Item 1. Business
FORWARD-LOOKING STATEMENTS
This annual report contains certain forward-looking statements. All statements other than statements of historical fact are "forward-looking statements" for purposes of these provisions, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operation; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those anticipated by the forward-looking statements.
These forward-looking statements involve significant risks and uncertainties, including, but not limited to, the following: competition, promotional costs and the risk of declining revenues. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of a number of factors. These forward-looking statements are made as of the date of this filing, and we assume no obligation to update such forward-looking statements. The following discusses our financial condition and results of operations based upon our unaudited financial statements which have been prepared in conformity with accounting principles generally accepted in the United States. It should be read in conjunction with our financial statements and the notes thereto included elsewhere herein.
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 consolidated financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
In this annual report, unless otherwise specified, all dollar amounts are expressed in United States Dollars (US$) and all references to "common shares" refer to the common shares in our capital stock.
As used in this annual report, the terms “we”, “us”, “our” and “our company” mean UAN Power Corp., and our subsidiaries UAN Lee Agricultural Technology Holding Limited, a Hong Kong company, and UAN Sheng Agricultural Technology Development Limited Company, a People’s Republic of China company, unless otherwise indicated.
Corporate Overview
Our company was incorporated in the State of Nevada on May 8, 2009. We completed a reincorporation of our company in Delaware under the name UAN Power Corp. on November 14, 2011.
Effective September 4, 2014, we filed with the Delaware Secretary of State a Certificate of Amendment of Certificate of Incorporation, wherein we have increased our authorized share capital to 420,000,000 shares of stock which includes 400,000,000 shares of common stock, having a par value of $0.00001 per share and 20,000,000 shares of Preferred Stock, having a par value of $0.00001 per share.
The increase of authorized capital was approved by our board of directors and by a majority of our stockholders by resolutions dated June 16, 2014.
Our company was originally organized to seek opportunities to manage income producing commercial and residential real estate properties in Florida and the southeastern region of the United States.
On May 23, 2011, our company and our principal shareholders, including David Dreslin, our former president, chief financial officer and treasurer, entered into a stock purchase agreement resulting in a change in control of our company. Pursuant to that agreement, Wan-Fang Liu, Yuan-Hao Chang and Pei-Chi Yang purchased an aggregate of 77,775,000 outstanding shares of our company’s common stock, par value $0.00001, from those principal shareholders for an aggregate purchase price of $200,000. On May 23, 2011, we entered into a further agreement with Wan-Fang Liu, pursuant to which 48,275,000 shares of the common stock purchased by Ms. Liu were immediately returned to our company in consideration of the payment of $1.00. These shares were subsequently sold in a private placement for a purchase price of $0.01 per share and aggregate gross proceeds of $482,750 on July 25, 2011.
Immediately prior to the completion of the stock purchase and cancellation described above, Mr. Dreslin, who owned 59,925,000 shares, or approximately 77% of the common stock of our company, was the largest shareholder of our company. Upon completion of these transactions, Ms. Liu owned 27,500,000 shares, or approximately 91.7% of the common stock, and became the largest shareholder of our company.
Concurrent with the change of control of our company that occurred on May 23, 2011, we abandoned our real estate business plan in order to seek the acquisition of an operating business by merger, share exchange, asset acquisition or other business combination.
In August 2011, we entered into a technology license and technology transfer agreement, under which we licensed the rights to develop, manufacture, market, sell and import products which incorporate or rely upon certain “Triops” technologies and processes in Taiwan, the People’s Republic of China, the United States, Japan and Korea, in exchange for a one-time licensing fee of $100,000. Triops are prehistoric creatures also known as dinosaur shrimp that are brought to life by adding water to eggs that are in suspended animation. In November 2012, we discontinued our limited business operations in Taiwan where we had entered into a technology licensing and transfer agreement to obtain the rights to develop, manufacture, market, sell and import products which incorporate or rely upon the “Triops” technologies and processes in Taiwan, the People’s Republic of China, the United States, Japan and Korea. Concurrent with the discontinuation of our business operations in Taiwan, we liquidated all assets related to that business.
On May 16, 2012, we entered into a joint venture agreement with Mr. Yuan-Hao Chang, a shareholder of our company, under which we intended to develop, own and operate an agricultural business in the People’s Republic of China and to rely on Mr. Chang’s experience and knowledge in organic fertilizers and farming to plant and grow various fruits in China, and to harvest and sell the produced crops and goods for a profit.
