10-Q 1 acug_10q.htm FORM 10-Q acug_10q.htm

 

 

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

 

FORM 10-Q

 

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2016

 

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from __________ to _________

 

SEC File No. 333-179082 

 

A & C United Agriculture Developing Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

100

27-5159463

(State or other jurisdiction

of incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(IRS I.D.)

 

Oak Brook Pointe, Suite 500,

700 Commerce Drive, Oak Brook, Illinois

60523

(Address of principal executive offices)

(Zip Code)

 

Issuer's telephone number: 630-288-2500

 

N/A 

(Former name, former address and former three months, if changed since last report)

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

o

Accelerated filer

o

Non-accelerated filer

o

Smaller Reporting Company

x

 

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

 

As of May 2, 2016 there were 36,731,495 shares issued and outstanding of the registrant's common stock.

 

 

 

TABLE OF CONTENTS

 

PART I — FINANCIAL INFORMATION

Item 1.

Financial Statements

3

Item 2.

Management's Discussion and Analysis or Plan of Operation

20

Item 3.

Quantitative and Qualitative Disclosure about Market Risk

25

Item 4.

Controls and Procedures

25

PART II — OTHER INFORMATION

Item 1.

Legal Proceedings

26

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

26

Item 3.

Defaults Upon Senior Securities

26

Item 4.

Mine Safety Disclosures

26

Item 5.

Other Information

26

Item 6.

Exhibits

27

 

 
2
 

 

PART I — FINANCIAL INFORMATION

 

Item 1. Financial Statements 

 

A & C United Agriculture Developing Inc 

(A Development Stage Enterprise) 

Unaudited Financial Statements 

As of March 31 2016 and 2015

 

 
3
 
 

Table of Contents

 

Balance Sheet

 

 

5

 

Statement of Loss

 

 

6

 

Statement of Stockholders Equity

 

 

7

 

Statement of Cash Flows

 

 

8

 

Notes to Financial Statements

 

 

9

 

Exhibit A

 

 

19

 

 

 
4
 

 

A & C United Agriculture Developing Inc

 

 

 

 

(A Development Stage Enterprise)

 

 

 

 

 

 

BALANCE SHEET

 

 

 

 

 

 

 

 

March 31,

 

 

September 30,

 

 

 

2016

 

 

2015

 

ASSETS

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$59,065

 

 

$32,745

 

Accounts receivable

 

 

295,000

 

 

 

41,800

 

Inventory

 

 

28,956

 

 

 

279,913

 

Total Current Assets

 

$383,021

 

 

$354,458

 

Other current assets:

 

 

 

 

 

 

 

 

Prepaid expense

 

$169

 

 

$169

 

Total Other Current Assets

 

$169

 

 

$169

 

Property, plant and equipment, net

 

$9,522

 

 

$12,243

 

Other assets:

 

 

 

 

 

 

 

 

Deferred interest expense

 

 

-

 

 

 

-

 

Total Other Assets

 

$-

 

 

$-

 

TOTAL ASSETS

 

$392,712

 

 

$366,870

 

LIABILITIES & EQUITY

 

Current liabilities:

 

 

 

 

 

 

 

 

Account payable

 

$21,370

 

 

$21,500

 

Credit card payable

 

 

509

 

 

 

3,205

 

Total current liabilities

 

$21,879

 

 

$24,705

 

Other current liabilities:

 

 

 

 

 

 

 

 

Loan from shareholders

 

$56,679

 

 

$46,474

 

Accrued Expenses Liability

 

 

8,024

 

 

 

1,795

 

Total other current liabilities

 

$64,703

 

 

$48,269

 

Long term liabilities:

 

 

 

 

 

 

 

 

Car loan

 

 

-

 

 

 

-

 

Total long term liabilities

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

$86,582

 

 

$72,974

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

 

 

 

 

Common stock, $0.001 par value; 500,000,000 shares authorized; 36,731,495 shares issued and outstanding.

 

$36,732

 

 

$36,732

 

Paid-in capital

 

 

885,718

 

 

 

885,718

 

Deficit accumulated during the development stage

 

 

(615,079)

 

 

(627,305)

Accumulated other comprehensive income (loss)

 

 

(1,241)

 

 

(1,249)

Total stockholders' equity

 

$306,130

 

 

$293,896

 

TOTAL LIABILITIES & EQUITY

 

$392,712

 

 

$366,870

 

 

 
5
 

 

A & C United Agriculture Developing Inc

 

 

 

 

 

 

 

 

 

 

 

 

 

(A Development Stage Enterprise)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months
Ended

March 31,

2016

 

 

Six Months
Ended

March 31,

2015

 

 

Three Months
Ended

March 31,

2016

 

 

Three Months
Ended

March 31,

2015

 

 

Cumulative

 from

February 7,

2011(Date of

Inception)

Through
March 31,
2016

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Revenues

 

$943,567

 

 

$381,636

 

 

$395,715

 

 

$141,636

 

 

$3,432,978

 

Cost of Goods Sold

 

$831,407

 

 

$341,756

 

 

$359,418

 

 

$122,989

 

 

$3,073,944

 

Gross Profit

 

$112,160

 

 

$39,880

 

 

$36,297

 

 

$18,647

 

 

$359,034

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

 

 

 

$-

 

 

 

 

 

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

$97,213

 

 

$131,301

 

 

$52,700

 

 

$89,227

 

 

$956,421

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expenses

 

$2,721

 

 

$2,721

 

 

$1,360

 

 

$1,360

 

 

$17,684

 

Total Operating Expenses

 

$99,934

 

 

$134,022

 

 

$54,060

 

 

$90,587

 

 

$974,105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

 

$12,226

 

 

$(94,142)

 

$(17,763)

 

$(71,940)

 

$(615,071)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income, net

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

Interest Expense, net

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$8

 

Income (Loss) before income taxes

 

$12,226

 

 

