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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 June 30, 2014
 
o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 
For the transition period from __________ to __________
 
SEC File No. 333-179082
 
A & C United Agriculture Developing Inc.
(Exact name of registrant as specified in its charter)
 
Nevada
 
100
 
27-5159463
(State or other jurisdiction
of incorporation or organization)
 
(Primary Standard Industrial
Classification Code Number)
 
IRS I.D.
 
Oak Brook Pointe, Suite 500,
700 Commerce Drive, Oak Brook, Illinois
 
60523
(Address of principal executive offices)
 
(Zip Code)
 
Issuer’s telephone number: 630-288-2500

N/A
(Former name, former address and former three months, if changed since last report)
 
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
o
Smaller Reporting Company
x

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

As of August 4, 2014, there were 36,611,495 shares issued and outstanding of the registrant’s common stock.
 


 
 

 
TABLE OF CONTENTS
 
PART I — FINANCIAL INFORMATION
     
       
Item 1.
Financial Statements
    3  
           
Item 2.
Management’s Discussion and Analysis or Plan of Operation.
    4  
           
Item 3.
Quantitative and Qualitative Disclosure about Market Risk
    11  
           
Item 4.
Controls and Procedures.
    11  
           
PART II — OTHER INFORMATION
       
           
Item 1.
Legal Proceedings.
    12  
           
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
    12  
           
Item 3.
Defaults Upon Senior Securities
    12  
           
Item 4.
Mine Safety Disclosures
    12  
           
Item 5.
Other Information
    12  
           
Item 6.
Exhibits.
    13  
 
 
2

 

PART I — FINANCIAL INFORMATION
 
Item 1. Financial Statements

A & C United Agriculture Developing Inc.
 
 (A Development Stage Enterprise)
 
Unaudited Financial Statements
 
As of June 30, 2014
 
 
3

 
 
Table of Contents
 
Balance Sheet
    F-2  
         
Statement of Loss
    F-3  
         
Statement of Stockholders Equity
    F-4  
         
Statement of Cash Flows
    F-5  
         
Notes to Financial Statements
    F-6  
         
Exhibit A
    F-16  
 
 
F-1

 
 
A & C United Agriculture Developing Inc
(A Development Stage Enterprise)
BALANCE SHEET
 
   
June 30,
   
September 30,
 
   
2014
   
2013
 
ASSETS
 
(unaudited)
   
(audited)
 
Current assets:
           
Cash and cash equivalents
  $ 79,761     $ 384,675  
Accounts receivable
    108,085       124,085  
Inventory
    252,741       2,216  
Total Current Assets
  $ 440,587     $ 510,976  
Other current assets:
               
Prepaid expense
  $ 689     $ 170  
Loan to shareholder
    41,224       46,884  
Prepaid to Supplier
    -       18,200  
Total Other Current Assets
  $ 41,913     $ 65,254  
Property, plant and equipment, net
  $ 19,044     $ 23,125  
Other assets:
               
Deferred interest expense
    189       284  
Total Other Assets
  $ 189     $ 284  
                 
TOTAL ASSETS
  $ 501,733     $ 599,639  
LIABILITIES & EQUITY
               
Current liabilities:
               
Account payable
  $ 10,000     $ -  
Credit card payable
    3,612       4,717  
Total current liabilities
  $ 13,612     $ 4,717  
Other current liabilities:
               
Loan from officer/shareholders
  $ 4,725     $ -  
Other accrued expenses
    155       -  
Payroll liabilities
    1,382       1,382  
Total other current liabilities
  $ 6,262     $ 1,382  
Long term liabilities:
               
Car loan
    13,793       20,689  
Total long term liabilities
  $ 13,793     $ 20,689  
Total liabilities
  $ 33,667     $ 26,788  
                 
Stockholders' Equity:
               
Common stock, $0.001 par value;
               
500,000,000 shares authorized;
               
36,611,495 shares issued and outstanding.
  $ 36,612     $ 36,362  
Paid-in capital
    873,838       824,088  
Deficit accumulated during the development stage
    (442,672 )     (287,906 )
Accumulated other comprehensive income (loss)
    288       307  
Total stockholders' equity
  $ 468,066     $ 572,851  
TOTAL LIABILITIES & EQUITY
  $ 501,733     $ 599,639  
 
 
F-2

 
 
A & C United Agriculture Developing Inc
(A Development Stage Enterprise)
STATEMENT OF LOSS
 
   
Nine Months Ended
   
Nine Months Ended
   
Three Months Ended
   
Three Months Ended
   
Cumulative from February 7, 2011 (Date
of Inception) Through
 
   
June 30,
   
June 30,
   
June 30,
   
June 30,
    June 30,  
   
2014
   
2013
   
2014
   
2013
   
 2014
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
                                         
Revenues
  $ 361,870     $ 623,144     $ -     $ 9,000     $ 1,506,099  
Cost of Goods Sold
  $ 324,538     $ 573,563     $ -     $ 5,834     $ 1,369,629  
Gross Profit
  $ 37,332     $ 49,581     $ -     $ 3,166     $ 136,470  
Operating expenses:
                                       
Research and development
  $ -     $ -     $ -     $ -     $ -  
                                         
Selling, general and administrative expenses
  $ 188,017     $ 172,413     $ 40,008     $ 63,683     $ 570,972  
                                         
Depreciation and amortization expenses
  $ 4,081     $ 2,721     $ 1,360     $ 1,360     $ 8,162  
Total Operating Expenses
  $ 192,098     $ 175,134     $ 41,368     $ 65,043     $ 579,134  
                                         
Operating Income (Loss)
  $ (154,766 )   $ (125,553 )   $ (41,368 )   $ (61,877 )   $ (442,664 )
                                         
Investment income, net
  $ -     $ -     $ -     $ -     $ -  
Interest Expense, net
  $ -     $ -     $ -     $ -     $ 8  
Income (Loss) before income taxes
  $ (154,766 )   $ (125,553 )   $ (41,368 )   $ (61,877 )   $ (442,672 )
Income (Loss) tax expense
  $ -     $ -     $ -     $ -     $ -  
Net Income (Loss)
  $ (154,766 )   $ (125,553 )   $ (41,368 )   $ (61,877 )   $ (442,672 )
                                         
