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EXCEL - IDEA: XBRL DOCUMENT - XIANGTIAN (USA) AIR POWER CO., LTD.Financial_Report.xls
EX-2.2 - EXHIBIT 2.2 - XIANGTIAN (USA) AIR POWER CO., LTD.v371393_ex2-2.htm
EX-31.1 - EXHIBIT 31.1 - XIANGTIAN (USA) AIR POWER CO., LTD.v371393_ex31-1.htm
EX-32.1 - EXHIBIT 32.1 - XIANGTIAN (USA) AIR POWER CO., LTD.v371393_ex32-1.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2014
 
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 333-161997
 
XIANGTIAN (USA) AIR POWER CO., LTD.
(Exact name of registrant as specified in its charter)
 
DELAWARE
98-0632932
(State or other jurisdiction of
(IRS Employer Identification No.)
Incorporation or organization)
 
 
Unit 602 Causeway Bay Comm Bldg 1
 Sugar Street, Causeway Bay
Hong Kong, People’s Republic of China
(Address of principal executive offices)
 
86 10 859 10 261
(Registrant’s telephone number)
 
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 ¨
 
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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No x
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer
¨
Accelerated filer
¨
Non-accelerated filer
¨
Smaller reporting company
x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
 
Indicate the number of outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: The registrant had 258,000,000 shares of common stock, $0.001 par value outstanding at March 13, 2014. The registrant has no other class of common equity.
 
 
 
PART I. FINANCIAL INFORMATION
 
 
 
Item 1. Financial Statements
 
 
Consolidated Balance Sheets as of January 31, 2014 and July 31, 2013(Unaudited)
1
 
Consolidated Statements of Operations for the Three and Six Months Ended January 31, 2014 and 2013 (Unaudited)
2
 
Consolidated Statements of Cash Flows for the Three and Six Months Ended January 31, 2014 and 2013 (Unaudited)
3
 
Notes to Consolidated Financial Statements (Unaudited)
4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
6
Item 3. Quantitative and Qualitative Disclosures About Market Risk
8
Item 4. Controls and Procedures
8
 
 
PART II. OTHER INFORMATION
 
 
 
Item 1. Legal Proceedings
8
Item 1A. Risk Factors
8
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
8
Item 3. Defaults Upon Senior Securities
8
Item 4. Mine Safety Disclosures
8
Item 5. Other Information
8
Item 6. Exhibits
9
Signatures
10
 
 
 
 
PART I. FINANCIAL INFORMATION
 
Item 1. Financial Statements
 
Xiangtian (USA) Air Power Co., Ltd.
(A Development Stage Company)
Consolidated Balance Sheets
January 31,2014
(Unaudited)
 
 
 
January 31,
 
July 31,
 
 
 
2014
 
2013
 
ASSETS
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
Cash
 
$
34,731
 
$
4,430
 
Prepaid expense
 
 
 
 
 
 
 
Current assets from discontinued operation
 
 
 
 
 
-
 
Total assets
 
$
34,731
 
$
4,430
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
 
 
0
 
 
1,500
 
Advances from related parties
 
$
280,189
 
 
84,283
 
Total liabilities
 
 
280,189
 
 
85,783
 
 
 
 
 
 
 
 
 
STOCKHOLDERS’ DEFICIT
 
 
 
 
 
 
 
Preferred stock: $0.001 par value, 100,000,000 shares authorized,
    none issued and outstanding
 
 
-
 
 
-
 
Common stock: $0.001 par value, 1,000,000,000 shares authorized,
    258,000,000 and 8,000,000 shares issued and outstanding
 
 
258,000
 
 
8,000
 
Additional paid-in capital
 
 
(173,750)
 
 
74,960
 
Deficit accumulated during the development stage
 
 
(329,709)
 
 
(164,312)
 
Total stockholders’ deficit
 
 
(245,459)
 
 
(81,352)
 
Total liabilities and stockholders’ deficit
 
$
34,731
 
$
4,430
 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
1

 
Xiangtian (USA) Air Power Co., Ltd.
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
 
 
 
For the Three Months
 
For the Six
 
Period From
September 2,
 
 
 
Months Ended
 
Months Ended
 
2008 (inception) to
 
 
 
January 31,
 
January 31,
 
January 31,
 
 
 
2014
 
2013
 
2014
 
2013
 
2014
 
Revenue:
 
$
0
 
0
 
$
0
 
0
 
$
0
 
General and administrative
 
$
70,125
 
27,157
 
$
165,396
 
48,597
 
$
325,611
 
Loss from continuing operations
 
 
(70,125)
 
