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, 2015 

 

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 11, 2015 there were 36,731,495 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.			19
Item 3.	Quantitative and Qualitative Disclosure about Market Risk			23
Item 4.	Controls and Procedures.			23
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.			24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.			24
Item 3.	Defaults Upon Senior Securities.			24
Item 4.	Mine Safety Disclosures.			24
Item 5.	Other Information.			24
Item 6.	Exhibits.			25

 

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, 2015

 

Table of Contents

 

Balance Sheet			4
Statement of Loss			5
Statement of Stockholders Equity			6
Statement of Cash Flows			7
Notes to Financial Statements			8
Exhibit A			18

 

3

 

A & C United Agriculture Developing Inc
(A Development Stage Enterprise)

BALANCE SHEET

 

		June 30, 2015				September 30, 2014
ASSETS						(audited)
Current assets:
Cash and cash equivalents		$	125,922			$	69,501
Accounts receivable			220,000				190,000
Inventory			143,769				245,525
Total Current Assets		$	489,691			$	505,026
Other current assets:
Prepaid expense		$	309			$	309
Advances to officer			-				25,645
Total Other Current Assets		$	309			$	25,954
Property, plant and equipment, net		$	13,603			$	17,684
Other assets:
Deferred interest expense			63				158
Total Other Assets		$	63			$	158
TOTAL ASSETS		$	503,666			$	548,822
LIABILITIES & EQUITY
Current liabilities:
Account payable		$	118,272			$	86,000
Credit card payable			7,171				4,297
Total current liabilities		$	125,443			$	90,297
Other current liabilities:
Loan from shareholders		$	38,170			$	5,406
Accrued Expenses Liability			1,790				2,119
Total other current liabilities		$	39,960			$	7,525
Long term liabilities:
Car loan			4,597				11,494
Total long term liabilities		$	4,597			$	11,494
Total liabilities		$	170,000			$	109,316
Stockholders' Equity:
Common stock, $0.001 par value; 500,000,000 shares authorized; 36,731,495 shares issued and outstanding.		$	36,732			$	36,612
Paid-in capital			885,718				873,838
Deficit accumulated during the development stage			(587,692	)			(471,232	)
Accumulated other comprehensive income (loss)			(1,092	)			288
Total stockholders' equity		$	333,666			$	439,506
TOTAL LIABILITIES & EQUITY		$	503,666			$	548,822

 

4

 

A & C United Agriculture Developing Inc
(A Development Stage Enterprise)

STATEMENT OF LOSS
 

		Nine Months Ended June 30				Nine Months Ended June 30				Three Months Ended June 30				Three Months Ended June 30				Cumulative from February 7, 2011 (Date of Inception) Through June 30,
		2015				2014				2015				2014				2015
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Revenues		$	687,896			$	361,870			$	306,260			$	-			$	2,445,493
Cost of Goods Sold		$	611,052			$	324,538			$	269,296			$	-			$	2,208,174
Gross Profit		$	76,844			$	37,332			$	36,964			$	-			$	237,319
Operating expenses:
Research and development		$	-			$	-			$	-			$	-			$	-
Selling, general and administrative expenses		$	189,223			$	188,017			$	57,923			$	40,008			$	811,400
Depreciation and amortization expenses		$	4,081			$	4,081			$	1,360			$	1,360			$	13,603
Total Operating Expenses		$	193,304			$	192,098			$	59,283			$	41,368			$	825,003
Operating Income (Loss)		$	(116,460	)		$	(154,766	)		$	(22,319	)		$	(41,368	)		$	(587,684	)
Investment income, net		$	-			$	-			$	-			$	-			$	-
Interest Expense, net		$	-			$	-			$	-			$	-			$	8
Income (Loss) before income taxes		$	(116,460	)		$	(154,766	)		$	(22,319	)		$	(41,368	)		$	(587,692	)
Income (Loss) tax expense		$	-			$	-			$	-			$	-			$	-
Net Income (Loss)		$	(116,460	)		$	(154,766	)		$	(22,319	)		$	(41,368	)		$	(587,692	)
Net income (loss) per common share- Basics		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.02	)
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		$	(1,380	)		$	(19	)		$	(1,380	)		$	-			$	(1,092	)
Other comprehensive income (loss)		$	(1,380	)		$	(19	)		$	(1,380	)		$	-			$	(1,092	)
Comprehensive Income (Loss)		$	(117,840	)		$	(154,785	)		$	(23,699	)		$	(41,368	)		$	(588,784	)