On May 31, 2012, we entered into a term promissory note with certain shareholders and/or directors of our company for the principal sum of $350,000 with a maturity date of May 31, 2017. The note may be paid in full or in part at the option of our company at any time prior to the maturity date without penalty, with interest accrued as at the date of prepayment. The note bears interest at 4% per annum and shall be computed on the basis of a year of 360 days for the number of days actually elapsed.
Effective July 3, 2012, our subsidiary, UAN Sheng, and UAN Lee Agricultural Technology Holding Limited, entered into a partnership agreement with Jianyang City Jinxiong Agricultural and Forestry Professional Cooperative (“Jinxiong”) to develop technology in the Greater China Region for the cultivation of tropical peach trees in Masha Town, Taiwan and to promote tropical peaches as the region’s major agricultural product (the “Proposition”).
Pursuant to the terms of the Proposition, UAN Sheng would provide tree species and personnel to undertake the anticipated tree cultivation. The property, provided by Jinxiong, consists of 300 acres of agricultural land located in Liutian Village, Masha Town, Jianyan City, Fujian Province. UAN Sheng was to acquire 70% of the Proposition’s earnings and Jinxiong would acquire the remaining 30% of the Proposition’s earnings, after tax deductions. In addition, the taxes allocated on the Proposition were to be distributed pro-rated to the interests of each party, where UAN Sheng would be responsible for 70% of the taxes due and Jinxiong would be responsible for the remaining 30% of the taxes due. Furthermore, both parties would each acquire 50% of the government agricultural subsidiary.
On July 7, 2012, UAN Sheng entered into a transfer agreement with Guifang Chen, whereby Guifang Chen agreed to transfer a factory building and land use rights on a property in the city of Jianyang. Guifang Chen transferred to UAN Sheng the use and rights of 7.53 acres of land located in Liangdong Village, Shuishang Xian, Masha Town, Jianyang City and all current factory equipment, effective July 9, 2012 and until December 31, 2046. Guifang Chen was compensated an aggregate of RMB¥650,000 by UAN Sheng, which includes a deposit of RMB¥200,000 to be paid upon execution of the transfer agreement. The balance was paid in one payment in July, 2012. As per the terms of the transfer agreement, UAN Sheng would be responsible for the all taxes and fees related to the transfer.
In conjunction with the partnership agreement, on October 18, 2012, UAN Sheng entered into a concession agreement with Lin Changbin, wherein UAN Sheng agreed to lease from Lin Changbin the rights to a property of 300 acres, containing approximately 8,800 pear trees, in Erlian Shan of Zhuzhou Village, from October 18, 2012 to December 31, 2025. Pursuant to the terms of the concession agreement, UAN Sheng would pay a sapling fee of an aggregate of RMB¥500,000 to Lin Changbin which included a deposit of RMB¥100,000 paid immediately upon signing of the concession agreement. The balance was paid in one payment in October, 2012.
On May 31, 2012, we entered into promissory note agreements to borrow $350,000 from Wan-Fang Liu, Wen-Cheng Huang, and Tsu-Yung Hsu who are shareholders and/or directors of our company, (collectively the “Holders”) for operational and possible investment opportunities. The maturity date of the notes is May 31, 2017 which bear interest at 4% per annum.
On December 1, 2012, our company and the Holders entered into an amendment agreement to amend the original promissory notes dated May 31, 2012 above, to add an automatic conversion clause to the terms of the notes.
On December 1, 2012, we entered into a convertible note agreement with Yuan-Hao (Michael) Chang, a shareholder of our company, for the outstanding amounts of HKD 1,222,726 ($157,682) which he advanced to our company as capital investment in a joint venture to develop, own, and operate an agricultural business in China, PRC. The maturity of this note is December 1, 2017 and bears interest at 4% per annum.
On December 31, 2012, we entered into a global amendment to the term promissory notes dated May 31, 2012, with each of the note holders. The amendment provides for the conversion of the aggregate outstanding principal and all unpaid accrued interest due under the notes into a number of units of common shares of our company equal to the aggregate outstanding principal and unpaid accrued interest, divided by $0.02.
The aggregate outstanding principal and all unpaid accrued interest due under the convertible notes above shall be automatically converted in to a number of units of common stock of our company equal to the aggregate outstanding principal and unpaid accrued interested due under the notes one year from issuance date, divided by $0.02, subject to appropriate adjustment in the event of any unit distribution, unit reverse split, combination, reclassification or other similar recapitalization affecting such units. The outstanding principal and all unpaid accrued interest due has not been converted as of June 30, 2014.
