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Asia Pacific Boiler Corp.
(fka Panama Dreaming Inc.) 
Notes to the Unaudited Consolidated Financial Statements

NOTE 1.  BASIS OF PRESENTATION

 

Asia Pacific Boiler Corp. (fka Panama Dreaming Inc.) (“Asia Pacific” or the “Company” or “we” or “us”), have been prepared in accordance with accounting principles generally accepted in the United States of America. Asia Pacific was incorporated in Nevada on June 23, 2011 for the purpose of offering real estate consulting services to persons located in North America who are interested in investing in real estate located in Panama. 

 

On November 5, 2012, the Company filed Articles of Merger with the Nevada Secretary of State to change its name from “Panama Dreaming Inc.” to “Asia Pacific Boiler Corporation”, to be effected by way of a merger with its wholly-owned subsidiary Asia Pacific Boiler Corporation, which was created solely for the name change.

 

Also on November 5, 2012, the Company filed a Certificate of Change with the Nevada Secretary of State to give effect to a forward split of its authorized, issued and outstanding shares of common stock on a 4 new for 1 old basis and, consequently, the Company’s authorized common stock increased from 100,000,000 to 400,000,000 shares, and the Company’s issued and outstanding common shares increased from 7,950,000 to 31,800,000, all with a par value of $0.00001. The Company’s preferred stock remained unchanged with 100,000,000 preferred shares authorized, par value $0.00001, and no preferred shares issued or outstanding.

 

The forward split and name change became effective with the Over-the-Counter Bulletin Board at the opening of trading on November 9, 2012.

 

On November 6, 2014, the Company changed the fiscal year end to December 31 from June 30. This Form and the 10-K for the period ended December 31, 2014 will cover the transition period.

 

Merge with Million Place Investments Ltd.

 

On August 5, 2014, we entered into and closed a share exchange agreement with Million Place Investments Ltd. (“Million Place”) and the shareholders of Million Place.  Pursuant to the terms of the share exchange agreement, we agreed to acquire all 10,000 of the issued and outstanding shares of Million Place’s common stock in exchange for the issuance by our company of 7,500,000 shares of our common stock to the shareholders of Million Place. As a result of these transactions, Million Place has become our wholly owned subsidiary. We would have 39,300,000 issued and outstanding common shares upon issuance of the 7,500,000 shares of common stock. As September 30, 2014, we have authorized but have not yet issued the 7,500,000 shares of common stock.

 

 

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Business of Million Place Investments Ltd.

 

Million Place was incorporated on April 30, 2012 under the laws of the British Virgin Island (BVI) to engage in any lawful corporate undertaking, including but not limited to mergers and acquisitions. 

 

Pursuant to a Share Tranfer Agreement dated December 3, 2012, Million Place purchased from John Gong, 14.7 million shares at Renminbi (RMB) 1.00 per ordinary share (approximately $2,227,273 in the aggregate) in the share capital of Inner Mongolia Yulong Pump Production Company Limited (Yulong Pump) thereby acquiring an equity interest of 49% in Yulong Pump.  Yulong Pump is a China foreign joint venture corporation engaged in the sale and manufacture of industrial equipment, and in the acquisition, development and exploitation of residential, commercial, and industrial real estate assets.  The business of Yulong Pump is further described below.  In acquiring a 49% interest in Yulong Pump, Million Place became the deemed cooperative foreign joint venture partner of Yulong Pump.

 

Pursuant to PRC law, the partners in a cooperative foreign joint venture are permitted to share profits on an agreed basis and not necessarily in proportion to capital contribution.  The joint venture is not required to be a distinct legal entity from its partners and management and financial control of the foreign joint venture may be determined at the discretion of the partners by mutual agreement provided that, upon termination of the joint venture, all fixed assets will become the property of the Chinese participant in the joint venture. Pursuant to the December 3, 2012 Share Transfer Agreement. Million Place was entitled to appoint the board of directors of Yulong Pump. Further, absent an agreement between Million Place and Yulong Pump, the articles of association of Yulong Pump provide for distribution of dividends amongst its shareholder in proportion to the number of shares held by them.  

 

On April 25, 2014 Million Place entered into a Share Sale & Purchase Agreement with Qin Xiu Shan, our President,Chief Executive Officer and (now) Director, whereby Mr. Qin, who is the beneficial owner of a 51% interest in Yulong Pump, granted to Million Place the option to purchase an additional 2% equity interest in Yulong Pump (being 600,000 shares) for the aggregate purchase price of RMB 1.00 per share or approximately $96,278 in the aggregate.  The option is perpetual and without provision for termination.  With its acquisition of a 49% equity interest together with an option to purchase an aggregate 51% equity interest, Million Place is seeking to establish a majority equity stake in Yulong Pump. 

 

On May 22, 2014 Million Place entered into a Joint Venture Contract with Yulong Pump pursuant to which the companies intend to jointly engage in the manufacture of industrial boilers, the provision of consultancy services for the design of boiler systems, the manufacture of industrial water pumps and accessories, and the acquisition and development of real estate.  Pursuant to the Joint Venture Contract, Million Place will be solely responsible all operations and management of the joint venture and shall have exclusive authority to enter into agreements on behalf of the joint venture.  Million Place will in turn receive compensation for services it provides to the joint venture and shall be entitled to a 49% share of profit generated by the joint venture.  Both Million Place and Yulong Pump shall be entitled to engage in business that is competitive with the joint venture.  Pursuant to the Joint Venture Contract, Yulong Pump has allocated its 143,106 square foot commercial property located in Wulateqianqi, Mongolia to the joint venture operation.  That property is currently under construction and is further described below.  Additional assets or operations may be allocated to the joint venture on an ongoing basis. 

