UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-K

 

 

Commission file number: 000-54823

 

JUQUN, INC.

 (formerly TTI INDUSTRIES, INCORPORATED.)

(Exact name of registrant as specified in its charter)

 

NEVADA		75-1939021
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
PO Box 12009 Marinia Del Rey, CA 90295 (US Agent)		213 400 2007 (US agent)
(Address of principal executive offices)		(Phone Number)

 INSERT OFFICE ADDRES AND TEL HERE

Registrant’s telephone number, including area code:

c/o Donald G. Davis, Esq.

Law Offices of Davis & Associates

PO Box 12009

213 400 2007

(legal counsel)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Name of each exchange on which registered
None		None

 

Securities registered pursuant to Section 12(g) of the Act:

 

i

Common Stock, par value $0.001

 

Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes [ ] No [ ]

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes[ ] No [ ]

 

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 (Paragraph 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

 

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)

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

 

As of August 31, 2013, the aggregate market value of the voting common stock held by non-affiliates of the Registrant (without admitting that any person whose shares are not included in such calculation is an affiliate) was approximately $1,505.71.

 

As of October 31, 2013, 26,166,643 shares of the common stock of the registrant were outstanding.

 

 

DOCUMENTS INCORPORATED BY REFERENCE

 

All previously filled reports under the Securities Exchange Act of 1934

 

 

ii

 

TABLE OF CONTENTS

PART I		Page
Item 1.	Business	4
Item 1A.	Risk Factors	11
Item 1B.	Unresolved Staff Comments	11
Item 2.	Properties	11
Item 3.	Legal Proceedings	11
Item 4.	(Removed and Reserved)	11
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	11
Item 6.	Selected Financial Data	14
Item 7.	Management’s Discussion and Analysis of Financial Condition and  Results of Operations	14
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 8.	Financial Statements and Supplementary Data	15
Item 9.	Changes in and Disagreements with Accountants on Accounting and  Financial Disclosure	15
Item 9A.	Controls and Procedures	15
Item 9A(T).	Controls and Procedures	15
Item 9B.	Other Information	16
Item 10.	Directors, Executive Officers and Corporate Governance	17
Item 11.	Executive Compensation	21
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	23
Item 13.	Certain Relationships and Related Transactions and Director Independence	24
Item 14.	Principal Accounting Fees and Services	24
Item 15.	Exhibits, Financial Statement Schedules	25

1

FORWARD-LOOKING STATEMENTS

 

This report includes forward-looking statements with-in the meaning of Section 27A of the Securities Act (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have based these statements on our beliefs and assumptions, based on information currently available to us. These forward-looking statements are subject to risks and uncertainties. Forward-looking statements include the information concerning our possible or assumed future results of operations, our total market opportunity and our business plans and objectives set forth under the sections entitled "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

 

Forward-looking statements are not guarantees of performance. Our future results and requirements may differ materially from those described in the forward-looking statements. Many of the factors that will determine these results and requirements are beyond our control. In addition to the risks and uncertainties discussed in "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," investors should consider those discussed under "Risk Factors, and elsewhere herein, and in other filings with the SEC."

 

These forward-looking statements speak only as of the date of this report. We do not intend to update or revise any forward-looking statements to reflect changes in our business anticipated results of our operations, strategy or planned capital expenditures, or to reflect the occurrence of unanticipated events.

 

  

 

PART I

Item 1. Business

 

INTRODUCTION:

 

JuQun, Inc. (the “Company” or “JQ”), the successor upon a merger with TTI Industries, Incorporated, is a development stage company, and was incorporated under the laws of the State of Nevada on September 5, 2012.

 

The Company intends to serve as a vehicle to effect an asset acquisition, merger, or exchange of capital stock or other business combination with a domestic or foreign business.  The Company is still devoting substantially all of its efforts on locating a business and its has not initiated principal operations.

 

The Company’s monthly burn rate is $22,863 For the audited year ended August 31, 2013 the Company has a net loss of approximately $274,000. To date management has been able to finance the initial phase of implementation of the Company’s business plan via loans from directors.

 

At October 31, 2013, we had approximately $73,414 in cash available as a result of the loans from our principle shareholders as referenced above. We estimate our monthly expenses moving forward will run approximately $22,000 per month, during which period we expect we will be identifying an operating business and negotiate and consummate an acquisition, and prepare and file a Form 8k disclosing the details of the acquisition, which we estimate to cost an additional $50,000. Our estimate of monthly expenses includes expenditures for office expense, accounting, legal, travel, and various filing fees, taxes and costs. The exact use of funds and the amount of expenditures are uncertain. If our estimates are correct, we should have sufficient cash on hand to cover these estimated expenses for approximately 2 years.