(27,157)
 
 
(165,396)
 
(48,597)
 
 
(325,611)
 
Loss from discontinued operations
 
 
 
 
 
 
 
 
 
 
 
 
(4,099)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss
 
$
(70,125)
 
(27,157)
 
$
(21,440)
 
(48,597)
 
$
(329,710)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss per common share - basic and diluted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
$
0
 
0
 
$
0
 
 
 
$
0
 
Discontinued operations
 
 
0
 
0
 
 
0
 
 
 
 
0
 
Total
 
$
0
 
0
 
$
0
 
 
 
$
0
 
Weighted average number of common shares outstanding - basic and diluted
 
 
258,000,000
 
8,000,000
 
 
174,666,667
 
8,000,000
 
 
8,000,000
 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
2

 
Xiangtian (USA) Air Power Co., Ltd.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
 
 
 
 
 
 
 
Period From
 
 
 
For the Six
 
For the Six
 
Sptember2, 2008
 
 
 
Months Ended
 
Months Ended
 
(inception) to
 
 
 
January 31,
 
January 31,
 
January 31,
 
 
 
2014
 
2013
 
2014
 
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
Net loss
 
 
(165,396)
 
$
(48,597)
 
$
(329,710)
 
Net loss from discontinued operation
 
 
0
 
 
 
 
 
4,099
 
Net loss from continuing operation, net of income taxes
 
 
(165,396)
 
$
(48,597)
 
$
(325,611)
 
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
 
 
 
 
 
 
Donated rent
 
 
 
 
 
3,000
 
 
7,500
 
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
 
 
 
Prepaid expense
 
 
0
 
 
21,826
 
 
0
 
Accounts payable and accrued liabilities
 
 
(1,500)
 
 
9,189
 
 
16,361
 
Net cash used in operating activities
 
 
(166,896)
 
 
(14,582)
 
 
(301,750)
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
Proceeds from stock issuance
 
 
1,289
 
 
0
 
 
1,289
 
Net cash provided by investing activities
 
 
1,289
 
 
0
 
 
1,289
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
Proceeds from issuances of common stock
 
 
 
 
 
 
 
 
55,000
 
Advances from related parties
 
 
195,906
 
 
14,545
 
 
280,190
 
Net cash provided by financing activities
 
 
195,906
 
 
14,545
 
 
335,190
 
 
 
 
 
 
 
 
 
 
 
 
Net change in cash
 
 
30,300
 
 
-37
 
 
34,731
 
Cash - beginning of period from continued operations
 
 
4,430
 
 
97
 
 
0
 
 
 
 
 
 
 
 
 
 
 
 
Cash - end of period from continued operations
 
$
34,731
 
$
60
 
$
34,731
 
 
 
 
 
 
 
 
 
 
 
 
Discontinued operations:
 
 
 
 
 
 
 
 
 
 
Net cash used in operating activities
 
$
-
 
$
 
 
$
(10,393)
 
Net cash provided by (used in) financing activities
 
 
-
 
 
 
 
 
10,393
 
 
 
 
 
 
 
 
 
 
 
 
Net change in cash from discontinued operations
 
 
-
 
 
 
 
 
 
 
Cash - beginning of period from discontinued operations
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash - end of period from discontinued operations
 
$
-
 
$
-
 
$
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental cash flows information:
 
 
 
 
 
 
 
 
 
 
Cash paid for interest
 
$
-
 
$
-
 
$
-
 
Cash paid for income tax
 
 
-
 
 
-
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
Non-cash investing and financing transactions:
 
 
 
 
 
 
 
 
 
 
Debt forgiveness from sale of Goa Excursion
 
$
-
 
$
 
 
$
20,460
 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
3

 
Xiangtian (USA) Air Power Co., Ltd.
(A Development Stage Company)
Notes to Consolidated Financial Statements
 
NOTE 1 - NATURE OF OPERATIONS
 
Xiangtian (USA) Air Power Co., Ltd. (the “Company”) was incorporated in the State of Delaware on September 2, 2008 as Goa Sweet Tours Ltd. The Company was originally formed to provide personalized concierge tour packages to tourists who visit the State of Goa, India. On April 17, 2012, the Company entered into Share Purchase Agreements, by and among, Luck Sky International Investment Holdings Limited (“Lucky Sky”), an entity owned and controlled by Zhou Deng Rong, and certain of our former stockholders who owned, in the aggregate, 7,200,000 shares of the Company’s common stock (90% of the at then outstanding shares). Luck Sky purchased all 7,200,000 shares for an aggregate of $235,000. The sale was completed on May 15, 2012.
 