 

 

 

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Business of Inner Mongolia Yulong Pump Production Company Limited

 

Inner Mongolia Yulong Pump Production Company Limited (“Yulong Pump”) was incorporated on October 6, 1998 under the laws of the Peoples Republic of China to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.  

 

In 1998, Yulong Pump acquired land use rights in Wuchuan, Inner Mongolia, for a total of RMB 799,000 ($131,985) for the purposes of establishing a manufacturing facility where, from 1998 until 2008, Yulong Pump was engaged in the manufacture of industrial water pumps for a variety of applications.  In 2008, Yulong Pump ceased its water pump manufacturing activities due to a decrease in demand for its products and increasing obsolescence of its manufacturing infrastructure.  The land use rights for the Wuchuan property expire in 2046 and are eligble for renewal subject to additional costs.  The Wuchuan property, is located in the city centre of Wuchuan, a suburb of Hohhot.  Yulong pump intends to explore the potential for commercial development of these lands. 

 

Since the termination of its water pump manufacturing operations, Yulong Pump has engaged in the identification and acquisition of other industrial manufacturing assets, and in the acquisition, development and exploitation of residential, commercial, and industrial real estate assets.

 

In 2008, Yulong Pump transformed itself from a local resident China company to a foreign joint venture company. As a result, the Company has become an entity with the status of a foreign joint venture company with registered capital of RMB￥  30 million (approximately USD$4,839,181), which consists of 30 million shares of authorized, issued and outstanding voting common stock with a par value of RMB ￥1.0 per share (USD$0.16).

 

In 2013, Yulong Pump applied to the Foreign Investment Committee of Inner Mongolia Autonomous Region to raise the registered capital from Rmb 30 million to Rmb 600 million.(approximately USD$96,783,624).  This was approved in November 2013. 

 

During the year 2013, Yulong Pump raised RMB ￥188,355,325 (USD$31,114,083) as a contribution from its president and CEO, Qin Xiu San.

 

On August 5, 2013 Yulong Pump entered into Real Estate Sales Contracts (Lease Agreements) with WulateqianqiHua Yuan Real Estate Limited Company pursuant to which Yulong Pump acquired the land use rights, expiring on September 15, 2080, to the third, fourth and fifth floors of a 6 story commercial building under development and located in Wulanteqianqi, Mongolia, China.  The leasehold area of the property is approximately 143,106 square feet.  Yulong pump paid RMB 188,355,325 (approximately USD $31,114,000) in consideration of the land use rights.  The property is under construction with completion anticipated by Spring of 2015.    The Wulateqianqi property was subsequently allocated to the joint venture between Million Place and Yulong Pump pursuant to the Joint Venture Agreement dated May 22, 2014.  Million Place is therefore responsible for the administration and management of the property and entitled to receive 49% of the joint venture proceeds.  The parties intend to lease the facility upon completion of construction and a potential tenant has been identified. 

 

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On February 1, 2014, Yulong Pump entered into a Warranty Deed Agreement with Qin Xiu San pursuant to which Mr. Qin has agreed to transfer to Yulong Pump by July 31, 2014 all outstanding securities of Hohhot Devotion Boiler General Company Private Limited (“Hohhot Devotion Boiler”).  The Warranty Deed Agreement does not provide for financial consideration.  Hohhot Devotion Boiler is a PRC company with approximately 300 employees engaged in the manufacture and sale of industrial boilers, and in real estate development in the Hohhot region of Inner Mongolia, China.  It is the largest manufacturer of boilers in Inner Mongolia.  Together, Devotion Boiler and Yulong Pump are concurrently planning to begin construction in March 2014 of a new state of the art boiler manufacturing factory with a planned investment of approximately USD$250 million. The companies intend to commence staffing and training of the new boiler plant employees concurrently with the start of construction. Yulong Pump and Devotion Boiler also intend to rezone for commercial and residential use industrial land owned by Devotion Boiler in Inner Mongolia.  As at the date of this report, the acquisition of Devotion Boiler by Yulong Pump remains incomplete, and there is no guarantee that any such acquisition will be completed.  Further, there is no guarantee that Yulong Pump or Devotion Boiler will successfully financing the construction of their planned boiler facility.

 

Through our wholly owned subsidiary, Million Place, together with its joint venture partner, Yulong Pump, we adopted a multi-pronged business plan involving the acquisition, development and exploitation of residential, commercial, and industrial real estate assets, the manufacture and sale of industrial water pumps and accessories and industrial boilers, and the provision of consultancy services for the design of industrial boiler systems. 

 

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information required to be included in a complete set of financial statements in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2014. The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes included in the Company’s 2013 Annual Report filed with the SEC.