 

HISTORY

 

JuQun, Inc.

 

JuQun Inc., formerly TTI Industries, Incorporated. (“JQ”), was incorporated in the State of Nevada on September 5, 2012, by its predecessor, TTI Industries, Incorporated (“TTI"), as a wholly owned subsidiary of TTI.

 

On September 19, 2012, TTI was merged into JQ pursuant to a short form merger into JQ, its wholly owned  subsidiary.  The merger resulted in a successor corporation, JQ, which is the Registrant herein.

 

 

 

2

 

 

TTI Industries, Incorporated

 

 TTI was incorporated in the State of Texas. Prior to May 6, 1998, TTI  operated under the name, “Environmental Plus, Inc.",  and conducted a business of construction and repair of industrial cooling towers mostly in Texas, Louisiana, and Arkansas, for electric utility companies.  The Company incurred operating losses in the second half of the 1990’s,  and in May of 1998, changed its name to TTI Industries, Incorporated and changed its trading symbol to TTIA.   In 2000, the Company’s management  formulated and initiated a new business plan for the production and sale of a series of pest control products for the home and garden, with an emphasis on products that were safe for children, pets and wildlife; environmentally friendly; priced at a low cost; and utilizing attractive animal-shaped designs.  Sufficient capital could not be located to pursue this business plan, the business was unsuccessful, and in March of 2002 the Company filed a Chapter 11 Bankruptcy proceeding in Santa Clara, California.  The Chapter 11 proceeding was converted to a Chapter 7 proceeding in December of 2002, and TTI was discharged from Bankruptcy on April 4, 2004.

 

From March 2002 to the present, TTI has not conducted any operations, and has existed as a shell public corporation.

 

In January of 2009, caretaker management was brought into TTI to groom it as a public company which would seek to acquire an operating business.  In June of 2012, the caretaker management of TTI was replaced by new management, which has continued as the management of JQ, the successor corporation as a result of the Merger.  

 

New management loaned $175,000 in cash to TTI between June 1, 2011 and the close of its last fiscal year on August 31, 2012.  No loan documents and no promissory note were generated to evidence this loan, and the loan was designated a non interest bearing loan.  This loan was converted into 38,293,216 shares of TTI’s restricted common stock on September 4, 2012.  The funds have been used to to settle outstanding debts and taxes, bring TTI current under Texas law, rehire the TTI’s transfer agent, hire outside accountants to prepare an audit of the TTI and the successor company, JQ, retain legal counsel, and provide working capital.  

 

TTI was a reporting company under the Securities Exchange Act of 1934 (the “34 Act”), and filed reports under the 34 Act through February of 2000.  From May, 2000 though September of 2009, TTI was delinquent and failed to file reports under the 34 Act due to its business reversals and its lack of operations.

 

In September of 2009, the SEC issued an order under Section 12 (j)of the Securities Exchange Act of 1934 (the “34 Act”) against TTI. As a result, trading of TTI’s common stock was suspended pursuant to Section 12(k) of the 34 Act,and TTI’s registration of its common stock was revoked under the 34 Act.  As a result TTI, which formerly traded on the Over The Counter Pink Sheets, ceased trading on the Pink Sheets, and TTI does not currently trade on any public market.

 

Subsequent Event: Merger of TTI Industries, Incorporated into JuQun, Inc.

 

On September 5, 2012, TTI organized a wholly owned subsidiary in Nevada, under the name, JuQun Inc.   On September 19, pursuant to the terms of an Agreement and Plan of Merger with Wholly Owned Subsidiary, TTI as parent Texas corporation, merged itself into JuQun, Inc., its Nevada subsidiary, with JuQun, Inc., the former Nevada subsidiary, becoming the surviving corporation.   JQ is therefor the registrant herein.

 

The purpose of the merger was to change the domicile of the TTI from Texas to Nevada, to increase its authorized capital stock from 100,000,000 shares to 150,000,000 shares, and to accomplish a one for seven reverse split of its outstanding common stock.

 

 

 

 

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The Company chose Nevada because it is more convenient to the West Coast where the Company has advisors, and there is no Corporate State Income Tax. The Terms of the merger provided for the conversion of the outstanding Shares of Common Stock of TTI Industries, to be automatically converted upon consummation of the merger in to common shares of JuQun, on the basis of the conversion of each seven shares of TTI Industries Common stock into  one Common share of JuQun common stock.  The nominal common shares of Juqun outstanding immediately prior to the merger were automatically canceled and returned to treasury  upon consummation of the merger.  As a result, the merger effectively accomplished a one for seven reverse split of the formerly outstanding shares of TTI, without changing the ownership percentage of any shareholder.

