10-Q 1 ag31918110q.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
   
FORM 10-Q
  
(Mark One)
 
☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2018 or
 
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________
 
Commission File Number: 000-52276
 
American Gene Engineer Corp.
(Exact name of registrant as specified in its charter)
 
Delaware
27-3983637
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
 
521 Fifth Avenue, Suite 1712, New York, New York 10175
(Address of principal executive offices) (Zip Code)
 
(212) 292-4231
(Registrant’s telephone number, including area code)
 
None
(Former name of Registrant)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒ No ☐
 
Indicate by check mark whether the registrant has submitted electronically 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 ☒ No ☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
   
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer ☐
(Do not check if a smaller reporting company)
Smaller reporting company ☒
 
Emerging growth company ☒
 
If an emerging growth company, indicate by checkmark if the registrant has not elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the securities Act. ☐
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐ No ☒
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:  100,000,000 shares of common stock issued and outstanding as of March 21, 2018.
 

 

 
TABLE OF CONTENTS
    
PART I – FINANCIAL INFORMATION
 
ITEM 1. FINANCIAL STATEMENTS
 
Balance Sheets as of January 31, 2018 and October 31, 2017 (Unaudited)
F - 1
Statements of Operations for the Three Months Ended January 31, 2018 and 2017 (Unaudited)
F - 2
Statements of Cash Flows for the Three Months Ended January 31, 2018 and 2017 (Unaudited)
F - 3
Notes to Financial Statements (Unaudited)
F - 4
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
7
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
9
ITEM 4. CONTROLS AND PROCEDURES.
9
   
PART II – OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS.
10
ITEM 1A. RISK FACTORS
10
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
10
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
10
ITEM 4. MINE SAFETY DISCLOSURES
10
ITEM 5. OTHER INFORMATION
10
ITEM 6. EXHIBITS
11
SIGNATURES
12
 


ITEM 1. FINANCIAL STATEMENTS

American Gene Engineer Corp.
Balance Sheets
As of January 31, 2018 and October 31, 2017
(Unaudited)

 
 
January 31,
2018
   
October 31,
2017
 
ASSETS
           
Current assets:
           
Cash and cash equivalents
 
$
153
   
$
447
 
Prepaid expense
   
80,749
     
80,328
 
Total current assets
   
80,902
     
80,775
 
Rent deposit
   
3,800
     
3,800
 
                 
Total assets
 
$
84,702
   
$
84,575
 
 
               
LIABILITIES AND STOCKHOLDERS’ DEFICIT
               
 
               
Current liabilities:
               
Accounts payable and accrued expenses
 
$
14,572
   
$
25,292
 
Accrued expenses – related party
   
11,082
     
6,000
 
Deferred revenue
   
568,000
     
568,000
 
Total liabilities
   
593,654
     
599,292
 
 
               
Commitments and contingencies
               
                 
Stockholders’ deficit:
               
Common stock, $0.001 par value, 200,000,000
authorized, 100,000,000 share issued and outstanding,
   
100,000
     
100,000
 
Additional paid-in capital
   
292,414
     
260,199
 
Accumulated deficit
   
(901,366
)
   
(874,916
)
Total stockholders’ deficit
   
(508,952
)
   
(514,717
)
                 
Total liabilities and  stockholders’ deficit
 
$
84,702
   
$
84,575
 
 
See accompanying notes to the financial statements.
 
F-1

 
American Gene Engineer Corp.
Statements of Operations
For the Three Months Ended January 31, 2018 and 2017
(Unaudited)

 
 
Three Months Ended January 31,
 
 
 
2018
   
2017
 
Revenue:
           
Revenue
 
$
-
   
$
-
 
                 
Operating expenses:
               
General and administrative expenses
   
26,450
     
84,112
 
                 
Net loss
 
$
26,450
   
$
84,112
 
                 
Net loss per common share – basic and diluted
   
(0.00
)
   
(0.00
)
Weighted average common shares outstanding – basic and
diluted
   
100,000,000
     
100,000,000
 
 
See accompanying notes to the financial statements.
 
