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EXCEL - IDEA: XBRL DOCUMENT - UAN Power CorpFinancial_Report.xls

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2011

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: 000-54334

 

UAN Power Corp.

(Exact name of registrant as specified in our charter)

 

Delaware

(State or other jurisdiction of

incorporation or organization)

 

27-0155619

(I.R.S. Employer Identification No.)

 

1021 Hill Street, Suite 200, Three Rivers, Michigan

(Address of principal executive offices)

 

49093

(Zip Code)

 

(586) 530-5605

(Registrant’s telephone number, including area code)

 

 

(Former name, former address and former fiscal year, if changed since last report)

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 x No q

Indicate by check mark whether the registrant has submitted electronically and posted on our corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes q No q

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. (Check one):

Large Accelerated Filer Accelerated Filer
Non-accelerated Filer Smaller reporting company

 

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

As of February 14, 2012, there were 78,273,000 shares of the registrant’s Common Stock outstanding.

 
 

 

UAN POWER CORP.

 

TABLE OF CONTENTS

 

 

 

    Page
PART I. FINANCIAL INFORMATION  
     
Item 1. Condensed Financial Statements 3
 

Condensed Balance Sheets at December 31, 2011 (unaudited)

and June 30, 2011 (audited)

3
 

Condensed Statements of Operations for the three and six months ended

December 31, 2011 and 2010 (unaudited) and from May 8, 2009 (inception) to

December 31, 2011)

4
 

Condensed Statements of Cash Flows for the six months ended

December 31, 2011 and 2010 (unaudited) and from May 8, 2009 (inception) to

December 31, 2011)

5
 

Statement of Changes In Shareholder Equity from May 8, 2009 (inception) to

December 31, 2011

6
    Notes to Condensed Financial Statements 7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 15
Item 3. Quantitative and Qualitative Disclosures About Market Risk 17
Item 4. Controls and Procedures 17
    18
PART II. OTHER INFORMATION  
     
Item 1. Legal Proceedings 18
Item 1A. Risk Factors 18
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 18
Item 3. Defaults Upon Senior Securities 18
Item 4. Mine Safety Disclosures 18
Item 5. Other Information 18
Item 6. Exhibits 19
  Signatures 20

 

 

 

 
 

PART I

 

Item 1.   Financial Statements

 

 UAN POWER CORP

 fka Gulf Shores Investments, Inc.

 (A Development Stage Company)

 Balance Sheets

 

      
   Unaudited  Audited
   December 31,
2011
  June 30,
2011
       
ASSETS      
CURRENT ASSETS          
Cash  $100,378   $—   
           
Total Current Assets   100,378    —   
           
Fixed  Assets, Net   83,210    —   
           
Other Assets, net (See Note 6)   108,533    12,500 
           
TOTAL ASSETS  $292,121   $12,500 
           
           
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)          
           
CURRENT LIABILITIES          
Accounts Payable and Accrued Expenses   38,845    8,443 
Amounts due to officers & shareholders   29,791    115,647 
           
           
Total Current Liabilities   68,636    124,090 
           
STOCKHOLDERS' EQUITY (DEFICIT)          
           
Preferred stock, $0.00001 par value, 20,000,000 shares          
  authorized, 0 shares issued and outstanding   —      —   
Common stock, $0.00001 par value, 250,000,000 shares          
  authorized, 78,273,000 and 29,998,999  shares issued and          
  oustanding at December 31, 2011 and June 30, 2011, respectively   783    300 
Additional paid-in capital   577,458    112,435 
Deficit accumulated during the development stage   (354,756)   (224,325)
           
Total Stockholders' Equity (Deficit)   223,485    (111,590)
           
TOTAL LIABILITIES AND STOCKHOLDERS'          
 EQUITY (DEFICIT)  $292,121   $12,500 
           

 

 The accompanying notes are an integral part of these condensed financial statements

3
 

UAN POWER CORP

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Statements of Operations

 