Interest expenses incurred on the notes for the year ended June 30, 2014 and 2013 was $20,308 and $17,556, respectively. Interest payable on the notes at June 30, 2014 was $39,153
Current Operations
On May 16, 2012, we entered into a joint venture agreement with Mr. Yuan-Hao Chang, a shareholder of our company, to develop, own and operate an agricultural business in China, PRC and to rely on Mr. Chang’s experience and knowledge in organic fertilizers and farming to plant and grow various fruits (namely tropical peaches), in China, and to harvest and sell the produced crops and goods for a profit.
On July 2, 2012, our company (through its director and UAN Lee) and Mr. Chang established UAN Sheng Agricultural Technology Development Limited Company (“UAN Sheng”) in China, PRC. As at October 11, 2012, both parties completed their initial capital contribution to UAN Sheng pursuant to the joint venture agreement. Our company contributed $320,000 to the joint venture.
In October 2014, due to lack of revenue generated in our agricultural operations, management of our company decided to abandon our agricultural business plan through UAN Sheng in order to seek the acquisition of an operating business by merger, share exchange, asset acquisition or other business combination.
As at the date of this report, we have no operations, no foreseeable prospect of revenue, and remain in the development stage. There is substantial doubt about our ability to continue as a going concern because we will be required to obtain additional capital to continue our operations. If adequate capital cannot be obtained on a timely basis and on satisfactory terms, our operations will be materially negatively impacted. There can be no assurance that we will be able to raise additional capital, on terms favorable to us or at all.
Our company is currently considered to be a “blank check” company. The SEC defines those companies as any (i) “development stage company that has no specific business plan or purpose or has indicated that its business is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person; and (ii) is issuing a ‘penny stock’,” within the meaning of Rule 3a51-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Under Rule 12b-2 under the Exchange Act, our company also qualifies as a “shell company”, because it has no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our equity or debt securities until we have successfully concluded a business combination or acquisition. Our company intends to comply with the periodic reporting requirements of the Exchange Act for so long as it is subject to those requirements.
Our Operating Strategy
We are actively seeking to acquire one or more target companies or businesses seeking the perceived advantages of being a publicly held corporation. We will continue to identify, research and negotiate the purchase of businesses that our management deems to be in the best interest of our shareholders. Our company’s principal business objective for the next 12 months and beyond will be to achieve long-term growth through a combination with, or acquisition of one or more businesses rather than immediate, short-term earnings. Our company will not restrict its potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business. We cannot assure you that we will be able to locate an appropriate target business or that we will be able to engage in a business combination with, or acquisition of a target business on favorable terms.
The analysis of new business opportunities will be undertaken by or under the supervision of the officers and directors of our company. Our company has not entered into any definitive acquisition or merger agreement with any party through which our company may acquire an existing operating company or business. Our company has unrestricted flexibility in seeking, analyzing and participating in potential business opportunities. In its efforts to analyze potential acquisition targets, our company will consider the following factors, among others:
(a)Potential for growth, indicated by new technology, anticipated market expansion or new products;
(b)Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole;
(c)Strength and diversity of management, either in place or scheduled for recruitment;
(d)Capital requirements and anticipated availability of required funds, to be provided by our company or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources;
(e)The cost of participation by our company as compared to the perceived tangible and intangible values and potentials;
(f)The extent to which the business opportunity can be advanced; and
(g)The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items.
In applying the foregoing criteria, no one of which will be controlling, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Business opportunities may occur 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. Due to our company's limited capital available for investigation, our company may not discover or adequately evaluate adverse facts about the opportunity to be acquired.
Competition
In identifying, evaluating and selecting any additional target business, we may encounter intense competition from other entities having a business objective similar to ours. There are numerous “public shell” companies either actively or passively seeking operating businesses with which to merge in addition to a large number of “blank check” companies formed and capitalized specifically to acquire operating businesses. In addition, we are subject to competition from other established operating companies looking to expand their operations through the acquisition of a target business. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than us and our financial resources will be relatively limited when contrasted with those of many of these competitors. Our ability to compete in acquiring certain sizable target businesses is limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of a target business. Further, our outstanding shares and potential future dilution may not be viewed favorably by certain target businesses.