F-2

 
American Gene Engineer Corp.
Statements of Cash Flows
For the Three Months Ended January 31, 2018 and 2017
(Unaudited)

 
 
Three Months Ended January 31,
 
 
 
2018
   
2017
 
Cash flows from operating activities:
           
Net loss
 
$
(26,450
)
 
$
(84,112
)
Adjustment to reconcile net loss to net cash used in operating
activities:
               
Changes in operating assets and liabilities:
               
Prepaid expenses and other assets
   
(421
)
   
(149,300
)
Accounts payable and accrued expenses
   
(10,720
)
   
(5,921
)
Accrued expense– related party
   
5,082
     
(2,858
)
Net cash used in operating activities
   
(32,509
)
   
(242,191
)
                 
Cash flows from financing activities:
               
Capital contribution from related party
   
32,215
     
1,047
 
Net cash provided by financing activities
   
32,215
     
1,047
 
 
               
Net decrease in cash and cash equivalents
   
(294
)
   
(241,144
)
Cash and cash equivalents, beginning of period
   
447
     
308,541
 
 
               
Cash and cash equivalents, end of period
 
$
153
   
$
67,397
 
 
               
Supplemental cash flow disclosures:
               
Cash paid for interest
 
$
-
   
$
-
 
Cash paid for income taxes
 
$
-
   
$
-
 
 
See accompanying notes to the financial statements.
 
F-3


American Gene Engineer Corp.
Notes to Financial Statements
(Unaudited)


NOTE 1 – ORGANIZATION

American Gene Engineer Corp. (the "Company") was incorporated in Delaware on November 15, 2010. The Company was established to provide professional consultation gene development, research, examination and studies.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING

BASIS OF PRESENTATION

The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These interim unaudited financial statements should be read in conjunction with the financial statements of the Company for the year ended October 31, 2017 and notes thereto contained elsewhere in the Annual Report on Form 10-K filed with the SEC on February 21, 2018

ESTIMATES AND ASSUMPTIONS

Preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid short-term investments purchased with an original maturity of three months or less to be cash equivalents. These investments are carried at cost, which approximates fair value.

REVENUE RECOGNITION

The Company recognizes revenue only when (1) there is persuasive evidence of an arrangement with the customer; (2) delivery has occurred or services have been rendered; (3) amount due to the customer is fixed or determinable; and (4) collectability is reasonably assured. Advance payments from customers are deferred and recorded in deferred revenue. During the year ended October 31, 2016, the Company received $568,000 from customers for gene analysis reports to be provided by the Company. Revenue will be recorded by the Company when the report is delivered. As of January 31, 2018, the Company has not delivered any reports.

INCOME TAXES

An asset and liability approach is used for financial accounting and reporting for income taxes. Deferred income taxes arise from temporary differences between income tax and financial reporting and principally relate to recognition of revenue and expenses in different periods for financial and tax accounting purposes and are measured using currently enacted tax rates and laws. In addition, a deferred tax asset can be generated by net operating loss carryforwards (“NOLs”). If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

In the event the Company is charged interest or penalties related to income tax matters, the Company would record such interest as interest expense and would record such penalties as other expense in the statement of operations. No such charges have been incurred by the Company.  As of January 31, 2018, the Company has no accrued interest related to uncertain tax positions.
 
F-4


EARNINGS (LOSS) PER COMMON SHARE

Basic net earnings (loss) per common share are computed by dividing net earnings (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted net earnings (loss) per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

SUBSEQUENT EVENTS

The Company has evaluated all transactions from January 31, 2018 through the financial statement issuance date for subsequent event disclosure consideration and noted no significant subsequent event that needs to be disclosed.

NEW ACCOUNTING PRONOUNCEMENTS

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” The guidance requires a company to recognize revenue when it transfers promised services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those services and requires enhanced disclosures. The new guidance is effective for annual and interim periods beginning after December 15, 2016, and early adoption is not permitted. On July 9, 2015, the FASB approved the deferral of the effective date of the new revenue guidance by one year to annual reporting periods beginning after December 15, 2017, with early adoption being permitted for annual periods beginning after December 15, 2016. The Company is currently evaluating the new guidance.

There were various other accounting standard and interpretations issued recently, none of which are expected to have a material impact on our financial position, operations or cash flows.

NOTE 3 – GOING CONCERN

At January 31, 2018, the Company had a net working capital deficit of $512,752. The Company has suffered recurring losses and expects such losses to continue through at least the following 12 months. The Company expects to finance its operations primarily through contributions from its Chief Executive Officer and receipts from customer contracts. The Chief Executive Officer is not legally obligated to provide any financing.