 

Pursuant to the terms of this Merger, JuQun, Inc. (“JQ”), the officers and directors of TTI became the officers and directors of JQ, the 68,825,188 outstanding capital shares of TTI were automatically changed and converted into 9,832,170 common shares of JQ, and any and all taxes owed by TTI were assumed by JQ.  As a result of the merger the Articles of Incorporation and Bylaws of JQ continued as the Articles of Incorporation and Bylaws of the combined entity.  

 

On September 26, 2012, immediately after consummation of the merger,  management arranged for the loan of $500,000 to JQ, to be used as working capital. This loan was made, but no loan documents and no promissory note were generated to evidence this loan, and the loan has been designated a non interest bearing loan.

 

The loan proceeds have been used primarily to fund continuing legal work of outside attorneys, continuing work of outside auditors, the costs of the Company's transfer agent, Nevada State costs and fees, and the travel expenses of the Company's CEO, Tom Chia, and  his advisors, as Mr. Chia explores the acquisition of an operating business by the Company.

 

PLAN OF OPERATION

 

JuQun, Inc. (the “Company”, or JQ), the successor corporation to the merger, and the registrant herein, will attempt to locate and negotiate with a business entity for the combination of that target company with the Company.   Because the principle officers and controlling shareholders of the Company are located in China, it is anticipated, but cannot be assured, that the operating business ultimately to be acquired will be an operating business located in China.

  

Further, because our two controlling shareholders, Messrs Tom Chia and Paul Wong, who also service as the principle officers of the Company, have various existing business interests and relationships in China, it is very possible that the operating business to be acquired will be a business in which one or both of these individuals have an investment or interest or with whom they have an existing relationship.  We plan to remain open to the prospect of an acquisition of an operating business in which one or both of these individuals are already involved.

 

As a result, the Board of Directors has declared as a policy that the Company may transact business with some of our officers, directors and affiliates, as well as with firms in which one or more of our officers, directors or affiliates have a material interest, and may consider the acquisition of an operating business in which one or more of them may already have some interest. In such event there will be a resulting conflict which will arise between the respective interests of the Company and the dual interests of such persons, or their related persons or entities. We believe that in such circumstances,  transactions can  be effected on terms at least as favorable to us as those available from unrelated third parties.

 

With respect to transactions involving real or apparent conflicts of interest, we have adopted policies and procedures which require that: (i) the fact of the relationship or interest giving rise to the potential conflict be disclosed or known to the directors who authorize or approve the transaction prior to such authorization or approval, (ii) the transaction be approved by a majority of our disinterested outside directors, and (iii) the transaction be fair and reasonable to us at the time it is authorized or approved by our directors.

  

 

4

 

 

 

We are a Blank Check Shell Company

 

We are considered a blank check company. The U.S. Securities and Exchange Commission (the “SEC”) defines those companies as “any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies.”

 

Under SEC Rule 12b-2 under the Securities Act of 1933, as amended (the “Securities Act”), we also qualify as a “shell company,” because we have no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.

 

Our current business plan is to attempt to identify and negotiate with a business target for the merger of that entity with and into the Company. In certain instances, a target company may wish to become a subsidiary of the Company or may wish to contribute or sell assets to the Company, or may wish to joint venture with the Company or license the Company, rather than to merge. No assurances can be given that we will be successful in identifying or negotiating with any target company. We seek to provide a method for a foreign or domestic private company to become a reporting or public company whose securities may ultimately be qualified for trading in the United States secondary markets.  However, our securities do not currently trade in any public market, and there is no assurance that our securities will ever be qualified for trading in such markets.

 

The Company has not restricted its search for any specific kind of business, and it may acquire a business which is in its preliminary or development stage, a business  which is already in operation, or a business in essentially any stage of its business life. It is impossible to predict the status of any business in which the Company may become engaged.  Such a business may be motivated by the need for additional capital, may desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer.

  

The Company will participate in a business combination only after the negotiation and execution of appropriate agreements. Negotiations with a target company will likely focus on the percentage of the Company which the target company shareholders would acquire in exchange for their shareholdings. Although the terms of such agreements cannot be predicted, generally such agreements will require certain representations and warranties of the parties thereto, will specify certain events of default, will detail the terms of closing and the conditions which must be satisfied by the parties prior to and after such closing and will include miscellaneous other terms. Any merger or acquisition effected by the Company can be expected to have a significant dilutive effect on the percentage of shares held by the Company’s shareholders at such time.

   

A business combination with a target company may result in the substitution by the target company of its own management and board of directors.

