. The Company does not intend to update these forward-looking statements.

BUSINESS OVERVIEW

San Lotus Holding Inc. was incorporated in the state of Nevada on June 21, 2011 to (1) market travel products and services to the growing "baby boomer" market, with an initial focus on the Asian market, via developing and operating a global travel and leisure agency business; and (2) jointly develop the tourism and travel of He Ping Zhen, Shaowu  City, Fujian Province, China with He Ping Zhen Development Ltd., a China Limited Corporation, the specific plans of which remains under preliminary discussion. Our vision is to consolidate travel products and services and deliver value to the world's travel population. We changed our state of incorporation from the State of Nevada to the State of California (the "Conversion") on July 21, 2015.

We are a development stage company that plans to market global travel products to the retiring baby boomer generation in the Asian markets. We are in the initial stages of opening a travel agency in Taiwan, Republic of China. On May 21, 2012, we obtained a license from the Investment Commission, Ministry of Economic Affairs, Taiwan (R.O.C.) to invest into Taiwan through our wholly-owned subsidiary, Green Forest Management Consulting Inc., a Taiwan (R.O.C.) company. We anticipate that we will be able to obtain this approval by the fourth quarter of 2016. The challenges we anticipate in obtaining the necessary approvals to operate a travel agency in Taiwan (as well as in other countries) primarily involves meeting the statutory requirements related to capital requirements, statutory reserves and employing fit, proper and qualified management. These challenges have already been addressed by starting our business in Taiwan (as referenced in Risk Factors under government approval). We expect to begin generating revenue in Taiwan in April 2016, after we obtain the relevant licenses and approval from Taiwan's government.

Our travel services entity in Taiwan will provide both outbound travel services for customers based in Taiwan and inbound travel services for customers based abroad and coming to Taiwan. Both the outbound and inbound services will be conducted in our Taiwan office, except the inbound services will rely in part on advertising conducted or directed outside of Taiwan.

We will not only book airplane tickets, hotels and tours, but design specialized destination-related travel services for our customers based on their specific needs and desires while they are in Taiwan. In this way, our market will consist of both those potential travelers based in Taiwan, but also anyone from any other country who might be planning a trip to Taiwan or need assistance with designing a travel itinerary once they arrive in Taiwan. We will market our products and services to the travel population in Taiwan and abroad through our website, www.sanlotusholding.com, as well as through services such as Twitter and other media outlets. we have purchased three vehicles to provide transportation to our customers while they are in California, a common destination for Taiwan business travelers and tourists.

We intend to use the cars, with hired drivers, to provide car service for our customers from the airport to their hotels or other desired destinations upon their arrival in California. Providing car service is an experimental project at this point as we only have three vehicles available for use. We will charge our customers an amount that will cover our expenses in providing the car and driver. In the event the service is popular and appears to benefit our services, we may add to the service in the future, at which time we would reevaluate the amount we charge for the service.

In addition to developing our business in Taiwan, in the first quarter of 2013, we entered into non-binding letters of intent to acquire existing travel services agencies in Taipei City, Taiwan, Hong Kong, Vietnam, Vancouver, British Columbia and California. We plan to proceed in negotiating terms for these acquisitions over the course of the next several months while we simultaneously gather operational data from our module operation in Taiwan. We expect to complete the acquisitions of such travel agencies by the end of 2016. At the same time, we also have entered into non-binding letters of intent to acquire land in Taiwan, which land we intend to use to develop destination-related travel services. We expect to complete the acquisitions of such land and/or land holding companies by the end of 2016.

Despite of entering the non-binding letters of intent to acquire the travel agencies and land, we remain in the preliminary discussion with the travel agencies and the sellers of the land about the specific considerations to acquire them. Thus, to date, we are not able to estimate any specific costs in completing such acquisitions. Acquiring the travel agencies located both within and outside of Taiwan and land in Taiwan is an ongoing effort that will continue during the life of the Company. To facilitate our acquisition efforts, we will actively seeking additional funding on favorable terms to continue our acquisition. If additional funding is not available on acceptable terms, we may not be able to implement our acquisitions and continue our operations. We plan to be funded by private placement of our equity securities and/or mortgage our land. But, there can be no assurance we will be funded as such. Thus, there can be no assurance we will successfully complete our acquisitions of travel agencies and/or land. If we fail to complete our acquisitions of travel agencies and/or land, we may be forced to cease our operation entirely, and you may lose all your investment.

