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EX-31.1 - CERTIFICATION - ADGS Advisory, Inc.lipn_ex311.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2011

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ______ to ________

Commission File Number: 001-34274

LIFE NUTRITION PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
 
Delaware   42-1743717
(State or other jurisdiction
of incorporation or organization)
 
(I.R.S. Employer
Identification Number)

c/o 30A Vreeland Road, Suite 230
Florham Park, New Jersey
   
07932
(Address of principal executive offices)
 
(Zip Code)

(973) 443-0600
(Registrants Telephone Number, Including Area Code)
 
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.  o Yes   o 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).  x Yes   o 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” 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).   x Yes   o No

As of August 15, 2011 there were 4,095,000 shares of common stock outstanding with a par value of $0.0001.
 


 
 

 

Table of Contents
 
    Page: 
     
Part I.  FINANCIAL INFORMATION    
     
            Item 1. Financial Statements (unaudited)
 
3
                        Condensed Balance Sheets
 
3
                        Condensed Statements of Operations
 
4
                        Condensed Statements of Cash Flows
 
5
                        Notes to Condensed Financial Statements
 
6-10
     
             Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 
 
11-14
     
             Item 3. Quantitative and Qualitative Disclosures about Market Risk 
 
14
     
             Item 4. Controls and Procedures 
 
14-15
     
Part II.  OTHER INFORMATION    
     
             Item 1. Legal Proceedings 
 
16
             Item 1A. Risk Factors 
 
16
             Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 
 
16
             Item 3. Defaults Upon Senior Securities 
 
16
             Item 4. [Removed and Reserved] 
 
16
             Item 5. Other Information 
 
16
             Item 6. Exhibits 
 
16
     
Signatures   17
 
 
2

 
 
Life Nutrition Products, Inc.
Condensed Balance Sheets
As of June 30, 2011 (unaudited) and December 31, 2010
 
   
June 30,
   
December 31,
 
   
2011
   
2010
 
Assets
Current Assets
           
Cash
  $ -     $ 68  
Total Current Assets
    -       68  
                 
Property and Equipment, net
    -       900  
                 
Total Assets
  $ -     $ 968  
                 
Liabilities and Stockholder’s Deficit
                 
Current Liabilities
               
Accounts payable and accrued expenses
  $ 19,981     $ 2,839  
       Notes payable
    127,795       55,000  
Loans payable
    -       16,768  
Total Current Liabilities
    147,776       74,607  
                 
Stockholder’s Deficit
               
Preferred stock, $0.0001 par value, 2,000,000 authorized,
               
none issued and outstanding
    -       -  
                 
Common stock $0.0001 par value, 50,000,000 authorized,
    410       1,688  
4,095,000 and 16,877,900 issued and outstanding as of
               
June 30, 2011 and December 31, 2010, respectively
               
                 
Additional paid-in-capital
    427,940       460,533  
Accumulated deficit
    (576,126 )     (535,860 )
Total Stockholders’ Deficit
    (147,776 )     (73,639 )
                 
Total Liabilities and Stockholders’ Deficit
  $ -     $ 968  
                 
 
The accompanying footnotes are an integral part of the condensed financial statements.
 
 
3

 
 
Life Nutrition Products, Inc.
Condensed Statements of Operations (unaudited)
 
   
For the Three Months Ended
   
For the Six Months Ended
 
   
June 30,
   
June 30,
 
   
2011
   
2010
   
2011
   
2010
 
                         
Revenue
  $ -     $ 50     $ -     $ 168  
Cost of Revenues
    -       30       -       100  
Gross Profit
    -       20       -       68  
                                 
                                 
                                 
                                 
Selling General and Administrative
    16,355       8,492       37,981       18,224  
                                 
Loss from Operations
    (16,355 )     (8,472 )     (37,981 )     (18,156 )
                                 
Interest Expense
    1,597       -       2,285       -  
                                 
  Net Loss
  $ (17,952 )   $ (8,472 )   $ (40,266 )   $ (18,156 )
                                 
                                 
                                 
Weighted Average Shares of Common
                               
   Stock Outstanding-Basic and Diluted
  $ 4,095,000     $ 17,882,800     $ 4,095,000     $ 17,743,573  
Net Loss per Basic and
                               
   Diluted Common Share
  $ -     $ -     $ -     $ -  
 
The accompanying footnotes are an integral part of the condensed financial statements.
 