$(94,142)

 

$(17,763)

 

$(71,940)

 

$(615,079)

Income (Loss) tax expense

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

Net Income (Loss)

 

$12,226

 

 

$(94,142)

 

$(17,763)

 

$(71,940)

 

$(615,079)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share- Basics

 

$0.00

 

 

$(0.00)

 

$(0.00)

 

$(0.00)

 

$(0.02)

Net income (loss) per common share- Diluted

 

$0.00

 

 

$(0.00)

 

$(0.00)

 

$(0.00)

 

$(0.02)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

$8

 

 

$-

 

 

$210

 

 

$-

 

 

$(1,241)

Other comprehensive income (loss)

 

$8

 

 

$-

 

 

$210

 

 

$-

 

 

$(1,241)

Comprehensive Income (Loss)

 

$12,234

 

 

$(94,142)

 

$(17,553)

 

$(71,940)

 

$(616,320)

 

 
6
 

 

A & C United Agriculture Developing Inc

 

 

 

 

 

 

 

 

 

 

(A Development Stage Enterprise)

 

 

 

 

 

 

 

 

 

 

 

 

 

STATEMENT OF STOCKHOLDERS EQUITY

 

 

 

 

 

 

 

 

 

 

The Period February 7, 2011 ( Date of Inception)

 

 

 

 

 

 

 

 

 

 

 

 

 

through March 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

During the

 

 

Other

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Development

 

 

Comprehensive

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Stage

 

 

Income (Loss)

 

 

Equity

 

Balance, September 30, 2011

 

 

34,449,495

 

 

$34,450

 

 

$440,500

 

 

$(37,543)

 

$207

 

 

$437,614

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, September 30, 2012

 

 

34,624,495

 

 

$34,625

 

 

$475,325

 

 

$(154,860)

 

$207

 

 

$355,297

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, September 30, 2013

 

 

36,361,495

 

 

$36,362

 

 

$824,088

 

 

$(287,906)

 

$307

 

 

$572,851

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stocks

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to Griffin Produce @ 0.2  per share on December 26,2013

 

 

250,000

 

 

$250

 

 

$49,750

 

 

 

 

 

 

 

 

 

 

$50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustment for currency rate exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$(19)

 

$(19)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended September 30, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

$(183,326)

 

 

 

 

 

$(183,326)

Balance, September 30, 2014

 

 

36,611,495

 

 

$36,612

 

 

$873,838

 

 

$(471,232)

 

$288

 

 

$439,506

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stocks

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to Michael Williams @ 0.1 per share on February 1, 2015

 

 

60,000

 

 

$60

 

 

$5,940

 

 

 

 

 

 

 

 

 

 

$6,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stocks

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to Globex Transfer LLC @ 0.1 per share on February 2, 2015

 

 

60,000

 

 

$60

 

 

$5,940

 

 

 

 

 

 

 

 

 

 

$6,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustment for currency rate exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$(1,537)

 

$(1,537)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended September 30, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

$(156,073)

 

 

 

 

 

$(156,073)

Balance, September 30, 2015

 

 

36,731,495

 

 

$36,732

 

 

$885,718

 

 

$(627,305)

 

$(1,249)

 

$293,896

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustment for currency rate exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$8

 

 

$8

 

Net loss for the period ended March 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

$12,226

 

 

 

 

 

 

$12,226

 

Balance, March 31, 2016

 

 

36,731,495

 

 

 

36,732

 

 

 

885,718

 

 

 

(615,079)

 

 

(1,241)

 

 

306,130

 

 

 
7
 

 

A & C United Agriculture Developing Inc

 

 

 

 

 

 

 

 

 

 

 

 

 

(A Development Stage Enterprise)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STATEMENT OF CASH FLOWS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months
Ended

March 31,

2016

 

 

Six Months
Ended

March 31,

2015

 

 

Three Months

Ended

March 31,

2016

 

 

Three Months

Ended

March 31,

2015

 

 

Cumulative from

February 7, 2011 (Date of Inception) Through

March 31,
 2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$12,226

 

 

$(94,142)

 

$(17,763)

 

$(71,940)

 

$(615,079)
Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-cash portion of share based legal fee expense

 

 

-

 

 

 

6,000

 

 

 

-

 

 

 

6,000

 

 

 

70,450

 

Non-cash portion of share based consulting fee expense

 

 

-

 

 

 

6,000

 

 

 

-

 

 

 

6,000

 

 

 

76,500

 

Depreciation expenses

 

 

2,721

 

 

 

2,721

 

 

 

1,360

 

 

 

1,360

 

 

 

17,684

 

Deferred interest expense

 

 

-

 

 

 

63

 

 

 

-

 

 

 

32

 

 

 

-

 

Inventory

 

 

250,958

 

 

 

121,521

 

 

 

133,159

 

 

 

(92,769)

 

 

(28,956)

Accounts Receivable

 

 

(253,200)

 

 

40,000

 

 

 

(127,487)

 

 

80,000

 

 

 

(295,000)

Prepaid expense

 

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

(169)

Prepaid to supplier

 

 

 

 

 

 

(60,000)

 

 

 

 

 

 

(60,000)

 

 

-

 

Accrued expense

 

 

6,228

 

 

 

(318)

 

 

4,075

 

 

 

(52)

 

 

8,024

 

Account payable

 

 

(130)

 

 

(59,534)

 

 

(1,308)

 

 

14,894

 

 

 

21,370

 

Credit card payable

 

 

(2,696)

 

 

863

 

 

 

(309)

 

 

697

 

 

 

509

 

Net cash provided by operating activities

 

$16,107

 

 

$(36,826)

 

$(8,273)

 

$(115,778)

 

$(744,667)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of property, plant and equipment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(27,206)

Net cash provided by investing activities

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$(27,206)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan from shareholders

 

$10,205

 

 

$7,840

 

 

$6,731

 

 