On May 1, 2012, the Company sold its Indian subsidiary, Goa Excursion Private Limited (“Goa Excursion”), to Iqbal Boga for a total value of $10. Both the purchaser and the seller fully released, discharged, waived, and held harmless the subsidiary’s debts and liabilities, including related party’s debts.
 
On May 25, 2012, the Company formed a corporation under the laws of the State of Delaware called Xiangtian (USA) Air Power Co., Ltd. ("Merger Sub") and on the same day, acquired one hundred shares of Merger Sub's common stock for cash. As such, Merger Sub became a wholly-owned subsidiary of the Company.
 
Effective as of May 29, 2012, Merger Sub was merged with and into the Company. As a result of the merger, the Company’s name was changed to “Xiangtian (USA) Air Power Co., Ltd.”. Prior to the merger, Merger Sub had no liabilities and nominal assets and, as a result of the merger, the separate existence of the Merger Sub ceased. The Company was the surviving corporation in the merger and, except for the name change provided for in the Agreement and Plan of Merger, there was no change in the directors, officers, capital structure or business of the Company.
 
On September 24, 2013, the Company acquired one hundred percent of the shares of common stock of Lucksky (Hong Kong) Shares Limited, a Hong Kong corporation,  for common stock of the Company, and agreed to acquire one hundred percent of the shares of Sanhe City LuckSky Electrical Engineering Limited (“Sanhe”) common stock for the Company’s common stock. Prior to the merger, Lucksky (Hong Kong) Shares Limited and Sanhe had no liabilities and nominal assets.  Effective as of September 24, 2013, Lucksky (Hong Kong) Shares Limited was merged with and into the Company and the Company was the surviving entity  On February 28, 2014, the Company and Sanhe agreed to extend the date of the merger of Sanhe into the Company to June 1, 2014.
 
The Company is a development stage company as defined by ASC 915 and since inception the Company has not generated consistent revenues and has incurred a cumulative net loss as reflected in the consolidated financial statements. The Company has minimal assets and has incurred losses since inception. The Company's limited start-up operations have consisted of the formation of the Company business plan and identification of the Company's target market.

NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Basis of Presentation
 
The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America. This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. The Company’s consolidated financial statements are expressed in U.S. dollars.
 
Use of Estimates and Assumptions
 
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.
 
 
4

 
Consolidation
 
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Lucksky (Hong Kong) Shares Limited. All significant intercompany balances and transactions have been eliminated in consolidation.
 
Discontinued Operations
 
The Company sold out its Indian subsidiary, Goa Excursion, on May 1, 2012. Goa Excursion has been reflected as discontinued operations for periods presented in the Company’s consolidated financial statements. Accordingly, the revenues, costs, expenses, assets, and liabilities of the Goa Excursion have been reported separately in the consolidated statements of operations and consolidated balance sheets for all periods presented. The results of discontinued operations do not reflect any allocation of the Company’s general and administrative expenses.
 
Cash and Cash Equivalents
 
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
 
Income Taxes
 
A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. At January 31, 2014 and July 31, 2013, a full deferred tax asset valuation allowance has been provided and no deferred tax asset benefit has been recorded.
 
Foreign Currency Translation
 
The Company’s functional currency is United States (“U.S.”) dollars as substantially all of the Company’s operations use this denomination. The consolidated financial statements are presented in U.S. dollars. Foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non-monetary assets and liabilities are translated at the exchange rates prevailing at the transaction date. Revenues and expenses are translated at average rates of exchange during the year. Gains or losses resulting from foreign currency transactions are included in results of operations.
 
Earnings (Loss) per Share
 
Basic earnings per common share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted earnings per common share gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Earnings per share exclude all potential dilutive shares of common stock if their effect is anti-dilutive. There were no potential dilutive securities outstanding during the three months ended January 31, 2014 or 2013.
 
Recent Accounting Pronouncements
 
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flows.
 
Subsequent Events
 
The Company evaluated events subsequent to January 31, 2014 through the date the consolidated financial statements were issued for disclosure considerations and determined there were no reportable subsequent events except that on February 28, 2014, the Company and Sanhe agreed to extend the date of the merger to June 1, 2014.

NOTE 3 - GOING CONCERN
 
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses since its inception resulting in an accumulated deficit of $329,709.as of January 31, 2014 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. These consolidated 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.
 
 
5

 
Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and/or the private placement of the Company’s common stock.