Net income (loss) per common share- Basics
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.01 )
Net income (loss) per common share- Diluted
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )
Other comprehensive income (loss), net of tax:
                                       
Foreign currency translation adjustments
  $ (19 )   $ 100     $ -     $ -     $ 288  
Other comprehensive income (loss)
  $ (19 )   $ 100     $ -     $ -     $ 288  
Comprehensive Income (Loss)
  $ (154,785 )   $ (125,453 )   $ (41,368 )   $ (61,877 )   $ (442,384 )
 
 
F-3

 
 
A & C United Agriculture Developing Inc
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS EQUITY
The Period February 7, 2011 ( Date of Inception)
through June 30, 2014
 
                     
Deficit
             
                     
Accumulated
   
Accumulated
       
               
Additional
   
During the
   
Other
   
Total
 
   
Common Stock
   
Paid-in
   
Development
   
Comprehensive
   
Stockholders'
 
   
Shares
   
Amount
   
Capital
   
Stage
   
Income (Loss)
   
Equity
 
Issuance of common stocks
                                   
to shareholders @ 0.001 per
                                   
share on February 7, 2011
    30,000,000     $ 30,000     $ -                 $ 30,000  
                                             
Issuance of common stocks
                                           
to shareholders @ 0.1 per
                                           
share on May 31, 2011
    4,449,495     $ 4,450     $ 440,500                 $ 444,950  
                                             
Adjustment for Exchange
                                           
rate changes
                                $ 207     $ 207  
                                               
Net loss for the year
                                             
ended September 30, 2011
 
 
   
 
   
 
    $ (37,543 )  
 
    $ (37,543 )
Balance, September 30, 2011
    34,449,495     $ 34,450     $ 440,500     $ (37,543 )   $ 207     $ 437,614  
                                                 
Issuance of common stocks
                                               
to Michael Williams @ 0.2
                                               
per share on July 16, 2012
    150,000     $ 150     $ 29,850                     $ 30,000  
                                                 
Issuance of common stocks
                                               
to Pivo Associates Inc @ 0.2
                                               
per share on July 20, 2012
    25,000     $ 25     $ 4,975                     $ 5,000  
                                                 
Adjustment for currency rate exchange
                            $ -     $ -  
                                                 
Net loss for the year
                                               
ended September 30, 2012
 
 
   
 
   
 
    $ (117,317 )  
 
    $ (117,317 )
Balance, September 30, 2012
    34,624,495     $ 34,625     $ 475,325     $ (154,860 )   $ 207     $ 355,297  
                                                 
Issuance of common stocks
                                               
to Shareholders @ 0.2
                                               
per share on December 31,2012
    1,675,000     $ 1,675     $ 333,325                     $ 335,000  
                                                 
Issuance of common stocks
                                               
to Shareholders @ 0.25
                                               
per share on March 12,2013
    50,000     $ 50     $ 12,450                     $ 12,500  
                                                 
Issuance of common stocks
                                               
to Blue Future @ 0.25
                                               
per share on April 29,2013
    12,000     $ 12     $ 2,988                     $ 3,000  
                                                 
Adjustment for currency rate exchange
                            $ 100     $ 100  
                                                 
Net loss for the year
                                               
ended September 30, 2013
 
 
   
 
   
 
    $ (133,046 )  
 
    $ (133,046 )
Balance, September 30, 2013
    36,361,495     $ 36,362     $ 824,088     $ (287,906 )   $ 307     $ 572,851  
                                                 
Issuance of common stocks
                                               
to Griffin Produce @ 0.2
                                               
per share on December 26,2013
    250,000     $ 250     $ 49,750                     $ 50,000  
                                                 
Adjustment for currency rate exchange
                            $ (19 )   $ (19 )
                                                 
Net loss for the period
                                               
ended June 30, 2014
 
 
   
 
   
 
    $ (154,766 )  
 
    $ (154,766 )
Balance, June 30, 2014
    36,611,495     $ 36,612     $ 873,838     $ (442,672 )   $ 288     $ 468,066  
 
 
F-4

 
 
A & C United Agriculture Developing Inc
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS

   
Nine Months Ended
   
Nine Months Ended
   
Three Months Ended
   
Three Months Ended
   
Cumulative from February 7, 2011 (Date
of Inception) Through
 
   
June 30,
   
June 30,
   
June 30,
   
June 30,
    June 30,  
   
2014
   
2013
   
2014
   
2013
   
2014
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
Operating Activities:
                             
Net income (loss)
  $ (154,766 )   $ (125,553 )   $ (41,368 )   $ (61,877 )   $ (442,672 )
Adjustments to reconcile net income to net cash provided
                                       
by operating activities:
                                       
Non-cash portion of share based legal fee expense
    -       -       -       -       64,450  
Non-cash portion of share based consulting fee expense
    50,000       15,500       -       3,000       70,500  
Depreciation expenses
    4,081       2,721       1,360       1,360       8,162  
Deferred interest expense
    95       (316 )     32       31       (189 )
Inventory
    (250,525 )     235,917       (222,240 )     (3,083 )     (252,741 )
Accounts Receivable
    16,000       (127,059 )     139,262       100,000       (108,085 )
Prepaid expense
    (519 )     15,682               394       (689 )
Prepaid to supplier
    18,200       (18,200 )     111,000       (18,200 )     -  
Payroll Liabilities
    -       1,382       -       (535 )     1,382  
Account payable
    10,000       871       (826 )     1,422       10,000  
Credit card payable
    (1,105 )     9,167       1,369       9,915       3,612  
Other Accrued Expenses
    155       -       155       -       155  
Unearned revenue
    -       (80,000 )     -       -       -  
Net cash provided by operating activities
  $ (308,384 )   $ (69,888 )   $ (11,256 )   $ 32,427     $ (646,115 )
                                         
Investing Activities:
                                       
Purchase of property, plant and equipment
    -       (27,206 )     -       -       (27,206 )
Net cash provided by investing activities
  $ -     $ (27,206 )   $ -     $ -     $ (27,206 )
                                         