$3,402

 

 

$56,679

 

Advance to shareholders

 

 

-

 

 

 

25,645

 

 

 

-

 

 

 

21,084

 

 

 

-

 

Long term Loans

 

 

-

 

 

 

(4,598)

 

 

-

 

 

 

(1,533)

 

 

-

 

Proceeds from issuance of common stock

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

775,500

 

Net cash provided by financing activities

 

$10,205

 

 

$28,887

 

 

$6,731

 

 

$22,953

 

 

$832,179

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of Exchange Rate on Cash

 

$8

 

 

$-

 

 

$210

 

 

$-

 

 

$(1,241)

Net increase (decrease) in cash and cash equivalents

 

$26,320

 

 

$(7,939)

 

$(1,332)

 

$(92,825)

 

$59,065

 

Cash and cash equivalents at beginning of the period

 

$32,745

 

 

$69,501

 

 

$60,397

 

 

$154,387

 

 

$-

 

Cash and cash equivalents at end of the period

 

$59,065

 

 

$61,562

 

 

$59,065

 

 

$61,562

 

 

$59,065

 

 

 
8
 

 

A & C UNITED AGRICULTURE DEVELOPING INC

 

NOTES TO FINANCIAL STATEMENTS

 

 

NOTE A - BUSINESS DESCRIPTION

 

A & C United Agriculture Developing Inc., or the "Company," is a Nevada corporation formed on February 7, 2011. Our principal executive office is located at Oak Brook Pointe, Suite 500, 700 Commerce Drive, Oak Brook IL 60523. Tel: 630-288-2500.

 

In addition to the U.S. operation, the Company established a subsidiary A & C Agriculture Developing (Europe) AB in Stockholm, Sweden in October 24, 2013, which is located at Gamla Sodertaljevagen 134A, 141 70 Segeltorp, Sweden.

 

Since the inception, the Company's long-term goal has been to solve some of the major challenges in China, such as pollution and food safety issues for the general public, as well as raising funds to grow the business. The Company believes that the best solution is to integrate and manage all links along the food production chain – seeds, farming, processing.

 

The Company has been and will be putting more resources in the seed business as it is still the main source of the Company's revenue. However, the Company has also been and will continue be working to leverage the resources that it believes can be obtained via strategic alliances in the future on both sides of the Pacific Ocean in order to expand the business scope.

 

Development Stage Company

 

The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards (SFAS) ASC 915, "Development Stage Entities". The Company has devoted substantially all of its efforts to establishing a new business and for which either of the following conditions exists: planned principal operations have not commenced; or the planned principal operations have commenced, and rising of capital and attempting to raise sales.

 

Basis of accounting

 

The financial statements reflect the assets, revenues and expenditures of the Company on the accrued basis of accounting. The Company's fiscal year end is the last day of September 30.

 

Concentration of credit risk

 

The Company maintains its cash in bank accounts which, at times, may exceed the federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash.

 

 
9
 

  

A & C UNITED AGRICULTURE DEVELOPING INC

 

NOTES TO FINANCIAL STATEMENTS

 

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect certain amounts reported in the financial statements and disclosures. Accordingly, actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

The Company considers all highly-liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of March 31, 2016, the company had cash and cash equivalents of $ 59,065.

 

Property, Plant, and Equipment Depreciation

 

Property, plant, and equipment are stated at cost. Depreciation is being provided principally by straight line methods over the estimated useful lives of the assets. Expenditures for maintenance and repairs, which do not improve or extend the expected useful lives of the assets, are expensed to operations while major repairs are capitalized.

 

The vehicle was recorded as fixed asset to depreciate over 5 years with straight line method. On December 5, 2012, the Company purchased a $27,206 passenger vehicle.

 

As of March 31, 2016, the company has property, plant, and equipment at a net cost of $9,522, and $17,684 of accumulated depreciation expense was recorded.

 

Account Receivable

 

As of March 31, 2016, the Company had account receivable of $295,000.

 

Inventory

 

The inventory was valued at cost of purchase from suppliers. As of March 31, 2016, the Company has $28,956 various vegetable seeds in stock in USA. And the inventories purchase from USA were stored at the garage of Yidan Liu's house at no charges and written agreement; and the inventories purchase from Europe were stored at the garage of Jun Huang's house at Sweden at no charges and written agreement.

 

 
10
 

  

A & C UNITED AGRICULTURE DEVELOPING INC

 

NOTES TO FINANCIAL STATEMENTS

 

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Prepaid Expense

 

As of March 31, 2016, the Company had prepaid rent expense of $169.

 

Stock-Based Compensation

 

The Company accounts for stock issued for services using the fair value method. In accordance with FASB ASC 718, Stock-Based Compensation, the measurement date of shares issued for services is the date at which the counterparty's performance is complete.

 

On June 30, 2011, 344,495 shares was issued to Michael Williams @ $0.1 per share for legal service value $34,450.

 

On July 16, 2012, 150,000 shares were issued to Michael Williams for legal services of $30,000 at $0.20 per share.

 

On June 20, 2012, 25,000 shares were issued to Pivo Associates for services of $5,000 at $0.20 per share.

 

On March 12, 2013, 50,000 shares were issued to three shareholders @ $0.25 per share for consulting service value $12,500.

 

On April 29, 2013, 12,000 shares were issued to Blue Future, Inc for consulting and advising services of $3,000 at $0.25 per share.

 

On December 26, 2013, 250,000 shares were issued to Griffin Produce Company, Inc @ $0.2 per share for consulting and advising service value $50,000.

 

On February 1, 2015, 60,000 shares were issued to Michael Williams for legal services of $6,000 at $0.10 per share.

 

On February 2, 2015, 60,000 shares were issued to Globex Transfer LLC for DTC professional services of $6,000 at $0.10 per share.

