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 June 30, 2017

 

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.)

 

1313 N Grand Ave. #16, Walnut, California

91789

(Address of principal executive offices)

(Zip Code)

 

  Issuer's telephone number: 626-262-7379

 

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 June 30, 2017, there were 37,731,495 shares issued and outstanding of the registrant's common stock.

 

 
 
 

A & C United Agriculture Developing Inc. & Subsidiary

 

Consolidated Financial Statements

 

As of June 30, 2017, and 2016

 

Table of Contents

 

Consolidated Balance Sheet

 

 

3

 

 

 

 

 

 

Consolidated Statement of Operations

 

 

4

 

 

 

 

 

 

Consolidated Statement of Stockholders’ Equity

 

 

5

 

 

 

 

 

 

Consolidated Statement of Cash Flows

 

 

6

 

 

 

 

 

 

Notes to Consolidated Financial Statements

 

 

7

 

 

 
2
 
 

 

A & C United Agriculture Developing Inc. & Subsidiary

CONSOLIDATED BALANCE SHEET

UNAUDITED

 

 

 

June 30,

 

 

September 30,

 

 

 

2017

 

 

2016

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$ 113,214

 

 

$ 114,508

 

Accounts receivable

 

 

210,000

 

 

 

6,867

 

Inventory

 

 

11,716

 

 

 

369,164

 

Total Current Assets

 

$ 334,930

 

 

$ 490,539

 

Other current assets:

 

 

 

 

 

 

 

 

Prepaid expense

 

$ 4,350

 

 

$ 379,343

 

Total Other Current Assets

 

$ 4,350

 

 

$ 379,343

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

$ 2,721

 

 

$ 6,802

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$ 342,001

 

 

$ 876,684

 

LIABILITIES & EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Account payable

 

$ 59,500

 

 

$ 31,753

 

Credit card payable

 

 

2,395

 

 

 

801

 

Total current liabilities

 

$ 61,895

 

 

$ 32,554

 

Other current liabilities:

 

 

 

 

 

 

 

 

Loan from shareholders

 

$ 29,178

 

 

$ 32,565

 

Accrued Expenses Liability

 

 

7,503

 

 

 

7,567

 

Unearned Income

 

 

-

 

 

 

156,030

 

Total other current liabilities

 

$ 36,681

 

 

$ 196,162

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

$ 98,576

 

 

$ 228,716

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

 

 

 

 

Common stock, $0.001 par value; 500,000,000 shares authorized; 40,731,495 in 9/30/2016 and 37,731,495 in 6/30/2017 shares issued and outstanding.

 

$ 37,732

 

 

$ 40,732

 

Paid-in capital

 

 

984,718

 

 

 

1,281,718

 

Accumulated deficit

 

 

(777,040 )

 

 

(672,996 )

Accumulated other comprehensive income (loss)

 

 

(1,985 )

 

 

(1,486 )

Total stockholders' equity

 

$ 243,425

 

 

$ 647,968

 

TOTAL LIABILITIES & EQUITY

 

$ 342,001

 

 

$ 876,684

 

 

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

 

 
3
 
 

 

A & C United Agriculture Developing Inc. & Subsidiary 

CONSOLIDATED STATEMENT OF OPERATIONS

 

 

 

Nine Months
Ended

 

 

Nine Months
Ended

 

 

Three Months
Ended

 

 

Three Months
Ended

 

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

Revenues

 

$ 854,839

 

 

$ 1,274,622

 

 

$ 297,932

 

 

$ 331,055

 

Cost of Goods Sold

 

$ 712,580

 

 

$ 1,130,850

 

 

$ 231,073

 

 

$ 299,442

 

Gross Profit

 

$ 142,259

 

 

$ 143,772

 

 

$ 66,859

 

 

$ 31,613

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$ 1,404

 

 

$ -

 

 

$ 799

 

 

$ -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

$ 240,892

 

 

$ 155,117

 

 

$ 81,033

 

 

$ 57,905

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expenses

 

$ 4,081

 

 

$ 4,081

 

 

$ 1,360

 

 

$ 1,360

 

Total Operating Expenses

 

$ 246,377

 

 

$ 159,198

 

 

$ 83,192

 

 

$ 59,265

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

 

$ (104,118 )

 