 

 

 

 

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NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Business Combinations

We evaluate each investment in a business to determine if we should account for the investment as a cost-basis investment, an equity investment, a business combination or a common control transaction. An investment in which we do not have a controlling interest and which we are not the primary beneficiary but where we have the ability to exert significant influence is accounted for under the equity method of accounting. For those investments that we account for in accordance ASC 805, Business Combinations, we record the assets acquired and liabilities assumed at our estimate of their fair values on the date of the business combination. Our assessment of the estimated fair value of each of these can have a material effect on our reported results as intangible assets are amortized over various lives. Furthermore, a change in the estimated fair value of an asset or liability often has a direct impact on the amount to recognize as goodwill, which is not amortized. Often determining the fair value of these assets and liabilities assumed requires an assessment of the expected use of the asset, the expected cost to extinguish a liability or our expectations related to the timing and the successful completion of the integration of the business. Such estimates are inherently difficult and subjective and can have a material impact on our financial statements. We account for business combinations under a method similar to the pooling-of-interest method ("Pooling-of-Interest") when the combination is with a business under common control with us by our majority shareholder.

Basic and Diluted Earnings (Loss) Per Share.     

 

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an "as if converted" basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the three and nine months ended September 30, 2014, there were no potentially dilutive securities outstanding.

 

Cash and Cash Equivalents.     

 

Asia Pacific considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of September 30, 2014, there were no cash equivalents. We maintain a bank account in Hong Kong that principally consists of cash.

 

F-8

 

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Income Taxes. 

 

The Company accounts for income taxes under the Financial Accounting Standards Board of Financial Accounting Standard ASC 740, "Accounting for Income Taxes." Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. There was no current or deferred income tax expense or benefits for the periods ending September 30, 2014 and 2013.

 

Recently Issued Accounting Pronouncements.     

 

In June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders’ equity. The amendments in ASU 2014-10 will effective prospectively for annual reporting periods begin after December 15, 2014, and interim periods within those annual periods. However, early adoption is permitted. The Company adopted ASU 2014-10 during the nine months ended September 30, 2014, thereby no longer presenting or disclosing any information required by Topic 915.

 

In August 2014, the FASB issued the FASB Accounting Standards Update No. 2014-15 “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”).

 

In connection with preparing financial statements for each annual and interim reporting period, an entity’s management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued (or at the date that the financial statements are available to be issued when applicable). Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). The term probable is used consistently with its use in Topic 450, Contingencies.

 

 

 

 

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When management identifies conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern, management should consider whether its plans that are intended to mitigate those relevant conditions or events will alleviate the substantial doubt. The mitigating effect of management’s plans should be considered only to the extent that (1) it is probable that the plans will be effectively implemented and, if so, (2) it is probable that the plans will mitigate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern.

 

If conditions or events raise substantial doubt about an entity’s ability to continue as a going concern, but the substantial doubt is alleviated as a result of consideration of management’s plans, the entity should disclose information that enables users of the financial statements to understand all of the following (or refer to similar information disclosed elsewhere in the footnotes):

 

a.     Principal conditions or events that raised substantial doubt about the entity’s ability to continue as a going concern (before consideration of management’s plans)

b.     Management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations

c.     Management’s plans that alleviated substantial doubt about the entity’s ability to continue as a going concern.

 

If conditions or events raise substantial doubt about an entity’s ability to continue as a going concern, and substantial doubt is not alleviated after consideration of management’s plans, an entity should include a statement in the footnotes indicating that there is substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or available to be issued). Additionally, the entity should disclose information that enables users of the financial statements to understand all of the following:

 

a.     Principal conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern

b.     Management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations

c.     Management’s plans that are intended to mitigate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern.

 

The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying financial statements.

 

 

 

 

 

F-10

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NOTE 3.  GOING CONCERN

These financial statements have been prepared on a going concern basis, which implies Asia Pacific will continue to meet its obligations and continue its operations for the next fiscal year. Realization value may be substantially different from carrying values as shown and these financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should Asian Pacific be unable to continue as a going concern. As of September 30, 2014, Asia Pacific has not generated revenues and has accumulated losses of $839,631 since inception. The continuation of Asia Pacific as a going concern is dependent upon the continued financial support from its shareholders, the ability of Asia Pacific to obtain necessary equity financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Asia Pacific’s ability to continue as a going concern.

NOTE 4.  INVESTMENT

The Company, through Million Place, has a 49% interest in Yulong Pump, a pump and boiler production company in Inner Mongolia since December 1, 2012. We use the equity method to account for investments in Yulong Pump; accordingly, our results of operations include the Company’s proportionate share of the net income or loss of Yulong Pump. Our judgment regarding the level of influence over each equity method investment includes considering key factors such as our ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions.

 

As of September 30 2014 and December 31, 2013, the carrying value of the Company’s investment in Yulong Pump amounted to $2,084,175 and $2,146,899, respectively. Investment loss from Yulong Pump amounted $7,454 and $17,744 for the three months ended September 30, 2014 and 2013, respectively. Investment loss from Yulong Pump amounted $62,725 and $37,906 for the nine months ended September 30, 2014 and 2013, respectively.

 

NOTE 5.  RELATED PARTY TRANSACTIONS     

As of September 30, 2014 and December 31, 2013, other receivable from a related party amounted to $1,425,000 and $0, respectively. Other receivable from a related party is money lent to Hohhot Devotion Boiler and is interest free, due on demand, and with no collateral.

