UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549  FORM 10-Q  x

   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the quarterly period ended September 30, 2014  o

   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the transition period from ______to______.  Commission File Number: 021-165129  SAN LOTUS HOLDING INC. (Exact name of registrant as specified in its charter)  Nevada

   45-2960145(State or other jurisdiction of

   incorporation or organization)

   (I.R.S. Employer Identification Number)Suite 23, 3301 Spring Mountain Road

   Las Vegas, NV 89102(Address of principal executive office and zip code)702-776-8066(phone) &702-776-8809(fax)(Registrant's telephone number, including area code)
  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.  YesxNoo  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).  YesxNoo  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.  Large Accelerated filero

   Accelerated filerxNon-accelerated filero

   Smaller reporting companyo
  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YesoNox  As of September 30, 2014,836,820,542shares of the Registrant's common stock, $0.1 par value, were outstanding.


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SAN LOTUS HOLDING INC.  FORM 10-Q  For the quarter ended September 30, 2014   TABLE OF CONTENTS  Page No.PART I - FINANCIAL INFORMATIONItem 1.

   Financial Statements.

   1Condensed Consolidated Balance Sheets as ofSeptember30, 2014 (Unaudited) and December 31, 2013 (Audited)

   1Condensed Consolidated Statements of Comprehensive Loss for the Nine Months EndedSeptember30, 2014 and 2013 (Unaudited)

   2Condensed Consolidated Statements of Cash Flows for the Nine Months EndedSeptember30, 2014 and 2013 (Unaudited)

   3Notes to Unaudited Consolidated Financial Statements.

   4 - 8Item 2.

   Management's Discussion and Analysis of Financial Condition and Results of Operations.

   8Item 3

   Quantitative and Qualitative Disclosures About Market Risk.

   19Item 4

   Controls and Procedures.

   19PART II - OTHER INFORMATIONItem 1.

   Legal Proceedings.

   20Item 1A.

   Risk Factors.

   20Item 2.

   Unregistered Sales of Equity Securities and Use of Proceeds.

   20Item 3.

   Defaults Upon Senior Securities.

   20Item 4.

   Mine Safety Disclosures.

   20Item 5.

   Other Information.

   20Item 6.

   Exhibits.

   20


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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.


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SAN LOTUS HOLDING INC. AND SUBSIDIARIES(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED BALANCE SHEETS(Unaudited)September 30, 2014

   

   December 31, 2013ASSETSCurrent AssetsCash and cash equivalents

   

   $

   11,074

   

   $

   54,616Prepaid and other current assets

   

   

   186,392,189

   

   

   8,635,987Total Current Assets

   

   

   186,403,263

   

   

   8,690,603Property and equipment, net

   

   

   3,604,092

   

   

   3,694,362Other assets

   

   

   7,272

   

   

   8,025Total Assets

   

   $

   190,014,627

   

   $

   12,392,990LIABILITIES AND EQUITYCurrent LiabilitiesAccrued expenses

   

   $

   61,817

   

   $

   11,125Other payable

   

   

   151,427

   

   

   128,376Total Current Liabilities

   

   

   213,244

   

   

   139,501Stockholders' EquityCommon stock, $0.1 par value; 1,500,000,000 shares authorized,836,820,542 and 96,859,485 shares issued and outstandingat September 30, 2014 and December 31, 2013

   

   

   83,682,054

   

   

   9,685,948Additional paid-in capital

   

   

   110,145,249

   

   

   3,436,872Deficit accumulated during the development stage

   

   

   (909,082)

   

   

   (759,657)Accumulated other comprehensive loss

   

   

   (3,104,159)

   

   

   (102,733)Total San Lotus Holding Inc. stockholders' equity

   

   

   189,814,062

   

   

   12,260,430Noncontrolling interest

   

   

   (12,679)

   

   

   (6,941)Total Equity

   

   

   189,801,383

   

   

   12,253,489Total Liabilities and Equity

   

   $

   190,014,627

   