 

5

 

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, 2015
   

										Additional				Deficit Accumulated During the				Accumulated 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 year ended September 30, 2014														$	(183,326	)						$	(183,326	)
Balance, September 30, 2014			36,611,495			$	36,612			$	873,838			$	(471,232	)		$	288			$	439,506
Issuance of common stocks to Michael Williams @0.1 per share on February 1, 2015			60,000			$	60			$	5,940											$	6,000
Issuance of common stocks to Globex Transfer LLC @0.1 per share on February 2, 2015			60,000			$	60			$	5,940											$	6,000
Adjustment for currency rate exchange																		$	(1,380	)		$	(1,380	)
Net loss for the period ended June 30, 2015														$	(116,460	)						$	(116,460	)
Balance, June 30, 2015			36,731,495			$	36,732			$	885,718			$	(587,692	)		$	(1,092	)		$	333,666

 

6

 

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

		Nine Months Ended June 30				Nine Months Ended June 30				Three Months Ended June 30				Three Months Ended June 30				Cumulative from February 7, 2011 (Date of Inception) Through June 30,
		2015				2014				2015				2014				2015
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Operating Activities:
Net income (loss)		$	(116,460	)		$	(154,766	)		$	(22,319	)		$	(41,368	)		$	(587,692	)
Adjustments to reconcile net income to net cash provided by operating activities:
Non-cash portion of share based legal fee expense			6,000				-								-				70,450
Non-cash portion of share based consulting fee expense			6,000				50,000								-				76,500
Depreciation expenses			4,081				4,081				1,360				1,360				13,603
Deferred interest expense			95				95				32				32				(63	)
Inventory			101,756				(250,525	)			(19,765	)			(222,240	)			(143,769	)
Accounts Receivable			(30,000	)			16,000				(70,000	)			139,262				(220,000	)
Prepaid expense			-				(519	)			-				-				(309	)
Prepaid to supplier			-				18,200				60,000				111,000				-
Payroll Liabilities			(135	)			-				(11	)			-				1,790
Account payable			32,272				10,000				91,806				(826	)			118,272
Credit card payable			2,874				(1,105	)			2,012				1,369				7,171
Other Accrued Expenses			(194	)			155				-				155				-
Unearned revenue			-				-				-				-				-
Net cash provided by operating activities		$	6,289			$	(308,384	)		$	43,115			$	(11,256	)		$	(664,047	)
Investing Activities:
Purchase of property, plant and equipment			-				-				-				-				(27,206	)
Net cash provided by investing activities		$	-			$	-			$	-			$	-			$	(27,206	)
Financing Activities:
Loan from shareholders		$	32,764			$	4,725			$	24,924			$	4,017			$	38,170
Loan to shareholders			25,645				5,660			$	-			$	6,105				-
Long term Loans			(6,897	)			(6,896	)		$	(2,299	)		$	(2,299	)			4,597
Proceeds from issuance of common stock			-				-				-				-				775,500
Net cash provided by financing activities		$	51,512			$	3,489			$	22,625			$	7,823			$	818,267
Effect of Exchange Rate on Cash		$	(1,380	)		$	(19	)		$	(1,380	)		$	-			$	(1,092	)
Net increase (decrease) in cash and cash equivalents		$	56,421			$	(304,914	)		$	64,360			$	(3,433	)		$	125,922
Cash and cash equivalents at beginning of the period		$	69,501			$	384,675			$	61,562			$	83,194			$	-
Cash and cash equivalents at end of the period		$	125,922			$	79,761			$	125,922			$	79,761			$	125,922

 

7

 

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. 