 

As of September 30, 2014 and December 31, 2013, advances from the Company’s chairman, chief executive officer and director, John Gong, amounted to $61,239 and $31,797, respectively. The advances are payments made by John Gong to cover expenses related to its operations. The advance is non-interest bearing, and payable on demand. 

 

As of September 30, 2014 and December 31, 2013, accounts payable to a related party, G Capital Limited, amounted $448,877 and $155,808, respectively. The payable is for providing management services to the Company. John Gong is the CEO and a shareholder of G Capital Limited.

 

 

F-11

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On August 5, 2014, the company acquired Million Place, a related party under common control. Accordingly, in accordance with ASC Topic 805, with respect to business combination for transactions between entities ender common control, the merger has been accounted for using Pooling-of-Interest with no adjustment to the historical basis of the Million Place or the company. The Balance sheets, statement of operations and statement of cash flows for Million Place have therefore been included in all period presented as if we had been combined at all times the entities were under common control.

 

NOTE 6. – SHARES TO BE ISSUED

  

On April 2, 2014, the Company received $230,000 and agreed to issue shares pursuant to Regulation S of the Securities Act for $1.50 per share.

 

On April 4, 2014, the Company received $140,000 and agreed to issue shares pursuant to Regulation S of the Securities Act for $1.50 per share.

 

On April 4, 2014, the Company received $876,311 and agreed to issue shares pursuant to Regulation S of the Securities Act for $1.50 per share. $311 of the proceeds was booked as shareholder’s contribution and $876,000 was booked as shares to be issued as of June 30, 2014.

 

On April 7, 2014, the Company received $15,000 and agreed to issue shares pursuant to Regulation S of the Securities Act for $1.50 per share.

 

On April 7, 2014, the Company received $144,000 and agreed to issue shares pursuant to Regulation S of the Securities Act for $1.50 per share.

 

On April 17, 2014, the Company received $60,000 and agreed to issue shares pursuant to Regulation S of the Securities Act for $1.50 per share.

 

On May 2, 2014, the Company received $15,000 and agreed to issue shares pursuant to Regulation S of the Securities Act for $1.50 per share.

 

On May 19, 2014, the Company received $15,000 and agreed to issue shares pursuant to Regulation S of the Securities Act for $1.50 per share.

 

On May 21, 2014, the Company received $19,600 and agreed to issue shares pursuant to Regulation S of the Securities Act for $1.50 per share.

 

On May 21, 2014, the Company received $60,000 and agreed to issue shares pursuant to Regulation S of the Securities Act for $1.50 per share.

 

 

 

 

F-12

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On August 5, 2014, the Company entered into and closed a share exchange agreement with Million Place and the shareholders of Million Place.  Pursuant to the terms of the share exchange agreement, the company agreed to acquire all 10,000 of the issued and outstanding shares of Million Place’s common stock in exchange for the issuance by the company of 7,500,000 shares of common stock to the shareholders of Million Place. As of September 30, 2014, the company have authorized but have not issued the 7,500,000 shares. So the Company has booked $75 shares to be issued relating to this transaction as of September 30, 2014 and the shares to be issued is $1,564,575 as of September 30, 2014.

 

NOTE 7. - STOCKHOLDER’S EQUITY

  

On November 5, 2012, we filed a Certificate of Change with the Nevada Secretary of State to increase our authorized capital from 100,000,000 common shares to 400,000,000 common shares. On the same date, we effected a forward split of our authorized, issued and outstanding shares of common stock on a four for one (4:1) basis. All prior share amounts have been restated retroactively.

 

On April 4, 2014, the Company received $876,311 and agreed to issue shares pursuant to Regulation S of the Securities Act for $1.50 per share. $311 of the proceeds were booked as shareholder’s contribution and $876,000 were booked as shares to be issued as of June 30, 2014.

 

On August 5, 2014, the Company entered into and closed a share exchange agreement with Million Place and the shareholders of Million Place.  Pursuant to the terms of the share exchange agreement, the company agreed to acquire all 10,000 of the issued and outstanding shares of Million Place’s common stock in exchange for the issuance by the company of 7,500,000 shares of common stock to the shareholders of Million Place. As a result of these transactions, Million Place has become our wholly owned subsidiary.  Because the company and Million Place are under common control, it is required under GAAP to account for the acquisition in a manner similar to the pooling of interest method of accounting. Under this method of accounting, the Company reflected in its balance sheet the assets of Million Place at the company’s historical carryover basis instead of reflecting the fair market value of assets and liabilities. The Company also retrospectively recast its financial statements to include the operating results of Million Place from the date these assets were originally acquired by the company (the dates upon which common control began).

 

On April 25, 2014, Million Place entered into a share sale and purchase agreement with Qin Xiu Shan, our former president, chief executive officer and director, whereby Qin Xiu Shan, who is the beneficial owner of a 51% interest in Yulong Pump, granted to Million Place the option to purchase an additional 2% equity interest in Yulong Pump (being 600,000 shares) for the aggregate purchase price of RMB 1.00 per share or approximately $96,278 in the aggregate. The option is perpetual and without provision for termination. With its acquisition of a 49% equity interest together with an option to purchase an aggregate 51% equity interest, Million Place is seeking to establish a majority equity stake in Yulong Pump. As of the report date, Million Place has not executed this option.