               From
   Three Month
Period
  Three Month
Period
  Six  Month
Period
  Six  Month
Period
  Inception
on May 8,
   Ended  Ended  Ended  Ended  2009 Through
   December 31, 2011  December 31, 2010  December 31, 2011  December 31, 2010  December 31, 2011
   Unaudited  Unaudited  Unaudited  Unaudited   
                
REVENUES  $59,946   $—     $59,946   $—     $59,946 
                          
COST OF  OPERATIONS   58,384    —      69,211    —      69,211 
                          
GROSS MARGIN  $1,562   $—     $(9,265)  $—     $(9,265)
                          
OPERATING EXPENSES                         
Consulting Fees - Related Party   13,200    0    23,700         83,600 
Professional Fees   50,478    3,710    89,273    5,210    228,777 
General and administrative   6,609    3,275    8,193    5,664    33,114 
                          
             Total Operating Expenses   70,287    6,985    121,166    10,874    345,491 
                          
INCOME (LOSS) FROM OPERATIONS   (68,725)   (6,985)   (130,431)   (10,874)   (354,756)
                          
                          
INCOME (LOSS) BEFORE INCOME TAXES   (68,725)   (6,985)   (130,431)   (10,874)   (354,756)
                          
Income tax expense   —      —      —      —      —   
                          
NET INCOME (LOSS)  $(68,725)  $(6,985)  $(130,431)  $(10,874)  $(354,756)
                          
BASIC INCOME (LOSS) PER COMMON SHARE  $(0.00)  $(0.00)  $(0.00)  $(0.00)     
                          
WEIGHTED AVERAGE NUMBER OF                         
  COMMON SHARES OUTSTANDING   78,273,000    78,273,000    71,568,139    78,273,000      

 

 The accompanying notes are an integral part of these financial statements

4
 

 

UAN POWER CORP
fka Gulf Shores Investments, Inc.
(A Development Stage Company)
Statements of Cash Flows

 

   Six Month  Six Month  From Inception
   Period  Period  on May 8,
   Ended  Ended  2009 Through
   December 31,
2011
  December 31,
2010
  December 31,
2011
                
OPERATING ACTIVITIES               
                
Net loss  $(130,431)  $(10,874)  $(354,756)
     Amortization expense   24,973    —      24,973 
Adjustments to reconcile net loss to net cash used by operating activities:               
Common stock issued for legal services   —      —      250 
Expenses paid by related party on the Company's behalf   —      —      19,125 
(Increase) decrease in amounts due from / from shareholders   (85,856)   —      29,791 
(Increase) in other assets and prepaid expenses   (104,366)   —      (116,866)
(Decrease) increase In accounts payable and accrued expenses   30,402    (2,250)   38,845 
(Decrease) increase in bank overdraft   —      2,675      
    —      —      —   
Net Cash Used in Operating Activities   (265,278)   (10,449)   (358,638)
                
INVESTING ACTIVITIES               
Fixed assets purchased   (99,850)   —      (99,850)
                
Net Cash Used in Operating Activities   (99,850)   —      (99,850)
                
FINANCING ACTIVITIES               
Proceeds from Notes Payable - Related Parties   —      10,000    33,500 
Payments on Notes Payable - Related Parties   —      (1,000)   (1,000)
Common stock issued for cash   465,506    —      526,366 
                
Net Cash Provided by Financing Activities   465,506    9,000    558,866 
                
NET INCREASE (DECREASE) IN CASH   100,378    (1,449)   100,378 
                
CASH AT BEGINNING OF PERIOD   —      1,449    —   
                
CASH AT END OF PERIOD  $100,378   $—     $100,378 
                
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION               
                
CASH PAID FOR:               
                
Interest  $—     $—     $—   
Income Taxes  $—     $—     $—   
                
NON-CASH ACTIVITIES:               
Legal fees paid by shareholder  $—     $—     $75,000 
Related  party debt forgiveness  $—     $—     $51,625 
Common Stock Issued for Services  $—     $—     $250 

 

5
 

 

UAN POWER CORP

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Statements of Stockholders' Equity (Deficit)