NOTE 4 - DISCONTINUED OPERATIONS
 
For the six months ended January 31, 2014 and 2013 and the period from September 2, 2008 (inception) to January 31, 2014, the amounts reported in loss from discontinued operations comprised operating expenses of $0, $0 and $4,099, respectively.

NOTE 5 - RELATED PARTY TRANSACTIONS
 
From time to time, the Company receives advances from its related parties. As of January 31, 2014 and July 31, 2013, the Company had advances from related parties of $280,189 and $84,283, respectively, and used the funds for its operation. These advances are due on demand, unsecured and non-interest bearing.

NOTE 6 - CAPITAL STOCK AND EQUITY TRANSACTIONS
 
Common Stock
 
The total number of common shares authorized that may be issued by the Company is 1,000,000,000 shares with a par value of $0.001 per share.
 
During the year ended July 31, 2009, the Company issued 5,000,000 shares of common stock for total cash proceeds of $25,000 to the Company’s sole director and officer. During the year ended July 31, 2010, the Company sold 3,000,000 shares of common stock for total cash proceeds of $30,000. Effective as of September 24, 2013, Lucksky (Hong Kong) Shares Limited was merged with and into the Company. As a result of the merger, Lucksky (Hong Kong) Shares Limited shareholders received one share of common stock for every share of Lucksky (Hong Kong) Shares Limited common stock they have for a total of 250,000,000 shares of the Company common stock.
 
Preferred Stock
 
The total number of preferred shares authorized that may be issued by the Company is 100,000,000 shares with a par value of $0.001 per share. The preferred stock may be issued in one or more series, from time to time, with each series to have such designation, relative rights, preference or limitations, as adopted by the Company’s Board of Directors. No preferred shares have been issued.

Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations.
 
Overview
 
Xiangtian (USA) Air Power Co., Ltd., was originally incorporated as Goa Sweet Tours Ltd. in the State of Delaware on September 2, 2008. We were formed to provide personalized concierge tour packages to tourists who visit the State of Goa, India.
 
On April 17, 2012, Goa Sweet Tours, Ltd. entered into Share Purchase Agreements (the “Purchase Agreements”), with Luck Sky International Investment Holdings Limited, an entity owned and controlled by Zhou Deng Rong, and certain of our former stockholders who owned, in the aggregate, 7,200,000 shares of our common stock (90% of the outstanding shares). Luck Sky International Investment Holdings Limited purchased such shares for an aggregate of $235,000. The sale of such shares closed on May 15, 2012.
 
On May 25, 2012, Goa Sweet Tours Ltd, formed a corporation under the laws of the State of Delaware called Xiangtian (USA) Air Power Co., Ltd. ("Merger Sub") and on the same day, acquired one hundred percent of the total outstanding shares of Merger Sub's common stock for cash. As such, Merger Sub became our wholly-owned subsidiary.
 
Effective as of May 29, 2012, Merger Sub was merged with and into the Company. As a result of the merger, the Company’s corporate name was changed to “Xiangtian (USA) Air Power Co., Ltd.” Prior to the merger, Merger Sub had no liabilities and nominal assets and, as a result of the merger, the separate existence of the Merger Sub ceased. The Company was the surviving corporation in the merger and, except for the name change provided for in the Agreement and Plan of Merger, there was no change in the directors, officers, capital structure or business of the Company.
 
 
6

 
On September 24, 2013, the Company acquired one hundred percent of the shares of common stock of Lucksky (Hong Kong) Shares Limited, a Hong Kong corporation,  for common stock of the Company, and agreed to acquire one hundred percent of the shares of Sanhe City LuckSky Electrical Engineering Limited (“Sanhe”) common stock for the Company’s common stock. Prior to the merger, Lucksky (Hong Kong) Shares Limited and Sanhe had no liabilities and nominal assets.  Effective as of September 24, 2013, Lucksky (Hong Kong) Shares Limited was merged with and into the Company and the Company was the surviving entity  On February 28, 2014, the Company and Sanhe agreed to extend the date of the acquisition to June 1, 2014.  
 
We are a development stage company and since inception, we have not generated consistent revenues and have incurred a cumulative net loss as reflected in the financial statements. We have minimal assets and have incurred losses since inception. We have no employees and own no real estate or personal property. The purpose of the business is to see the acquisition of or merger with, an existing company in the air power industry or to develop such technologies and manufacturing capabilities ourselves. We are specifically seeking companies in the manufacturing, research and development of products which uses engines powered by compressed air, including transportation, electricity generation, etc. as suitable business combination candidates.
 