 

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NOTE 8. - INCOME TAXES

    
The income tax expense in the consolidated statements of operations consisted of:

  

 

United States

 

Asia Pacific is incorporated in United States, and is subject to corporate income tax rate of 34%.

 

As of September 30, 2014, the company has net operating losses of approximately $839,631 that begin expiring in 2031. The potential benefit of the company’s net operating losses has not been recognized in these financial statements because the company cannot be assured it is more likely-than-not it will utilize the net operating losses carried forward.

 

 

NOTE 9.  SUBSEQENT EVENTS

 

On November 6, 2014, the company changed the fiscal year end to December 31 from June 30. This Form and 10-K for the period ended December 31, 2014 will cover the transition period.

 

 

 

 

 

 

 

 

 

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

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to “common stock” refer to shares of our common stock.

As used in this quarterly report, the terms “we”, “us”, “our”, and “our company” mean Asia Pacific Boiler Corporation, unless otherwise indicated.

Corporate History

We were incorporated in Nevada on June 23, 2011, to engage in the business of real estate investment consulting with respect to properties located in Panama. We have not started operations. We have not generated revenues from operations, but must be considered a development stage business. Our statutory registered agent in Nevada is National Registered Agents Inc. of Nevada located at 1000 East William Street, Suite 204, Carson City, Nevada 89701. Our business office is Unit 10 & 11, 26th Floor, Lippo Center, Tower 2, 89 Queensway Admiralty, Hong Kong.

We are a company with no operations. As of the date hereof, we have not been successful in our real estate investment consulting operations. Historically, we have been able to raise a limited amount of capital through private placements of our equity stock, but we are uncertain about our continued ability to raise funds privately.

 

 

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On November 5, 2012, we filed Articles of Merger with the Nevada Secretary of State to change our name from “Panama Dreaming Inc.” to “Asia Pacific Boiler Corporation”, to be effected by way of a merger with our wholly-owned subsidiary Asia Pacific Boiler Corporation, which was created solely for the name change. As of the date of this filing, the company did not close the merger.

Also on November 5, 2012, we filed a Certificate of Change with the Nevada Secretary of State to give effect to a forward split of our authorized, issued and outstanding shares of common stock on a 4 new for 1 old basis and, consequently, our authorized capital increased from 100,000,000 to 400,000,000 shares of common stock and our issued and outstanding shares of common stock increased from 7,950,000 to 31,800,000, all with a par value of $0.00001. Our preferred shares remained unchanged.

The forward split and name change became effective with the Over-the-Counter Bulletin Board at the opening of trading on November 9, 2012. Our CUSIP number is 04521K 107.

Previously we intended to offer real estate consulting services through our website to persons located in North America and around the world, who were interested in investing in real estate located in Panama. We intended to cater to the newly located or inexperienced real estate investors who did not have a preexisting relationship with a real estate agent in Panama. Our plan was to assist the investor by locating qualified local real estate agents in Panama who would assist with the issues relating to the purchase of real property in Panama. For providing such service, we were to be paid a fee by our customer once the purchase was made.

Effective September 24, 2012, Miguel Miranda resigned as president, secretary, treasurer and a director of our company and we appointed John Gong as president, chief executive officer, secretary, chief financial officer, treasurer and a director of our company. The resignation of Mr. Miranda was not the result of any disagreements with our company regarding our operations, policies, practices or otherwise.

Our management has been analyzing the various alternatives available to our company to ensure our survival and to preserve our shareholder's investment in our common shares. This analysis has included sourcing additional forms of financing to continue our business as is, or mergers and/or acquisitions. At this stage in our operations, we believe either course is acceptable, as our operations have not been profitable and our future prospects for our business are not good without further financing.

We are focusing our preliminary merger/acquisition activities on potential business opportunities with established business entities for the merger of a target business with our company. In certain instances, a target business may wish to become a subsidiary of our company or may wish to contribute assets to our company rather than merge. We anticipate that any new acquisition or business opportunities by our company will require additional financing. There can be no assurance, however, that we will be able to acquire the financing necessary to enable us to pursue our plan of operation. If our company requires additional financing and we are unable to acquire such funds, our business may fail.

 

 

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In implementing a structure for a particular business acquisition or opportunity, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. Upon the consummation of a transaction, it is likely that our present management will no longer be in control of our company and our existing business will close down. In addition, it is likely that our officers and directors will, as part of the terms of the acquisition transaction, resign and be replaced by one or more new officers and directors.

We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. Management believes that there are numerous firms in various industries seeking the perceived benefits of being a publicly registered corporation. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

We may seek a business opportunity with entities who have recently commenced operations, or entities who wish to utilize the public marketplace in order to raise additional capital in order to expand business development activities, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.

At this stage, we can provide no assurance that we will be able to locate compatible business opportunities, what additional financing we will require to complete a combination or merger with another business opportunity or whether the opportunity's operations will be profitable.

If we are unable to secure adequate capital to continue our business or alternatively, complete a merger or acquisition, our shareholders will lose some or all of their investment and our business will likely fail.