 

Since the inception, the Company's long-term goal has been to solve some of the major challenges in China, such as pollution and food safety issues for the general public, as well as raising funds to grow the business. The Company believes that the best solution is to integrate and manage all links along the food production chain - seeds, farming, processing.  

 

The Company has been and will be putting more resources in the seed business as it is still the main source of the Company's revenue. However, the Company has also been and will be working to leverage the resources that could be obtained via strategic alliances in the future on both sides of the Pacific Ocean in order to expand the business scope. 

 

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.

 

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.

 

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.

 

8

 

A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

  

NOTE B - SIGNIFICANT ACCOUNTING POLICIES 

 

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.

 

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, 2015, the company had cash and cash equivalents of $ 125,922. 

 

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, 2015, the company has property, plant, and equipment at a net cost of $ 13,603, and $ 13,603 of accumulated depreciation expense was recorded.

 

Account Receivable

 

As of June 30, 2015, the Company had account receivable of $ 220,000.  

 

Prepaid Expense

 

As of June 30, 2015, the Company had prepaid expense of $ 309 for rent and other expenses.

 

9

 

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, 2015, the Company has $ 143,769 inventories recorded, which included $ 143,705 various vegetable seeds in stock in USA and $ 64 tomato seeds in stock in Sweden. 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.  

 

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.  

 

On February 1, 2015, 60,000 shares were issued to Michael Williams for legal services of $ 6,000 at $0.10 per share.

 

On February 2, 2015, 60,000 shares were issued to Globex Transfer LLC for DTC professional services of $6,000 at $0.10 per share.

 

10

 

A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

  

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued) 

 

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.

 

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, 2015, the Company has a net car loan of $ 4,597.

 

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.

 

11

 

A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

  

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Revenue Recognition (Continued)

 

The Company had total revenue of $ 306,260 and $ 0 for the fiscal quarter ended June 30, 2015 and 2014 respectively and $ 2,445,493 for the period of February 7, 2011 to June 30, 2015. 

 

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 UnitedState 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 $ 124,005 inventory as of March 31, 2015.  

 

From the period of April 1, 2015 to June 30, 2015, the Company purchase $ 286,200 vegetable seeds from US suppliers and Europe suppliers; and there are $ 143,769 inventories as of June 30, 2015. 

 

For the fiscal quarter ended June 30, 2015, the Company had related cost of goods sold expense and freight cost of $ 2,861. 

 

As a result, a total of $ 269,296 cost of goods sold was recorded for the fiscal quarter ended June 30, 2015; and $ 2,208,174 cost of goods sold was recorded for the period of February 7, 2011 to June 30, 2015. 

 

12

 

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, 2015 through February 28, 2016 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, 2015 and 2014, there was a total of $ 59,283 and $ 41,368 operating expenses respectively. For the cumulative period from February 7, 2011 (Date of Inception) to June 30, 2015, there was a total of $ 825,003 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.

 

Started from September 2014, the Company hired an employee to taking care of the office operation in Sweden subsidiary at a cost of SEK 8,000 monthly.

 

The total payroll expense for the fiscal quarter ended June 30, 2015 and 2014 is $ 20,326 and $ 16,659 respectively, which included the payroll taxes to the government and the net salary to the officer and employee. 

 

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 $ 1,922 and $ 8,060 for the fiscal quarter ended June 30, 2015 and 2014 respectively. 

 

13

 

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. 

 

14

 

A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

  

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued) 

 

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. 

 

Foreign Currency Translation

 

The Company has determined the United States dollars (USD) to be its functional currency for A&C United Agriculture Developing Inc., U.S.A 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.

 

As of June 30, 2015, the Company had foreign currency translation loss of $1,380. 