Financing Activities:
                                       
Loan from shareholders
  $ 4,725     $ -     $ 4,017     $ -     $ 4,725  
Loan to shareholders
    5,660       (62,603 )   $ 6,105       7,396       (41,224 )
Long term Loans
    (6,896 )     22,988     $ (2,299 )     (2,298 )     13,793  
Proceeds from issuance of common stock
    -       335,000               -       775,500  
Net cash provided by financing activities
  $ 3,489     $ 295,385     $ 7,823     $ 5,098     $ 752,794  
                                         
Effect of  Exchange Rate on Cash
  $ (19 )   $ 100     $ -     $ -     $ 288  
Net increase (decrease) in cash and cash equivalents
  $ (304,914 )   $ 198,391     $ (3,433 )   $ 37,525     $ 79,761  
Cash and cash equivalents at beginning of the period
  $ 384,675     $ 181,879     $ 83,194     $ 342,745     $ -  
Cash and cash equivalents at end of the period
  $ 79,761     $ 380,270     $ 79,761     $ 380,270     $ 79,761  

 
F-5

 
 
A & C UNITED AGRICULTURE DEVELOPING INC
 
NOTES TO FINANCIAL STATEMENTS
 
NOTE A - BUSINESS DESCRIPTION
 
A & C United Agriculture Developing Inc., or the “Company,” is a Nevada corporation formed on February 7, 2011. Our principal executive office is located at Oak Brook Pointe, Suite 500, 700 Commerce Drive, Oak Brook IL 60523. Tel: 630-288-2500.
 
In addition to the U.S. operation, the Company established a subsidiary A & C Agriculture Developing (Europe) AB in Stockholm, Sweden in October 24, 2013, which is located at Gamla Sodertaljevagen 134A, 141 70 Segeltorp, Sweden.
 
A & C United Agriculture Developing Inc., a vertically integrated "seed to table" agriculture company is engaged in standardized vegetable seed-selecting, planting, growing, harvesting, cool chain transportation, processing and final product selling.
 
Andy Liu and Charlie Huang, our two founders, driven by the sense of mission and duty to provide safe, high-quality and affordable vegetable products in China for her current and future generations, formed the company in state of Nevada, USA at 2011.
 
The Company, in addition to its existing seeds export from U.S and Europe to China, will continue leveraging the resources obtained via strategic alliances in the future on both sides of the Pacific Ocean, and applying America’s advanced agriculture technologies and quality control/ management practices to build and enhance the entire vegetable production chain in China that will also be utilizing large-scale, mechanization and standardization. As a food-safety oriented company, around the production chain, it will be building systems that support the two-way traceability and recall capability for its products to comply with and exceed local and global food safety requirements from field to supermarket, year round.
 
Development Stage Company
 
The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards (SFAS) ASC 915, “Development Stage Entities”. The Company has devoted substantially all of its efforts to establishing a new business and for which either of the following conditions exists: planned principal operations have not commenced; or the planned principal operations have commenced, and rising of capital and attempting to raise sales.
 
 
F-6

 
 
A & C UNITED AGRICULTURE DEVELOPING INC
 
NOTES TO FINANCIAL STATEMENTS
 
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
 
Basis of accounting
 
The financial statements reflect the assets, revenues and expenditures of the Company on the accrued basis of accounting. The Company’s fiscal year end is the last day of September 30.
 
Use of Estimates
 
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect certain amounts reported in the financial statements and disclosures. Accordingly, actual results could differ from those estimates.
 
Concentration of credit risk
 
The Company maintains its cash in bank accounts which, at times, may exceed the federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash.
 
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. As of June 30, 2014, the company had cash and cash equivalents of $ 79,761.
 
Property, Plant, and Equipment Depreciation
 
Property, plant, and equipment are stated at cost. Depreciation is being provided principally by straight line methods over the estimated useful lives of the assets. Expenditures for maintenance and repairs, which do not improve or extend the expected useful lives of the assets, are expensed to operations while major repairs are capitalized.
 
The vehicle was recorded as fixed asset to depreciate over 5 years with straight line method. On December 5, 2012, the Company purchased a $ 27,206 passenger vehicle.
 
As of June 30, 2014, the company has property, plant, and equipment at a net cost of $ 19,044, and $ 8,162 of accumulated depreciation expense was recorded.
 
 
F-7

 
 
A & C UNITED AGRICULTURE DEVELOPING INC
 
NOTES TO FINANCIAL STATEMENTS
 
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
Prepaid Expense
 
As of June 30, 2014, the Company prepaid insurance expense of $ 689.
 
Stock-Based Compensation
 
The Company accounts for stock issued for services using the fair value method. In accordance with FASB ASC 718, Stock-Based Compensation, the measurement date of shares issued for services is the date at which the counterparty’s performance is complete.
 
On June 30, 2011, 344,495 shares was issued to Michael Williams @ $0.1 per share for legal service value $ 34,450.
 
On July 16, 2012, 150,000 shares were issued to Michael Williams for legal services of $30,000 at $0.20 per share.
 
On June 20, 2012, 25,000 shares were issued to Pivo Associates for services of $5,000 at $0.20 per share.
 
On March 12, 2013, 50,000 shares were issued to three shareholders @ $ 0.25 per share for consulting service value $ 12,500.
 
On April 29, 2013, 12,000 shares were issued to Blue Future, Inc for consulting and advising services of $3,000 at $0.25 per share.
 
On December 26, 2013, 250,000 shares were issued to Griffin Produce Company, Inc @ $0.2 per share for consulting and advising service value $ 50,000.
 
Basics and Diluted Net Loss per Common Share
 
The Company computes per share amounts in accordance with Statement of Financial Accounting Standards (SFAS) ASC 260, Earnings per Share (EPS). ASC 260 requires presentation of basis and diluted EPS. Basic EPS is computed by dividing the income (loss) available to Common Shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock and common stock equivalents outstanding during the periods.
 
The Company only issued one type of shares, i.e., common shares only. There are no other types securities were issued. Accordingly, the diluted and basics net loss per common share are the same.
 