 

 
11
 

  

A & C UNITED AGRICULTURE DEVELOPING INC

 

NOTES TO FINANCIAL STATEMENTS

 

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Basics and Diluted Net Loss per Common Share

 

The Company computes per share amounts in accordance with Statement of Financial Accounting Standards (SFAS) ASC 260, Earnings per Share (EPS). ASC 260 requires presentation of basis and diluted EPS. Basic EPS is computed by dividing the income (loss) available to Common Shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock and common stock equivalents outstanding during the periods.

 

The Company only issued one type of shares, i.e., common shares only. There are no other types securities were issued. Accordingly, the diluted and basics net loss per common share are the same.

 

Long Term Liabilities

 

In December 5th, 2012, the Company purchased a vehicle at a financing amount of $27,585.36 with 36 monthly equal payments. The Company had paid off the auto loan in September 2015. As of March 31, 2016, the Company has zero car loans.

 

Revenue Recognition

 

In accordance with the FASB Accounting Standards Codification (ASC) 605-15-25 "Revenue Recognition for Sales of Product", the Company recognizes revenue when it is realized or realizable and earned. The revenue from the product sales transaction shall be recognized at time of sale if the following conditions are met: 

 

 

·

The seller's price to the buyer is substantially fixed or determinable at the date of sale.

 

·

The buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product.

 

·

The buyer's obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product.

 

·

The buyer acquiring the product for resale has economic substance apart from that provided by the seller.

 

·

The seller does not have significant obligations for future performance to directly bring about resale of the product by the buyer.

 

·

The amount of future returns can be reasonably estimated.

 

Revenues include sales of seeds in Asia, Europe, and North America.

 

 
12
 

  

A & C UNITED AGRICULTURE DEVELOPING INC

 

NOTES TO FINANCIAL STATEMENTS

 

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Revenue Recognition (Continued)

 

The Company had total revenue of $395,715 and $141,636 for the quarter ended March 31, 2016 and 2015 respectively and $3,432,978 for the period of February 7, 2011 to March 31, 2016.

 

Cost of Goods Sold

 

The Company's purchase cost is primarily from supplier, U.S seed companies. Based upon management's experience in the industry, we believe vegetable seeds supply in United State for the varieties we intend to sell is plenty. We believe that with advanced technology and mature global seed accessibility, U.S seed companies can provide the varieties Chinese end users are looking for. We are focused on finding the right variety. We first will collect specifications from Chinese end users, and then we will match them with the variety here. We ask samples or sometimes we purchase small amount of seed. We will then try them in various locations in China at different planting season. The challenge we have is that not all the varieties we may initially select will prove to work in China. The trial cycle can be over a year in some cases.

 

We do not anticipate offering any material right of return on our product although we may reimburse buyers on a case-by-case basis if seed which passed our trials does not perform well for a particular grower through no fault of the grower.

 

The Company had $162,115 inventory as of December 31, 2015.

 

From the period of January 01, 2016 to March 31, 2016, the Company purchase $216,597 vegetable seeds from US suppliers and Europe suppliers; and there are $28,956 inventories as of March 31, 2016.

 

For the fiscal quarter ended March 31, 2016, the Company had related cost of goods sold expense and freight cost of $9,662.

 

As a result, a total of $359,418 cost of goods sold was recorded for the fiscal year ended March 31, 2016; and $3,073,944 cost of goods sold was recorded for the period of February 7, 2011 to March 31, 2016.

 

 
13
 

  

A & C UNITED AGRICULTURE DEVELOPING INC

 

NOTES TO FINANCIAL STATEMENTS

 

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Operating Leases

 

The Company entered into a lease for its corporate offices in under terms of non-cancelable operating leases. The lease term is from March 1, 2016 through February 28, 2017 and requires a roughly $170 monthly lease payment, and this office is located at 700 Commerce Drive, STE 500, Oak Brook IL 60523, USA.

 

Operating Expense

 

Operation expense consists of selling, general and administrative expenses, and depreciation expense.

 

For the fiscal quarter ended March 31, 2016 and 2015, there was a total of $54,060 and $90,587 operating expenses respectively. For the cumulative period from February 7, 2011 (Date of Inception) to March 31, 2016, there was a total of $974,105 operating expenses.

 

The Details were showed in Exhibit A.

 

Payroll Expense

 

Started from January 2013, the Company stayed the annually salary amount of Officer Yidan Liu for $ 60,000. The Social Security tax and Medicare tax were paid by both employer and employees in USA; employees also withheld portion of Federal and State tax calculate by each individual's status. All of the tax was submitted to Internal Revenue Service and local government at a monthly basis.

 

Started from September 2014, the Company hired an employee to taking care of the office operation in Sweden subsidiary at a cost of SEK 8,000 monthly.

 

Started from November 2015, the Company started paying salary amount to Officer Jun Huang for SEK 33,000 monthly.

 

The total payroll expense for the fiscal quarter ended March 31, 2016 and 2015 is $35,503 and $20,063 respectively, which included the payroll taxes to the government and the net salary to the officers and employee.

 

Professional Fees

 

Professional fees are consist of accounting and auditing fee, legal fee, consulting expenses, SEC filing fee, and other professional expenses. The total professional fees were $1,946 and $41,859 for the fiscal quarter ended March31, 2016 and 2015 respectively.

 

 
14
 

  

A & C UNITED AGRICULTURE DEVELOPING INC

 

NOTES TO FINANCIAL STATEMENTS

 

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Recent Accounting Pronouncements

 

The following pronouncements have become effective during the period covered by these financial statements or will become effective after the end of the period covered by these financial statements:

 

Pronouncement

Issued

Title

ASC 605

October 2009

Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements – a consensus of the FASB Emerging Issues Task Force

ASC 860

December 2009

Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets

ASC 505

January 2010

Accounting for Distributions to Shareholders with Components of Stock and Cash – a consensus of the FASB Emerging Issues Task Force

ASC 810

January 2010

Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary – a Scope Clarification

ASC 718

January 2010

Compensation – Stock Compensation (Topic 718): Escrowed Share Arrangements and the Presumption of Compensation

ASC 820

January 2010

Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements

ASC 810

February 2010

Consolidation (Topic 810): Amendments for Certain Investment Funds

ASC 815

March 2010

Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives

ASC-310 Receivables

July 2010

For public entities, the disclosure as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The disclosures about activity that occurs during a reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. For nonpublic entities, the disclosures are effective for annual reporting period ending on or after December 15, 2011.