 
4

 
 
Life Nutrition Products, Inc.
Condensed Statements of Cash Flows (unaudited)
 
   
For the Six Months Ended
June 30,
 
   
2011
   
2010
 
Cash Flows from Operating Activities:
           
             
Net Loss
  $ (40,266 )   $ (18,156 )
Adjustments to reconcile net loss to net cash used in operating activities
               
Depreciation
    900       616  
  Changes in Assets and Liabilities
               
    Decrease in Inventory
    -       100  
    Decrease in Prepaid Rent
    -       3,000  
    Increase in Accounts Payable and Accrued Expenses
    17,142       9,979  
        Net cash used in operating activities
    (22,224 )     (4,461 )
                 
Cash Flows from Financing Activities:
               
    Repayment of Stock
    (49,729 )     -  
    Advances from Conqueror
    72,795       -  
    Repayment of Loan
    (910 )        
        Net cash provided by financing activities
    22,156       -  
                 
Net decrease in cash
    (68 )     (4,461 )
Cash at beginning of period
    68       4,461  
Cash at end of period
  $ -     $ -  
                 
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION
               
Cash paid during the year for:
               
Interest
  $ -     $ -  
Income taxes
  $ -     $ -  
                 
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES:
               
Stock issued to settle liability
  $ -     $ 18,000  

The accompanying footnotes are an integral part of the condensed financial statements.
 
 
5

 
 
Life Nutrition Products, Inc.
Notes to the Condensed Financial Statements (unaudited)
 
1.  NATURE OF OPERATIONS AND BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for the interim financial information and with the instructions to Form 10-Q and Regulation S-K as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair statement of the results of operations have been included. The results of operations for the six months ended June 30,  2011 are not necessarily indicative of the results of operations for the full year. When reading the financial information contained in this Quarterly Report, reference should be made to the financial statements, schedule, and notes contained in the Company’s annual report for the year ended December 31, 2010.

Our previous primary business purpose was to market over-the-counter, all-natural dietary supplements under the trade names: Trim For Life3 Appetite Control and Trim For Life3 Energy Formula. The Trim For Life3 Appetite Control Formula is patent pending and supported by scientific studies. The Trim For Life3 Energy Formula is a proprietary formula blend.  The Company is no longer pursuing this business.

On September 7, 2010, Life Nutrition Products, Inc. (the "Company") entered into a Share Exchange Agreement (the "Share Exchange Agreement") with Conqueror Group Limited, a Hong Kong corporation ("Conqueror") and Acumen Charm Ltd., a British Virgin Islands corporation (the "Conqueror Shareholder"). Pursuant to the Share Exchange Agreement, at the closing of the transaction contemplated in the Agreement (the "Transaction"), the Company will acquire 100% of the issued and outstanding capital stock of Conqueror from the Conqueror Shareholder, making Conqueror a wholly-owned subsidiary of the Company.

On November 17, 2010, the parties entered into a First Amendment to the Share Exchange Agreement (the “First Amendment”) which, among other things, provided that 1,004,900 shares shall be redeemed by the Company contemporaneously with the execution of the First Amendment at an aggregate redemption price of $55,270 (the “Group B Redemption Price”) and 12,782,900 shares shall be redeemed by the Company at or before the closing at an aggregate redemption price of $49,731 (the “Group C Redemption Price”) pursuant to mutually acceptable and duly executed redemption agreements.