$ (15,426 )

 

$ (16,333 )

 

$ (27,652 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income, net

 

$ 74

 

 

$ 6

 

 

$ 25

 

 

$ 6

 

Interest Expense, net

 

$ -

 

 

$ -

 

 

$ -

 

 

$ -

 

Income (Loss) before income taxes

 

$ (104,044 )

 

$ (15,420 )

 

$ (16,308 )

 

$ (27,646 )

Income (Loss) tax expense

 

$ -

 

 

$ -

 

 

$ -

 

 

$ -

 

Net Income (Loss)

 

$ (104,044 )

 

$ (15,420 )

 

$ (16,308 )

 

$ (27,646 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share- Basics

 

$ (0.00 )

 

$ (0.00 )

 

$ (0.00 )

 

$ (0.00 )

Net income (loss) per common share- Diluted

 

$ (0.00 )

 

$ (0.00 )

 

$ (0.00 )

 

$ (0.00 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

$ (499 )

 

$ 8

 

 

$ 429

 

 

$ -

 

Other comprehensive income (loss)

 

$ (499 )

 

$ 8

 

 

$ 429

 

 

$ -

 

Comprehensive Income (Loss)

 

$ (104,543 )

 

$ (15,412 )

 

$ (15,879 )

 

$ (27,646 )

 

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

 

 
4
 
 

 

A & C United Agriculture Developing Inc. & Subsidiary 

STATEMENT OF STOCKHOLDERS EQUITY

For the period ended June 30, 2017

UNAUDITED 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Comprehensive

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, September 30, 2015

 

 

36,731,495

 

 

$ 36,732

 

 

$ 885,718

 

 

$ (627,305 )

 

$ (1,249 )

 

$ 293,896

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stocks

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

for consulting service @0.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

per share on July 15, 2016

 

 

1,000,000

 

 

$ 1,000

 

 

$ 99,000

 

 

 

 

 

 

 

 

 

 

$ 100,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stocks

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

for professional service @0.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

per share on July 15, 2016

 

 

1,000,000

 

 

$ 1,000

 

 

$ 99,000

 

 

 

 

 

 

 

 

 

 

$ 100,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stocks

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

for director fee @0.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

per share on August 11, 2016

 

 

2,000,000

 

 

$ 2,000

 

 

$ 198,000

 

 

 

 

 

 

 

 

 

 

$ 200,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustment for currency rate exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$ (237 )

 

$ (237 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ended September 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

$ (45,691 )

 

 

 

 

 

$ (45,691 )

Balance, September 30, 2016

 

 

40,731,495

 

 

$ 40,732

 

 

$ 1,281,718

 

 

$ (672,996 )

 

$ (1,486 )

 

$ 647,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancelled common stocks for non-performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

of professional service @0.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

per share on November 15, 2016

 

 

(1,000,000 )

 

$ (1,000 )

 

$ (99,000 )

 

 

 

 

 

 

 

 

 

$ (100,000 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancelled common stocks for

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

non-performance of director service @0.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

per share on November 15, 2016

 

 

(2,000,000 )

 

$ (2,000 )

 

$ (198,000 )

 

 

 

 

 

 

 

 

 

$ (200,000 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustment for currency rate exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$ (499 )

 

$ (499 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ended June 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

$ (104,044 )

 

 

 

 

 

$ (104,044 )

Balance, June 30, 2017

 

 

37,731,495

 

 

$ 37,732

 

 

$ 984,718

 

 

$ (777,040 )

 

$ (1,985 )

 

$ 243,425

 

 

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

 

 
5
 
 

 

A & C United Agriculture Developing Inc

CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

 

Nine Months
Ended

 

 

Nine Months
Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2017

 

 

2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Operating Activities:

 

 

 

 

 

 

Net income (loss)

 

$ (104,044 )

 

$ (15,420 )

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Non-cash portion of share based legal fee expense

 

 

-

 

 

 

-

 

Non-cash portion of share based consulting fee expense

 

 

-

 

 

 

-

 

Depreciation expenses

 

 

4,081

 

 

 

4,081

 

Deferred interest expense

 

 

-

 

 

 

-

 

Inventory

 

 

357,448

 

 

 

246,963

 

Accounts receivable

 

 

(203,133 )

 

 