 

NOTE C - RELATED PARTY TRANSACTIONS

 

Common Shares Issued to Executive and Non-Executive Officers and Directors

 

As of June 30, 2015, 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			40.84	%
Yidan Liu		President			15,000,000			$	15,000			2/7/2011			40.84	%
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						82.31	%

 

*Based upon total outstanding shares 36,731,495 as of June 30, 2015.

 

15

 

A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

  

Loans from Officers/Shareholders

 

As of June 30, 2015, the officers loaned $ 38,170 to the Company for purchases and operating, and marketing expenses. The outstanding balance is due on demand and no agreement was signed. 

 

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. 

 

16

 

A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

  

NOTE D - SHAREHOLDERS' EQUITY (Continued) 

 

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.  

 

On February 1, 2015, 60,000 shares were issued to Michael Williams for legal services of $ 6,000 at $0.10 per share.

 

On February 2, 2015, 60,000 shares were issued to Globex Transfer LLC for DTC professional services of $6,000 at $0.10 per share.

 

Therefore, as of June 30, 2015, there was total of 36,731,495 shares issued and outstanding.

 

NOTE E - 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, 2015 the cash and cash equivalent balance was $ 125,922 and there is cumulative net loss of $ 587,692 for the cumulative period from February 7, 2011 (Date of Inception) to June 30, 2015.

 

17

 

Exhibit A

 

		Three Months Ended				Three Months Ended				Cumulative from February 7, 2011 (Date of Inception)Through
		June 30,				June 30,				June 30,
		2015				2014				2015
Expense
Bank Service Charges			145				25				1,399
Business Licenses and Permits			571				307				8,550
Meals and Entertainment			1,693				1,570				21,567
Membership fee			95				-				600
Office Supplies			388				-				11,590
Postage and Delivery			18				75				955
Printing and Reproduction							-				136
Auto and Truck Expenses			991				97				2,990
Payroll Expenses			20,326				16,659				176,578
Conference & Meeting							-				4,538
Interest Expense			32				32				316
Utilities							-				41
Website Expense							-				2,634
Telephone Expense			86				320				485
Depreciation Expense			1,360				1,360				13,603
Insurance Expense			1,916				3,696				22,087
Marketing and Promotion Expense							-				4,137
Medical Expenses			425				778				4,546
Travel Expense			19,388				6,438				121,000
Professional Fees
Accounting			298				310				90,578
Consulting Fees							-				114,660
Legal Fee			1,500				6,000				149,250
Transfer Agent fees			200				445				16,295
SEC & EDGAR Filling Fee			(76	)			1,305				16,393
Professional Fees			1,922				8,060				387,176
Software							-				501
Rent Expense			9,532				507				35,447
Repairs and Maintenance			395				963				2,555
Research and Survey expenses			-				-				572
Registration Fees			-				-				520
Training & Education Expense			-				480				480
Total Expense			59,283				41,368				825,003

 

18

 

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," directly and through its subsidiaries is focused on selling agricultural seeds in China. We plan to continue to focus on developing our core seed selling business in China. 

 

To increase our revenues, we are contemplating entering into agreements with other seed vendors in China pursuant to which they will agree to buy from us on an exclusive basis all or an agreed-upon portion of their seed needs or a will agree to a similar mechanism that produces the same economic result from us. We anticipate that we will have to pay some cash and some stock to the buyer to enter into this type of arrangements. We currently do not have a formal contract, agreement or commitment with any potential seed buyer in China to enter into this kind or arrangement with us. As the transaction, however structured, must be structured in a way which significantly increases our revenues, we believe our financial position will be much stronger if we are able to execute this strategy successfully. However, we believe we will need to raise significant capital from investors before any buyer will discuss these types of transactions with us. We currently have no offering structured or any contract, agreement or commitment from any investor to invest in any offering to raise this capital, and there is no assurance that we will ever be able to raise the capital necessary to be able to implement this strategy. 