Contemporaneously with the execution of the First Amendment, Conqueror loaned the Company the principal amount of $55,270 in exchange for which the Company delivered a promissory note to Conqueror which proceeds were used to pay the Group B Redemption Price.  The First Amendment further provided that at or before the closing, Conqueror shall loan the Company the principal amount of $49,731 which shall be paid from the funds remaining in escrow (the “Remaining Escrow Funds”) pursuant to the Escrow Agreement dated as of August 13, 2010, as amended on August 30, 2010, by and among Conqueror, the Company and Cyruli Shanks Hart & Zizmor LLP, in exchange for which the Company shall deliver a promissory note to Conqueror which proceeds shall be used to pay the Group C Redemption Price.

The First Amendment also provided that in the event that the closing does not occur for any reason on or before January 31, 2011, then, among other things, the Remaining Escrow Funds shall be paid to the Company and used to promptly redeem 12,782,900 shares as provided therein at the Group C Redemption Price, and the then officers and directors of the Company shall resign with immediate effect and appoint such persons as designated by Conqueror as officers and directors.

 
6

 

Life Nutrition Products, Inc.
Notes to the Condensed Financial Statements (unaudited)
(Continued)
 
The Closing was to transpire on or before January 31, 2011 but, as of the date hereof, has not occurred.  As a result, on May 11, 2011, and in accordance with the terms of the First Amendment, the Remaining Escrow Funds were paid to the Company and were used to redeem 12,782,900 shares at the Group C Redemption Price and the Company delivered a promissory note to Conqueror in the principal amount of $49,731.  On May 11, 2011, Michael M. Salerno, the Company’s sole officer and director, resigned as an officer and director of the Company, and appointed Chu Zhanjun and Li Gang as directors, and Chu Zhanjun as President, Chief Executive Officer and Principal Financial Officer of the Company, each a designee of Conqueror.

On May 11, 2011, the Company’s former CEO agreed to forgive and discharge all amounts due and owing to him for funds advanced or loans made to the Company (see Note 5).

Going Concern

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern. The Company has suffered recurring losses and experiences a deficiency of cash flow from operations. These matters raise substantial doubt about the Company's ability to continue as a going concern. The continued operations of the Company are dependent upon the Company's ability to raise capital and/or generate positive cash flows from operations. Management may achieve profitability and generate positive cash flows through possible acquisition or merger. However, there is no guarantee that a suitable offer may exist or that funding will be available to close on such a transaction. These 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 the Company cannot continue in existence.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.

Cash and Cash Equivalents

For purposes of the cash flow statements, the Company considers investments with an initial maturity of 3 months or less to be cash equivalents.

The Company maintains cash balances at financial institutions and are insured by the Federal Deposit Insurance Corporation up to federally insured limits.  At times during the year, balances in certain bank accounts may exceed the FDIC insured limits.

Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization are computed on the straight-line method based on the estimated useful lives of the assets.  Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred.
 
 
7

 

Life Nutrition Products, Inc.
Notes to the Condensed Financial Statements (unaudited)
(Continued)

Revenue Recognition

The Company recognizes revenue upon shipment of goods, and the price is fixed and determinable, and collectability is reasonably assured.

Net (Loss) Per Share of Common Stock

Net loss per common share is computed using the weighted average number of common shares outstanding.  Diluted earnings per share (EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants.  Common stock equivalents are not included in the computation of diluted earnings per share as the result is anti-dilutive for the periods presented.

Recent Accounting Pronouncements

As noted in our annual report on Form 10-K for the year ended December 31, 2010 filed April 2011, recent accounting pronouncements issued by the Financial Accounting Standards Board are not believed by the Company to have a significant material impact on the financial statements.

Income Taxes

The Company utilizes ASC 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial
statements or tax returns.  Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC 740-10 prescribes detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements in accordance with generally accepted accounting standards. Tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized. Federal, state and local income tax returns for the years prior to 2007 are no longer subject to examination by tax authorities. The Company did not have any uncertain tax positions.