From May 8, 2009 (Inception) through December 31, 2011

 

               Deficit   
               Accumulated  Total
         Stock  Additional  During the  Stockholders'
   Common Stock  Subscription  Paid-In  Development  Equity
   Shares  Amount  Receivable  Capital  Stage  (Deficit)
                   
Balance, May 8, 2009 - Inception   —     $—          $—     $—     $—   
                               
Issuance of common stock on May 8, 2009 for cash at a price of $0.0000033 per share   60,000,000    600         (400)        200 
                               
Stock Subscription Receivable             (200)             (200)
                               
Issuance of common stock on May 19, 2009 for cash at a price of $0.00333 per share   12,000,000    120         39,880         40,000 
                               
Net Loss for the period from inception to June 30, 2009                       (38,846)   (38,846)
                               
Balance, June 30, 2009   72,000,000   $720   $(200)  $39,480   $(38,846)  $1,154 
                               
Issuance of common stock on July 1, 2009 in exchange for legal services provided at a price of $0.00333 per share   75,000    1         249         250 
                               
Issuance of common stock during the quarter ending September 2009 for cash at an average price of $0.00333 per share   198,000    2         658         660 
                               
Collection of stock subscription receivable on September 23, 2009             200              200 
                               
Issuance of common stock on December 1, 2009 for cash at a price of $0.00333 per share   6,000,000    60         19,940         20,000 
                               
Net Loss for the period from July 1, 2009 to June 30, 2010                       (60,065)   (60,065)
                               
Balance, June 30, 2010   78,273,000   $783   $—     $60,327   $(98,911)  $(37,801)
                               
Loan forgiveness - Related Parties on March 31, 2011                  51,625         51,625 
                               
Cancellation of Shares on May 23, 2011   (48,275,000)   (483)        483         0 
                               
Net Loss for the period from July 1, 2010 to June 30, 2011                       (125,414)   (125,414)
                               
Balance, June 30, 2011 (audited)   29,998,000   $300   $—     $112,435   $(224,325)  $(111,590)
                               
Issuance of common stock on July 25, 2011, net of costs, for cash at a price of $.01 per share   48,275,000    483         465,023         465,506 
                               
Net Loss for the period from July 1, 2011 to September 30, 2011                       (130,431)   (130,431)
                               
Balance, December 31, 2011 (unaudited)   78,273,000   $783   $—     $577,458   $(354,756)  $223,485 

 

The accompanying notes are an integral part of these condensed financial statements

6
 

UAN POWER CORPORATION

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Notes to Financial Statements

From Inception Through December 31, 2011

 

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Nature of Business

 

The financial statements presented are those of UAN Power Corporation (fka Gulf Shores Investments, Inc - the “Company”). The Company is incorporated under the laws of the State of Delaware (On November 14, 2011 the company changed both the original state of incorporation from the State of Nevada to the State of Delaware and the name of the company from Gulf Shores Investments, Inc. to UAN Power Corporation). The Company has commenced revenue-generating operations in the quarter ended December 31, 2011 (see Note 7), and, in accordance with ASC Topic 915, is considered a development stage company. UAN Power Corporation is intended to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other similar business combination with an operating business (a “Target Business”). All activity from inception (May 8, 2009) through the Company’s initial public offering on July 14, 2010 was related to the Company's formation and capital raising activities. Activities since the Company’s initial public offering related to the identification and investigation of a Target Businesses. The company’s plan is to identify a quality investment opportunity in an operating business, which can benefit from the reverse merger transaction to become a publicly traded company and to subsequently utilize the public equity markets to finance its growth strategy.

 

Use of Estimates

 

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 and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Dividends

 

The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.

 

Revenue Recognition

 

The company is a development stage company as such has realized no product and or directly related expenses. The company entered into an initial agency agreement for the distribution of products resulting from the technology licensing agreement outlined in Note 7. The agreement requires the payment to the company service fees of no less than $20,000 monthly for a twelve month period starting October 2011. These revenues are being recognized as received.