 

Another strategy we are working on to further increase our revenues in the future in the long-term is to develop better seed varieties that we hope will be more desirable than seed varieties currently on the market in China under our agreement with CapGen, a Spanish breeder. Based on the agreement, we are working together to collect specification on varieties that are popular in the Chinese market and produce seeds using CapGen's existing R&D platform. This has the potential to increase revenues because we would have more desirable seed products than our competition and thus would have more customers in China buying our products. 

 

The Company's goal is to continue generating revenues from its core seed selling business and to increase revenues through the R&D activities with CapGen and through the types of agreements with seed vendors in China described above if we can secure the necessary financial resources. 

 

19

 

Results of Operations 

 

For the third quarter end ended June 30, 2015 vs. 2014

 

Revenue

 

There was $ 306,260 and $ 0.00 revenue generated for the third quarter ended June 30, 2015 and 2014 due to increased sales efforts. 

 

Cost of Revenue

 

There was $ 269,296 and $ 0.00 cost of goods sold incurred for the third quarter ended June 30, 2015 and 2014 respectively. The cost of goods sold increased due to the increasing of revenue. 

 

For the third quarter ended June 30, 2015 and 2014, there was a total of $ 59,283 and $ 41,368 operating expenses respectively.  

 

 For the cumulative period from February 7, 2011 (Date of Inception) to June 30, 2015, there was a total of $825,003 operating expenses. 

 

		Three Months Ended				Three Months Ended				Cumulative from February 7, 2011 (Date of Inception) Through
		June 30,				June 30,				June 30,
		2015				2014				2015
Expense
Bank Service Charges			145				25				1,399
Business Licenses and Permits			571				307				8,550
Meals and Entertainment			1,693				1,570				21,567
Membership fee			95				-				600
Office Supplies			388				-				11,590
Postage and Delivery			18				75				955
Printing and Reproduction							-				136
Auto and Truck Expenses			991				97				2,990
Payroll Expenses			20,326				16,659				176,578
Conference & Meeting							-				4,538
Interest Expense			32				32				316
Utilities							-				41
Website Expense							-				2,634
Telephone Expense			86				320				485
Depreciation Expense			1,360				1,360				13,603
Insurance Expense			1,916				3,696				22,087
Marketing and Promotion Expense							-				4,137
Medical Expenses			425				778				4,546
Travel Expense			19,388				6,438				121,000
Professional Fees			1,922				8,060				387,176
Software							-				501
Rent Expense			9,532				507				35,447
Repairs and Maintenance			395				963				2,555
Research and Survey expenses			-				-				572
Registration Fees			-				-				520
Training & Education Expense			-				480				480
Total Expense			59,283				41,368				825,003

 

20

 

Income & Operation Taxes

 

We are subject to income taxes in the U.S. 

 

We paid no income taxes in USA for the third quarter ended June 30, 2015 due to the net operation loss in the USA.

 

For the nine months ended June 30, 2015 vs. 2014 

 

Revenue

 

There was $ 687,896 and $ 361,870 revenue generated for the nine months ended June 30, 2015 and 2014 due to increased sales efforts. 

 

Cost of Revenue

 

There was $ 611,052 and $ 324,538 cost of goods sold incurred for the nine months ended June 30, 2015 and 2014 respectively. The cost of goods sold increased due to the increasing of revenue. 

 

For the nine months ended June 30, 2015 and 2014, there was a total of $ 193,304 and $ 192,098 operating expenses respectively.  

 

For the cumulative period from February 7, 2011 (Date of Inception) to June 30, 2015, there was a total of $825,003 operating expenses. 