The tax effect of temporary differences, primarily net operating loss carryforwards, gave rise to the Company's deferred tax asset in the accompanying June 30, 2011 and December 31, 2010 balance sheets. Because of the current uncertainty of realizing the benefit of the tax carry forward, a valuation allowance equal to the tax benefit for deferred taxes has been established. The full realization of the tax benefit associated with the carry forward depends predominantly upon the Company's ability to generate taxable income during the carry forward period.

As of June 30, 2011 and December 31, 2010, the Company has net operating loss carry forwards of approximately $560,000 and $536,000 that can be utilized to offset future taxable income for Federal income tax purposes through 2029. Utilization of these net loss carry forwards is subject to the limitations of Internal Revenue Code Section 382.  Significant components of the Company's deferred tax assets and liabilities are summarized as follows:
 
 
8

 

Life Nutrition Products, Inc.
Notes to the Condensed Financial Statements (unaudited)
(Continued)
 
   
June 30, 2011
   
December 31, 2010
 
             
Deferred tax asset
  $ 196,000     $ 186,000  
Less: Valuation allowance
    (196,000 )     (186,000 )
Net Deferred Tax Asset
  $ -     $ -  
                 

Fair Value Measurements

The carrying amounts of the Company’s financial instruments including cash, prepaid expenses, accrued expenses and officer loans, approximate fair value because of their short-term nature.

The Company follows ASC 820, which defines fair value, provides a consistent framework for measuring fair value under Generally Accepted Accounting Principles and expands fair value financial statement disclosure requirements. ASC 820’s valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. ASC 820 classifies these inputs into the following hierarchy:

Level 1 Inputs– Quoted prices for identical instruments in active markets.
 
Level 2 Inputs– Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 Inputs– Instruments with primarily unobservable value drivers.

3.  PROPERTY AND EQUIPMENT

At June 30, 2011 and December 31, 2010, property and equipment consists of the following:

   
June 30,
   
December 31,
 
Estimated
   
2011
   
2010
 
Useful Lives
               
Computer Equipment
  $ 4,324     $ 4,324  
3 years
Website Development
    4,315       4,315  
3 years
Less: accumulated depreciation and amortization
    (8,639 )     (7,739 )  
    $ -     $ 900    

4. NOTES PAYABLE

At June 30, 2011 and December 31, 2010, notes payable consist of the following:

 
9

 
 
Life Nutrition Products, Inc.
Notes to the Condensed Financial Statements (unaudited)
(Continued)
 
   
June 30,
   
December 31,
 
   
2011
   
2010
 
             
Note payable to Conqueror Group Limited bears interest at 5%, originally due May 17, 2011, currently due on demand
  $ 55,270     $ 55,000  
Note payable to Conqueror Group Limited bears interest at 5% and  due November 11, 2011
    49,730       -  
Advances from Conqueror Group Limited bears 5% interest and due on demand
    22,795       -  
    $ 127,795     $ 55,000  

The Company has accrued and expensed $2,285 for interest as of June 30, 2011.

5. LOANS PAYABLE

The Company was advanced $5,598 from its former CEO in 2009, which was due on demand without interest. The Company was advanced $11,170 from a company controlled by the Company’s former CEO in 2010. Total advances of $16,768 were due on demand without interest. The Company repaid $910 and the $15,858 was forgiven in the transaction and included in additional paid in capital.

6. STOCKHOLDERS’ DEFICIT

We have authorized 2,000,000 shares of blank check preferred stock, none of which are issued and outstanding.

We have authorized 50,000,000 shares of common stock, par value $.0001 per share. As of June 30, 2011 there are 4,095,000 issued and outstanding. In connection with the share exchange agreement, the Company redeemed and cancelled 13,787,800 shares of its common stock.
 
 
10

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
FORWARD LOOKING STATEMENT
 
This report contains certain forward-looking statements and information relating to the Company that are based on the beliefs and assumptions made by the Companys management as well as information currently available to the management.  When used in this document, the words anticipate, believe, estimate, and expect and similar expressions, are intended to identify forward-looking statements.  Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions.  Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected.  The Company does not intend to update these forward-looking statements.
 