On August 5, 2014, we entered into and closed a share exchange agreement with Million Place Investments Ltd. (“Million Place”) and the shareholders of Million Place.  Pursuant to the terms of the share exchange agreement, we agreed to acquire all 10,000 of the issued and outstanding shares of Million Place’s common stock in exchange for the issuance by our company of 7,500,000 shares of our common stock to the shareholders of Million Place. As a result of these transactions, Million Place has become our wholly owned subsidiary. We would have 39,300,000 issued and outstanding common shares upon issuance of the 7,500,000 shares of common stock. As of September 30, 2014, we had authorized but not issued the 7,500,000 shares of common stock to the shareholders of Million Place.  The 7,500,000 shares were subsequently issued, increasing the number of our issued and outstanding common shares to 39,300,000. 

 

Million Place was incorporated on April 30, 2012 under the laws of the British Virgin Island (BVI) to engage in any lawful corporate undertaking, including but not limited to mergers and acquisitions. 

 

Pursuant to a Share Tranfer Agreement dated December 3, 2012, Million Place purchased from John Gong, 14.7 million shares at Renminbi (RMB) 1.00 per ordinary share (approximately $2,227,273 in the aggregate) in the share capital of Inner Mongolia Yulong Pump Production Company Limited (Yulong Pump) thereby acquiring an equity interest of 49% in Yulong Pump.  Yulong Pump is a China foreign joint venture corporation engaged in the sale and manufacture of industrial equipment, and in

 

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the acquisition, development and exploitation of residential, commercial, and industrial real estate assets.  The business of Yulong Pump is further described below.  In acquiring a 49% interest in Yulong Pump, Million Place became the deemed cooperative foreign joint venture partner of Yulong Pump.

 

Pursuant to PRC law, the partners in a cooperative foreign joint venture are permitted to share profits on an agreed basis and not necessarily in proportion to capital contribution.  The joint venture is not required to be a distinct legal entity from its partners and management and financial control of the foreign joint venture may be determined at the discretion of the partners by mutual agreement provided that, upon termination of the joint venture, all fixed assets will become the property of the Chinese participant in the joint venture. Pursuant to the December 3, 2012 Share Transfer Agreement. Million Place was entitled to appoint the board of directors of Yulong Pump. Further, absent an agreement between Million Place and Yulong Pump, the articles of association of Yulong Pump provide for distribution of dividends amongst its shareholder in proportion to the number of shares held by them.  

 

On April 25, 2014 Million Place entered into a Share Sale & Purchase Agreement with Qin Xiu Shan, our President, Chief Executive Officer and (now) Director, whereby Mr. Qin, who is the beneficial owner of a 51% interest in Yulong Pump, granted to Million Place the option to purchase an additional 2% equity interest in Yulong Pump (being 600,000 shares) for the aggregate purchase price of RMB 1.00 per share or approximately $96,278 in the aggregate.  The option is perpetual and without provision for termination.  With its acquisition of a 49% equity interest together with an option to purchase an aggregate 51% equity interest, Million Place is seeking to establish a majority equity stake in Yulong Pump. 

 

On May 22, 2014 Million Place entered into a Joint Venture Contract with Yulong Pump pursuant to which the companies intend to jointly engage in the manufacture of industrial boilers, the provision of consultancy services for the design of boiler systems, the manufacture of industrial water pumps and accessories, and the acquisition and development of real estate.  Pursuant to the Joint Venture Contract, Million Place will be solely responsible all operations and management of the joint venture and shall have exclusive authority to enter into agreements on behalf of the joint venture.  Million Place will in turn receive compensation for services it provides to the joint venture and shall be entitled to a 49% share of profit generated by the joint venture.  Both Million Place and Yulong Pump shall be entitled to engage in business that is competitive with the joint venture.  Pursuant to the Joint Venture Contract, Yulong Pump has allocated its 143,106 square foot commercial property located in Wulateqianqi, Mongolia to the joint venture operation.  That property is currently under construction and is further described below.  Additional assets or operations may be allocated to the joint venture on an ongoing basis. 

 

On February 1, 2014, Yulong Pump entered into a Warranty Deed Agreement with Qin Xiu San pursuant to which Mr. Qin has agreed to transfer to Yulong Pump by July 31, 2014 all outstanding securities of Hohhot Devotion Boiler General Company Private Limited (“Hohhot Devotion Boiler”).  The Warranty Deed Agreement does not provide for financial consideration.  Hohhot Devotion Boiler is a PRC company with approximately 300 employees engaged in the manufacture and sale of industrial boilers, and in real estate development in the Hohhot region of Inner Mongolia, China.

 

 

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It is the largest manufacturer of boilers in Inner Mongolia.  Together, Devotion Boiler and Yulong Pump are concurrently planning to begin construction in March 2014 of a new state of the art boiler manufacturing factory with a planned investment of approximately USD$250 million. The companies intend to commence staffing and training of the new boiler plant employees concurrently with the start of construction. Yulong Pump and Devotion Boiler also intend to rezone for commercial and residential use industrial land owned by Devotion Boiler in Inner Mongolia.  As at the date of this report, the acquisition of Devotion Boiler by Yulong Pump remains incomplete, and there is no guarantee that any such acquisition will be completed.  Further, there is no guarantee that Yulong Pump or Devotion Boiler will successfully financing the construction of there palnned boiler facility.