There is no assurance that the Company will be able to obtain such additional capital.  Additionally, no assurance can be given that any such financing, if obtained, will be adequate to meet the Company’s ultimate capital needs and to support its growth.  If adequate capital cannot be obtained on a timely basis and on satisfactory terms, the Company’s operations would be materially negatively impacted.

As a result of the above discussed conditions, there exists substantial doubt about the Company’s ability to continue as a going concern.  The Company’s financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  The financial statements do not include any adjustments relating to the recoverability of the recorded assets or the classification of liabilities that may be necessary should it be determined that the Company is unable to continue as a going concern.

NOTE 4 – PREPAID EXPENSE

Prepaid expense consisted of the following at January 31, 2018 and October 31, 2017:

   
January 31, 2018
   
October 31, 2017
 
Prepaid examination fee
 
$
75,977
   
$
76,906
 
Others
   
4,772
     
3,422
 
Total prepaid expense
 
$
80,749
   
$
80,328
 

On September 30, 2016, the Company entered into an agreement with Pharmacogenomics Lab in Taiwan for gene testing services. Pursuant to the agreement, the Company prepaid $90,007 to Pharmacogenomics Lab in October 2016. As of January 31, 2018 and October 31, 2017, prepaid examination fees to Pharmacogenomics Lab were $60,305.
 
F-5


In March 2017, the Company prepaid Asia-Pacific Gene Engineering Limited, a company controlled by the Chief Executive Officer’s son, $20,000 for testing services. As of January 31, 2018 and October 31, 2017, prepaid examination fee to Asia-Pacific Gene Engineering Limited was $15,672 and $16,601, respectively.

NOTE 5 – RELATED PARTY TRANSACTIONS

As of January 31, 2018 and October 31, 2017, salary payable to the Company’s Chief Executive Officer was $11,082 and $6,000.

On November 1, 2016, the Company entered into a service agreement with Asia-Pacific Gene Engineering Limited. Pursuant to the agreement, Asia-Pacific Gene Engineering Limited agreed to provide services to the Company’s customers, such as pre-exam consulting, testing result analyzing and post exam consulting for one year for a $200,000 service fee. The Company paid the $200,000 service fee in January 2017 and expensed $50,000 during the three months ended January 31, 2017.

See Note 7 for contributions made by the Company’s Chief Executive Officer.

NOTE 6 – INCOME TAXES

At January 31, 2018, we had federal income tax net operating loss (“NOL”) carryforwards of approximately $901,000. The NOL carryforwards expire from fiscal year 2033 through 2038. The value of these carryforwards depends on our ability to generate taxable income. A change in ownership, as defined by federal income tax regulations, could significantly limit our ability to utilize our net operating loss carryforwards. Additionally, because federal tax laws limit the time during which the net operating loss carryforwards may be applied against future taxes, if we fail to generate taxable income prior to the expiration dates we may not be able to fully utilize the net operating loss carryforwards to reduce future income taxes. We have had cumulative losses and there is no assurance of future taxable income, therefore, valuation allowances have been recorded to fully offset the deferred tax asset at January 31, 2018 and October 31, 2017.

NOTE 7 – EQUITY

During the three months ended January 31, 2018 and January 31, 2017, the Company’s Chief Executive Officer contributed cash of $32,215 and $1,047, respectively, to the Company.
 
F-6


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

Forward Looking Statements

This report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors”, that may cause our company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.

In this quarterly report, unless otherwise specified, all references to “common shares” refer to the common shares of our capital stock.

As used in this quarterly report, the terms “we”, “us”, “our”, “American Gene Engineer Corp.”, “the Company” means American Gene Engineer Corp., unless otherwise indicated.

Corporate Overview
 
American Gene Engineer Corp. (“Company”) was incorporated in the State of Delaware on November 15, 2010. We have no full-time employees and own no real estate or personal property. We were originally formed as a vehicle to seek the acquisition of, or merger with, an existing company which provides genetic testing and diagnostic services or alternatively develop our own business in those or related market segments. In July 2016, we ceased to be a “shell company,” as defined under the Securities and Exchange Act, when we commenced our own business in the area of genetic testing and entered into contracts with two individuals in Taiwan, pursuant to which the Company will provide genetic testing of those individuals in Taiwan. Subsequently, we have entered into similar contracts with 27 additional customers to perform genetic testing services. The overall business objective of the Company is to provide professional consultation services in gene development, research, examination and studies.