8
 

Advertising Costs

 

The Company's policy regarding advertising is to expense advertising when incurred. The Company had not incurred any advertising expense as of December 31, 2011 or 2010.

 

Cash and Cash Equivalents

 

For purposes of the Statement of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. As of December 31, 2011 the Company had $100,378 cash and cash equivalents. As of June 30, 2011 the Company had no cash or cash equivalents.

 

Basic (Loss) per Common Share

 

Basic (loss) per share is calculated by dividing the Company's net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company's net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of December 31, 2011 or 2010.

 

   For The
Six Months
Ended
  For The
Six Months
Ended
   December 31,
2011
  December 31,
2010
Net (Loss)  $(130,431)  $(10,874)
Weighted Average Shares   71,568,139    78,273,000 
Net (Loss) Per Share  $(0.00)  $(0.00)

  

Income Taxes

 

The Company provides for income taxes under ASC 740 "Accounting for Income Taxes". ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.

 

Impairment of Long-Lived Assets

 

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

9
 

Property

 

On August 30, 2011 the Company entered into a two year operating lease (Tenancy Agreement) for a facility in Taiwan to meet the needs of the Technology Licensing Agreement Described in Note 7. The Company acquired $99,850 in fixed assets and leasehold improvements in relation to this lease. The fixed assets and leasehold improvements are being amortized over a two year lease period.

 

Accounting Basis

 

The basis is accounting principles generally accepted in the United States of America. The Company has adopted a June 30 fiscal year end.

 

Stock-based compensation

 

The Company records stock-based compensation in accordance with ASC 718 (formerly SFAS No. 123R "Share Based Payments"), using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

 

Recent Accounting Pronouncements

 

The company has evaluated all the recent accounting pronouncements and believes that none of them will have a material effect on the Company's financial statements.

 

Interim Financial Statements

 

The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the Company’s audited financial statements and footnotes thereto for the year ended June 30, 2011, included in the Company’s Form 10-K filed on November 14, 2011. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The financial statements reflect all adjustments (consisting primarily of normal recurring adjustments) that are, in the opinion of management necessary for a fair presentation of the Company’s financial position and results of operations. The operating results for the six months ended December 31, 2011 are not necessarily indicative of the results to be expected for any other interim period of a future year.

10
 

Reclassification

 

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported net income or losses.

 

Foreign Currency Translation

 

The functional currency of the Company's operations in Taiwan is the New Taiwan Dollar (“NTD”) and its reporting currency is the U.S. dollar. Transactions denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the date of the transactions. Exchange gains or losses on transactions are included in earnings.

 

The combined financial statements of the Company are translated into U.S. dollars in accordance with the standard, “Foreign Currency Translation,” codified in ASC 830, using rates of exchange at the end of the period for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses and historical rates for equity. Translation adjustments resulting from the process of translating the local currency combining financial statements into U.S. dollars are included in determining comprehensive income. At December 31, 2011, the cumulative translation adjustments was $0. For the six months ended December 31, 2011, other comprehensive loss was $0.

 

The exchange rates used to translate amounts in NTD into U.S. dollars for the purposes of preparing the combined financial statements were as follows:  As of December 31, 2011, the Company used the period-end rates of exchange for assets and liabilities of $1.00 US to NTD 30.00. For the six months ended December 31, 2011, the Company used the period’s average rate of exchange to convert revenues, costs, and expenses of $1.00 US to NTD 30.00. The Company used historical rates for equity.

 

NOTE 2 - GOING CONCERN

 

These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. During the six month period ended December 31, 2011, the Company recognized no product sales revenue and incurred a net loss of $130,431, and had an accumulated deficit of $354,756 from inception on May 8, 2009 through December 31, 2011. The continuation of the Company as a going concern is dependent upon the continued financial support from its Shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

11
 

NOTE 3 - STOCKHOLDERS' EQUITY

 

The stockholders' equity section of the Company contains the following classes of Capital stock as of December 31 2011:

 

Preferred stock, $0.00001 par value, 20,000,000 shares authorized 0 shares issued and outstanding.