Each of these non-binding letters of intent above was disclosed to the SEC in a Current Report on Form 8-K shortly after our entry into each such non-binding letter of intent.

Regarding the development of our travel services entity in Taiwan, our plan is to build up a successful module operation in Taiwan and to gain meaningful operational data for one year before using it as a model to replicate throughout Asia. It is critically important for us to obtain credible data in terms of the following (per module main office, plus branch officers):

1.      Start-up Cost

A.        Capital requirements - estimated $100,000 upon application license - end of 2015

B.        Statutory reserve - estimated $20,000 upon approval of license - end of 2015

C.         Fees - estimated $1,000 upon application for license - end of 2015  

D.        Rent deposit - estimated $2,000 upon rental of office - end of 2015

E.         Equipment, etc. - estimated $5,000 - end of 2015

F.         Purchase of condominium and automobiles in California - $628,141 - June 2012

G.        Purchase of interest in A Peace World Holding Inc. - $46,500 - January 2012

2.      Operating Expenses

A.        Number of employees and salary per office - two employees at $1,500 each per month for a total of $3,000 - starting in April 2014

B.        Office rent-Green Forest-$2,000 per month-starting in September 2013

C.         Office rent-Da Ren-$1,333 per month -starting in September 2013

D.        Telecommunications - $200 per month-starting in June 2012 and $700 starting in September 2012

E.         Utilities, etc. - $500 per month- starting in September 2013

F.         Advertising - estimated $5,000 for initial television advertising development - end of 2015

G.        Condominium expenses -$900 per month-starting in September 2013

H.        Automobile-related expenses - $1,500- September 2013

3.      Projected Sales

A.        Dollar sales/commission per office

B.        Breakdown of sales by product

4.      Projected Cash Flow

5.    Breakeven point and Projected Earnings

Making projections using real figures based on the module operations should lower our level of risk as we expand into other countries. While it is premature to set any definitive dates in applying for obtaining statutory approval to operate travel agencies beyond Taiwan (R.O.C.), we anticipate that after one full year of operation, we will have sufficient data to construct an expansion plan for establishing ventures beyond Taiwan.

Products and Services Offered:

-                Transportation: airlines / buses / car rentals / railways / cruises;

-                Accommodation: hotels / resorts / cruises; and

-               Packaged holidays / local tours.

Our business strategy is to generate revenue mainly through commissions or mark-ups for selling travel products. For example, for airplane tickets, for which we do not take inventory, we will receive commission revenue from the airlines as compensation for selling airplane tickets to our customers. In other words, our revenue will not come directly from the payments which the customers make to the airlines, but instead our commission revenue will be paid by the product provider (e.g. airlines) directly to our Company. The size of commission will vary from product to product, depending on how product providers (e.g. airlines) set their distribution strategy. Below is an estimate of the commission percentage we expect to be able to obtain for each type of product:

Another type of revenue would come from mark-ups. Our mark-up revenue will be earned when we choose to take inventory on products such as hotel stays, cruise trips or tours. This type of revenue is different from commission-based revenue in that we will secure the product outright before customers purchase the product. After we purchase the product, we would then sell the product to the customer at a higher price, thereby earning the difference or mark-up as profit. The size of the mark-up will vary depending on our inventory level, market conditions and customer preference.

Below is an estimate of the mark-up percentage and the initial cost of obtaining wholesale inventory for each type of product:

We expect to incur the cost of obtaining wholesale inventory starting in the first quarter of 2014 or as soon as our license to operate a travel agency has been granted. Consequently, we will recover the cost and make a profit when inventory is turned over or sold. The profitability of our mark-up business will depend on how frequent inventory is turned.