   $

   12,392,990
    The accompanying notes are an integral part of these consolidated financial statements.     1


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SAN LOTUS HOLDING INC. AND SUBSIDIARIES(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS(UNAUDITED)Three Months Ended September 30,

   

   Nine Months Ended September 30,

   

   Period From June 21, 2011 (Inception) to September 30,2014

   

   2013

   

   2014

   

   

   2013

   

   2014Revenue

   $

   -

   

   $

   -

   

   $

   -

   

   $

   -

   

   $

   -General and administrative expenses

   

   44,149

   

   

   50,777

   

   

   155,167

   

   

   234,213

   

   

   968,503Loss from operations

   

   (44,149)

   

   

   (50,777)

   

   

   (155,167)

   

   

   (234,213)

   

   

   (968,503)Other income (expenses)Interest income

   

   -

   

   

   62

   

   

   5

   

   

   62

   

   

   243Loss from long-term investments

   

   -

   

   

   -

   

   

   -

   

   

   -

   

   

   (20,837)Gain from disposal of long-term investments

   

   -

   

   

   -

   

   

   -

   

   

   -

   

   

   20,837Total other income, net

   

   -

   

   

   62

   

   

   5

   

   

   62

   

   

   243Loss before provision for income taxes

   

   (44,149)

   

   

   (50,715)

   

   

   (155,162)

   

   

   (234,151)

   

   

   (968,260)Provision for income taxes

   

   -

   

   

   -

   

   

   -

   

   

   -

   

   

   -Net loss

   

   (44,149)

   

   

   (50,715)

   

   

   (155,162)

   

   

   (234,151)

   

   

   (968,260)Add: Net loss attributable to noncontrolling interest

   

   -

   

   

   547

   

   

   5,737

   

   

   193

   

   

   59,178Net loss attributable to San Lotus Holding Inc.

   

   (44,149)

   

   

   (50,168)

   

   

   (149,425)

   

   

   (233,958)

   

   

   (909,082)Other comprehensive loss, net of taxConsolidated net loss

   

   (44,149)

   

   

   (50,715)

   

   

   (155,162)

   

   

   (234,151)

   

   

   (968,260)Foreign currency translation adjustment, net of tax

   

   (2,611,080)

   

   

   (547)

   

   

   (3,001,426)

   

   

   (4,130)

   

   

   (3,104,159)Comprehensive loss

   

   (2,655,229)

   

   

   (51,262)

   

   

   (3,156,588)

   

   

   (238,281)

   

   

   (4,072,419)Add: Comprehensive loss attributable to the noncontrolling interest

   

   -

   

   

   547

   

   

   5,737

   

   

   193

   

   

   59,178Comprehensive loss attributable to San Lotus Holding Inc.

   $

   (2,655,229)

   

   $

   (50,715)

   

   $

   (3,150,851)

   

   $

   (238,088)

   

   $

   (4,013,241)Net Loss Per Share:Basic and diluted

   $

   (0.00)

   

   $

   (0.00)

   

   $

   (0.00)

   

   $

   (0.01)

   

   $

   (0.01)Weighted-average shares outstandingBasic and Diluted

   

   562,635,195

   

   

   19,244,851

   

   

   312,178,407

   

   

   16,146,820

   

   

   82,527,100
   The accompanying notes are an integral part of these consolidated financial statements.    2


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SAN LOTUS HOLDING INC. AND SUBSIDIARIES(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF CASH FLOW(UNAUDITED)Nine Months Ended September 30,

   

   Period from June 21, 2011 (Date of Inception) to2014

   

   2013

   

   September 30, 2014Cash Flows from Operating ActivitiesNet loss

   

   

   $

   (155,162)

   

   $

   (234,151)

   

   $

   (968,260)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation

   

   40,530

   

   

   37,948

   

   

   116,871Loss from long-term investments

   

   -

   

   

   -

   

   

   20,837Gain from disposal of investments

   

   -

   

   

   -

   

   