 

Management does not anticipate that the adoption of these standards will have a material impact on the financial statements.

 

 
15
 

 

A & C UNITED AGRICULTURE DEVELOPING INC

 

NOTES TO FINANCIAL STATEMENTS

 

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Comprehensive Income

 

The company's comprehensive income is comprised of net income, unrealized gains and losses on marketable securities classified foreign currency translation adjustments, and unrealized gains and losses on derivative financial instruments related to foreign currency hedging.

 

Foreign Currency Translation

 

The Company has determined the United States dollars (USD) to be its functional currency for A&C United Agriculture Developing Inc., U.S.A and Swedish Krona (SEK) to be its functional currency in European business. Assets and liabilities were translated to U.S. dollars at the period-end exchange rate. Statement of operations amounts were translated to U.S. dollars using the first date of each month during the year. Gains and losses resulting from translating foreign currency financial statements are accumulated in other comprehensive income (loss), a separate component of shareholders' equity.

 

As of March 31, 2016, the Company had foreign currency translation loss of $ 1,241.

 

NOTE C - RELATED PARTY TRANSACTIONS

 

Common Shares Issued to Executive and Non-Executive Officers and Directors

 

As of March 31, 2016, total 30,235,000 shares were issued to officers and directors as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name

 

Title

 

Share QTY

 

 

Amount

 

 

Purchase Date

 

% of Common Share

 

Jun Huang

 

Secretary

 

 

15,000,000

 

 

$15,000

 

 

2/7/2011

 

 

40.84%

Yidan Liu

 

President

 

 

15,000,000

 

 

$15,000

 

 

2/7/2011

 

 

40.84%

Ross Rispens

 

Director

 

 

75,000

 

 

$10,000

 

 

5/31/2011

 

 

0.20%

Xinyu Wang

 

Director

 

 

10,000

 

 

$1,000

 

 

5/31/2011

 

 

0.03%

Manying Chen

 

Director

 

 

50,000

 

 

$5,000

 

 

5/31/2011

 

 

0.14%

Minhang Wei

 

Director

 

 

100,000

 

 

$10,000

 

 

5/31/2011

 

 

0.27%

Total

 

 

 

 

30,235,000

 

 

$56,000

 

 

 

 

 

82.31%

 

*Based upon total outstanding shares 36,731,495 as of March 31, 2016.

 

 
16
 

 

A & C UNITED AGRICULTURE DEVELOPING INC

 

NOTES TO FINANCIAL STATEMENTS

 

 

Loans from Officers/Shareholders

 

As of March 31, 2016, the officers loaned $56,679 to the Company for purchases and operating, and marketing expenses. The outstanding balance bears no interest, is due on demand and is not the subject of a written note or agreement.

 

NOTE D - SHAREHOLDERS' EQUITY

 

Under the Company's Articles of Incorporation of the Company, the Company is authorized to issue 500,000,000 shares of common stock with a par value of $0.001.

 

On February 7, 2011, the Company was incorporated in the State of Nevada.

 

On February 7, 2011, two founders of the Company, Jun Huang and Yidan Liu purchased 30,000,000 shares at $0.001 per share. The proceeds of $30,000 were received.

 

On May 31, 2011, additional 4,105,000 shares were issued to 113 shareholders at price of $0.1 per share or $410,500 common stock.

 

On June 30, 2011, 344,495 shares was issued to Michael Williams @ $0.1 per share for legal service value $34,450.

 

On July 16, 2012, 150,000 shares were issued to Michael Williams @ $0.2 per share for legal service value $30,000.

 

On July 20, 2012, 25,000 shares were issued to Pivo Associate Inc @ $0.2 per share for consulting service value $5,000.

 

On December 2012, additional 1,175,000 shares were issued to 12 shareholders and at price of $0.2 per share or $235,000 common stock.

 

On December 2012, 500,000 shares were issued to 7 new shareholders at price of $0.2 per share or $100,000 common stock.

 

On March 12, 2013, 50,000 shares were issued to three shareholders @ $0.25 per share for consulting service value $12,500.

 

On April 29, 2013, 12,000 shares were issued to Blue Future, Inc @ $0.25 per share for consulting and advising service value $3,000.

 

 
17
 

  

A & C UNITED AGRICULTURE DEVELOPING INC

 

NOTES TO FINANCIAL STATEMENTS

 

 

NOTE D - SHAREHOLDERS' EQUITY (Continued)

 

On December 26, 2013, 250,000 shares were issued to Griffin Produce Company, Inc @ $0.2 per share for consulting and advising service value $50,000.

 

On February 1, 2015, 60,000 shares were issued to Michael Williams for legal services of $6,000 at $0.10 per share.

 

On February 2, 2015, 60,000 shares were issued to Globex Transfer LLC for DTC professional services of $6,000 at $0.10 per share.

 

Therefore, as of March 31, 2016, there was total of 36,731,495 shares issued and outstanding.

 

NOTE E - GOING CONCERN

 

The Company is currently in the development stage and their activities consist solely of raising capital and attempting to sell products to generate and increase sales revenues.

 

There is no guarantee that the Company will be able to raise enough capital or generate revenues to sustain its operations and carry out its business plan. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

 

The financial statements do not include any adjustments relating to the carrying amounts of recorded assets or the carrying amounts and classification of recorded liabilities that may be required should the Company be unable to continue as a going concern.