We anticipate providing other ancillary travel services such as submitting visa applications on behalf of clients. It is our understanding that it is customary to charge a handling fee of US$5~10 for the submission of a visa application. These types of services, however, should only constitute a small part of our overall revenue.

We plan to market our company to high-income individuals and affinity groups, such as private schools, alumni groups and wealth management organizations at banks and investment firms. Our plan to reach these target customers is through seeking lists from the affinity groups and marketing online. In terms of seeking lists from affinity groups, our strategy involves no upfront cost to our company. We will instead share the profits with the organizations that provided such lists when customers purchase travel products through our company. Our general rule of thumb is to share 50% of the profit with the affinity group. This estimate may be adjusted upward or downward depending on the size and quality of the customer list. Separately, we plan to market our company online through our company website. Currently under construction, our company website, www.sanlotusholding.com, will be a vehicle to promote our offerings to a wide audience. We plan on interacting with our retail customers primarily through our website. Our customers will be able to place their purchases via the telephone, through credit card or bank transfer payment.

Business Development

The Company seeks to develop mutually beneficial business relationships with travel product providers, such as airlines, hotels and tour operators, and will begin offering travel products to our customers. The Company will work on reaching a variety of affinity groups and reaching agreements to service their customers. The Company recently launched a website, www.sanlotusholding.com, to begin marketing our services online. Our costs as a reporting company in our first year are approximately $165,000 in legal fees and $45,000 in auditing fees, including the preparation of our 10-K filing and annual audit. And, our costs as a reporting company in our second year are approximately $16,193 in legal fees and $50,300 in auditing fees, including the preparation of our 10-K filing and annual audit.

Marketing and Sales

Our initial marketing efforts will be designed to drive prospective clients to our website, www.sanlotusholding.com. We plan to use social media vehicles such as Twitter and Facebook to generate awareness of our website. We expect to engage prospective clients through promoting our website and responding to requests for information. Eventually, we expect to use broader-based email marketing to generate a much larger number of sales leads that will be followed up with a personal exchange, via email or telephone, but there is no guarantee this will be successful.

We have taken the following steps in implementing our business plan:

Vendor Discussion and Supplier Agreements

We have contacted vendors to provide travel related products to our customers. Below is a summary of the number of vendors who have responded favorably to our request. We have not signed any formal supplier agreements with product vendors.

Website Development

We have completed the initial version of our website, www.sanlotusholding.com, and will use this site to market our services to the general public.

Affinity Groups

We have used the contacts of our directors and officers in initially contacting various affinity groups. Thus far, we have had conversations with no less than five groups that have expressed interest in sharing their group list with our company. However, at this time we have not executed any of agreements with these companies. Below is a summary of the statistics we wish to reach regarding various affinity groups:

We are in the process of applying for our license to operate a travel agency in Taiwan. We expect to receive approval for our business license by the end of 2016. Once proper licenses and approvals have been granted, we will need to take the following steps in generating revenue:

-         Formally launch online operations (in or after 2015)

-         Sign formal supplier agreements with product vendors that have expressed interest previously (in or after 2015)

-         Sign on additional product vendors (in or after 2015)

-         Sign profit sharing agreements with affinity groups that have expressed interest previously (completed as of the year 2012)

-         Sign on additional affinity groups (in or after 2015)

-         Hire office staff (in or after 2015)

These steps will ensure that we have sufficient product and service offerings to attract customers, both to launch our operations and on an ongoing basis going forward.

In addition to the aforementioned steps, we are in the process of investing in and developing scenic/destination real estate sites through the acquisition of land and land holding companies. We acquired certain land and canceled certain land transactions in Taiwan (R.O.C.), which is specifically described in Item 2 of our annual report on Form 10-K filed on March 30, 2015( as amended by the Form 10K/A filed on July 7, 2015).  