 

Through our wholly owned subsidiary, Million Place, together with its joint venture partner, Yulong Pump, we adopted a multi-pronged business plan involving the acquisition, development and exploitation of residential, commercial, and industrial real estate assets, the manufacture and sale of industrial water pumps and accessories and industrial boilers, and the provision of consultancy services for the design of industrial boiler systems. 

 

On November 6, 2014, we changed our fiscal year end to December 31, 2014 from June 30. Our company will file a Form 10-K for the period ended December 31, 2014 which will cover the transition period.

 

Our sole director, John Gong Chin Ong, is the controlling shareholder, principal officer, and a director of Million Place. Mr. Qin XiuShan, a director and president of our company, is the majority shareholder, principal officer and a director of Hohhot Devotion Boiler. Both John Gong Chin Ong and Qin XiuShan are affiliated shareholders and principals of Yulong Pump.

Plan of Operation

Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we complete the development of our website, build a client base, and generate revenue from our services. We believe the technical aspects of our website will be sufficiently developed to use for our operations 90 days from the completion of our offering. Accordingly, we must raise cash from sources other than operations. Our only other source for cash at this time is investments by others in our company. We must raise cash to implement our project and begin our operations. We will not begin operations until we raise money from our public offering.

If we are unable to successfully negotiate strategic alliances with purveyors of services to enable us to offer these services to our clients, or if we are unable to attract enough clients to utilize our services, we may quickly use up the proceeds from the minimum amount of money from the offering and will need to find alternative sources, like a second public offering, a private placement of securities, or loans from our officer or others in order for us to maintain our operations. At the present time, we have not made any arrangements to raise additional cash, other than through our initial public offering.

 

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If we need additional cash and cannot raise it we will either have to suspend operations until we do raise the cash, or cease operations temporarily. We believe the funds raised from our initial offering will last a year but with limited funds available to develop growth strategy. Other than as described in this paragraph, we are exploring other business / financing plans.

From the funds raised, we believe we can satisfy our cash requirements for the ongoing period of operation and will not be conducting any product research or development. We do not expect to purchase or sell plant or significant equipment. Further we do not expect significant changes in the number of employees.

In summary, subsequent to the completion of our offering, we intend to implement our business plan and expect to begin engaging clients. We anticipate that we will generate revenue once we begin our operations.

Cash Requirements

Over the next 12 months, through our wholly owned subsidiary, Million Place, we intend to engage in the acquisition, development and management of commercial real estate assets in cooperation with our joint venture partner, Yulong Pump. Together with Yulong Pump, we are also seeking to engage in the manufacture and sale of industrial water pumps and accessories and industrial boilers for commercial buildings, and the provision of consultancy services for the design of boiler systems. We anticipate that we will incur the following operating expenses during this period:

 

  

We will require funds of approximately $900,000 over the next twelve months (beginning October 1, 2014) to execute our business plan. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is no assurance that we will secure any additional financing or maintain operations at a level sufficient for an investor to obtain a return on their investment in our common stock. Further, we may continue to be unprofitable.

 

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Future Financings

We anticipate continuing to rely on equity sales of our shares of common stock in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned activities.

Purchase of Significant Equipment

We do not anticipate the purchase or sale of any plant or significant equipment during the next 12 months.

Going Concern

There is significant doubt about our ability to continue as a going concern.

Our company has incurred a net loss of $839,631 for the period from inception on June 23, 2011 to September 30, 2014 and has generated no revenues. The continuity of our future operations is dependent upon our ability to raise additional capital and to successfully execute our business plans in a timely manner. These conditions raise substantial doubt about our ability to continue as a going concern. We intend to continue relying upon the issuance of equity securities to finance our operations. However there can be no assurance we will be successful in raising the funds necessary to maintain operations, or that a self-supporting level of operations will ever be achieved. The likely outcome of these future events is indeterminable. The financial statement does not include any adjustment to reflect the possible future effect on the recoverability and classification of the assets or the amounts and classification of liabilities that may result should we cease to continue as a going concern.

Results of Operations

Three Months Ended September 30, 2014 and 2013

We have generated no revenues and have incurred $123,765 in operating expenses for the three month period ended September 30, 2014 and $103,015 in operating expenses for the three month period ended September 30, 2013. The primary reason for the increase from the three months ended 2014 from 2013 is the increase in legal and accounting fees, offset by decreased management fee.

Nine Months Ended September 30, 2014 and 2013

We have generated no revenues and have incurred $421,003 in operating expenses for the nine month period ended September 30, 2014 and $141,541 in operating expenses for the nine month period ended September 30, 2013. The primary reason for the increase from the nine months ended 2014 from 2013 is the increase in general and administrative fees, and increased management fee.

 

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Liquidity and Capital Resources

Working Capital

 

Cash Flows

 

 

As of the date of this report, we have yet to generate any revenues from our business operations.

As of September 30, 2014, our total current assets were $1,473,842 and our total current liabilities were $2,114,360. We had cash of $48,842 as of September 30, 2014 and a working capital deficit of $(640,518).

During the nine months ended September 30, 2014 we spent $413,555 on operating activities, whereas we spent $116,544 on operating activities during the same period in fiscal 2013. The increase in our expenditures on operating activities during the nine months ended September 30, 2014 was primarily due to our reliance on our partnership with G Capital Limited to finance operations.