Results of Operations
 
Revenue
 
Since inception on September 2, 2008 and for the six months ended January 31, 2014 we have not earned any revenues.  We are currently seeking business combination opportunities with companies in the air power industry or sources of capital to allow us to develop such technologies and manufacturing opportunities ourselves. We do not expect to realize any revenues until our business plan is implemented.
 
Operating Expenses
 
For the six months ended January 31, 2014, we incurred operating expenses in the amount of $ 165,396 compared to operating expenses of $48,497 for the six months ended January 31, 2013, an increase of 341%. The increase was substantially due to costs incurred in connection with regulatory compliance.
 
We incurred total operating expenses in the amount of $ 325,611 from inception on September 2, 2008 through January 31, 2014.
 
Liquidity and Capital Resources
 
As of January 31, 2014, we had a cash balance of $ 34,731.
 
Since inception, we have raised $55,000 through the sale of 8,000,000 shares of our common stock. We do not anticipate generating any revenue for the foreseeable future. No other source of capital has been identified or sought, except for advances from related parties that totaled $280,189 as of January 31, 2014. We have experienced a shortfall in operating capital.
 
Management intends to continue to finance operating costs over the next twelve months with existing cash on hand and loans from directors.
 
When additional funds become required, we expect to raise funds through equity financing from the sale of our common stock.  If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our company. We do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our business plan. In the absence of such financing, our business will fail.
 
We anticipate to continue to incurring operating losses in the foreseeable future. We base this expectation, in part, on the fact that we are a development stage company.
 
Our future financial results are also uncertain due to a number of factors, some of which are outside our control. These risk factors are disclosed factors include, but are not limited to:
 
· our ability to raise additional funding;
· the results of our proposed operations
 
We are in dire need for injection of funds to execute our business, repay advances received and to continue meeting our reporting obligations with the SEC.
 
Going Concern Consideration
 
Our operations and financial results are subject to numerous various risks and uncertainties that could adversely affect our business, financial condition and results of operations.
 
 
7

 
Off-Balance Sheet Arrangements
 
We have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.
 
Forward Looking Statements
 
The information in this quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements involve risks and uncertainties, including statements regarding the Company’s capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined from time to time, in other reports we file with the Securities and Exchange Commission (the “SEC”). These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
 
Item 3. Qualitative and Quantitative Disclosure about Market Risks
 
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
 
Item 4. Controls and Procedures.
 
Evaluation of Disclosure Controls and Procedures
 
Our Principal Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report, have concluded that, based on the evaluation of these controls and procedures, that our disclosure controls and procedures were effective.
 
Controls and Procedures over Financial Reporting
 
Additionally, there were no changes in our internal controls over financial reporting or in other factors that could significantly affect these controls subsequent to the evaluation date. We have not identified any significant deficiencies or material weaknesses in our internal controls, and therefore there were no corrective actions taken.
 
PART II - OTHER INFORMATION
 
Item 1. Legal Proceedings.
 
The Company currently is not a party to any legal proceedings and, to the Company’s knowledge; no such proceedings are threatened or contemplated.
 
Item 1A. Risk Factors
 
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
 
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 
None
 
Item 3. Default Upon Senior Securities.
 
None.
 
Item 4. Mine Safety Disclosures.
 
Not applicable.
 
Item 5. Other Information.
 
None.
 
 
8

 
Item 6. Exhibits
 
Exhibit No.
 
Description
2.1
 
Agreement and Plan of Merger (incorporated by reference to exhibits to Current Report on 8-K filed May 29, 2012)
2.2
 
Amendment No. 3 to the Agreement and Plan of Merger dated as of February 24, 2014.*
3.1
 
Articles of Incorporation (incorporated by reference to exhibits to Registration Statement on Form S-1 filed on September 18, 2009)
3.2
 
Bylaws (incorporated by reference to exhibits to Registration Statement on Form S-1 filed on September 18, 2009)
3.3
 
Articles of Merger (incorporated by reference to exhibits to Current Report on 8-K filed May 29, 2012)
31.1 *
 
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.§ 1350, as adopted pursuant to § 302 of the Sarbanes-Oxley Act of 2002.
32.1 *
 
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002.
 
*  Filed herewith.
 
 
9

 
SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) 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.
 
 
XIANGTIAN (USA) AIR POWER CO., LTD.
 
 
 
By: /s/ Zhou Deng Rong
 
Zhou Deng Rong
 
Principal Executive Officer
 
Principal Financial Officer
 
 
 
Date: March 17, 2014
 
 
10