   (20,837)Changes in operating assets and liabilities:Prepaid and other current assets

   

   (52,661)

   

   

   (24,210)

   

   

   (202,809)Other Assets

   

   753

   

   

   (7,124)

   

   

   (7,272)Accrued expenses

   

   50,593

   

   

   13,994

   

   

   61,638Other payable

   

   23,150

   

   

   49,144

   

   

   151,418Net cash used in operating activities

   

   (92,797)

   

   

   (164,399)

   

   

   (848,414)Cash Flows from Investing ActivitiesPurchase of property and equipment

   

   -

   

   

   -

   

   

   (719,560)Net cash used in investing activities

   

   -

   

   

   -

   

   

   (719,560)Cash Flows from Financing ActivitiesIssuance of common stock

   

   -

   

   

   -

   

   

   1,481,213Capital contribution

   

   -

   

   

   -

   

   

   46,500Net cash provided by financing activities

   

   -

   

   

   -

   

   

   1,527,713Effect of exchange rate changes on cash and cash equivalents

   

   49,255

   

   

   (2,916)

   

   

   51,335Net increase (decrease) in cash and cash equivalents

   

   (43,542)

   

   

   (167,315)

   

   

   11,074Cash and cash equivalents, beginning of the period

   

   54,616

   

   

   277,210

   

   

   -Cash and cash equivalents, ending of the period

   $

   11,074

   

   $

   109,895

   

   $

   11,074Supplemental disclosure of cash flow informationCash paid during the period for:Interest expense

   $

   -

   

   $

   -

   

   $

   -Income tax

   

   $

   -

   

   $

   -

   

   $

   -Supplemental disclosure of noncash financing activitiesIssuance of note payable to acquire land

   $

   180,704,483

   

   $

   3,070,645

   

   $

   192,346,090Issuance of common stock in settlement of note payable

   $

   180,704,483

   

   $

   3,070,645

   

   $

   192,346,090
   The accompanying notes are an integral part of these consolidated financial statements.   3


**SAN LOTUS HOLDING INC.**
 (A DEVELOPMENT STAGE COMPANY) NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS SEPTEMBER 30, 2014  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 ("GAAP") in the United States have been condensed or omitted. These consolidated financial statements should be read in conjunction with the Company's 2013 annual consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013. 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 has not conducted business operations nor had revenues from operations since its inception. The Company's business plan is to design and market global travel packages and affinity travel excursions throughout the world, and develop a global travel and leisure agency business. The Company's year-end is December 31. Basis of Consolidation The accompanying consolidated financial statements include the accounts of San Lotus Holding Inc. and its majority-owned subsidiaries and its 50% owned subsidiary A Peace World Holding Inc (collectively the Company). All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements as well as their related disclosures. Such estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents consist of cash in banks and all highly liquid instruments with original maturities of three months or less.    4


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NOTE 1- NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES (continued) Property and Equipment Property and equipment are carried at cost. Expenditures for maintenance and repairs are expensed 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: Building                                                              40 years Vehicles                                                                5 years Equipment                                                        3~5 years As of September 30, 2014, the Company's property and equipment consisted of the following: Building

   $ 346,256Land

   3,148,274Vehicles

   167,414Equipment

   58,4033,720,347Less: accumulated depreciation

   (116,255)Property and equipment, net

   $ 3,604,092
  Depreciation expense for the three months ended September 30, 2014 and 2013 were $ 13,530 and $ 9,007, respectively.  Net Income (Loss) Per Share Basic income (loss) per share is computed by dividing net income by weighted average number of shares of common stock outstanding during each period. Diluted income per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. At September 30, 2014, the Company does not have any outstanding common stock equivalents; therefore, a separate computation of diluted loss per share is not presented. 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.       5