Any of these factors may place us at a competitive disadvantage in successfully negotiating a business combination or acquisition. Our management believes, however, that our status as a public entity and potential access to the United States public equity markets may give us a competitive advantage over privately-held entities with a business objective similar to ours to acquire a target business on favorable terms.
If we succeed in effecting a business combination or acquisition, there will be, in all likelihood, intense competition from competitors of the target business. Many of our target business’ competitors are likely to be significantly larger and have far greater financial and other resources than we will. Some of these competitors may be divisions or subsidiaries of large, diversified companies that have access to financial resources of their respective parent companies. Our target business may not be able to compete effectively with these companies or maintain them as customers while competing with them on other projects. In addition, it is likely that our target business will face significant competition from smaller companies that have specialized capabilities in similar areas. We cannot accurately predict how our target business’ competitive position may be affected by changing economic conditions, customer requirements or technical developments. We cannot assure you that we will have the resources to compete effectively subsequent to a business combination or acquisition.
Employees
Our company currently has 5 employees, our chief financial officer is located in Taiwan and, 3 employees are located in China in addition to our chief executive officer, who is located in the United States. None of these employees are covered by a collective bargaining agreement, and management considers its relations with its employees to be good. Our company also relies on the services of independent consultants.
Item 1A.
Item 1A. Risk Factors
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 1B.
Item 1B. Unresolved Staff Comments
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 2.
Item 2. Properties
Our business office is located at 850 Stephenson Hwy, Ste 310, Troy, MI 49083. We entered into a month to month lease starting December 2012 for $200 a month. We do not anticipate that we will require any additional premises in the foreseeable future. Our telephone number is (586) 530-5605.
On July 7, 2012, we entered into a transfer agreement with Guifang Chen, whereby Guifang Chen transferred a factory building and land use rights on a property in the city of Jianyang. Guifang Chen transferred to us the use and rights of 7.53 acres of land located in Liangdong Village, Shuishang Xian, Masha Town, Jianyang City and all current factory equipment, effective July 9, 2012 and until December 31, 2046. Guifang Chen is compensated an aggregate of RMB¥650,000 by us, which includes a deposit of RMB¥200,000 was paid upon execution of the transfer agreement and the remaining balance was paid in one payment in July, 2012. As per the terms of the transfer agreement, we will be responsible for the all taxes and fees related to the transfer.
On October 18, 2012, we entered into a concession agreement with Lin Changbin, whereas we has agreed to lease from Lin Changbin the rights to a property of 300 acres, containing approximately 8,800 pear trees, in Erlian Shan of Zhuzhou Village, from October 18, 2012 to December 31, 2025. Pursuant to the terms of the concession agreement, we will pay a sapling fee of an aggregate of RMB¥500,000 to Lin Changbin which includes a deposit of RMB¥100,000 paid immediately upon signing of the concession agreement and the balance was paid in one payment in October, 2012.
Item 3.
Item 3. 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 any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.
Item 4.
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common stock is quoted on the OTC Bulletin Board under the symbol "UPOW". As of October 9, 2014 there have been no trades of our common stock.
Our shares are issued in registered form. Empire Stock Transfer Inc., 1859 Whitney Mesa Drive, Henderson, NV, 89014 (telephone: (702) 818-5898), (facsimile: (702) 974-1444), is the registrar and transfer agent for our common shares.
Holders
On October 9, 2014, the shareholder’s list showed 28 registered shareholders and 78,273,000 common shares outstanding.
Dividend Policy
To date, we have not paid dividends on shares of our common stock and we do not expect to declare or pay dividends on shares of our common stock in the foreseeable future. The payment of any dividends will depend upon our future earnings, if any, our financial condition, and other factors deemed relevant by our board of directors.
Securities Authorized For Issuance Under Equity Compensation Plans
Our company does not have any equity compensation plans or any individual compensation arrangements with respect to its common stock or preferred stock. The issuance of any of our common or preferred stock is within the discretion of our board of directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval.
Recent Sales of Unregistered Securities and Use of Proceeds
We did not sell any equity securities which were not registered under the Securities Act during our fiscal year ended June 30, 2014.
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
We did not purchase any of our shares of common stock or other securities during our fiscal year ended June 30, 2014.
Item 6.