 
F-8

 
 
A & C UNITED AGRICULTURE DEVELOPING INC
 
NOTES TO FINANCIAL STATEMENTS
 
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
Inventory
 
The inventory was valued at cost of purchase from suppliers. As of June 30 2014, the Company has $ 252,741 various vegetable seeds in stock. And the inventories purchase from USA were stored at the garage of Yidan Liu’s house at no charges and written agreement; and the inventories purchase from Europe were stored at the garage of Jun Huang’s house at Sweden at no charges and written agreement.
 
Long Term Liabilities
 
In December 5th, 2012, the Company purchased a vehicle at a financing amount of $ 27,585.36 with 36 monthly equal payments. As of June 30, 2014, the Company has a net car loan of $ 13,793.
 
Revenue Recognition
 
In accordance with the FASB Accounting Standards Codification (ASC) 605-15-25 “Revenue Recognition for Sales of Product”, the Company recognizes revenue when it is realized or realizable and earned. The revenue from the product sales transaction shall be recognized at time of sale if the following conditions are met:
 
•  
The seller’s price to the buyer is substantially fixed or determinable at the date of sale.
•  
The buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product.
•  
The buyer’s obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product.
•  
The buyer acquiring the product for resale has economic substance apart from that provided by the seller.
•  
The seller does not have significant obligations for future performance to directly bring about resale of the product by the buyer.
•  
The amount of future returns can be reasonably estimated.
 
Revenues include sales of seeds in Asia, Europe, and North America.
 
The Company had total revenue of $ 0 and $ 9,000 for the fiscal quarter ended June 30, 2014 and 2013 respectively and $ 1,506,099 for the period of February 7, 2011 to June 30, 2014.
 
 
F-9

 
 
A & C UNITED AGRICULTURE DEVELOPING INC
 
NOTES TO FINANCIAL STATEMENTS
 
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
Cost of Goods Sold
 
The Company’s purchase cost is primarily from supplier, U.S seed companies. Based upon management’s experience in the industry, we believe vegetable seeds supply in United State for the varieties we intend to sell is plenty. We believe that with advanced technology and mature global seed accessibility, U.S seed companies can provide the varieties Chinese end users are looking for. We are focused on finding the right variety. We first will collect specifications from Chinese end users, and then we will match them with the variety here. We ask samples or sometimes we purchase small amount of seed. We will then try them in various locations in China at different planting season. The challenge we have is that not all the varieties we may initially select will prove to work in China. The trial cycle can be over a year in some cases.
 
We do not anticipate offering any material right of return on our product although we may reimburse buyers on a case-by-case basis if seed which passed our trials does not perform well for a particular grower through no fault of the grower.
 
The Company had $ 30,500 inventory as of March 31, 2014.
 
From the period of April 1, 2014 to June 30, 2014, the Company purchase $ 222,240 vegetable seeds from US suppliers; and there are $ 252,741 inventories as of June 30, 2014.
 
As a result, a total of $ 0 and $ 5,834 cost of goods sold was recorded for the fiscal quarter ended June 30, 2014 and 2013; and $ 1,369,629 cost of good sold was recorded for the period of February 7, 2011 to June 30, 2014.
 
Comprehensive Income
 
The company’s comprehensive income is comprised of net income, unrealized gains and losses on marketable securities classified foreign currency translation adjustments, and unrealized gains and losses on derivative financial instruments related to foreign currency hedging.
 
 
F-10

 
 
A & C UNITED AGRICULTURE DEVELOPING INC
 
NOTES TO FINANCIAL STATEMENTS
 
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
Operating Leases
 
The Company entered into a lease for its corporate offices in under terms of non-cancelable operating leases. The lease term is from March 1, 2014 through February 29, 2015 and requires a roughly $170 monthly lease payment, and this office is located at 700 Commerce Drive, STE 500, Oak Brook IL 60523, USA.
 
Operating Expense
 
Operation expense consists of selling, general and administrative expenses, and depreciation expense.
 
For the fiscal quarter ended June 30, 2014 and 2013, there was a total of $ 41,368, and $ 65,043 operating expenses respectively.
 
For the nine months period ended June 30, 2014 and 2013, there was a total of $ 192,098, and $ 175,134 operating expenses respectively.
 
For the cumulative period from February 7, 2011 (Date of Inception) to June 30, 2014, there was a total of $ 579,134 operating expenses.
 
The Details were showed in Exhibit A.
 
Payroll Expense
 
Started from January 2013, the Company stayed the annually salary amount of Officer Yidan Liu for $ 60,000. The Social Security tax and Medicare tax were paid by both employer and employees in USA; employees also withheld portion of Federal and State tax calculate by each individual’s status. All of the tax was submitted to Internal Revenue Service and local government at a monthly basis.
 
The total payroll expense for the fiscal quarter ended June 30, 2014 is $16,659, which included the payroll taxes to the government and the net salary to the Officer.
 
Professional Fees
 
Professional fees are consist of accounting and auditing fee, legal fee, consulting expenses, SEC filing fee, and other professional expenses. The total professional fees were $ 8,060 and $ 25,330 for the three months period ended June 30, 2014 and 2013 respectively.
 
 
F-11

 
 
A & C UNITED AGRICULTURE DEVELOPING INC
 
NOTES TO FINANCIAL STATEMENTS
 
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
Recent Accounting Pronouncements
 
The following pronouncements have become effective during the period covered by these financial statements or will become effective after the end of the period covered by these financial statements:
 
Pronouncement
 
Issued
 
Title
ASC 605
 
October 2009
 
Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements – a consensus of the FASB Emerging Issues Task Force
ASC 860
 
December 2009
 
Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets
ASC 505
 
January 2010
 
Accounting for Distributions to Shareholders with Components of Stock and Cash – a consensus of the FASB Emerging Issues Task Force
ASC 810
 
January 2010
 
Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary – a Scope Clarification
ASC 718
 
January 2010
 
Compensation – Stock Compensation (Topic 718): Escrowed Share Arrangements and the Presumption of Compensation
ASC 820
 
January 2010
 
Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements
ASC 810
 
February 2010
 
Consolidation (Topic 810): Amendments for Certain Investment Funds
ASC 815
 
March 2010
 
Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives
ASC-310 Receivables
 
July 2010
 
For public entities, the disclosure as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The disclosures about activity that occurs during a reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. For nonpublic entities, the disclosures are effective for annual reporting period ending on or after December 15, 2011.
 