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NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES (continued) Foreign-currency Transactions Foreign-currency transactions are recorded in New Taiwan dollars ("NTD") at the rates of exchange in effect when the transactions occur. Gains or losses resulting from the application of different foreign exchange rates when cash in foreign currency is converted into New Taiwan dollars, or when foreign-currency receivables or payables are settled, are credited or charged to income in the year of conversion or settlement. On the balance sheet dates, the balances of foreign-currency assets and liabilities are restated at the prevailing exchange rates and the resulting differences are charged to current income except for those foreign currencies denominated investments in shares of stock where such differences are accounted for as translation adjustments under stockholders' equity. Translation Adjustment The Company financial statements are presented in the U.S. dollar ($), which is the Company's reporting currency, while it's functional currency is the New Taiwan dollar ("NTD"). Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of income. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange ruling at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the statements of income. In accordance with ASC 830, Foreign Currency Matters, the Company translates the assets and liabilities into U.S. dollars ($) 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 NTD into U.S. dollars are recorded in stockholders' equity as part of accumulated other comprehensive income. Comprehensive Income (Loss) The Company complies with FASB ASC Topic 220, Comprehensive Income, which establishes rules for the reporting and display of comprehensive income (loss) and its components. FASB ASC 220 requires the Company's change in foreign currency translation adjustments to be included in other comprehensive loss, and is reflected as a separated component of stockholders' equity. Recent Accounting Pronouncements In June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders' equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014. The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on its result of operations, financial position or cash flow. 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. At September 30, 2014, there were no deferred tax assets or liabilities. NOTE 3 - LAND ACQUISITION  6


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On March 13, 2014, the Company's wholly-owned subsidiary, Green Forest, a Taiwanese corporation, entered into a land purchase agreement with an unrelated party to acquire 35,790.4921 square meters of land in Dataoping Section of Zaoqiao Township, and 281, 116.5 square meters of land in Laotianliao Section of Touwu Township, both in Miaoli County, Taiwan, for a total of TWD$830,490,304 (US$28,165,580.60). The purchase price was paid for through Green Forest's issuance of a promissory note payable to the seller. Through an agreement of assignment, assumption and release, which the Company entered into with the sellers and Green Forest on March 13, 2014, we assumed the debt Green Forest owed under the promissory note, thus relieving Green Forest of its obligations. On the same date, the Company entered into a stock purchase agreement for the issuance of 139,364,582 shares of its common stock, par value $0.1 per share, at a purchase price of $0.2021per share, to the sellers and their designees pursuant to stock purchase agreement. NOTE 4 - RELATED PARTY TRANSACTIONS In August 2014, our wholly-owned subsidiary, Green Forest, a Taiwanese corporation, entered into a land purchase agreement with Lo, Fun-Ming, Yu, Chien-Yang, and Mao Ren International Inc. to acquire 1,124,935 square meters of land in Dataoping Section of Zaoqiao Township, Miaoli County, Taiwan and 160,779 square meters of land in Laotianliao Section of Touwu Township, Miaoli County, Taiwan, all of which is 1,285,713 square meters. Green Forest purchased the Land for TWD$3,369,303,693 (US$111,581,126). The purchase price was paid for through Green Forest's issuance of a promissory note payable to the sellers. Through an agreement of assignment, assumption and release, which the Company entered into with the sellers and Green Forest on August 11, 2014, we assumed the debt Green Forest owed under the promissory note, thus relieving Green Forest of its obligations. On the same date, the Company entered into a stock purchase agreement for the issuance of 397,935,544 shares of its common stock, par value $0.1 per share, at a purchase price of $0.2804 per share, to the sellers and their designees pursuant to stock purchase agreement. In August 2014, our wholly-owned subsidiary, Green Forest, a Taiwanese corporation, entered into a land purchase agreement with Chen, Kuan-Yu to acquire 453,295 square meters of land in Dataoping Section of Zaoqiao Township, Miaoli County, Taiwan and 10,120 square meters of land in Laotianliao Section of Touwu Township, Miaoli County, Taiwan, all of which is 463,415 square meters. Green Forest purchased the Land for TWD$1,214,398,015 (US$40,957,778). The purchase price was paid for through Green Forest's issuance of a promissory note payable to the seller. Through an agreement of assignment, assumption and release, which the Company entered into with the seller and Green Forest on August 11, 2014, we assumed the debt Green Forest owed under the promissory note, thus relieving Green Forest of its obligations. On the same date, the Company entered into a stock purchase agreement for the issuance of 202,660,931 shares of its common stock, par value $0.1 per share, at a purchase price of $0.2021 per share, to the seller and their designees pursuant to stock purchase agreement. NOTE 5 - 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 $909,082 as of September 30, 2014, and it has had no revenue from operations since its inception. 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 asa 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.  7