APPLICATION OF CRITICAL ACCOUNTING PRACTICES
 
This Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Quarterly Report ending June 30, 2011 on Form 10-Q should be read in conjunction with the accompanying Financial Statements and related notes. Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Our significant accounting policies are more fully described in Notes to the financial statements. The preparation of 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, revenues and expenses, and the related disclosures of contingent assets and liabilities. Actual results could differ from those estimates under different assumptions or conditions.

We review our estimates and assumptions on an on-going basis. Our estimates are based on our historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions, but we do not believe such differences will materially affect our financial position or results of operations.

OVERVIEW AND PLAN OF OPERATION

Life Nutrition Products, Inc. (the “Company”, “we”, “us” and “our”) was previously a dietary supplement company specializing in the development, marketing and distribution of all natural, proprietary, dietary supplements under the names Trim For Life3® Appetite Control and Trim For Life3® Energy Formula.

In our original business plan, we outlined a marketing strategy to compete more effectively in the dietary supplement marketplace. However, due to a lack of available financing, we were unable to implement the marketing strategy or invest in product expansion. We are no longer pursuing this business. As a result, we began to explore other viable options that may provide the potential to generate a positive cash flow to accommodate the costs of being a public company. With volatile economic conditions and unknown opportunities, we are unable to adequately determine if there are indeed, business opportunities that would lend to the Company acquiring additional capital or having the available resources to construct such a deal.

Our common stock is traded in the over-the-counter market under the symbol “LIPN”.  Since January 20, 2009, it has been listed on the OTC Bulletin Board.  As a public company with the potential for shares to trade on the open market, we believe the Company may be in a better position to raise additional capital to meet our operating costs. However, we cannot claim nor guarantee that by having Company stock publicly quoted that it will provide the opportunity to raise additional capital.
 
 
11

 

Our current operating costs are minimal due to limited business activities, but we do incur an expense in ongoing legal and professional services to meet our SEC obligations as a publicly held company. The Company may continue to meet these expenses by opting to raise additional capital through sales of our common stock, loans from our board of directors and affiliates, and/or other transactions to meet these obligations.

Recent Developments

On September 7, 2010, we entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Conqueror Group Limited, a Hong Kong corporation (“Conqueror”) and Acumen Charm Ltd., a British Virgin Islands corporation (the “Conqueror Shareholder”). Pursuant to the Share Exchange Agreement, at the closing of the transaction contemplated in the Share Exchange Agreement (the “Transaction”), the Company will acquire 100% of the issued and outstanding capital stock of Conqueror from the Conqueror Shareholder, making Conqueror a wholly-owned subsidiary of the Company. There was no prior relationship between the Company and any of its affiliates and the Conqueror Shareholder and any of its affiliates.

Conqueror owns 100% of the equity interest of Shenyang Kai Xin, a wholly-owned foreign enterprise incorporated in the People’s Republic of China (“PRC”), which entity has entered into contractual arrangements with Liaoning New Land Food & Beverage Co., Limited (“NLFB”) and Liaoning New Land Fast Frozen Food Co. Limited (“NLFF”), each a company incorporated in the PRC, which arrangements give Conqueror effective control of the business of NLFB and NLFF.  NLFB is principally engaged in the processing and distribution of raspberry and blueberry drinks, wines and other related products in China, and NLFF is principally engaged in the cultivation, processing and distribution of fresh and frozen raspberries in the domestic market in China and internationally.

In consideration for the purchase of the Conqueror Shareholder’s interest in Conqueror, the Company will issue to designees of the Conqueror Shareholder a total of 23,905,000 newly issued shares of the Company’s common stock.