We expect the destination real estate portion of our business to make up approximately half of our overall business in the future, with the other half consisting of travel agencies. By destination real estate, we mean to develop locations that will attract and support visitors for stays of one day or longer, providing outdoor activities and places of interest for visitors from both domestic locales and abroad. In addition to our destination real estate business, we are continuing to develop our travel agency in Taiwan and have entered into certain non-binding letters of intent to acquire travel agencies located outside of Taiwan in both Asia and North America. We aim to complete the acquisition of five travel agencies by the end of 2016. We intend to fund all of these acquisitions through the sale of our common stock. While this will cause dilution to the existing shareholders, we do not believe this dilution will negatively affect the shareholders as the acquisitions will add significant value to the Company and will allow the Company to proceed in developing its business.

We may also from time to time invest in travel-related service providers that we believe can help us better service our customers and help them meet their travel needs. Through investing in such entities, we may be able to recoup some of our costs through maintaining small ownership interests in the entities our clients use. Furthermore, by investing in these entities, we may be able to work with them to better improve their travel offerings or related services or bring the entities up to the standard of service our customers expect. We recently made one such investment in A Peace World Holding Inc. ("APW"), a company in the early stages of developing destination real estate products and services. We expect that APW, based on its expressed business plans, will develop destination real estate that our customers will be interested in traveling to, thus enhancing the products and services we can provide to our customers. Any costs involved in offering such products and services to our customers, if there are any such costs, will be incorporated into the fees we charge our customers for our service. At this time we have no further plans for making any additional such investments and therefore have no plans of making further capital expenditures in relation to such investments.

Competition

We will be operating in two sectors - in the area of destination real estate development and travel agencies. These two sectors will complement each other as, over the long term, the travel agencies will be able to refer clients and visitors to our destination real estate sites. We will face competition from many individuals and companies that also market travel locations and products. As concerns travel destinations, we desire to utilize scenic properties that will allow for outdoor activities. Thus we must create locations that provide both activities of interest and provide convenience and amenities, while allowing visitors to enjoy the natural beauty of the area around them.

Observation tells us that the current travel industry is generally driven by the lowest cost provider. However, different segments of the market, such as the affluent segment, consider factors beyond cost when they plan vacations and travel. Ahead of cost, an affluent consumer may value factors such as convenience, comprehensive service, and luxury and/or prestige, to name a few. We believe that a successful marketing effort to reach the affluent market segment (retiring baby boomers) with the right quality of products should increase our revenue opportunity. In Taiwan, market conditions for the travel industry are similar to those of the U.S. There is a mix of large travel agencies, online service providers and small-scale local operators. However, since Taiwan is geographically much smaller than the U.S., competition is fierce.

In Taiwan, there are four types of travel agencies:

1.      Mega Agencies

A.        Lion Travel

B.        Cola Tour

C.        EZ Travel

2.      Intermediate-Small - locally or regionally owned agencies

A.        Star Travel

B.        SET Tour

3.      Independent Agencies: Usually catering to a special or niche market

A.        Royal Jet Way

B.        Perfect Travel

C.        Life Tour

4.      Airline & other types of travel consolidators

A.        China Airlines

B.        EVA Airlines

C.        American Express

We feel at this time we would fall into the Independent Agency category and hope to create our own niche as a more customer-oriented agency or travel service provider with a reputation of going the "extra mile" wherever possible in connecting the right type of customers with the right type of products.

Concerning destination real estate sites, there are many competitors who will be vying for the business of our potential clientele. The key will be to develop attractive properties that provide the amenities and activities that visitors would enjoy. In our development plans, we are defining destination real estate as locations that will draw tourist from both domestically and abroad to visit our sites for a period of one or two days or more. So in the long term we will be developing sites that include hotels, restaurants, as well as activity and entertainment centers, among other things. Some of our competitors in the destination real estate sector in Taiwan include the following companies:

Elements Innovation Co. Ltd.

E United Group

Taiwan Land Development Inc.

EMERGING GROWTH COMPANY STATUS

We qualify as an "emerging growth company" under the Jumpstart Our Business Startups Act (the "JOBS Act"). As a result, we are permitted to rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We will remain an "emerging growth company" for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

RESULTS OF OPERATIONS

The following table summarizes our historical condensed consolidated statements of operations data.