Management does not anticipate that the adoption of these standards will have a material impact on the financial statements.
 
 
F-12

 
 
A & C UNITED AGRICULTURE DEVELOPING INC
 
NOTES TO FINANCIAL STATEMENTS
 
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
Foreign Currency Translation
 
The Company has determined the United States dollars (USD) to be its functional currency for Flurida Group USA and Swedish Krona (SEK) to be its functional currency in European business. Assets and liabilities were translated to U.S. dollars at the period-end exchange rate. Statement of operations amounts were translated to U.S. dollars using the first date of each month during the year. Gains and losses resulting from translating foreign currency financial statements are accumulated in other comprehensive income (loss), a separate component of shareholders’ equity.
 
NOTE C – RELATED PARTY TRANSACTIONS
 
Common Shares Issued to Executive and Non-Executive Officers and Directors
 
As of June 30, 2014, total 30,235,000 shares were issued to officers and directors as follows:
 
Name
 
Title
 
Share QTY
   
Amount
 
Purchase Date
 
% of Common Share
 
Jun Huang
 
Secretary
    15,000,000     $ 15,000  
2/7/2011
    40.97 %
Yidan Liu
 
President
    15,000,000     $ 15,000  
2/7/2011
    40.97 %
Ross Rispens
 
Director
    75,000     $ 10,000  
5/31/2011
    0.20 %
Xinyu Wang
 
Director
    10,000     $ 1,000  
5/31/2011
    0.03 %
Manying Chen
 
Director
    50,000     $ 5,000  
5/31/2011
    0.14 %
Minhang Wei
 
Director
    100,000     $ 10,000  
5/31/2011
    0.27 %
Total
        30,235,000     $ 56,000         82.58 %
 
*Based upon total outstanding shares 36,611,495 as of June 30, 2014.
 
Loans to Officers
 
As of June 30, 2014, the Company advanced $ 41,224 to the officer, Jun Huang, for operating and marketing activity of the corporation. The outstanding balance is due on demand and no agreement was signed.
 
Loans from Officers/Shareholders
 
As of June 30, 2014, the officer, Yidan Liu, loaned $ 4,725 to the Company. The outstanding balance is due on demand and no agreement was signed.
 
 
F-13

 
 
A & C UNITED AGRICULTURE DEVELOPING INC
 
NOTES TO FINANCIAL STATEMENTS
 
NOTE D – SHAREHOLDERS’ EQUITY
 
Under the Company’s Articles of Incorporation of the Company, the Company is authorized to issue 500,000,000 shares of common stock with a par value of $0.001.
 
On February 7, 2011, the Company was incorporated in the State of Nevada.
 
On February 7, 2011, two founders of the Company, Jun Huang and Yidan Liu purchased 30,000,000 shares at $0.001 per share. The proceeds of $30,000 were received.
 
On May 31, 2011, additional 4,105,000 shares were issued to 113 shareholders at price of $0.1 per share or $ 410,500 common stock.
 
On June 30, 2011, 344,495 shares was issued to Michael Williams @ $0.1 per share for legal service value $ 34,450.
 
On July 16, 2012, 150,000 shares were issued to Michael Williams @ $0.2 per share for legal service value $ 30,000.
 
On July 20, 2012, 25,000 shares were issued to Pivo Associate Inc @ $0.2 per share for consulting service value $ 5,000.
 
On December 2012, additional 1,175,000 shares were issued to 12 shareholders and at price of $0.2 per share or $ 235,000 common stock.
 
On December 2012, 500,000 shares were issued to 7 new shareholders at price of $0.2 per share or $ 100,000 common stock.
 
On March 12, 2013, 50,000 shares were issued to three shareholders @ $0.25 per share for consulting service value $ 12,500.
 
On April 29, 2013, 12,000 shares were issued to Blue Future, Inc @ $0.25 per share for consulting and advising service value $ 3,000.
 
On December 26, 2013, 250,000 shares were issued to Griffin Produce Company, Inc @ $0.2 per share for consulting and advising service value $ 50,000.
 
Therefore, as of June 30, 2014, there was total of 36,611,495 shares issued and outstanding.
 
 
F-14

 
 
A & C UNITED AGRICULTURE DEVELOPING INC
 
NOTES TO FINANCIAL STATEMENTS
 
NOTE E– SUBSEQUENT EVENT
 
At July 22, 2014, the Company has realized and recognized sales revenues of $ 240,000.
 
NOTE F – GOING CONCERN
 
The Company is currently in the development stage and their activities consist solely of raising capital and attempting to sell products to generate and increase sales revenues.
 
There is no guarantee that the Company will be able to raise enough capital or generate revenues to sustain its operations and carry out its business plan. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
 
The financial statements do not include any adjustments relating to the carrying amounts of recorded assets or the carrying amounts and classification of recorded liabilities that may be required should the Company be unable to continue as a going concern.
 
As of June 30, 2014 the cash and cash equivalent balance was $ 79,761 and there is cumulative net loss of $ 442,672 for the cumulative period from February 7, 2011 (Date of Inception) to June 30, 2014.
 