There are a number of factors that raise substantial doubt about our ability to continue as a going concern. Such doubts include the fact (i) that we have not established any source of revenue to cover our operating costs; (ii) that we will engage in very limited activities without incurring any liabilities that must be satisfied in cash until a source of funding is secured; and (iii) that if we are unable to obtain revenue producing contracts or financing or if the revenue or financing we do obtain is insufficient to cover any operating losses we may incur, we may substantially curtail or terminate our operations.

Plan of Operation

The part of the business plan that we are currently implementing is to provide genetic testing services and genetic test analysis services to individuals. Genetic tests can be performed to determine genetic relationships to certain diseases, indicate possible future illness issues, and evaluate an individual’s response to therapy and medication. We currently focus on individualized RNA genetic testing (“RNA tests”). The Company provides RNA tests for both healthy individuals and individuals with specified health concerns. For healthy individuals, the RNA test is preventative. For individuals with special health concerns, the RNA tests can be used to determine the right treatment and medication for such individuals.  Because we currently do not have our own clinics and clinical laboratories to perform the Preventative Tests and we do not have any professionals on staff who can analyze the test results, we have entered into arrangements with entities in Taiwan to conduct the Preventative Tests. We currently have entered into an arrangement with the Li Ren Yi Shi Jian Yan Suo (“Li Ren”) in Taipei, Taiwan, pursuant to which, Li Ren agreed to perform blood tests in Taipei, Taiwan.  We also entered into a Service Agreement with Pharmacogenomics Lab in Taiwai (“Pharmacogenomics”), pursuant to which, Pharmacogenomics agreed to conduct genetic tests on the blood samples provided by Li Ren.  Once the testing is completed, Asian-Pacific Genetic Engineering Limited, a company that is owned by the son of our Chief Executive Officer, will prepare the client reports analyzing the test results.  We are also currently in negotiation with selected physicians and genetic specialists to help us convey the test results to our customers.  In the future, we plan to establish our own clinics and laboratories in Taiwan where the patients can have their blood drawn and tested.  Currently we are in the testing process of client blood samples under those signed contracts and we plan to issue analysis reports in May 2018.
 
7


In the early stage of development, prior to the establishment of its own laboratories, the Company will outsource the RNA tests and the analysis thereof. In the future, we plan to establish our own clinical laboratories to conduct the genetic tests and hire physicians as employees to analyze the testing results. We also plan to expand our business by identifying potential business partners in the DNA repairing industry. Although our current operation is in Taiwan, we plan to expand our operation globally by setting up subsidiaries and/or investing in the existing business in the foreign countries.

Results of Operation

Three months ended January 31, 2018 as Compared to three months ended January 31, 2017
 
We have not generated any revenue since inception. For the three months ended January 31, 2018, and 2017, we did not receive any amount for future services. During the fiscal year ended October 31, 2016, we collected $456,000 (net of customer referral fees of $112,000) which has been deferred until such time as the services are provided. We expect to deliver our services in May 2018 with the help of Asia-Pacific Gene Engineering Limited. As of January 31, 2018, we had prepaid expense of $15,672 related to Asia-Pacific Gene Engineering Limited. Additional costs, if any, related to the delivery of our services will be funded by our Chief Executive Officer although our Chief Executive Officer is not obligated to fund our operations.
 
For the three months ended January 31, 2018, we incurred $26,450 in operating expenses as compared to $84,114 for the same period in 2017. Our operating expenses for the three months ended January 31, 2018 mainly included fees paid to our third party professionals, including lawyers, accountants and auditors for the filing of periodic reports with SEC and other miscellaneous fees. Compared to the three months ended January 31, 2017, the decrease in operating expense is because of a $50,000 service fee to one related party during three months ended January 31, 2017. There were no such expenses during three months ended January 31, 2018.

For the three months January 31, 2018 and 2017 we had net losses of $26,450 and $84,112, respectively. The decrease was mainly due to the related party service fee incurred during the three months ended January 31, 2017 as described above.
 
Liquidity and Capital Resources

As of January 31, 2018, we have no current source of revenue and had cash and cash equivalents of $153.  There is a substantial doubt regarding the Company’s ability to continue as a going concern.
 
Our expenses have been paid for with cash collected from customers in advance and funds provided by our Chief Executive Officer.

We anticipate that in order to fund our ongoing working capital requirements, we will need to use all of the remaining cash funds as well as seeking other sources of funding. We may need to raise additional capital through loans or additional investments from our initial shareholders, officers, directors, or third parties. None of the initial shareholders, officers or directors is under any obligation to advance funds or invest in, us. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of our business plan, and controlling overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. These factors raise substantial doubt about our ability to continue as a going concern.