Comparison of Three Months Ended September 30, 2015 and 2014

Revenues.  We incurred revenue of $599,942 and $0 during the three months ended September 30, 2015 and 2014. The revenue was attributable to XO EXPERIENCE INC., travel agent of wholesaler.

General and Administrative Expenses.  We incurred general and administrative expenses of $227,304 and $44,149 during the three months ended September 30, 2015 and 2014, respectively. The increase was mainly attributable to combination of XO EXPERIENCE INC.

Income (loss) from operations.   Income from operations is $130,991 for the three months ended September 30, 2015, and Loss from operations for the three months ended September 30, 2014 is ($44,149).  This increase was mainly for combination of XO EXPERIENCE INC and lower development costs expended in implementing our business plan for the three-month periods ended September 30, 2015 as compared to the same period in 2014

Other Income (expenses).  Other income was $39,160and $0 for the three months ended September 30, 2015 and 2014. It was attributable to gain on sale of assets and disposal of investment.

Net Income (loss) Before Income Taxes.  Income before income taxes is $170,151 for the three months ended September 30, 2015, and Loss before income taxes for the same period in 2014 is ($44,149).  The increase was mainly attributable to combination of XO EXPERIENCE INC.

Provision for Income Taxes.  We have no income tax liabilities for the three months ended September 30, 2015 and 2014.

Net Income (loss)  As a result of the above factors, we experienced a net income of approximately $169,351 for the three months ended September 30, 2015 as compared to the net loss of approximately ($44,149) for the three months ended September 30, 2014, representing a increase of approximately $213,500. This increase was primarily for operating income of XO EXPERIENCE INC and less development costs; less office rental expenses; and lower payroll expenses.

Net Loss Attributable to Non-controlling Interest. Net loss attributable to non-controlling interest ended September 30, 2015 and 2014 is ($0) and ($5,737). It according to we disposal our investment of A peace world Inc at July 13, 2015

Liquidity and Capital Resources

Capital Resources and Liquidity

Excluding our planned acquisitions, we expect the running of San Lotus Holding, Green Forest and Da Ren to require approximately $130,000 to carry out planned operations for the next 12 months.  To meet our needs for cash required for sustain our businesses and completing our planned acquisitions, we will need to generate sufficient revenues or require additional funding through the private placement of our equity securities and/or mortgage our land. But, there can be no assurance we will be funded as such. And, there can be no assurance that our existing shareholders will provide us with additional capital.

As of September 30, 2015, we had $61,530 cash in the bank; $108,862 cash held by our wholly-owned Taiwan (R.O.C.) subsidiary, Green Forest Management Consulting Inc.; $10,143 cash held by our wholly-owned Taiwan (R.O.C.) subsidiary, Mao Ren International Inc.; $2,544 cash held by our wholly-owned Taiwan (R.O.C.) subsidiary, Da Ren International Development Inc.; and $160,180 cash held by our wholly-owned California subsidiary, XO EXPERIENCE INC. for purposes of building our travel services business in Taiwan.,

Based upon the above, we believe that Mao Ren International Inc. will not have enough funds to support themselves for remaining months., We will likely to borrow funds from our President and Chairman, Chen Li-Hsing, to sustain our operations until we are able to complete a private placement of our equity securities and/or mortgage our land.

As to our planned acquisitions, although the non-binding letters of intent to acquire the travel agencies were entered, we remain in the preliminary discussion with them about the specific considerations to acquire each of them. Thus, to date, we are not able to estimate any specific costs in completing such acquisitions. Additionally, except for the completed acquisitions of Da Ren International Development Inc., we remain in the preliminary discussion about the specific consideration in acquiring other land or land holding companies. Thus, to date, we are not able to estimate any specific costs in completing the acquisitions other than the completed acquisitions.