 

Common Stock, $0.00001 par value, 250,000,000 shares authorized 78,273,000 shares issued and outstanding.

 

On May 8, 2009, we entered into an agreement for the sale of 60,000,000 shares of common stock at a price of $0.00000333 per share. The Company realized $200 from this subscription.

 

On May 19, 2009, we entered into an agreement for the sale of 12,000,000 shares of common stock at a price of $0.00333 per share.

 

On July 1, 2009, the Company issued 75,000 shares of common stock as part of our fee agreement for legal services associated with the Company's S-1 filing. The shares were valued at $0.00333 per share.

 

During the quarter ending September 2009, the Company entered into an agreement for the sale of 198,000 shares of common stock at a price of $0.00333 per share to 39 different investors. The Company realized $660 from these subscriptions.

 

On December 1, 2009, the Company entered into an agreement for the sale of 6,000,000 shares of common stock at a price of $0.00333 per share. The Company realized $20,000 from this subscription.

 

On January 5, 2010, The company's board of directors authorized a three-for-one stock split. Each shareholder of record on January 5, 2010 received two additional shares of common stock for each share held on that date. All share and related information presented in these financial statements and accompanying footnotes have been adjusted to retroactively reflect the increased number of shares resulting from this action.

 

On May 23, 2011 the majority of the shareholders of the company entered into a Stock Purchase Agreement which resulted in a change in control of the company and appointment of a new Board of Directors.

12
 

On May 23, 2011, the Company entered into a Return to Treasury Agreement with a shareholder, pursuant to which 48,275,000 shares of the Common Stock beneficially owned by the shareholder immediately after the Stock Purchase, were retired for $1.

 

On July 25, 2011 the company completed a Private Placement Memorandum (equity financing) where 48,275,000 shares of common stock were issued (Par value $.00001 per share) at $.01 per share – total proceeds $465,506 net of $16,844 costs of issuance.

 

On July 31, 2011 the company repaid shareholders $75,000 in fees associated with the Stock Purchase Agreement executed on May 23, 2011. This payment was included in accrued expenses on June 30, 2011 and charged to professional services expense in the year ended June 30, 2011.

 

ADDITIONAL PAID IN CAPITAL

 

For the year ending June 30, 2011, the Company's founder and majority shareholder agreed to forgive the Company's debt payable to them. The amount as of March 31, 2011 was $51,625 and was fully forgiven on that date resulting in an increase to the Company's paid in capital of $51,625.

 

NOTE 4 – INCOME TAXES

 

ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

 

The Company has cumulative tax losses of approximately $224,000 at June 30, 2011 which are not likely to be fully realized and consequently a full valuation allowance has been established relating to such deferred tax assets. This cumulative tax loss expires as early as June 30, 2029.

 

The provision for income taxes differs from the amounts which would be provided by applying the statutory federal and state income tax rate of 39% to net loss before provision for income taxes for the following reasons:

 

   For The Six Months
Ended
  For The Six Months
Ended
   December 31, 2011  December 31, 2010
Income tax expense at statutory rate  $(50,868)  $(4,241)
Net deferred tax asset   50,868    4,241 
Income tax expense per books  $—     $—   

 

13
 

Net deferred tax assets consist of the following components as of:

 

   For The
Six Months
Ended
  For The
Six Months
Ended
   December 31,
2011
  December 31,
2010
NOL carryover  $130,431   $10,874 
Valuation allowance   (130,431)   (10,874)
Income tax expense  $—     $—   

 

NOTE 5 - RELATED PARTY TRANSACTIONS

 

Periodically, the Company's founder and majority shareholder provided loans for administrative and operating expenses. The amounts owed by the Company as of June 30, 2011 were $0.

 

On March 31, 2011, the loans owed by the Company were forgiven by the Company's founder and shareholder resulting in an increase to the Company's paid in capital.