(388,752 )

Prepaid expense

 

 

74,993

 

 

 

-

 

Accrued expense

 

 

(64 )

 

 

6,233

 

Account payable

 

 

27,747

 

 

 

124,614

 

Unearned Income

 

 

(156,030 )

 

 

6,031

 

Credit card payable

 

 

1,594

 

 

 

(2,635 )

Net cash provided by operating activities

 

$ 2,592

 

 

$ (18,885 )

 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

 

 

Purchase of property, plant and equipment

 

 

-

 

 

 

-

 

Net cash provided by investing activities

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

 

 

Loan from shareholders

 

$ (3,387 )

 

$ 13,362

 

Long term loans

 

 

-

 

 

 

-

 

Proceeds from issuance of common stock

 

 

-

 

 

 

-

 

Net cash provided by financing activities

 

$ (3,387 )

 

$ 13,362

 

 

 

 

 

 

 

 

 

 

Effect of Exchange Rate on Cash

 

$ (499 )

 

$ 8

 

Net increase (decrease) in cash and cash equivalents

 

$ (1,294 )

 

$ (5,515 )

Cash and cash equivalents at beginning of the period

 

$ 114,508

 

 

$ 32,745

 

Cash and cash equivalents at end of the period

 

$ 113,214

 

 

$ 27,230

 

 

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

 

 
6
 
 

 

A & C UNITED AGRICULTURE DEVELOPING INC. & SUBSIDIARY

 

NOTES TO CONSOLIDATED 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 current principal executive office is located at 1313 N Grand Ave. #16, Walnut, CA 91789. Tel: 626-262-7379.

 

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.

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES

 

Basis of accounting

 

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

 

Basis of presentation

 

The accompanying unaudited condensed financial statements of the Company have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission requirements for interim financial statements. Therefore, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The financial statements should be read in conjunction with the Company’s Form 10-K audited financial statements filed for the year ended September 30, 2016.

 

The interim unaudited financial statements present the balance sheet, statements of operations and cash flows A & C United Agriculture Developing Inc. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States.

 

The interim financial information is unaudited. In the opinion of management, all adjustments necessary to present fairly the financial position as of September 30, 2016 and the results of operations and cash flows presented herein have been included in the financial statements. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results of operations for the full year.

 

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.

 

All of the Company’s accounts receivable in 2017 and 2016 are due from its principal major customer.

 

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.

 

 
7
 
 

 

A & C UNITED AGRICULTURE DEVELOPING INC. & SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

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 June 30, 2017, the company had cash and cash equivalents of $ 113,214.

 

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 June 30, 2017, the company has property, plant, and equipment at a net cost of $ 2,721. Depreciation expense totaled $ 1,360 for quarter ended June 30, 2017 and 2016.

 

Accounts Receivable

 

As of June 30, 2017, the Company had account receivables of $ 210,000. Management determined that no allowance for doubtful accounts was necessary based on its past collection history.

 

Prepaid and Deferred Expenses

 

As of June 30, 2017, the Company had prepaid and deferred expenses of $ 4,350. The September 30, 2016 balance consists primarily of $379,167 of deferred stock compensation which is recognized ratably over the term the services are to be performed. In November 2016, 3,000,000 common shares accounting for $300,000 of the deferred stock compensation were returned to the Company for non-performance service.

 

 
8
 
 

 

A & C UNITED AGRICULTURE DEVELOPING INC. & SUBSIDIARY

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Inventory

 

The inventory was valued at the lower of cost or market using the specific identification method. As of June 30, 2017, and September 30, 2016, the Company has $ 11,716 and $ 369,164 respectively, of various vegetable seeds in stock in USA. The inventories purchased from the USA were stored at the garage Yidan Liu’s, a former officer at no charges and written agreement; and the inventories purchased from Europe were of stored at the garage of Jun Huang’s, a former officer at Sweden at no charges and written agreement.

 

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 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.

 

On July 15, 2016, 1,000,000 shares were issued to Speedlight Consulting Service Inc for consulting services of $ 100,000 at $0.10 per share.

 

On July 15, 2016, 1,000,000 shares were issued to ChineseInvestors.Com for professional services of $ 100,000 at $0.10 per share. The shares were cancelled and returned to the Company in November 2016 for non-performance.