If we require additional funding to complete our planned acquisitions, we will actively seeking additional funding by completing a private placement of our equity securities and/or mortgage our land. But, there can be no assurance we will be funded as such. And, there can be no assurance that our existing shareholders will provide us with additional capital. Finally, if we are unable to generate sufficient revenue and/or obtain additional funding, we may have to cease operations entirely. We cannot guarantee that our operations and proceeds from any funding will be sufficient for us to continue as going concern.

Tabular disclosure of contractual obligations

Going Concern

At present, we have no enough cash to pay for our selling, general and administrative expenses. As such, in order to continue developing our operations as planned, we may be reliant on obtaining additional funding by private placement of our equity securities and/or obtaining the loan by mortgage our land. But, there can be no assurance we will be funded as such. Thus, there can be no assurance we will successfully continue our operation and/or complete our plan of operations.  Based on these assumptions, our auditor has expressed doubt about our ability to continue as a going concern.

Critical Accounting Polices

We have made no material changes to our critical accounting policies in connection with the preparation of financial statements included in this Quarterly Report on Form 10-Q.

Impact of Accounting Pronouncements

There were no recent accounting pronouncements that have had a material effect on the Company's financial position or results of operations.

Recently Issued Accounting Policies

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

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 or results of operations.

Item 3. Quantitative and Qualitative Disclosures about Market Risks.

We do not take positions or engage in transactions in risk-sensitive market instruments in any substantial degree, nor as defined by SEC rules and instructions. Based on the nature of our current operations, we have not identified any issues of market risk at this time.

Item 4. Controls and Procedures.

Evaluation of disclosure controls and procedures.

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 (the "Exchange Act") are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating and implementing possible controls and procedures.

Management conducted its evaluation of disclosure controls and procedures under the supervision of our chief executive officer. Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of June 30, 2014 due to a material weakness in our internal control over financial reporting which is described below.

Management identified significant deficiencies related to (i) the lack of U.S. GAAP expertise of our chief financial officer, (ii) the lack of U.S. GAAP expertise of our internal accounting staff, and (iii) the company's failure to have a board of directors consisting of a majority of independent directors and our lack of a director who qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. We plan to address these weaknesses in the near term as the Company develops.

Changes in internal controls.

There were no changes in our internal controls over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Our management knows of no material existing or pending legal proceeding, litigation or claim against us, nor are we involved as a plaintiff in any material existing legal proceeding or pending legal proceeding, litigation or claim.

Yu Chien-Yang, our vice president and a member of our board of directors, was indicted by the Taichung District Prosecutor's Office of Taichung County, Taiwan (R.O.C.) on May 17, 2013. The indictment in no way involves San Lotus Holding Inc. or any of our subsidiaries and the matters described therein do not include any conduct involving, by, or on behalf of the Company or any of our subsidiaries.

The enforcement actions were brought against seven individuals, including Mr. Yu, alleging violations of Taiwan's banking and securities laws in connection with disclosure issues related to a single corporate bond issuance. The action predates Mr. Yu's employment with the Company and is in connection with Mr. Yu's service at another company, Da Chuang Business Management Consultant Co., Ltd. and its subsidiary, Da Ren International Investments Inc., which had conducted a general solicitation of its corporate bonds to the general public in the year 2010. We do not expect this litigation to have a material effect on our business.

Item 1A. Risk Factors.

There is no any material changes from risk factors as previously disclosed in our Form 10-K.

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

None.

Item 3. Defaults Upon Senior Securities.

None

Item 4.  Mine Safety Disclosures.

Not applicable.

Item 5.   Other Information.

On July 13, 2015, we entered into and closed a stock transfer agreement (the "STA") selling 465,000 shares of common stock of A Peace World Holding Inc.(the "APW") to Mr. Chen, Kuan-Yu for an aggregate of US$1 (the "Purchase Price"). Mr. Chen, Kuan-Yu is our Secretary and Director. Through this purchase, Mr. Chen, Kuan-Yu acquires all of the issued and outstanding common stock in APW.

Item 6.    Exhibits.

* Filed herewith.

** This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

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.