Off-Balance Sheet Arrangements
 
We do not have any off-balance sheet arrangements, financings or other relationships with entities or other persons, also known as “special purpose entities.”
 
8

 
Critical Accounting Estimates
 
The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America requires our management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. As such, in accordance with the use of accounting principles generally accepted in the United States of America, our actual realized results may differ from management’s initial estimates as reported. A summary of our significant accounting policies are detailed in the notes to the financial statements, which are an integral component of this analysis.
 
Significant Accounting Policies
 
The Company has defined a significant accounting policy as one that is both important to the portrayal of the Company’s financial condition and results of operations and requires management of the Company to make difficult, subjective or complex judgments. Estimates and assumptions about future events and their effects cannot be predicted with certainty. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments. These estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. 
 
We have identified the policies set forth in Note 2 to our financial statements as significant to our business operations and the understanding of our results of operations. The impact and any associated risks related to these policies on our business operations is discussed throughout Management’s Discussion and Analysis of Results of Operations and Financial Condition, where such policies affect our reported and expected financial results. In the ordinary course of business, we have made a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ significantly from those estimates under different assumptions and conditions. We believe that the discussion set forth in Note 2 to our financial statements addresses our most significant accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require our most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934 are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Our disclosure controls and procedures are also designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, to allow timely decisions regarding required disclosure. Our chief executive officer and chief financial officer have reviewed the effectiveness of our disclosure controls and procedures as of January 31, 2018 and, based on his evaluation, have concluded that the disclosure controls and procedures were not effective.

Management’s assessment identified several material weaknesses in our internal control over financial reporting. A “material weakness” is defined under SEC rules as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

Our management concluded that we had material weaknesses in our control environment and financial reporting process consisting of the following as of the Evaluation Date:

1)
lack of design and implementation of a system of internal controls over financial reporting;
 
9

 
2)
lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal control and procedures;
3)
inadequate segregation of duties consistent with control objectives;
4)
ineffective controls over period end financial disclosure and reporting processes; and
5)
lack of accounting personnel with adequate experience and training.

Changes in internal control over financial reporting

During the three months ended January 31, 2018, there were no changes in our internal control over financial reporting identified in connection with the evaluation performed during the fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS.
  
We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
   
ITEM 1A. RISK FACTORS
    
As of the date of this filing, there have been no material changes from the risk factors disclosed in Item 1A (Risk Factors) contained in our Form 10-K for the year ended October 31, 2017, filed with the SEC on February 21, 2018. We operate in a changing environment that involves numerous known and unknown risks and uncertainties that could materially affect out operations. The risks, uncertainties and other factors set forth in our Form 10-K for the year ended October 31, 2017, filed with the SEC on February 21, 2018, may cause our actual results, performances and achievements to be materially different from those expressed or implied by our forward-looking statements. If any of these risks or events occurs, our business, financial condition or results of operations may be adversely affected.
   
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
None.
   
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
   
None.
   
ITEM 4. MINE SAFETY DISCLOSURES
   
Not applicable.
   
ITEM 5. OTHER INFORMATION
   
None.
 
10

 
ITEM 6. EXHIBITS
  
(3)
Articles of Incorporation and By-laws
3.1
3.2
3.3
(10)
Material Contracts
10.1
10.2
(31)
Section 302 Certification
31.1*
31.2*
(32)
Section 906 Certification
32.1*
32.2*
101.INS*
XBRL INSTANCE DOCUMENT
101.SCH*
XBRL TAXONOMY EXTENSION SCHEMA
101.CAL*
XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
101.DEF*  
 XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
101.LAB*  
 XBRL TAXONOMY EXTENSION LABEL LINKBASE
101.PRE*  
 XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE
  
*filed herewith
 
11

 
SIGNATURES
  
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
  
Date: March 26, 2018
 
 
American Gene Engineer Corp.
 
 
 
 
 
 
 
/s/ Ming Lin
 
 
 
Ming Lin
 
 
 
CEO, Principal Executive Officer, and Director
 
 
 
Date:
 
 
 
 
 
 
 
 
 
 
 
/s/ Han-Chen Lin
 
 
 
Han-Chen Lin
 
 
 
CFO, Principal Accounting Officer, and Director
 
 
 
Date:
 
 
 
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