 

 

 

5

 

 

 

No assurances can be given that we will be able to enter into a business combination or transaction, or, if we do enter into such a business combination or transaction, no assurances can be given as to the terms of a business combination or transaction, or as to the nature of the target operating business.

 

It is anticipated that the investigation of specific business acquisition and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If a decision is made not to make the acquisition, the costs incurred in the  investigation will not be recoverable.

 

Statements contained in this report, including statements regarding our search for and intended acquisition of an operating business, and our belief or current expectations with respect to our ability to negotiate and close on such an acquisition, are all forward-looking statements, and speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.

 

Employees

As of October 31,  2013, and for the proceeding several years we had no full or part time employees.

 

Consultants

 

The Company currently has no agreements with management consultants.

 

ITEM 1A.   RISK FACTORS

 

Doubt About the Company’s Ability to Continue as A Going Concern

 

The accompanying financial statements have been prepared assuming JQ will continue as a going concern.  JQ’s recurring losses from operations, stockholders' deficiency and working capital deficiency, and lack of revenue generating operations, raise substantial doubt about the Company’s ability to continue as a going concern.

 

Management believes JQ will continue to incur losses and negative cash flows from activities for the foreseeable future and will need additional equity or debt financing to sustain itself until it can acquire an operating business, and ultimately achieve profitability and positive cash flows, if ever. Management will likely seek additional debt and/or equity financing for JQ at some point in the future, but has no present plans to do so, and cannot assure that such financing when sought will be available, or available on commercially acceptable terms.

 

The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.  There can be no assurance that management will be successful in implementing its business plan to acquire an operating business, or that a successful acquisition will actually improve the Company’s operating results.

 

Acquisition Of  An Operating Business is Likely to Present Significant Risks.

 

 

6

 

 

 

It may be anticipated that the acquisition of an operating business will present significant risks. Many of these risks cannot be adequately identified prior to selection of the specific operating business, and the Company's shareholders must, therefore, depend on the ability of management to identify and evaluate such risks. In the case of some of the opportunities available to the Company, it may be anticipated that the promoters thereof have been unable to develop a going concern or that such business is in its development stage in that it has not generated significant revenues from its principal business activities prior to the Company's acquisition. There is a risk that the combined enterprises will still be unable to become a going concern or advance beyond the development stage. Many of the opportunities may involve new and untested products, processes, or market strategies which may not succeed. Such risks will be assumed by the Company and, therefore, its shareholders.

 

Because the Executive Officers of the Company, who are also its principle shareholders, are residents of China, it is anticipated that the operating business to be acquired will be a China operating business. Assuming this is the case and a China business is acquired, the operation of a China business by a US company presents additional risks. Businesses operating in China are subject to state and local enterprise income tax, which can increase; there may be limited access to insurance covering such risks as business liability, loss of data, and business disruption insurance in China; the PRC government may find that arrangements for acquisition or operation of the operating business acquired do not comply with PRC government restrictions on foreign investment, with resulting penalties and other negative consequences, such as confiscation of income, revoking of business licenses, forced restructure of ownership or operations, or discontinuance of operations; uncertainties with respect to the PRC legal system could adversely such an acquired operated business; we may be relying on dividends paid by such an acquired China operating business for our cash needs in the US, or to pay dividends, and PRC restrictions on transferring capital out of the country may impede or preclude such transfers of capital out of China; fluctuations in the value of the Renminbi, the China currency, could also have a material adverse effect on such a China operating business. Risk factors such as these could cause significant negative impact on our business and the value of our stock, assuming we are successful in acquiring an operating business in China.

 

Lack of Diversification

Management anticipates that it will only participate in one potential business venture.   Assuming we are successful in acquiring a business, lack of diversification should be considered as a substantial risk because it will not permit the Company to offset potential losses from one venture against gains from another.

It Is Likely Existing Shareholders upon Successful Acquisition of an Operating Business Will Hold A Significantly Smaller Percentage of the Company.

With respect to any merger, acquisition, or other transaction, in negotiations with the target operating business, management expects to focus on the percentage of the Company which the target operating business equity holders and management would acquire in exchange for their holdings in the operating business.  Depending upon, among other things, the operating business' assets and liabilities, the Company's shareholders will in all likelihood hold a significantly lesser percentage ownership interest in the Company following any merger, acquisition, or other transaction with an operating business.

 

 

 

7

 

 

 

Issuance of Securities In Connection with the Acquisition of an Operating Business May Depress Future Public Trading Markets.

 

It is anticipated that any securities issued in any such business combination would be issued in reliance upon exemption from registration under applicable federal and state securities laws.  The issuance of additional securities and their potential future sale, either as a result of registration, or as a result of an available exemption for resale of such securities,  into any future trading market which may develop in the Company’s securities, may depress the market value of the Company’s securities in the future. There of course is no assurance that a future public trading market will develop, although its management’s intention to seek to establish one, once an acquisition is made.