 
F-15

 
 
Exhibit A
 
                           
Cumulative from
 
   
Nine Months Ended
   
Nine Months Ended
   
Three Months Ended
   
Three Months Ended
   
February 7, 2011 (Date of Inception)
 Through
 
   
June 30,
   
June 30,
   
June 30,
   
June 30,
   
June 30,
 
   
2014
   
2013
     2,014      2013      2014  
Expense
                                   
Bank Service Charges
    326       104       25       17       1,031  
Business Licenses and Permits
    1,222       944       307       844       7,138  
Meals and Entertainment
    8,243       4,592       1,570       2,402       15,145  
Membership fee
    -       -       -       -       505  
Office Supplies
    587       63       -       15       6,038  
Postage and Delivery
    312       347       75       -       809  
Printing and Reproduction
    -       -       -       -       135  
Auto and Truck Expenses
    342       955       97       909       1,494  
Payroll Expenses
    48,996       32,943       16,659       16,148       97,975  
Conference & Meeting
            1,987       -       -       2,347  
Interest Expense
    95       -       32       32       189  
Utilities
    -       41       -       -       41  
Website Expense
    96       2,085       -       -       2,181  
Telephone Expense
    320       80       320       -       400  
Depreciation Expense
    4,081       2,721       1,360       1,360       8,162  
Insurance Expense
    7,622       860       3,696       394       8,867  
Marketing and Promotion Expense
    1,798       1,804       -       1,804       3,602  
Travel Expense
    26,078       22,214       6,438       15,107       71,686  
Professional Fees
                                       
Accounting
    21,027       25,000       310       -       71,027  
Consulting Fees
    50,000       38,160       -       13,000       114,660  
Legal Fee
    13,500       26,800       6,000       10,800       133,750  
Transfer Agent fees
    945       1,025       445       -       3,295  
SEC & EDGAR Filling Fee
    2,586       4,582       1,305       1,530       13,062  
Professional Fees
    88,058       95,567       8,060       25,330       335,794  
Software
    -       74       -       -       394  
Rent Expense
    1,700       7,753       507       681       12,980  
Repairs and Maintenance
    963       -       963       -       963  
Training & Education Expense
    480       -       480       -       480  
Medical Expenses
    778       -       778       -       778  
Total Expense
    192,098       175,134       41,368       65,043       579,134  
 
 
F-16

 
 
Item 2. Management’s Discussion and Analysis or Plan of Operation.
 
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-Q.

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.
 
Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.
 
Overview

A & C United Agriculture Developing Inc., or the “Company,” is a Nevada corporation formed on February 7, 2011. Our principal executive office is located at Oak Brook Pointe, Suite 500, 700 Commerce Drive, Oak Brook IL 60523. Tel: 630-288-2500.

In addition to the U.S. operation, the Company established a subsidiary A & C Agriculture Developing (Europe) AB in Stockholm, Sweden in October 24, 2013, which is located at Gamla Sodertaljevagen 134A, 141 70 Segeltorp, Sweden.
 
A & C United Agriculture Developing Inc., a vertically integrated "seed to table" agriculture company is engaged in standardized vegetable seed-selecting, planting, growing, harvesting, cool chain transportation, processing and final product selling.

Andy Liu and Charlie Huang, our two founders, driven by the sense of mission and duty to provide safe, high-quality and affordable vegetable products in China for her current and future generations, formed the company in state of Nevada, USA at 2011.

The Company, in addition to its existing seeds export from U.S to China, will continue leveraging the resources obtained via strategic alliances in the future on both sides of the Pacific Ocean, and applying American and European advanced agriculture technologies and quality control/management practices to build and enhance the entire vegetable production chain in China that will also be utilizing large-scale, mechanization and standardization. As a food-safety oriented company, around the production chain, it will be building systems that support the two-way traceability and recall capability for its products to comply with and exceed local and global food safety requirements from field to supermarket, year round.
 
 
4

 
 
While the Company is focusing on providing safe, fresh quality products that are easy to use, appetizing and nutritious, it commits not to compromise quality or harm the environment and ecosystems.
 
Current Operational Activities

We continue to meet vegetable seed breeders, producers, growers, freezers and processors in the U.S., Europe and in China but as of the date of the filing of this report, we have no binding agreement, commitment or understanding with any of them and may never have any such binding agreement, commitment or understanding with any of them in the future.

The trials for carrots in South China were complete. However, due to the cold weather in North America, Dr. Ladd could not finish the work here in United States therefore could not make the trip to China as planned. As an alternative, we went over the trial results remotely with Dr. Ladd. There were few tips identified in the discussion with her that growers could apply to improve the performance in the future trials. Also, Dr. Ladd sent us more varieties to trial for 2014-2015.

However, it still remains true that we have no binding agreement, commitment or understanding with Dr. Ladd, Integra Hybrids, LLC or any of their affiliates to develop the carrot market in China or undertake any other activities other than set forth above. There is no assurance that we will ever have a binding agreement, commitment or understanding with Dr. Ladd, Integra Hybrids, LLC or any of their affiliates or that we will develop the carrot market in China or undertake any other similar activities.

Mr. Huang and Mr. Liu visited several seed companies in Europe, including the one for which we have trialed their varieties previously. This company is regarded by others in the industry as having a strong research and development platform and well-known breeders. We plan to commence a discussion with them about a potential a strategic partnership in which they provide technologies and seeds according to our requests, and we develop markets in both China and U.S. We are currently negotiating detailed terms. However, there is no assurance that we will ever have a binding agreement or commitment with this company.

Mr. Huang and Mr. Liu have also met two, out of many, Chinese agriculture companies that show interests in collaborating with A & C United Agriculture Developing Inc. in order to build/enhance vegetable production chain. We have verbally agreed to work on with them and are currently working on some of the prerequisites prior to the discussion of agreement terms. However, there is no assurance that we will ever have a binding agreement, commitment or understanding with these companies.

In addition, our Stockholm subsidiary has purchased seeds earlier in order to lock a discounted price. Currently Mr. Huang is working with the local regulatory departments and authorities to prepare for exporting and selling seeds in China which we hope to commence in the next fiscal quarter.

Due to the U.S. shipping carrier’s mistake, our inbound shipment failed to arrive in Illinois when we had anticipated and therefore we could not ship the product by June 30, 2014 as planned. However this sale has completed on July 22, 2014.
 
 
5

 

During the next 12 months, we anticipate engaging in the following operational activities, although we may vary our plans depending upon operational conditions:
 
Milestone Table

Event
 
Actions
 
Anticipated Time Frame
 
Total estimated cost
 
                 
Continue to work with the European seeds company on a potential partnership agreement
 
Ad hoc business trips
 
By 12/31/2014
 
$
5,000
 
Continue to work with the Chinese companies on a potential collaboration
 
Ad hoc business trips
 
By 12/31/2014
 
5,000
 
Obtain DTC Eligibility
 
Hire consulting firm 
Prepare required documents
File application
 
By 9/30/2014
 
$
15,000
 
Continue trials of carrots and other varieties obtained from Europe companies.
     