 

As of December 31, 2011, an officer and shareholder and a second shareholder of the company had advanced the company $29,791 to cover initial operating expenses and to initiate Taiwan based operations relating to the aforementioned Technology Licensing Agreement.

 

The following is a summary of the notes payable and advances from shareholders during year 2011 and the six months ended December 31, 2011. 

 

   For The
Six Months
  For The
Year
   Ended  Ended
   December 31,
2011
  June 30,
2011
Balance payable - beginning period  $115,647   $7,500 
Advances in the period   (394,340)   168,272 
Expenses paid on behalf of Company   153,517    —   
Deposit on license agreement   100,000    —   
Purchase of fixed assets   99,850    —   
Amounts repaid   (41,950)   (1,000)
Amounts advanced forgiven   (2,933)   (51,625)
Notes payable - forgiven   —      (7,500)
Balance payable, net - end period  $29,791   $115,647 

 

Certain shareholder of the company provided various consulting services to the Company for which they are compensated. For the six months ended December 31, 2010 and 2011, consultant fees were $0 and $$23,700, respectively.

14
 

NOTE 6 – OTHER ASSETS

 

As of December 31, 2011 the company had recorded the following items in other assets:

 

·         $1,400 in an “evergreen” legal retainer.

·         $93,333  in technology licensing fees (net)

·         $13,800 in lease security deposit

 

NOTE 7 – SIGNIFICANT AGREEMENTS

 

On August 30, 2011 the Company entered into a Technology Licensing & Transfer Agreement to obtain the rights to develop, manufacture, market, sell and import products which incorporate or rely upon certain “Triops” technologies and processes in Taiwan, The People’s Republic of China, the United States, Japan and Korea. The agreement required the payment of a $100,000 licensing fee with the agreement. The licensing fee is being amortized over the shorter of the license period or the expected useful life of the technology.

 

In relation to this agreement, the Company also entered into a Tenancy Agreement for property in Taiwan for a two year period. Under this agreement the company paid a $13,800 deposit and will incur monthly rental payments of $5,000 for a two year period.

 

NOTE 8 - COMMITMENTS

 

Rent expense in the six month period ended December 31, 2011 was $20,000. Future lease commitments are as follows:

 

Year Ending  $
6/30/2012  30,000
6/30/2013  60,000
6/30/2014  10,000
   100,000

 

 

15
 

 

Item 2.   Management's Discussion and Analysis of Financial Condition and Result of Operations

 

Overview

 

UAN Power Corp. (the “Company, “we” or “our”) was originally incorporated in the State of Nevada on May 8, 2009. We completed the reincorporation of the Company in Delaware under the name UAN Power Corp. on November 14, 2011.

 

We were originally organized to seek opportunities to manage income producing commercial and residential real estate properties. With the change in control on May 23, 2011, however, we stopped pursuing that business. Our new business is to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other business combination with one or more entities that have operating businesses. We are not targeting any specific industry. We seek businesses that are profitable, with positive cash flow, with significant growth potential and that can benefit from (i) the advantages that typically accrue to a public company, such as greater visibility, greater ability to finance growth through acquisition, and greater ability to attract talent by offering incentive and contingent compensation, and (ii) the strategic, financial and operational expertise and experience our management can offer on an ongoing basis.

 

We are currently considered to be a “blank check” company and a “shell company” under the rules of the Securities and Exchange Commission. Please see our Annual report on Form 10-K for the fiscal year ended June 30, 2011 for a complete description of our business.

 

Recent Developments

 

In August 2011, we entered into a technology license and technology transfer agreement, under which we licensed the rights to develop, manufacture, market, sell and import products which incorporate or rely upon certain “Triops” technologies and processes in Taiwan, The People’s Republic of China, the United States, Japan and Korea, in exchange for a one-time licensing fee of $100,000. “Triops” are prehistoric creatures also known as dinosaur shrimp that are brought to life by adding water to eggs that are in suspended animation. We began initial operations using this license in the quarter ended December 31, 2011.