 

The Company will Incur Additional Costs As A Reporting Company

 

Because the Company is becoming a Reporting Company under the 34 Act, henceforth it will  incur significant legal and accounting costs, both in connection with any acquisition of a business opportunity, including the costs of preparing a Form 8-K to report such acquisition, and  also in connection with the Company’s continuing responsibilities to file Form 10Q quarterly reports, Form 10K Annual reports, event triggered Form 8-K reports,  and comply with other reporting and  legal requirements under the 34 Act.  The Company estimates it will spend $50,000 in legal and accounting expenses to acquire an operating business and complete and file the necessary Form 8K report. The Company estimates it will spend as much at least $30,000 per year in legal and accounting costs to maintain its filings under the 34 Act, and may spend considerably more, depending on the nature of the operating business ultimately acquired.

 

The Company Will Have Insignificant Capital  With Which to Attract A Business Acquisition

 

The Company has, and will continue to have, insufficient capital, and will be unable to provide the owners of a prospective operating business with any significant cash or other assets.   This may make it difficult to locate a suitable business for acquisition and negotiate and then consummate an acquisition.  Further, the owners of a business opportunity, once acquired by the Company, will incur significant post acquisition costs, including both the ongoing costs of operating as a 34 Act company, and  registration costs in the event they wish to register a portion of their shares for subsequent sale.

 

JQ Does Not Have Full Time Officers And Directors, And May Not Get Priority Attention to Its Affairs.

 

The officers and directors of the Company will devote only a portion of their time to the business affairs of the Company, until such time as an acquisition has been determined to be highly favorable, at which time they expect to spend full time in investigating and closing any acquisition. Management estimates that each officer will spend approximately 6 hours per month on Company matters at the outset. Directors will hold board meetings on an "as needed" basis. This will increase to full time once an operating business is identified and acquired. In addition, in the face of competing demands for their time, the officers and directors may grant priority to other business interest and activities they have or may develop.

 

 Need For Additional Capital

 

Depending on the capital available in the operating business, once acquired, the Company may not have sufficient funds to undertake any significant development, marketing, manufacturing of any products, or extension of operations of the acquired business.  In such event, the Company may be required to seek debt or equity financing or obtain funding from third parties.  If needed, there is no assurance that the Company would  be able either to obtain additional financing or interest third parties in providing funding for the further development, marketing and manufacturing of any products, business or operations of the operating business acquired.

 

The current state of the US and the World Economies May Negatively Impact the Ability to Raise Additional Capital.

 

 

8

 

 

 

The US has been in a serious recession for several years, Europe is slipping into another recession, and China growth appears to be slowing. Under these depressed economic conditions, it may be difficult or even impossible for the Company to attract additional capital. If additional capital cannot be attracted, and attracted on commercially reasonable terms, the Company may not be able to acquire an operating business, or may find it extremely challenging to operate the operating business, once acquired.

 

Management May Change Upon Acquisition Of Operating Business Without a Vote of Shareholders.

 

On the consummation of a transaction, it is possible that the present management of the Company will not be in control of the Company. In addition, a majority or all of the  Company's  officers  and  directors  may,  as  part  of  the  terms  of the  acquisition transaction,  resign and be replaced by new officers and  directors without a vote of the Company's shareholders.

 

ITEM 2.  PROPERTIES.

 

The Company owns no property.  It currently has  no rental space. The owner provides office space at no cost.

 

ITEM 3.  LEGAL PROCEEDINGS

 

NONE.

 

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

 

NONE.

 

PART II

 ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

 

Market Information

 

The Company's common stock does not currently trade on any public market, and as a result there are no quotes available for its common shares.

 

 

 

9

 

 

Common Stock

 

All outstanding shares of Common Stock are of the same class and have equal rights and attributes. The holders of Common Stock are entitled to one vote per share on all matters submitted to a vote of stockholders of the Company. All stockholders are entitled to share equally in dividends, if any, as may be declared from time to time by the Board of Directors out of funds legally available. In the event of liquidation, the holders of Common Stock are entitled to share ratably in all assets remaining after payment of all liabilities. The stockholders do not have cumulative or preemptive rights.

 

As of August 31, 2013, there are approximately  1,571 shareholders of record, including beneficial holders of the Company’s common stock, with  9,833,310 shares outstanding.

The Company had no Common shares in treasury stock as of Auguest 31, 2013.

The Company is authorized to issue up to 150,000,000 Common shares according to its Articles of Incorporation.