By 6/30/2015
 
$
10,000
 
 
As described in “Liquidity and Capital Resources,” below, we currently have sufficient cash resources to fund all of the anticipated obligations in the chart as well as those set forth in the chart above.
 
Emerging Growth Company
 
We are an emerging growth company under the JOBS Act. We shall continue to be deemed an emerging growth company until the earliest of:
 
(a)
the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;
 
(b)
the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective IPO registration statement;
 
(c)
 the date on which such issuer has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or
 
(d)
 the date on which such issuer is deemed to be a ‘large accelerated filer’, as defined in section 240.12b-2 of title 17, Code of Federal Regulations, or any successor thereto.’.
 
As an emerging growth company we are exempt from Section 404(b) of Sarbanes Oxley. Section 404(a) requires Issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures. Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting. As an emerging growth company we are also exempt from Section 14A (a) and (b) of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes. These exemptions are also available to us as a Smaller Reporting Company.
 
We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the Jobs Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.
 
 
6

 

Results of Operations

For the fiscal quarter ended June 30, 2014 vs. 2013

Revenue
 
There was $ 0.00 and $ 9,000 revenue generated for the fiscal quarter ended June 30, 2014 and 2013. This is due to some of the inbound shipments not being received by June 30, 2014 as planned, and we decided to postpone the outbound shipment until we got all the seeds ready. However, this sale, meant for completion in this quarter, actually completed at July 22, 2014. We expect an increase in total revenue for the next fiscal quarter as a result of this unanticipated delay in completing the sale this quarter.
 
Cost of Revenue
 
There was $ 0.00 and $ 5,834 cost of goods sold incurred for the fiscal quarter ended June 30, 2014 and 2013 respectively. The cost of goods sold declined due to the decreasing of revenue.

Expense
 
Our expenses consist of selling, general and administrative expenses and depreciation expense as follows:

For the fiscal quarter ended June 30, 2014 and 2013, there was a total of $ 41,368 and $ 65,043 operating expenses respectively. $ 8,060 out of the total $ 41,368 was professional service fee, and $25,330 out of the total $ 65,043 was professional service fee related to expenses associated with being an SEC reporting company. The decrease was primarily due to not incurring expenses in connection with going public in this quarter 2014 which were incurred in the quarter in 2013.
 
For the cumulative period from February 7, 2011 (Date of Inception) to June 30, 2014, there was a total of $579,134 operating expenses.
 
   
Three Months Ended
June 30,
2014
   
Three Months Ended
June 30,
2013
   
Cumulative from
February 7, 2011 (Date of Inception)
 Through
June 30,
2014
 
Expense
                 
Bank Service Charges
    25       17       1,031  
Business Licenses and Permits
    307       844       7,138  
Meals and Entertainment
    1,570       2,402       15,145  
Membership fee
    -       -       505  
Office Supplies
    -       15       6,038  
Postage and Delivery
    75       -       809  
Printing and Reproduction
    -       -       135  
Auto and Truck Expenses
    97       909       1,494  
Payroll Expenses
    16,659       16,148       97,975  
Conference & Meeting
    -       -       2,347  
Interest Expense
    32       32       189  
Utilities
    -       -       41  
Website Expense
    -       -       2,181  
Telephone Expense
    320       -       400  
Depreciation Expense
    1,360       1,360       8,162  
Insurance Expense
    3,696       394       8,867  
Marketing and Promotion Expense
    -       1,804       3,602  
Travel Expense
    6,438       15,107       71,686  
Professional Fees
                       
Accounting
    310       -       71,027  
Consulting Fees
    -       13,000       114,660  
Legal Fee
    6,000       10,800       133,750  
Transfer Agent fees
    445       -       3,295  
SEC & EDGAR Filling Fee
    1,305       1,530       13,062  
Professional Fees
    8,060       25,330       335,794  
Software
    -       -       394  
Rent Expense
    507       681       12,980  
Repairs and Maintenance
    963       -       963  
Training & Education Expense
    480       -       480  
Medical Expenses
    778       -       778  
Total Expense
    41,368       65,043       579,134  

 
7

 
 
Income & Operation Taxes
 
We are subject to income taxes in the U.S.
 
We paid no income taxes in USA for the fiscal quarter ended June 30, 2014 due to the net operation loss in the USA.
 
Net Loss
 
Our net loss decreased to $ 41,368 and $ 61,877 for the fiscal quarter ended June 30, 2014 and 2013 primarily due to not having expenses for going public in the fiscal quarter ended June 30, 2014.

For the nine month period ended June 30, 2014 vs. 2013

Revenue
 
There was $ 361,870 and $ 623,144 revenue generated for the nine month period ended June 30, 2014 and 2013. This decline is primarily due to decreased market preferences for some of the varieties of our vegetables and tougher competition in the sale of certain competing vegetables from other companies located in China.
 
There was $ 324,538 and $ 573,563 cost of goods sold incurred for the nine month period ended June 30, 2014 and 2013 respectively. The cost of goods sold declined due to the decrease of revenue.
 
Expense
 
Our expenses consist of selling, general and administrative expenses and depreciation expense as follows:
 
For the nine month period ended June 30, 2014 and 2013, there was a total of $ 192,098 and $ 175,134 operating expenses respectively. $88,058 out of the total $ 192,098 was professional service fee, and $ 95,567 out of the total $175,134 was professional service fee related to expenses associated with being an SEC reporting company. The decrease was primarily due to not incurring expenses in connection with going public in this period 2014 which were incurred in the same period in 2013.
 
 
8

 
 
For the cumulative period from February 7, 2011 (Date of Inception) to June 30, 2014, there was a total of $ 579,134 operating expenses.
 