The closing of the Transaction is conditioned upon, among other things, satisfactory due diligence investigations by the parties, the cancellation of a total of 13,787,800 shares of the Company’s common stock by certain shareholders of the Company, the ability of certain designees of Conqueror to purchase a total of 4,010,000 shares of the Company’s common stock from non-affiliated shareholders of the Company in unrelated transactions, the accuracy at closing of the representations made by the parties in the Share Exchange Agreement, and the obtaining of necessary consents.

The First Amendment to the Share Exchange Agreement (the “First Amendment”) was entered into on November 17, 2010 by the Company with Conqueror and the Conqueror Shareholder.  The First Amendment amends the terms of the Share Exchange Agreement in which 1,004,900 shares shall be redeemed by the Company contemporaneously with the execution of the First Amendment at an aggregate redemption price of $55,270 (the “Group B Redemption Price”) and 12,782,900 shares shall be redeemed by the Company at or before the closing at an aggregate redemption price of $49,731 (the “Group C Redemption Price”) pursuant to mutually acceptable and duly executed redemption agreements.

Contemporaneously with the execution of the First Amendment, Conqueror loaned the Company the principal amount of $55,270 in exchange for which the Company delivered a promissory note to Conqueror which proceeds were used to pay the Group B Redemption Price.  The First Amendment further provides that at or before the closing, Conqueror shall loan the Company the principal amount of $49,731 which shall be paid from the funds remaining in escrow (the “Remaining Escrow Funds”) pursuant to the Escrow Agreement dated as of August 13, 2010, as amended on August 30, 2010, by and among Conqueror, the Company and Cyruli Shanks Hart & Zizmor LLP, in exchange for which the Company shall deliver a promissory note to Conqueror which proceeds shall be used to pay the Group C Redemption Price.
 
 
12

 

The First Amendment also provides that in the event that the closing does not occur for any reason on or before January 31, 2011, then, among other things, the Remaining Escrow Funds shall be paid to the Company and used to promptly redeem 12,782,900 shares as provided therein at the Group C Redemption Price, and the then officers and directors of the Company shall resign with immediate effect and appoint such persons as designated by Conqueror as officers and directors.

The Closing was to transpire on or before January 31, 2011 but, as of the date hereof, has not occurred.  As a result, as of May 11, 2011, and in accordance with the terms of the First Amendment, the Remaining Escrow Funds were paid to the Company and were used to redeem 12,782,900 shares at the Group C Redemption Price and the Company delivered a promissory note to Conqueror in the principal amount of $49,731.  In addition, on May 11, 2011, Michael M. Salerno, the Company’s sole officer and director, resigned as an officer and director of the Company, and appointed Chu Zhanjun and Li Gang as directors, and Chu Zhanjun as President, Chief Executive Officer and Principal Financial Officer of the Company, each a designee of Conqueror.

As a result, a change in control has occurred, due to the resignation of Mr. Salerno as sole officer and director, appointment of Mr. Zhanjun as President, Chief Executive Officer and Principal Financial Officer of the Company, and appointment of Mr. Zhanjun and Mr. Gang as directors.

As of the date hereof, we do not expect that the transaction contemplated by the Share Exchange Agreement will be completed at any time in future.

RESULTS OF OPERATIONS

Revenue was $0 for the three and six months ended June 30, 2011 compared to $50 and $168 for the three and six months ended June 30, 2010. The revenues derived in 2010 were from the Company’s previous dietary supplement business which business we are no longer pursuing.

Gross profit was $0 for the three and six months ended June 30, 2011 compared to $20 and $68 for the three and six months ended June 30, 2010.  Cost of revenues were $30 and $100 for the three and six months ended June 30, 2010 from our previous business compared to no cost of revenues for the three and six months ended June 30, 2011.

Selling, general and administrative expenses were $16,355 and $37,981 for the three and six months ended June 30, 2011 compared to $8,492 and $18,224 for the three and six months ended June 30, 2010, an increase of $7,863 and $19,757, respectively, which increase was primarily due to professional fees incurred related to the Share Exchange Agreement and the transaction contemplated thereby which has not occurred to date and is not expected to be completed.