 

As of March 31, 2016 the cash and cash equivalent balance was $59,065 and there is cumulative net loss of $615,079 for the cumulative period from February 7, 2011 (Date of Inception) to March 31, 2016.

 

 
18
 

 

Exhibit A

 

A & C United Agriculture Developing Inc

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months
Ended

March 31,

2016

 

 

Six Months
Ended

March 31,

2015

 

 

Three Months
Ended

March 31,

2016

 

 

Three Months
Ended

March 31,

2015

 

 

Cumulative from

February 7, 2011 (Date of

Inception)

Through

March 31,

2016

 

Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank Service Charges

 

 

638

 

 

 

166

 

 

 

360

 

 

 

115

 

 

 

2,242

 

Business Licenses and Permits

 

 

900

 

 

 

956

 

 

 

900

 

 

 

956

 

 

 

9,453

 

Meals and Entertainment

 

 

4,206

 

 

 

3,464

 

 

 

2,015

 

 

 

1,296

 

 

 

29,672

 

Membership fee

 

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

600

 

Office Supplies

 

 

723

 

 

 

130

 

 

 

111

 

 

 

130

 

 

 

13,256

 

Postage and Delivery

 

 

43

 

 

 

109

 

 

 

43

 

 

 

105

 

 

 

1,021

 

Printing and Reproduction

 

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

136

 

Auto and Truck Expenses

 

 

536

 

 

 

442

 

 

 

101

 

 

 

214

 

 

 

3,723

 

Payroll Expenses

 

 

65,440

 

 

 

40,500

 

 

 

35,503

 

 

 

20,063

 

 

 

261,887

 

Conference & Meeting

 

 

 

 

 

 

980

 

 

 

 

 

 

 

 

 

 

 

4,858

 

Interest Expense

 

 

 

 

 

 

63

 

 

 

 

 

 

 

32

 

 

 

376

 

Utilities

 

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

41

 

Website Expense

 

 

 

 

 

 

453

 

 

 

 

 

 

 

453

 

 

 

2,755

 

Medical Expenses

 

 

2,798

 

 

 

3,343

 

 

 

7

 

 

 

3,343

 

 

 

9,017

 

Registration Fees

 

 

100

 

 

 

520

 

 

 

100

 

 

 

520

 

 

 

620

 

Repairs and Maintenance

 

 

791

 

 

 

1,197

 

 

 

791

 

 

 

669

 

 

 

3,346

 

Research and Survey expenses

 

 

3,759

 

 

 

572

 

 

 

3,759

 

 

 

-

 

 

 

4,331

 

Training & Education Expense

 

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

480

 

Telephone Expense

 

 

755

 

 

 

-

 

 

 

87

 

 

 

-

 

 

 

1,712

 

Depreciation Expense

 

 

2,721

 

 

 

2,721

 

 

 

1,360

 

 

 

1,360

 

 

 

17,684

 

Insurance Expense

 

 

4,752

 

 

 

6,534

 

 

 

2,412

 

 

 

1,278

 

 

 

28,756

 

Marketing and Promotion Expense

 

 

434

 

 

 

136

 

 

 

26

 

 

 

136

 

 

 

4,572

 

Travel Expense

 

 

7,465

 

 

 

14,552

 

 

 

4,030

 

 

 

5,864

 

 

 

142,208

 

Professional Fees

 

 

2,858

 

 

 

44,482

 

 

 

1,946

 

 

 

41,859

 

 

 

393,892

 

Software

 

 

 

 

 

 

106

 

 

 

-

 

 

 

106

 

 

 

501

 

Rent Expense

 

 

1,014

 

 

 

12,597

 

 

 

507

 

 

 

12,089

 

 

 

36,968

 

Total Expense

 

 

99,934

 

 

 

134,022

 

 

 

54,060

 

 

 

90,587

 

 

 

974,105

 

 

 
19
 

 

Item 2. Management's Discussion and Analysis or Plan of Operation.

 

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-Q.

 

Our Management's Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

 

Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

 

Overview

 

Since inception, the Company's long-term goals have been to work to solve some of the major agricultural challenges in China, such as food safety issue, soil health problem and outdated farming practices, as well as to raise additional capital to grow our business and to help us implement projects that are targeting above mentioned issues. As the Company's name has suggested, the management team believes by unifying the valuable resources the Company is working to access, significant progress toward the above goals can be realized.

 

The Company has been and will be putting more resources in the seed business as it is still the main source of the Company's revenue. However, the Company has also been and will continue to be working to leverage the resources that it believes can be obtained via strategic alliances in the future on both sides of the Pacific Ocean in order to expand the business scope.

 

Current Operational Activities

 

The revenue of the second fiscal quarter of 2016 is about $400,000 which is higher than we anticipated as the Chinese Spring Festival usually slows down our business.

 

 
20
 

 

During this quarter, the management team continued to work on the high level strategy in regards of the bio fertilizer project. This project is aiming to introduce an American bio fertilizer product into China market. The manufacture, the potential investors and our company are the main players for this project. After carefully research and study, we strongly believe that in order to succeed the project, a six to eight months' trial phase is crucial prior to a potential massive sale. In this period of time, we plan to achieve three goals: fully understand how the product works in China by location and by crop; comply with all regulation at different levels and start marketing campaign and selling in selected areas and regions. In March, the Singapore group that we reported in previous filings had another meeting with us in Beijing and discussed in greater details regarding the next steps. The outcome of the meeting is that all parties agree that a trial phase we recommended above is necessary and an external fund injection to the Company is needed in order to proceed with the ground works and tasks. We plan to have another meeting in China early this summer however we cannot predict if and/or when we will be able to raise the funds we need to move forward with this project.

 

The CapGen has provided us more varieties for trials after the meeting we had in December 2015. We have deployed personnel at various trial locations. Trial results might start coming back in a few months depending on the location and weather condition.