 

		Nine Months Ended				Nine Months Ended				Cumulative from February 7, 2011 (Date of Inception) Through
		June 30,				June 30,				June 30,
		2015				2014				2015
Expense
Bank Service Charges			311				326				1,399
Business Licenses and Permits			1,527				1,222				8,550
Meals and Entertainment			5,157				8,243				21,567
Membership fee			95				-				600
Office Supplies			518				587				11,590
Postage and Delivery			128				312				955
Printing and Reproduction							-				136
Auto and Truck Expenses			1,432				342				2,990
Payroll Expenses			60,827				48,996				176,578
Conference & Meeting			979								4,538
Interest Expense			95				95				316
Utilities							-				41
Website Expense			453				96				2,634
Telephone Expense			86				320				485
Depreciation Expense			4,081				4,081				13,603
Insurance Expense			8,450				7,622				22,087
Marketing and Promotion Expense			136				1,798				4,137
Medical Expenses			3,767				778				4,546
Travel Expense			33,940				26,078				121,000
Professional Fees			46,404				88,058				387,176
Software			106				-				501
Rent Expense			22,128				1,700				35,447
Repairs and Maintenance			1,592				963				2,555
Research and Survey expenses			572				-				572
Registration Fees			520				-				520
Training & Education Expense			-				480				480
Total Expense			193,304				192,098				825,003

 

21

 

Income & Operation Taxes

 

We are subject to income taxes in the U.S. 

 

We paid no income taxes in USA for the nine months ended June 30, 2015 due to the net operation loss in the USA. 

 

Milestone Table

 

Event		Actions		Anticipated Time Frame		Total estimated cost
Secure funds to implement planned business program as described in "Overview"		Continue to explore all options for securing funds from investors		By 12/31/2015		$	40,000
Management team to visit U.S. breeders, seed distributors, seed producers and potential investors.		Marketing and sales promotion		By 12/31/2015		$	5,000
Continue trials of carrots and other varieties obtained from Europe and America.		Visit trial fields  Collect feedbacks  Evaluate results		By 12/31/2015		$	10,000
Continue to work with the Chinese companies on a potential collaboration		Ad hoc business trips		By 12/31/2015		$	5,000

 

We currently have sufficient cash resources to fund all of our operations for the next 12 months, including the expenses set forth in the chart above. However, as noted in "Overview" above, we currently have no offering structured or any contract, agreement or commitment from any investor to invest in any offering to raise this capital, and there is no assurance that we will ever be able to raise the capital necessary to be able to implement this strategy. 

 

Liquidity and Capital Resources

 

		At June 30,				At September 30,
		2015				2014
Current Ratio*			2.96				5.43
Cash		$	125,922			$	69,501
Working Capital***		$	324,597			$	433,158
Total Assets		$	503,666			$	548,822
Total Liabilities		$	170,000			$	109,316
Total Equity		$	333,666			$	439,506
Total Debt/Equity**			0.51				0.25

_________________ 

*Current Ratio = Current Assets /Current Liabilities. 

 

** Total Debt / Equity = Total Liabilities / Total Shareholders' Equity. 

 

*** Working Capital = Current Assets - Current Liabilities. 

 

22

 

The Company had cash and cash equivalents of $ 125,922 and $69,501 at first quarter ended June 30, 2015 and year ended September 30, 2014 and the working capital of $ 324,597 and $ 433,158 with liabilities of $ 170,000 and $ 109,316 for the same periods. 

 

As of June 30, 2015, we have $ 125,922 in cash and $ 220,000 in accounts receivable. As shown in the Milestone Table above, we need a minimum of approximately $60,000 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 set forth in the Milestone Table, including general operating costs, bank service fees and those costs associated with SEC requirements associated with staying public, estimated to be approximately $300,000 annually. Accordingly, as we anticipate an average monthly burn rate of no more than $25,000 during the next 12 months, we believe we have sufficient cash available (assuming we collect all our existing and anticipated sales and 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 December 31, 2015 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, 2015, 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. 

 

23

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

None. 

 

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

 

None/Not Applicable 

 

Item 3. Defaults Upon Senior Securities.

 

None. 

 

Item 4. Mine Safety Disclosure.

 

Not applicable. 

 

Item 5. Other Information.

 

Not applicable. 

 

24

 

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. 

 

25

 

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 11, 2015		/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, Principal Financial Officer and Principal Accounting Officer		August 11, 2015

 

26

 

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. 

 

 

27

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