 

On August 11, 2016, 2,000,000 shares were issued to Wei Wang for director fees of $ 200,000 at $0.10 per share. The shares were cancelled and returned to the Company in November 2016 for non-performance.

 

Basic 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.

 

 
9
 
 

 

A & C UNITED AGRICULTURE DEVELOPING INC. & SUBSIDIARY

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Basic and Diluted Net Loss per Common Share (Continued)

 

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. The three and nine months weighted average shares outstanding at June 30, 2017 and 2016 was 37,731,495 and 40,731,495, respectively.

 

Recent Accounting Pronouncements

 

Management believes that none of the recently issued accounting pronouncements will have a material impact on the financial statements.

 

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.

 

The Company had total revenue of $ 297,932 and $ 331,055 for the quarter ended June 30, 2017 and June 30, 2016 respectively.

 

 
10
 
 

 

A & C UNITED AGRICULTURE DEVELOPING INC. & SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

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 $ 11,717 inventory as of March 31, 2017.

 

From the period of April 01, 2017 to June 30, 2017, the Company purchase $ 240,820 vegetable seeds from US and Europe suppliers; and there are $ 11,716 inventories as of June 30, 2017.

 

For the period ended June 30, 2017, the Company had related cost of goods sold expense and freight cost of $ 9,753, and purchase discount of $ 19,500.

 

As a result, a total of $ 231,073 of goods sold was recorded for the fiscal quarter ended June 30, 2017.

 

Operating Leases

 

The Company entered into a lease for its corporate offices in under terms of an operating lease. The lease term is from March 1, 2017 through February 28, 2018 and requires a roughly $175 monthly lease payment, and this office is located at 700 Commerce Drive, STE 500, Oak Brook IL 60523, 

 

Operating Expenses

 

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

 

For the fiscal quarter ended June 30, 2017 and 2016, there was a total of $ 83,192 and $ 59,265 operating expenses, respectively.

 

 
11
 
 

 

A & C UNITED AGRICULTURE DEVELOPING INC. & SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Payroll Expense

 

Commencing in 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.

 

Commencing in November 2015, the Company started paying salary to Officer Jun Huang of approximately $5,000 monthly.

 

The total payroll expense for the fiscal quarter ended June 30, 2017 and 2016 is $ 31,013 and $ 34,459 respectively, which included the payroll taxes to the government and the net salary to the officers and employee.

 

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.

 

For the fiscal quarter ended June 30, 2017 and 2016, the Company had foreign currency translation income of $ 429 and $ 0.00, respectively.

 

 
12
 
 

 

A & C UNITED AGRICULTURE DEVELOPING INC. & SUBSIDIARY

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 

NOTE C - RELATED PARTY TRANSACTIONS

 

Loans from Officers/Shareholders

 

As of June 30, 2017, Yidan Liu and Jun Huang, the prior officers of the Company, loaned $ 29,178 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 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.

 

On July 15, 2016, 1,000,000 shares were issued to Speedlight Consulting Service Inc for consulting services of $100,000 at $0.10 per share.

 

On July 15, 2016, 1,000,000 shares were issued to ChineseInvestors.Com for professional services of $100,000 at $0.10 per share.

 

On August 11, 2016, 2,000,000 shares were issued to Wei Wang for director fees of $200,000 at $0.10 per share.

 

On November 15, 2016, the Company and ChineseInvestors.Com terminated the professional consulting agreement which was signed on July 15, 2016. The 1,000,000 shares at value of $100,000 was cancelled and returned to the Company.

 

On November 15, 2016, the Company and Wei Wang terminated the Executive Director Appointment Agreement which was signed on August 11, 2016. The 2,000,000 shares at value of $200,000 was cancelled and returned to the Company.

 

As of June 30, 2017, there was total of 37,731,495 shares issued and outstanding.

 

 
13
 
 

 

A & C UNITED AGRICULTURE DEVELOPING INC. & SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE E - INCOME TAXES

 

The Company incurred net operating losses through June 30, 2017 of approximately $779,025.

 

Using a 35% statutory federal income tax rate (the Company is not subject to state income tax), the Company’s tax valuation allowance as of June 30, 2017 totals approximately $272,659. Because there is a less than 50% change that the allowance will be realized, no income tax benefit relating to the net operating losses have been reflected in these financial statements.