Interest expense was $1,597 and $2,285 for the three and six months ended June 30, 2011 compared to $0 for the three and six months ended June 30, 2010, which interest for the first six months of 2011 was primarily due the accrued interest on the $127,795 loan payable to Conqueror Group Limited.

IMPACT of INFLATION

Inflation has not had a material effect on our results of operations.

LIQUIDITY and CAPITAL RESOURCES

Net cash used in operating activities was $22,224 for the six months ended June 30, 2011 primarily due to a net loss of $40,266 offset by an increase in accounts payable and accrued expenses of $17,142 compared to net cash used by operating activities $4,461 for the six months ended June 30, 2010 which was primarily due to a net loss of $18,156 offset by an increase in accounts payable and accrued expenses of $9,979 and a decrease in prepaid rent of $3,000.
 
 
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Net cash provided by financing activities was $22,156 for the six months ended June 30, 2011 which was primarily due to advances from Conqueror of $72,795 offset by repayment of stock of $49,729 compared to no cash provided by or used in financing activities for the six months ended June 30, 2010.

There was no cash provided by or used in investing activities for the six months ended June 30, 2011 and 2010.

On June 30, 2011, we had working capital deficit of $147,776 and a total stockholders’ deficit of $147,776, compared to working capital deficit of $74,539 and a total stockholders’ deficit of $73,639 on December 31, 2010.  On June 30, 2011, we had no cash and no assets, and total liabilities of $147,776 compared to cash of $68, total assets of $968 and total liabilities of $74,607 on December 31, 2010.

Obligations are being met on a month-to-month basis as cash becomes available. There can be no assurances that the Company’s present flow of cash will be sufficient to meet current and future obligations. The Company has incurred losses since its inception, and continues to require additional capital to fund its operations and meet SEC requirements of being a publicly held company. As such, the Company’s ability to pay its already incurred obligations is mostly dependent on the Company raising additional capital in the form of equity or debt.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital resources.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4. Controls and Procedures.

(a)  Evaluation of disclosure controls and procedures

Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report.  Based on that evaluation, our Principal Executive Officer and Principal Financial Officer has concluded that, as of June 30, 2011, these disclosure controls and procedures were not effective to ensure that all information required to  be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commissions rule and forms; and (ii) accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
 
 
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The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) inadequate segregation of duties consistent with control objectives; and (2) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of June 30,  2011.

Management believes that the material weaknesses set forth in items (1) and (2) above did not have an effect on our financial results. At this time, the Company does not have an audit committee and relies on its Board of Directors and executive management to monitor internal controls and procedures to ensure the Company is meeting its SEC obligations.
 
(b) Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

(c) Inherent Limitations on Effectiveness of Controls

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
 
 
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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

There are no material pending legal proceedings to which the Company is a party or to which any of its property is subject.

Item 1A. Risk Factors

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. [Removed and Reserved]

Item 5. Other Information.

None.

Item 6. Exhibits.
 
31.1
 
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of  2002 (Rules 13a-14 and 15d-14 of the Exchange Act)
     
31.2
 
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of  2002 (Rules 13a-14 and 15d-14 of the Exchange Act)
     
32.1
 
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
     
101*   The following financial information from our Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, filed with the SEC formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Balance Sheets, (ii) the Condensed Statements of Operations, (iii) the Condensed Statements of Cash Flows, and (iv) Notes to Condensed Financial Statements
________
*XBRL (Extensible Business Reporting Language) information is being furnished and not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended and is not incorporated by reference into any registration statement under the Securities Act of 1933, as amended.
 
 
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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.

 
  LIFE NUTRITION PRODUCTS, INC.  
  (Registrant)  
       
Dated:  August 19, 2011 
By:
/s/ Chu Zhanjun  
    Chu Zhanjun  
    Chief Executive Officer  
 
Dated:  August 19, 2011  
By:
/s/ Chu Zhanjun  
    Chu Zhanjun  
    Principal Financial Officer  
 
 
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