 

In connection with the license, we also entered into a tenancy agreement under which we leased office and research and development space in Taiwan for a two-year period. The tenancy agreement requires rental payments of $5,000 per month. In addition, we provided the landlord with a deposit of $13,800 upon the execution of the lease.

 

In September 2011, we entered into our first sales agency agreement related to the Triops technology and we purchased $99,850 of leasehold improvements associated with the tenancy agreement described above.

 

In December 2011, we established a Taiwan Branch of UAN Power Corp. At December 31, 2011, the branch employed six people.

 

Liquidity and Capital Resources

 

Our cash position increased from $0 as of June 30, 2011 to $100,378 as of December 31, 2011.

 

Working capital increased to $31,742 at December 31, 2011, compared to a working capital deficit of $124,090 at June 30, 2011.

 

We completed a private placement financing in the six-month period ended December 31, 2011, resulting in proceeds of $465,506 (net of expenses).

 

In September 2011, we entered into our first sales agency agreement related to the Triops technology described above. We expect to generate a minimum of $240,000 in revenues over the following twelve months under this agreement. We recorded revenues of $59,946 from this agreement in the three months ended December 31, 2011.

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In the six months ended December 31, 2011, we purchased $99,850 of leasehold improvements associated with the tenancy agreement described above, and paid a $100,000 one-time licensing fee in connection with the technology license described above.

 

Limited Operating History

 

We have an extremely limited operating history and have generated no significant independent financial history. Our business plan changed significantly in May 2011, and we have not demonstrated that we will be able to execute that plan. We began our initial operations under the technology license described above in the quarter ended December 31, 2011. We cannot guarantee that this business will be successful or that our efforts to identify and acquire any other target companies or businesses as described above will be successful. Our business is subject to all of the risks inherent in development-stage enterprises, including limited capital resources and possible rejection of our business model.

 

Future financing may not be available to us on acceptable terms or at all. If financing is not available or is not available on satisfactory terms, we may be unable to continue our operations. Any equity financing that may be available will result in dilution of the interests of our existing shareholders.

 

Results of Operations

 

Three Months Ended December 31, 2011 vs. December 31, 2010

 

We realized revenues of $59,946 in the three-month period ended December 31, 2011, and no revenue in the three-month period ending December 31, 2010.

 

Cost of Operations were $58,384 and $0 for the three-month periods ended December 31, 2011 and 2010, respectively. The increase is due principally to the commencement of our operations in Taiwan in December 2011.

 

Total operating expenses increased from $6,985 for the three-month period ended December 31, 2010 to $70,287 for the three-month period ended December 31, 2011. The increase was due principally to professional and consulting fees as we began to explore new business opportunities described in the plan of operations below and the commencement of our operations in Taiwan.

 

Six Months Ended December 31, 2011 vs. December 31, 2010

 

We realized revenues of $59,946 in the six-month period ended December 31, 2011, and no revenue in the six-month period ended December 31, 2010.

 

Cost of Operations were $69,211 and $0 for the six-month periods ended December 31, 2011 and 2010, respectively. The increase is due principally to the commencement of our operations in Taiwan in December 2011.

 

Total operating expenses increased from $10,874 for the six-month period ended December 31, 2010 to $121,166 for the six-month period ended December 31, 2011. The increase was due principally to professional and consulting fees as we began to explore new business opportunities described in the plan of operations below and the commencement of our operations in Taiwan.

 

Balance Sheet as of December 31, 2011 (unaudited) vs. Balance Sheet as of June 30, 2011 (audited)

 

Our total assets at December 31, 2011 were $292,121, compared to $12,500 at June 30, 2011. The significant increase in our assets resulted from commencing our initial operations under the technology license, which resulted in the acquisition of the license ($100,000), the purchase of fixed assets ($99,850), a lease security deposit ($13,800), and an advance to a shareholder to fund the commencement of our operations in Taiwan ($81,350).

 

Current liabilities decreased from $124,090 as of June 30, 2011 to $68,636 as of December 31, 2011. The decrease resulted principally from repayment of advances to a shareholder and director who was initially funding much of our expenses.