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NOTE 6 - SUBSEQUENT EVENTS Management has evaluated subsequent events through the date of this filing which the consolidated financial statements were available for issuance. On October 2, 2014, the Board of Directors has approved a reverse stock split of the Company's common stock at a ratio of 10 to 1 (the "Reverse Stock Split"). Upon effectiveness of the Reverse Stock Split, the par value of each share of the Company's Common Stock will be increased from $0.1 per share to $1 per share (the "Common Stock").As a result of the Reverse Stock Split, the Company's authorized shares of common stock will decrease to approximately 150,000,000 post-split shares (prior to effecting the rounding of fractional shares into whole shares as described below) from approximately 1,500,000,000 pre-split shares.The reverse split will reduce the number of shares of the Company's common stock outstanding from approximately 836,820,542 to approximately 83,682,054. Proportional adjustments will be made to the Company's authorized shares and outstanding common stock equivalents. 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 market travel products and services to the growing "baby boomer" market, with an initial focus on the Asian market.  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 2013. 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 2014, 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 beconducted in our Taiwan office, except the inbound services will rely in part on advertising conducted or directed outside of Taiwan.  8


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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. In addition, we have already taken steps to begin marketing our services to the Chinese market in California through a California television station, TBWTV Inc. ("TBWTV"). We plan to use this entity for purposes of gaining access to a means of advertising our services to the California market of potential Taiwan travelers. Our vice president and secretary, Yu Chien-Yang and Chen Kuan-Yu, own TBWTV and, as a result, have knowledge of when preferred advertising slots become available and may be able to assist us in gaining preferable advertising rates, although we have no contractual guarantees on either of these issues. In addition, 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 the second quarter of 2014. 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 the first quarter of 2014.  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 2014  B.Statutory reserve - estimated $20,000 upon approval of license - end of 2014  C.Fees - estimated $1,000 upon application for license -end of 2014  D.Rent deposit - estimated $2,000 upon rental of office - end of 2014   9


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E.Equipment, etc. - estimated $5,000 - end of 2014  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 2014  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:  Type of Product

   Estimated Commission %Transportation

   3 ~ 10%Accommodation

   3 ~ 10%Packaged Tours

   3 ~ 10%
  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:  Type of Product

   Estimated Mark-up %

   Initial Cost of Obtaining Wholesale InventoryTransportation

   5 ~ 20%

   $10,000Accommodation

   10 ~ 30%

   $30,000Packaged Tours

   10 ~ 20%

   $10,000
  10


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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 will also market to potential customers based in California through TBWTV, a Chinese language television station based in California.  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.  Type of Vendor

   Number of VendorAirline

   2Bus Company

   1Cruise Company

   2Hotel

   7Resort

   2Other Travel Agency

   2
   11


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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.  Television Advertising in California  We will begin advertising our services to potential Taiwan travelers in California through TBWTV Inc., a local California station geared toward Chinese speaking audiences, sometime during 2014. With California's large Asian population and strong business connections with Taiwan, we believe there is potential to develop a strong customer base in California by directing potential customers to our website. As part of this effort, we have purchased a condominium unit in California so that our management and employees will be able to easily be able to travel to California to work on our television advertising campaign, as well as enable them to work with our various U.S. service providers. In addition, we purchased three vehicles that will be used to transport our management, as well as our customers, when in California.  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:  Type of Vendor