 

During the next 12 months, we anticipate continuing our efforts to raise capital through continued meetings with potential investors, although there is no assurance we will raise capital from any of the investors as we have no contracts, agreements or commitments from this or other funding sources.

 

We currently have sufficient cash resources to fund all of our operations for the next 12 months.

 

Results of Operations

 

For the fiscal quarter ended March 31, 2016 vs. 2015

 

Revenue

 

There was $395,715 and $141,636 revenue generated for the fiscal quarter ended March 31, 2016 and 2015 due to increased sales efforts.

 

Cost of Revenue

 

There was $359,418 and $122,989 cost of goods sold incurred for the fiscal quarter ended March 31, 2016 and 2015 respectively. The cost of goods sold increased due to the increasing of revenue.

 

Expense

 

Our expenses consist of selling, general and administrative expenses and depreciation expense as follows:

 

For the fiscal quarter ended March 31, 2016 and 2015, there was a total of $54,060 and $90,587 operating expenses respectively. The decrease was primarily in the decrease of professional fees.

 

 
21
 

 

For the cumulative period from February 7, 2011 (Date of Inception) to March 31, 2016, there was a total of $974,105 operating expenses.

 

Three Months

Ended

March 31,
2016

 

 

Three Months

Ended

March 31,

2015

 

 

Cumulative from February 7, 2011 (Date of Inception)Through

March 31,
2016

Expense

Bank Service Charges

 

 

360

 

 

 

115

 

 

 

2,242

 

Business Licenses and Permits

 

 

900

 

 

 

956

 

 

 

9,453

 

Meals and Entertainment

 

 

2,015

 

 

 

1,296

 

 

 

29,672

 

Membership fee

 

 

 

 

 

 

-

 

 

 

600

 

Office Supplies

 

 

111

 

 

 

130

 

 

 

13,256

 

Postage and Delivery

 

 

43

 

 

 

105

 

 

 

1,021

 

Printing and Reproduction

 

 

 

 

 

 

-

 

 

 

136

 

Auto and Truck Expenses

 

 

101

 

 

 

214

 

 

 

3,723

 

Payroll Expenses

 

 

35,503

 

 

 

20,063

 

 

 

261,887

 

Conference & Meeting

 

 

 

 

 

 

 

 

 

 

4,858

 

Interest Expense

 

 

 

 

 

 

32

 

 

 

376

 

Utilities

 

 

 

 

 

 

-

 

 

 

41

 

Website Expense

 

 

 

 

 

 

453

 

 

 

2,755

 

Medical Expenses

 

 

7

 

 

 

3,343

 

 

 

9,017

 

Registration Fees

 

 

100

 

 

 

520

 

 

 

620

 

Repairs and Maintenance

 

 

791

 

 

 

669

 

 

 

3,346

 

Research and Survey expenses

 

 

3,759

 

 

 

-

 

 

 

4,331

 

Training & Education Expense

 

 

 

 

 

 

-

 

 

 

480

 

Telephone Expense

 

 

87

 

 

 

-

 

 

 

1,712

 

Depreciation Expense

 

 

1,360

 

 

 

1,360

 

 

 

17,684

 

Insurance Expense

 

 

2,412

 

 

 

1,278

 

 

 

28,756

 

Marketing and Promotion Expense

 

 

26

 

 

 

136

 

 

 

4,572

 

Travel Expense

 

 

4,030

 

 

 

5,864

 

 

 

142,208

 

Professional Fees

 

 

1,946

 

 

 

41,859

 

 

 

393,892

 

Software

 

 

-

 

 

 

106

 

 

 

501

 

Rent Expense

 

 

507

 

 

 

12,089

 

 

 

36,968

 

Total Expense

 

 

54,060

 

 

 

90,587

 

 

 

974,105

 

 

 
22
 

 

Income & Operation Taxes

 

We are subject to income taxes in the U.S.

 

We paid no income taxes in USA for the fiscal quarter ended March 31, 2016 due to the net operation loss in the USA.

 

Net Loss

 

We incurred net losses of $17,763 and $71,940 for the fiscal quarter ended March 31, 2016 and 2015, and net losses of $615,079 for period from February 7, 2011 to March 31, 2016 for the reasons set forth above.

 

For the six months ended March 31, 2016 vs. 2015

 

Revenue

 

There was $943,567 and $381,636 revenue generated for the six months ended March 31, 2016 and 2015 due to increased sales efforts.

 

Cost of Revenue

 

There was $831,407 and $341,756 cost of goods sold incurred for the six months ended March 31, 2016 and 2015 respectively. The cost of goods sold increased due to the increasing of revenue.

 

Expense

 

Our expenses consist of selling, general and administrative expenses and depreciation expense as follows:

 

For the six months ended March 31, 2016 and 2015, there was a total of $99,934 and $134,022 operating expenses respectively. The decrease was primarily in the decrease of professional fees.

 

 
23
 

 

For the cumulative period from February 7, 2011 (Date of Inception) to March 31, 2016, there was a total of $ 974,105 operating expenses.

 

Six Months

Ended

March 31,
2016

Six Months

Ended

March 31,
2015

Cumulative from February 7, 2011 (Date of Inception)Through

March 31,
2016

Expense

Bank Service Charges

 

 

638

 

 

 

166

 

 

 

2,242

 

Business Licenses and Permits

 

 

900

 

 

 

956

 

 

 

9,453

 

Meals and Entertainment

 

 

4,206

 

 

 

3,464

 

 

 

29,672

 

Membership fee

 

 

 

 

 

 

-

 

 

 

600

 

Office Supplies

 

 

723

 

 

 

130

 

 

 

13,256

 

Postage and Delivery

 

 

43

 

 

 

109

 

 

 

1,021

 

Printing and Reproduction

 

 

 

 

 

 

-

 

 

 

136

 

Auto and Truck Expenses

 

 

536

 

 

 

442

 

 

 

3,723

 