17
 

We completed a private placement financing in the six-month period ended December 31, 2011, resulting in proceeds of $465,506 (net of expenses).

 

Plan of Operations

 

In May 2011, we commenced limited operations under our current business model of identifying one or more businesses to merge with or acquire. As described above, in August 2011, we entered into a technology license and technology transfer agreement, under which we licensed the rights to develop, manufacture, market, sell and import products which incorporate or rely upon certain “Triops” technologies and processes in Taiwan, The People’s Republic of China, the United States, Japan and Korea. We began our initial operations using this license in the quarter ended December 31, 2011.

 

We will evaluate our performance over the next twelve months of operations as we attempt to emerge from the development stage. We have a limited operating budget and must maintain tight expense controls. We believe we will require additional funding of approximately $150,000 over the next twelve months unless we are able to execute additional sales agency agreements related to the Triops technology during that period.

 

Off-Balance Sheet Arrangements

 

A significant shareholder has indicated a willingness to cover our cash shortfalls, although there is no written agreement or guarantee to that effect. As of December 31, 2011, we did not have any other off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

 

Item 3.   Quantitative and Qualitative Disclosure About Market Risks

 

Not applicable.

 

Item 4.  Controls and Procedures

 

The certifications of our Chief Executive Officer and Chief Financial Officer attached as Exhibits 31.1 and 31.2 to this Quarterly Report on Form 10-Q include, in paragraph 4 of such certifications, information concerning our disclosure controls and procedures, and internal control over financial reporting. Such certifications should be read in conjunction with the information contained in this Item 4 for a more complete understanding of the matters covered by such certifications.

 

Disclosure Controls and Procedures

 

Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2011. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits 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. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions to be made regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer concluded that we did maintain effective internal control over financial reporting as of December 31, 2011 and further concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

18
 

Changes in Internal Control Over Financial Reporting

 

There were no changes to our internal control over financial reporting during the quarter ended December 31, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Important Considerations

 

The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time. Because of these limitations, there can be no assurance that any system of disclosure controls and procedures or internal control over financial reporting will be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management.

 

PART II - OTHER INFORMATION

 

Item 1.  Legal Proceedings

 

Not applicable.

 

Item 1A.   Risk Factors

 

Not applicable.

 

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

 

Not applicable.

 

Item 3.   Defaults Upon Senior Securities

 

Not applicable.

 

Item 4.   Mine Safety Disclosures

Not applicable.

 

Item 5.   Other Information

 

Not applicable.

 

19
 

Item 6.   Exhibits

 

3.1 (1) Certificate of Incorporation of UAN Power Corp.
   
3.2 (1) By-Laws of UAN Power Corp.
   
10.1 (2) Agent Contract dated September 23, 2011, between UAN Power Co., Ltd. and UAN Biotech Co., Ltd.
   
10.2 (2) Sales Contract dated September 8, 2011, between UAN Power Co., Ltd. and Asia News Network Co., Ltd.
   
31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
   
31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
   
32.1 Certification of the Chief Executive Officer Pursuant to 18 U.S.C. 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
   
32.2 Certification of the Chief Financial Officer Pursuant to 18 U.S.C. 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
   
101.INS XBRL Instance Document
   
101.SCH XBRL Taxonomy Extension Schema Document
   
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
   
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
   
101.LAB XBRL Taxonomy Extension Label Linkbase Document
   
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

 _______________

(1)Filed as an Exhibit to the Company’s Definitive Proxy Statement, filed with the Securities and Exchange Commission on October 5, 2011, and incorporated herein by reference.

 

(2)Filed herewith.

 

20
 

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.

 

  UAN Power Corp.
Dated: February 16, 2012 By:  /s/ Parashar Patel
    Parashar Patel
    President & Chief Executive Officer
    (Principal Executive Officer)
     
     
Dated: February 16, 2012 By: /s/ Chung Hua Yang
    Chung Hua Yang
    Chief Financial Officer
    (Principal Financial Officer and Chief
Accounting Officer)

 

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