   Number of VendorAirline

   5Bus Company

   2Cruise Company

   2Hotel

   15Resort

   5Other Travel Agency

   5
  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 2014. 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 2014)  -Sign formal supplier agreements with product vendors that have expressed interest previously (in or after 2014)  -Begin advertising with TBWTV (in or after 2014)  -Sign on additional product vendors (in or after 2014)  -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 2014)  -Hire office staff (in or after 2014)  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 in Taiwan (R.O.C.), which is


specifically described in Item 2 of our annual report on Form 10-K which is filed on April 7, 2014. We also have entered into four additional non-binding letters of intent to acquire additional land in scenic and/or agricultural areas in Taiwan. We aim to complete four acquisitions by the end of 2014. After we have completed these acquisitions, we will evaluate all of our real estate holdings as a group and determine how we will utilize those properties to support our overall goal of developing a travel, tourism and destination real estate business. At that same time, we will evaluate and plan for the costs of developing the properties.  12


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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 nine 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 these nine travel agencies by the end of the second quarter 2014. 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  13


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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:  ●

   have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
  ●

   comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);
  ●

   submit certain executive compensation matters to shareholder advisory votes, such as "say-on-pay" and "say-on-frequency"; and
  14


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●

   disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation.
  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.  15


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




|SAN LOTUS HOLDING INC. AND SUBSIDIARIES                  
|---------------------------------------------------------
|(A DEVELOPMENT STAGE COMPANY)                            
|CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS            
|(UNAUDITED)                                              
|                                                         
|                                                         
|Revenue                                                  
|General and administrative expenses                      
|Loss from operations                                     
|Other income (expenses)                                  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                         
|Loss before provision for income taxes                   
|                                                         
|Net loss                                                 
|Add: Net loss attributable to noncontrolling interest    
|Net loss attributable to San Lotus Holding Inc.          
|Other comprehensive loss, net of tax                     
|                                                         
|                                                         
|Comprehensive loss                                       
|                                                         
|Comprehensive loss attributable to San Lotus Holding Inc.
|                                                         
|Net Loss Per Share:                                      
|                                                         
|Weighted-average shares outstanding                      
|                                                         



16


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Comparison of Three Months Ended September 30, 2014 and 2013  Revenues.  We did not generate any revenue for the three months ended September 30, 2014 and 2013. We have not generated any revenue since our formation on June 21, 2011.  General and Administrative Expenses.  We incurred general and administrative expenses of $44,149 and $50,777 during the three months ended September 30, 2014 and 2013, respectively. The decrease was mainly attributable to fewer professional service fees forSecurities and Exchange Commission filingsincurred during the current period this year. The decrease was also attributable to lower office rent and salaries, partially offset by the increase in depreciation expense for the three months ended September 30, 2014.  Income (loss) from operations.   Loss from operations is ($44,149) for the three months ended September 30, 2014, and Loss from operations for the three months ended September 30, 2013 is ($50,777).  This decrease was mainly for lower development costs expended in implementing our business plan for the three-month periods ended September 30, 2014 as compared to the same period in 2013.  Other Income (expenses).  Other income was $- for the three months ended September 30, 2014, and was $62 for the three-months ended September 30, 2013.  Net Loss Before Income Taxes.  Loss before income taxes is($44,149) for the three months ended September 30, 2014, and Loss before income taxes for the same period in 2013 is ($50,715).  This decrease was mainly for a decrease in operating expense during the development stage.  Provision for Income Taxes.  We have not generated income and thus have no income tax liabilities for the three months ended September 30, 2014and 2013.  Net Loss.  As a result of the above factors, we experienced a net loss of approximately ($44,149) for the three months ended September 30, 2014 as compared to the net loss of approximately ($50,715) for the three months ended September 30, 2013, representing a decrease of approximately $6,566. This decrease was primarily for less development costs; less office rental expenses; and lower payroll expenses, partially offset by the increase in depreciation expenses for the three months ended September 30, 2014 as compared with the same period in 2013.  Net Loss Attributable to Non-controlling Interest.Net loss attributable to non-controlling interest ended September 30, 2014 and 2013 is ($-) and ($547).  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 $578,688 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, 2014, we had $11,074 cash in the bank, $1,053 cash held by our wholly-owned Taiwan (R.O.C.) subsidiary, Green Forest Management Consulting Inc. and $1,723 cash held by our wholly-owned Taiwan (R.O.C.) subsidiary Da Ren International Development Inc. Thus, San Lotus and Da Ren will not have enough funds to support themselves for remaining months, and Green Forest are already almost out of funds, 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.; Xinpi land; and certain lands inMiaoli County.We remain in thepreliminary 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.   17