 

The description of certain matters relating to the securities of the Company is a summary and is qualified in its entirety by the provisions of the Company's Certificate of Incorporation and By-Laws.  

 

Dividends

 

The Company has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Company's business.

 

Debt Securities

 

None

 

 

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Stock Purchase Warrants

 

The Company has no warrants, options or debt securities outstanding.

 

Recent Sales of Unregistered Securities

 

In September of 2012 the Company reversed split its stock, in effect, on a 1 to 7 basis, rounding up for fractional shares and changed its authorized stock to 150,000,000 shares at a par of $0.001 per share. The financials have been restated to reflect this split for all the periods presented herein.

 

At November 30, 2012 the Company repaid a loan of $175,000 from the Company’s majority stockholders, by issuing 38,293,216 shares of common stock. The price per share was calculated at $.00457, which was the result of the debt divided by the number of shares. The shares were issued in reliance on the exemption on registration under the Securities Act of  1933 provided by Section 4(1) thereof.

On September 24, 2013 the Company issued 16,333,333 shares to its officer, Tom Chia,  for services. The shares were issued in reliance on the exemption on registration under the Securities Act of  1933 provided by Section 4(1) thereof.

ITEM 6.  SELECTED FINANCAL DATA

 

As a "smaller reporting company" as defined in Rule 12b-2 of Regulation S-K, the Company is not required to provide information required by Item 301 of Regulation S-K with respect to Selected Financial Data.

 

ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this annual report. Our audited  financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

 

Forward-Looking Statements

 

This report contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including, "could" "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

 

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this Annual Report.

 

 

 

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Business Plan

 

Requirements and Utilization of Funds

 

To implement our plan of operations, including some or all of the above described milestones (objectives), we will need to continue to raise capital (“equity”) in an amount between $2,500,000 and $5,000,000 in equity from restricted stock sales or other acceptable financing options over the 12 month period beginning in the first quarter of 2013 on terms and conditions to be determined. Management may elect to seek subsequent interim or “bridge” financing in the form of debt (corporate loans) as may be necessary.

 

We anticipate the need to raise additional capital for the first 6 months of operations, if at least $2.5 million has not been raised by the end of such period, subject to the successful implementation of our initial milestones over the first 180 days of operations and our revenue growth cycle thereafter. At this time, management is unable to determine the specific amounts and terms of such future financings.

 

We foresee the proceeds from capital raised to be allocated as follows: (a) consolidation and integration; (b) growth capital; (c) research and due diligence; (d) pre-development plant costs; (e) product enhancements and technology partners; (f) new business development; (g) legal, audit, SEC filings and compliance fees; (h) financing costs; (i) working capital (general and administrative); (j) reserve capital for costs of acquisition and market expansion.

 

At such time as these funds are required, management would evaluate the terms of such debt financing and determine whether the business could sustain operations and growth and manage the debt load. To date management has not identified the source for such additional capital, and whether the Company will be able to raise sufficient capital, and do so on commercially reasonable terms, in uncertain. If we cannot raise additional proceeds via a private placement of our common stock or secure debt financing we would be required to cease business operations. As a result, investors in our common stock would lose all of their investment.

 

Management has plans for the staged development of our business over the next twelve months. Other than engaging and/or retaining independent consultants to assist the Company in various administrative and marketing related needs, we do not anticipate a significant change in the number of our employees, if any, unless we are able to obtain adequate financing.

 

In our 2011 Form 10-K/A, our auditors have issued a “going concern” opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our expenses. This is because we have not generated enough revenues and no substantial revenues are anticipated in the near-term. Accordingly, we must seek to raise cash from sources other than from the sale of our products.

 

 

 

 

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Summary and Outlook of the Business

 

Prior to May 6, 1998, TTI Industries, Incorporated (the "Company") operated under the name of Environmental Plus, Inc., and was primarily in the business of construction and repair of industrial cooling towers, mostly in Texas, Louisiana and Arkansas, for electric utility companies; and the marketing of a fire retardant foam as a fire fighting device for industrial use.

 

The Company intends to serve as a vehicle to effect an asset acquisition, merger, or exchange of capital stock or other business combination with a domestic or foreign business. The Company is still devoting substantially all of its efforts on locating a business and it has not initiated principal operations.

 

Revenues

 

The Company has recorded zero revenues for the past three fiscal years ended August 31, 2013, 2013 and 2012.  

 

Operating Expenses

 

The Company expenses of $1,000 per month for services were provided without cost to the Company by its officers. Of the $274,367, $0 was valued for their services and $12,000 for office space. Since 2012, the expense of $12,000 per year has been offset to additional paid in capital. A majority of our operating expenses in the year ended August 31, 2013 have been for professional services for legal and accounting services. Such professional services totaled $195,111 for  the year ended August 31, 2013.