   
Nine Months Ended
June 30,
2014
   
Nine Months Ended
June 30,
2013
   
Cumulative from
February 7, 2011 (Date of Inception)
 Through
June 30, 2014
 
Expense
                 
Bank Service Charges
    326       104       1,031  
Business Licenses and Permits
    1,222       944       7,138  
Meals and Entertainment
    8,243       4,592       15,145  
Membership fee
    -       -       505  
Office Supplies
    587       63       6,038  
Postage and Delivery
    312       347       809  
Printing and Reproduction
    -       -       135  
Auto and Truck Expenses
    342       955       1,494  
Payroll Expenses
    48,996       32,943       97,975  
Conference & Meeting
            1,987       2,347  
Interest Expense
    95       -       189  
Utilities
    -       41       41  
Website Expense
    96       2,085       2,181  
Telephone Expense
    320       80       400  
Depreciation Expense
    4,081       2,721       8,162  
Insurance Expense
    7,622       860       8,867  
Marketing and Promotion Expense
    1,798       1,804       3,602  
Travel Expense
    26,078       22,214       71,686  
Professional Fees
                       
Accounting
    21,027       25,000       71,027  
Consulting Fees
    50,000       38,160       114,660  
Legal Fee
    13,500       26,800       133,750  
Transfer Agent fees
    945       1,025       3,295  
SEC & EDGAR Filling Fee
    2,586       4,582       13,062  
Professional Fees
    88,058       95,567       335,794  
Software
    -       74       394  
Rent Expense
    1,700       7,753       12,980  
Repairs and Maintenance
    963       -       963  
Training & Education Expense
    480       -       480  
Medical Expenses
    778       -       778  
Total Expense
    192,098       175,134       579,134  

 
9

 

Income & Operation Taxes
 
We are subject to income taxes in the U.S.
 
We paid no income taxes in USA for the nine month period ended June 30, 2014 due to the net operation loss in the USA.
 
Net Loss
 
We incurred net losses of $ 154,766 and $ 125,553 for the nine month period ended June 30, 2014 and 2013 primarily due to not having expenses for going public in the nine month period ended June 30, 2014.
 
Liquidity and Capital Resources
 
   
At June 30
   
At June 30
   
At September 30
 
   
2014
   
2013
   
2013
 
                   
Current Ratio
    24.28       17.13       94.48  
Cash
  $ 79,761     $ 380,270     $ 384,675  
Working Capital
  $ 462,626     $ 578,531     $ 570,131  
Total Assets
  $ 501,733     $ 616,334     $ 599,639  
Total Liabilities
  $ 33,667     $ 35,990     $ 26,788  
                         
Total Equity
  $ 468,066     $ 580,344     $ 572,851  
                         
Total Debt/Equity
    0.07       0.06       0.05  
___________
* Current Ratio = Current Assets /Current Liabilities.
** Total Debt / Equity = Total Liabilities / Total Shareholders’ Equity.
*** Working Capital = Current Assets - Current Liabilities.
 
 
10

 
 
The Company had cash and cash equivalents of $ 79,761 and $ 380,270 at fiscal quarter ended June 30, 2014 and 2013 and the working capital of $ 462,626 and $ 578,531 with liabilities of $ 33,667 and $ 35,990.
 
As of June 30, 2014, we have $ 79,761 in cash, and $ 108,085 account receivable. As shown in the Milestone Table above, we need a minimum of approximately $35,000 in funds to finance our business in the next 12 months. This amount does not include all our costs which we will incur irrespective of our business development activities, including bank service fees and those costs associated with SEC requirements associated with staying public, estimated to be approximately $70,000 annually. Accordingly, we estimate our total need for funds for operations in the next 12 months is $120,000. Accordingly, as we anticipate an average monthly burn rate of no more than $10,000 during the next 12 months, we believe we have sufficient cash available, from cash on hand and collection of receivables, to fund all of our operational and SEC filing needs during the next 12 months.
 
Item 3. Quantitative and Qualitative Disclosure about Market Risk
 
Not applicable.
 
Item 4. Controls and Procedures.
 
Evaluation of Disclosure Controls and Procedures
 
The Company has established disclosure controls and procedures to ensure that information required to be disclosed in this quarterly report on Form 10-Q was properly recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. The Company’s controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers to allow timely decisions regarding required disclosure.

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) at June 30, 2014 based on the evaluation of these controls and procedures required by paragraph (b) of Rule 13a-15 or Rule 15d-15 under the Exchange Act. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer/Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer/Chief Financial Officer concluded that, at June 30, 2014, our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company's internal control over financial reporting that occurred during the Company's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
 
 
11

 
 
PART II — OTHER INFORMATION
 
Item 1. Legal Proceedings.
 
None.
 
Item 2. Unregistered Sales of Equity Securities and Use of Proceed.

None

Item 3. Defaults Upon Senior Securities.

None.
 
Item 4. Mine Safety Disclosure.

Not applicable.

Item 5. Other Information.
 
Not applicable.
 
 
12

 
 
Item 6. Exhibits.
 
(a)
Exhibits.

Exhibit No.
 
Document Description
     
31.1
 
CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
     
32.1 *
 
CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002
 
Exhibit 101
 
Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.**
     
101.INS
 
XBRL Instance Document**
     
101.SCH
 
XBRL Taxonomy Extension Schema Document**
     
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase Document**
     
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document**
     
101.LAB
 
XBRL Taxonomy Extension Label Linkbase Document**
     
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase Document**
____________
* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
 
13

 
 
SIGNATURES
 
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

A & C United Agriculture Developing Inc.,
a Nevada corporation

Title
 
Name
 
Date
 
Signature
             
Principal Executive Officer
 
Yidan (Andy) Liu
 
August 4, 2014
 
/s/ Yidan (Andy) Liu

In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
 
SIGNATURE
 
NAME
 
TITLE
 
DATE
             
/s/ Yidan (Andy) Liu
 
Yidan (Andy) Liu
 
Principal Executive Officer,
 
August 4, 2014
       
Principal Financial Officer and
Principal Accounting Officer
   
 
 
14

 
 
EXHIBIT INDEX
 
Exhibit No.
 
Document Description
     
31.1
 
CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
     
32.1 *
 
CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002
 
Exhibit 101
 
Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.**
     
101.INS
 
XBRL Instance Document**
     
101.SCH
 
XBRL Taxonomy Extension Schema Document**
     
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase Document**
     
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document**
     
101.LAB
 
XBRL Taxonomy Extension Label Linkbase Document**
     
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase Document**
_________________
* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
 
15