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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   Contractual obligations

   Payments due by period

   3-5 years

   More than 5 yearsTotal

   Less than

   1 year

   1-3 years[Long-Term Debt Obligations]

   -

   -

   -

   -

   -[Capital Lease Obligations]

   -

   -

   -

   -

   -[Operating Lease Obligations]

   $8,192

   $8,192

   -

   -

   -[Purchase Obligations]

   -

   -

   -

   -

   -[Other Long-Term Liabilities Reflected on the Registrant's Balance Sheet under GAAP]

   -

   -

   -

   -

   -Total

   $8,192

   $8,192

   -

   -

   -
  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.      18


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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 September 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.    19


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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.  We conducted a reverse stock split ( the "Reverse Stock Split") at the 10 to 1 ratio, effective date of which is expected as October 17, 2014. We have disclosed the Reverse Stock Split in our current reports on Form 8-K filed on October 8, 2014 and on Form 8-K/A filed on October 9, 2014.  Additionally, we also amended our bylaws and adopted relevantcorporate measures required by national securities exchanges, all of which are also disclosed in our current reports on Form 8-K filed on October 8, 2014 and Form 8-K/A filed on October 9, 2014.  Item 6. Exhibits.  Exhibit Number

   

   Description31.1

   *

   Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2

   *

   Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1

   **

   Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.101.INS

   

   XBRL Instance Document101.SCH

   

   XBRL Taxonomy Schema101.CAL

   

   XBRL Taxonomy Calculation Linkbase101.DEF

   

   XBRL Taxonomy Definition Linkbase101.LAB

   

   XBRL Taxonomy Label Linkbase101.PRE

   

   XBRL Taxonomy Presentation Linkbase
  20


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* 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.  SAN LOTUS HOLDING INC.Date: October 24, 2014

   By:

   /s/Chen, Li-HsingChen, Li-Hsng

   President
  Date: October 24, 2014

   By:

   /s/Lin, Mu-ChenLin, Mu-Chen

   Chief Financial Officer andPrincipal Accounting Officer
   21


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Exhibit 31.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002  I, Chen, Li-Hsing, certify that:  1. I have reviewed this report on Form 10-Q of San Lotus Holding Inc.  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.   Date: October 24, 2014 /s/Chen, Li-Hsing__________________________________By: Chen, Li-Hsing, President
                                         22


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Exhibit 31.2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002  I, Lin, Mu-Chen, certify that:  1. I have reviewed this report on Form 10-Q of San Lotus Holding Inc.;  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.   Date: October 24, 2014 /s/Lin, Mu-Chen______________________________By: Lin, Mu-Chen, Principal Financial Officer
   23


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Exhibit 32.1
  CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002  In connection with the Report on Form 10-Q ("Form 10-Q") of San Lotus Holding Inc. (the "Company") for the quarter ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof, Chen, Li-Hsing, President of the Company, and Lin Mu-Chen, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:  (1)   The Form 10-Q fully complies with the requirements of Section  13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and  (2)   The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.  /s/Chen, Li-Hsin______________________________By: Chen, Li-Hsing, President
 October 24, 2014   /s/Lin, Mu-Chen______________________________By: Lin, Mu-Chen, Principal Financial Officer
 October 24, 2014   This certification accompanies this Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not deemed filed by the Company and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.