 

Going Concern

 

As reflected in the accompanying financial statements, the Company had an accumulated deficit of $5,144,400 at August 31, 2013 and had a net loss of  $274,367 and net cash used in operating activities of $189,911.

 

While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations.  Management intends to raise additional funds by way of public or private offering.  Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern.  While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect.  The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.

 

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

   

Liquidity and Capital Resources

 

The Company is currently illiquid.  The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital, as well as successful implementation of its business plan.  In the last fiscal year, the Company has been funded by its board members. Whether we will be successful in obtaining additional capital, or obtaining such capital on commercially reasonable terms, and whether we can begin to generate and then significantly increase revenues, is uncertain.

As of August 31, 2013 and 2012, total current assets were $0.

 

 

 

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As of August 31, 2013, total current liabilities were $402,456 which consisted of $330,000 of loans payable to related parties.  As of August 31, 2012, total current liabilities were $175,000, which consisted of loans payable to related parties.

  

During the period from September 1, 2012 to August 31, 2013 net cash used by operating activities was $189,911.   From August 31, 2011 to August 31, 2012 net cash used by operating activities was $175,000.

 

Cash flows from financing activities for the period from September 1 to August 31, 2013 were $330,000, consisting of proceeds in the amount of $330,000from loans from related parties.

 

Set forth below is a table indicating the amounts from loans to the Company, with the identity of each lender set forth. The Company has no commitments from such persons for further funding, and it is unknown whether such persons might lend further sums if needed in the future.

		Amount
Name	Address	Paid	Consideration
Tom Chia	Juqun Network Technology Co., Ltd. 19/F 179 N.  Tianhe Road, Guangzhou, China	$0	Cash Loan
Paul Wong	Juqun Network Technology Co., Ltd. 19/F 179 N.  Tianhe Road, Guangzhou, China	$0	Cash Loan
Totals		$0

 

Critical Accounting Policies

 

Revenue Recognition

 

In general, the Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for the various revenues streams of the Company:

 

Revenue will be recognized at the time a product is shipped.  Provision for sales returns will be estimated based on the Company's historical return experience.  Revenue is presented net of returns.

 

Financial Instruments

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of August 31, 2013.  The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values.  These financial instruments include cash and accounts payable and accrued expenses.  Fair values were assumed to approximate carrying values for these financial instruments because they are short term in nature and their carrying amounts approximate fair values.

 

 

 

14

 

 

 

Liquidity

 

At October 31, 2013, we had approximately $74,000 in cash available as a result of the loans from our principle shareholders as referenced above. We estimate our monthly expenses moving forward will run approximately $23,000 per month, during which period we expect we will be identifying an operating business and negotiate and consummate an acquisition, and prepare and file a Form 8k disclosing the details of the acquisition, which we estimate to cost an additional $50,000. Our estimate of monthly expenses includes expenditures for office expense, accounting, legal, travel, and various filing fees, taxes and costs. The exact use of funds and the amount of expenditures are uncertain. If our estimates are correct, we should have sufficient cash on hand to cover these estimated expenses for approximately 2 years

 

Net Income (Loss) Per Common Share

 

Basic net (loss) income per common share is calculated using the weighted average common shares outstanding during each reporting period.  Diluted net (loss) income per common share adjusts the weighted average common shares for the potential dilution that could occur if common stock equivalents (convertible debt and preferred stock, warrants, stock options and restricted stock shares and units) were exercised or converted into common stock.  There were no common stock equivalents at August 31, 2013.  

 

Income Taxes

 

Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.  A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized.  Income tax expense is the sum of current income tax plus the change in deferred tax assets and liabilities.

 

ASC 740, Income Taxes, requires a company to first determine whether it is more likely than not (which is defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information.  A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority.

 

Stock-Based Compensation

 

The Company accounts for equity instruments issued to employees in accordance with ASC 718, Compensation - Stock Compensation.  ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on the fair value using an option pricing model.  ASC 718 requires forfeitures to be estimated at the time of grant and revised in subsequent

periods if actual forfeitures differ from initial estimates.

 

 

 

15

 

 

 

Equity instruments granted to non-employees are accounted for in accordance with ASC 505, Equity.  The final measurement date for the fair value of equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or there is a significant disincentive for non-performance.

 

Off-Balance Sheet Arrangements

 

The Company’s majority shareholders Paul Wong and Tom Chia paid $90,000 personally to purchase the existing shares of TTI held by three shareholders and to pay expenses associated with this transaction on the buyer’s behalf.  This was a transaction outside of TTI and is not a transaction that would appear on TTI’s books.