Payroll Expenses

 

 

65,440

 

 

 

40,500

 

 

 

261,887

 

Conference & Meeting

 

 

 

 

 

 

980

 

 

 

4,858

 

Interest Expense

 

 

 

 

 

 

63

 

 

 

376

 

Utilities

 

 

 

 

 

 

-

 

 

 

41

 

Website Expense

 

 

 

 

 

 

453

 

 

 

2,755

 

Medical Expenses

 

 

2,798

 

 

 

3,343

 

 

 

9,017

 

Registration Fees

 

 

100

 

 

 

520

 

 

 

620

 

Repairs and Maintenance

 

 

791

 

 

 

1,197

 

 

 

3,346

 

Research and Survey expenses

 

 

3,759

 

 

 

572

 

 

 

4,331

 

Training & Education Expense

 

 

 

 

 

 

-

 

 

 

480

 

Telephone Expense

 

 

755

 

 

 

-

 

 

 

1,712

 

Depreciation Expense

 

 

2,721

 

 

 

2,721

 

 

 

17,684

 

Insurance Expense

 

 

4,752

 

 

 

6,534

 

 

 

28,756

 

Marketing and Promotion Expense

 

 

434

 

 

 

136

 

 

 

4,572

 

Travel Expense

 

 

7,465

 

 

 

14,552

 

 

 

142,208

 

Professional Fees

 

 

2,858

 

 

 

44,482

 

 

 

393,892

 

Software

 

 

 

 

 

 

106

 

 

 

501

 

Rent Expense

 

 

1,014

 

 

 

12,597

 

 

 

36,968

 

Total Expense

 

 

99,934

 

 

 

134,022

 

 

 

974,105

 

 

Income & Operation Taxes

 

We are subject to income taxes in the U.S.

 

We paid no income taxes in USA for the six months ended March 31, 2016 due to the net operation loss in the USA.

 

 
24
 

 

Net Loss

 

We incurred net income of $ 12,226 and net losses $ 94,142 for the six months ended March 31, 2016 and 2015, and net losses of $ 615,079 for period from February 7, 2011 to March 31, 2016 for the reasons set forth above.

 

Liquidity and Capital Resources

 

 

 

At March 31,

 

 

At September 30,

 

 

 

2016

 

 

2015

 

Current Ratio

 

 

4.43

 

 

 

4.86

 

Cash

 

$59,065

 

 

$32,745

 

Working Capital

 

$296,608

 

 

$281,653

 

Total Assets

 

$392,712

 

 

$366,870

 

Total Liabilities

 

$86,582

 

 

$72,974

 

 

 

 

 

 

 

 

 

 

Total Equity

 

$306,130

 

 

$293,896

 

 

 

 

 

 

 

 

 

 

Total Debt/Equity

 

 

0.28

 

 

 

0.25

 

 

* Current Ratio = Current Assets /Current Liabilities.

 

** Total Debt / Equity = Total Liabilities / Total Shareholders' Equity. 

 

*** Working Capital = Current Assets - Current Liabilities. 

 

The Company had cash and cash equivalents of $ 59,065 as of March 31, 2016 and $32,745 as of September 30, 2015, and the working capital of $ 296,608 and $ 281,653 with liabilities of $ 86,582 and $ 72,974 for the same periods.

 

As of March 31, 2016, we have $59,065 in cash and $ 295,000 in accounts receivable. We anticipate that we will continue to generate revenues from sales. As we anticipate an average monthly burn rate of no more than $25,000 for operations and SEC filings during the next 12 months, we believe we have sufficient cash available (assuming we collect all our existing and anticipated sales and receivables) to fund all of our operational and SEC filing needs during the next 12 months.

 

Item 3. Quantitative and Qualitative Disclosure about Market Risk

 

Not applicable.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

The Company has established disclosure controls and procedures to ensure that information required to be disclosed in this quarterly report on Form 10-Q was properly recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. The Company's controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officer to allow timely decisions regarding required disclosure.

 

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) at March 31, 2016 based on the evaluation of these controls and procedures required by paragraph (b) of Rule 13a-15 or Rule 15d-15 under the Exchange Act. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer/Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer/Chief Financial Officer concluded that, at March 31, 2016, our disclosure controls and procedures are effective.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in the Company's internal control over financial reporting that occurred during the Company's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

 

 
25
 

 

PART II — OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

None.

 

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

 

None/Not Applicable.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosure.

 

Not applicable.

 

Item 5. Other Information.

 

Not applicable.

 

 
26
 

 

Item 6. Exhibits.

 

(a)

Exhibits.

 

Exhibit No.

Document Description

31.1

CERTIFICATION of CEO/CFO 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 CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002

 

Exhibit 101

Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.**

101.INS

XBRL Instance Document**

101.SCH

XBRL Taxonomy Extension Schema Document**

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document**

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document**

101.LAB

XBRL Taxonomy Extension Label Linkbase Document**

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document**

____________________

* This exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

 

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

 
27
 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

A & C United Agriculture Developing Inc.,

 

 a Nevada corporation

 

Title

Name

Date

Signature

Principal Executive Officer

Yidan (Andy) Liu

May 13, 2016

/s/ Yidan (Andy) Liu

 

In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

SIGNATURE

NAME

TITLE

DATE

/s/ Yidan (Andy) Liu

Yidan (Andy) Liu

Principal Executive Officer,

May 13, 2016

Principal Financial Officer and Principal Accounting Officer

 

 
28
 

 

EXHIBIT INDEX

 

Exhibit No.

Document Description

31.1

CERTIFICATION of CEO/CFO 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 CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002

 

Exhibit 101

Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.**

101.INS

XBRL Instance Document**

101.SCH

XBRL Taxonomy Extension Schema Document**

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document**

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document**

101.LAB

XBRL Taxonomy Extension Label Linkbase Document**

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document**

________________

* This exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

 

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

 

29