 

The Company is current in its income tax filings. Accordingly, it is subject to the normal tax regulatory audits for the last years.

 

NOTE F - SUBSEQUENT EVENTS

 

In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial statements were issued on August 01, 2017 and has determined that it does not have any material subsequent events to disclose in these financial statements.

 

NOTE G - GOING CONCERN

 

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.

 

The Company demonstrates adverse conditions that raise substantial doubt about the Company's ability to continue as a going concern. These adverse conditions are negative financial trends, specifically recurring operating losses, accumulated deficit and other adverse key financial ratios.

 

The Company generated certain profits during the three months ended June 30, 2017, however, the amount is not sufficient to cover its operating expenses. On June 19, 2017, the Company's prior majority shareholders, Yidan (Andy) Liu and Jun (Charlie) Huang, transferred 22,640,000 of their common stock, representing about 60% of the total outstanding common shares of the Company, to Mr. Chin Kha Foo, the current President and director of the Company. The Company plans to raise capital through financings from our new President to support the Company's normal business operating. There is no assurance, however, that the Company will be successful in raising the needed capital and, if funding is available, that it will be available on terms acceptable to the Company.

 

The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern. 

 

 
14
 
 

 

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.

 

 
15
 
 

 

Current Operational Activities

 

Our US company generated $261,430 revenue during this reporting quarter and $ 36,502 from Swedish company.

 

The trials with CapGen are still progressing and we met with GapGen at its R&D facility in Spain along with other international distributors in late April and shared user feedbacks, marketing strategies and R&D status.

 

As reported in previous filings, the Company has been trialing a soil health enhancing product in China with one local strategic partner. The test was completed but the result of performance is not as expected. We are collecting relevant data and analyzing with the local technicians and the product supplier. We need to conduct further tests once we complete the review of above mentioned test.

 

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

 

Results of Operations

 

For the fiscal quarter ended June 30, 2017 vs. 2016

 

Revenue

 

There was $ 297,932 and $ 331,055 revenue generated for the fiscal quarter ended June 30, 2017 and 2016. The decrease was mainly attributable to the sales decreased.

 

Cost of Revenue

 

There was $ 231,073 and $ 299,442 cost of goods sold incurred for the fiscal quarter ended June 30, 2017 and 2016 respectively. The decrease was mainly due to the revenue decreasing from sales.

 

Expense

 

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

 

For the fiscal quarter ended June 30, 2017 and 2016, there was a total of $ 83,192 and $59,265 operating expenses respectively. The increase was primarily due to the increasing of professional expenses.

 

 
16
 
 

 

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 June 30, 2017 due to the net operation loss in the USA.

 

Net Loss

 

We incurred net loss of $ 16,308 and $27,646 for the fiscal quarter ended June 30, 2017 and 2016.

 

Liquidity and Capital Resources

 

 

 

At

June 30,

 

 

At

September 30,

 

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

Current Ratio

 

 

3.44

 

 

 

3.80

 

Cash

 

$ 113,214

 

 

$ 114,508

 

Working Capital

 

$ 240,704

 

 

$ 641,166

 

Total Assets

 

$ 342,001

 

 

$ 876,684

 

Total Debt

 

$ 98,576

 

 

$ 228,716

 

 

 

 

 

 

 

 

 

 

Total Equity

 

$ 243,425

 

 

$ 647,968

 

 

 

 

 

 

 

 

 

 

Total Debt/Equity

 

 

0.40

 

 

 

0.35

 

_____________

* 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 $ 113,214 as of June 30, 2017 and $114,508 as of September 30, 2016, and the working capital of $240,704 and $641,166 with liabilities of $ 98,576 and $228,716 for the same periods.

 

 
17
 
 

 

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 June 30, 2017 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 June 30, 2017, our disclosure controls and procedures were not 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.

 

 
18
 
 

 

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

 

 
19
 
 

 

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.

 

 
20
 
 

 

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

Chin Kha Foo

August 8, 2017

/s/ Chin Kha Foo

 

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/ Chin Kha Foo

Chin Kha Foo

Principal Executive Officer,

August 8, 2017

Principal Financial Officer and Principal Accounting Officer

 

 
21
 
 

 

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.

 

 

22