During the nine months ended September 30, 2014 we used $1,425,000 in investing activities compared to nil during the nine months ended September 30, 2013. The investment is for our boiler factory project.

During the nine months ended September 30, 2014 $1,887,397 was provided by financing activities compared to $116,544 provided by financing activities during the nine months ended September 30, 2013.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

 

 

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Contractual Obligations

As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.

Critical Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States 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 reporting period. Actual results could differ from those estimates.

Business Combinations

 We have made strategic acquisitions to expand our footprint, establish strategic partnerships and/or to obtain technology that is complementary to our product offerings and strategy. We evaluate each investment in a business to determine if we should account for the investment as a cost-basis investment, an equity investment, a business combination or a common control transaction. An investment in which we do not have a controlling interest and which we are not the primary beneficiary but where we have the ability to exert significant influence is accounted for under the equity method of accounting. For those investments that we account for in accordance ASC 805, Business Combinations, we record the assets acquired and liabilities assumed at our estimate of their fair values on the date of the business combination. Our assessment of the estimated fair value of each of these can have a material effect on our reported results as intangible assets are amortized over various lives. Furthermore, a change in the estimated fair value of an asset or liability often has a direct impact on the amount to recognize as goodwill, which is not amortized. Often determining the fair value of these assets and liabilities assumed requires an assessment of the expected use of the asset, the expected cost to extinguish a liability or our expectations related to the timing and the successful completion of the integration of the business. Such estimates are inherently difficult and subjective and can have a material impact on our financial statements. We account for business combinations under a method similar to the pooling-of-interest method ("Pooling-of-Interest") when the combination is with a business under common control with us by our majority shareholder.

Basic and Diluted Earnings (Loss) Per Share.     

 

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an "as if converted" basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the three and nine months ended September 30, 2014, there were no potentially dilutive securities outstanding.

 

 

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Cash and Cash Equivalents

Our company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of September 30, 2014, there were no cash equivalents.

Income Taxes

Our company accounts for income taxes under the Financial Accounting Standards Board of Financial Accounting Standard ASC 740, "Accounting for Income Taxes." Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. There was no current or deferred income tax expense or benefits for the nine month periods ending September 30, 2014 and 2013.

Recently Issued Accounting Pronouncements

In June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders’ equity. The amendments in ASU 2014-10 will effective prospectively for annual reporting periods begin after December 15, 2014, and interim periods within those annual periods.

 

However, early adoption is permitted. Our company adopted ASU 2014-10 during the nine months ended September 30, 2014, thereby no longer presenting or disclosing any information required by Topic 915.

 

In August 2014, the FASB issued the FASB Accounting Standards Update No. 2014-15 “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”).

 

In connection with preparing financial statements for each annual and interim reporting period, an entity’s management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued (or at the date that the financial statements are available to be issued when applicable). Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). The term probable is used consistently with its use in Topic 450, Contingencies.

 

 

 

 

 

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When management identifies conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern, management should consider whether its plans that are intended to mitigate those relevant conditions or events will alleviate the substantial doubt. The mitigating effect of management’s plans should be considered only to the extent that (1) it is probable that the plans will be effectively implemented and, if so, (2) it is probable that the plans will mitigate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern.

 

If conditions or events raise substantial doubt about an entity’s ability to continue as a going concern, but the substantial doubt is alleviated as a result of consideration of management’s plans, the entity should disclose information that enables users of the financial statements to understand all of the following (or refer to similar information disclosed elsewhere in the footnotes):

 

a.     Principal conditions or events that raised substantial doubt about the entity’s ability to continue as a going concern (before consideration of management’s plans)

b.     Management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations

c.     Management’s plans that alleviated substantial doubt about the entity’s ability to continue as a going concern.

 

If conditions or events raise substantial doubt about an entity’s ability to continue as a going concern, and substantial doubt is not alleviated after consideration of management’s plans, an entity should include a statement in the footnotes indicating that there is substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or available to be issued). Additionally, the entity should disclose information that enables users of the financial statements to understand all of the following:

 

a.     Principal conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern

b.     Management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations

c.     Management’s plans that are intended to mitigate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern.

 

The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying financial statements.

 

 

 

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4.   Controls and Procedures

Management’s Report on Disclosure Controls and Procedures   

We maintain disclosure controls and procedures, that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) to allow timely decisions regarding required disclosure.

As of the end of the quarter covered by this report, we conducted an evaluation under the supervision and with the participation of our president (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) concluded that our disclosure controls were not effective as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during our last fiscal quarter that materially affected, or are reasonably likely to affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.           Legal Proceedings

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 1A.        Risk Factors

As a “smaller reporting company”, we are not required to provide the information required by this Item.

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

None.

 

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Item 3.           Defaults Upon Senior Securities

None.

Item 4.           Mine Safety Disclosures

Not applicable.

Item 5.           Other Information

On November 6, 2014, we changed our fiscal year end to December 31, 2014 from June 30. Our company will file a Form 10-K for the period ended December 31, 2014 which will cover the transition period.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Item 6.           Exhibits

  

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf of the undersigned thereunto duly authorized.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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