 

Recent Accounting Pronouncements

 

In September 2009, Accounting Standards Codification ("ASC") became the source of authoritative GAAP recognized by the Financial Accounting Standards Board ("FASB") for nongovernmental entities, except for certain FASB Statements not yet incorporated into ASC.  Rules and interpretive releases of the SEC under federal securities laws are also sources of authoritative GAAP for registrants.

 

ITEM 7A  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

 

Not Applicable

 

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA,  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AN DFINAIALS DISCLOSURES

 

 

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JUQUN, INC.

FINANCIAL STATEMENTS

AUGUST 31, 2013

(AUDITED)

 

 

 

Terry L. Johnson, CPA

406 Greyford Lane, Casselberry, Florida 32707

Phone: (407)721-4753  Fax: (866)813-3428

E-mail cpatlj@yahoo.com

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Stockholders and Board of Directors JuQun, Inc., Inc.,

 

I have audited the accompanying balance sheets of JuQun, Inc. as of August 31, 2013 and 2012 and the statements of operations, stockholders’ equity, and cash flows for the years ended August 31, 2013 and 2012.  These financial statements are the responsibility of the Company’s management.  My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with standards of the Public Company Accounting Oversight Board (United States).  Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting.  My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, I express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of JuQun, Inc. as of August 31, 2013 and 2012 and the results of its operations and its cash flows for the year period ended August 31, 2013 and 2012 in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 3 to the financial statements, the Company has experienced losses from operations since inception, and it does not have a source of revenue sufficient to cover its operating costs.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans in this regard are described in Note 3.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ Terry L. Johnson, CPA

Casselberry, Florida

December 20, 2013

 

17

 

JUQUN, INC.
BALANCE SHEET
Assets:	August 31,		August 31,
Current Assets	2013		2012
Cash	$                  140,089		$                        -
Accounts Receivable	-		-
Total Current Assets	140,089		-
Total Assets	$                140,089		$                        -
Liabilities:
Current Liabilities
Accrued Expenses	$               72,456		$                        -
Loan Payable - Related Party	330,000		175,000
Total Current Liabilities	402,456		175,000
Total Liabilities	402,456		175,000
Stockholders' Equity (Deficit):
Preferred Stock, par value $0.001 authorized 5,000,000 shares none issued
Common Stock par value $0.001 authorized 150,000,000
shares, Issued 9,833,310 and 4,362,851 shares, respectively	9,833		4,363
Additional Paid in Capital	4,872,200		4,690,670
Accumulated Deficit	(5,144,400)		(4,870,033)
Total Stockholders' Deficit	(262,367)		(175,000)
Total Liabilities and Stockholders' Deficit	$             140,089		$                        -
The accompanying notes are an integral part of these financial statements.

JUQUN, INC.
STATEMENTS OF OPERATIONS
	For the Years Ended
	August 31,		August 31,
	2013		2012
Revenues	$                           -		$                         -
Costs of Services	-		-
Gross Margin	-		-
Operating Expenses:
Professional Fees	195,111		139,980
Salaries	-		-
General and Administrative	57,439		37,020
Operating Expenses	252,550		177,000
Operating (Loss)	(252,550)		(177,000)
Gain (Loss) Before Interest Expense	(252,550)		(177,000)
Interest	(21,817)		-
Net Income (Loss)	$             (274,367)		$          (177,000)
Loss per Share, Basic &
Diluted	$                   (0.03)		$                 (0.04)
Weighted Average Shares
Outstanding	9,788,347		4,362,851
The accompanying notes are an integral part of these financial statements.

JUQUN, INC.
STATEMENTS OF CASH FLOWS
	For the Years Ended
	August 31,		August 31,
	2013		2012
CASH FLOW FROM OPERATING ACTIVITES:
Net Loss for the Period	$             (274,367)		$         (177,000)
Adjustments to reconcile net loss to net cash
used by operating activities:
Shares Issued for Services	-		-
Contributed Services - Officers	12,000		12,000
Changes in Operating Assets and Liabilities:	-		-
Increase in Inventory	-		-
Increase in Accrued Expenses	72,456		(10,000)
Net Cash (Used) in Operating Activities	(189,911)		(175,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Subsidiaries	-		-
Net Cash Used by Investing Activities	-		-
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Loan Payable - Related Parties-Net	330,000		175,000
Net Cash Provided by Financing Activities	330,000		175,000
Net (Decrease) Increase in Cash	140,089		-
Cash at Beginning of Period	-		-
Cash at End of Period	$            140,089		$                         -
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest	$0		$0
Franchise and Income Taxes	$0		$0
Stock issued for Debt	$        175,000
-
The accompanying notes are an integral part of these financial statements.