Item 6. Selected Financial Data
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following plan of operations provides information that management believes is relevant to an assessment and understanding of our financial condition and results of operations. The discussion should be read along with our financial statements and notes thereto. This discussion includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words such as “believe,” “expect,” “estimate,” “anticipate,” “intend,” “project” and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
Limited Operating History
We have an extremely limited operating history and have generated no significant independent financial history. Our business plan changed significantly in May 2011, and we have not demonstrated that we will be able to execute that plan. We cannot guarantee that our existing ventures or our efforts to identify and acquire one or more target companies or businesses as described above will be successful. Our business is subject to all of the risks inherent in development-stage enterprises, including limited capital resources and possible rejection of our business model.
Future financing may not be available to us on acceptable terms or at all. If financing is not available or is not available on satisfactory terms, we may be unable to continue our operations. Any equity financing that may be available will result in dilution of the interests of our existing shareholders.
Results of Operations
For the years ended June 30, 2014 and June 30, 2013
We have realized revenues of $10,944 and $0 for the years ended June 30, 2014 and 2013.
Expenses
Operating expenses for year ended June 30, 2014 decreased by $80,838 or approximately 18.99% compared to operating expenses for year ended June 30, 2013, primarily as a result of decreases in professional and consulting fees - related party, general and administrative expenses and professional fees. We incurred wages and salaries expenses of $67,575, travel expenses of $51,237, rent expenses of $23,971 and other general and administrative expenses of $83,662.
During the fiscal year ended June 30, 2014, we had revenue of $10,944 and cost of sales of $628,117. Expenses for the year totaled $344,877, resulting in a net loss of $985,976.
Liquidity and Capital Resources
Working Capital
Cash Flows
As of June 30, 2014, we had a cash balance of $43,141, total assets of $383,767 and total liabilities of $1,582,544, as compared to a cash balance of $18,316, total assets of $841,437 and total liabilities of $934,047 as of June 30, 2013. Our working capital at June 30, 2014 was $(1,025,867), as compared to a working capital of $96,290 at June 30, 2013.
Our company’s operations have been funded through an equity financing and a series of debt transactions, primarily with shareholders, directors, and officers of our company. These related party debt transactions have operated as informal lines of credit since the inception of our company, and related parties have extended credit as needed which our company has repaid at its convenience. We anticipate that we will incur operating losses in the foreseeable future and we believe we will need additional cash to support our daily operations while we are attempting to execute our business plan and produce revenues. If our related parties are unable or unwilling to provide additional capital, we would likely require financing from third parties. There can be no assurance that any additional financing will be available to us, on terms we believe to be favorable or at all. The inability to obtain additional capital would have a material adverse effect on our operations and financial condition and could force us to curtail or discontinue operations entirely and/or file for protection under bankruptcy laws.
On May 31, 2012, three of our shareholders and directors loaned us an aggregate of $350,000. These loans are represented by term promissory notes which are payable on May 31, 2017 and bear interest at the rate of 4% per annum. We advanced $319,896 of those loans as initial capital for the establishment of a new business venture.
In July 2011, we completed a private placement financing resulting in proceeds of $465,506 (net of expenses). From time to time our officers and shareholders have advanced money to our company as working capital. For the years ended June 30, 2014 and 2013, net cash provided by financing activities was $675,687 and $804,048, respectively.
Operating Activities
During the fiscal years ended June 30, 2014 and 2013, we used $467,630 and $841,385 in operating activities, respectively. The decrease in net cash used in operating activities resulted from decreases in loss from continuing operations, other assets and net cash provided by discontinued operations, offset by decreases in depreciation and amortization expense, accounts payable and accrued expenses.
We have used a total of $1,752,540 in operating activities since inception on May 8, 2009.
Investing Activities
During the fiscal year ended June 30, 2014 we used $193,523 whereas we received $14,203 in investing activities for the fiscal year ended June 30, 2013. From inception on May 8, 2009 through June 30, 2014, we used $699,066 in investing activities. The increase in net cash used in investing activities resulted from increases in fixed assets purchased and acquisition of non-controlling interest
Financing Activities
During the fiscal year ended June 30, 2014, we received proceeds from capital contribution by non-controlling interest of $34,034 and advances from related parties and affiliated company of $641,597. As a result, we had net cash provided by financing activities of $675,687.
During the fiscal year ended June 30, 2013, we received proceeds from notes payable - related parties of $157,691 capital contribution by non-controlling interest of $312,830, advances from related parties and affiliated company of $333,527 and repayment to shareholders of $Nil. As a result, we had net cash provided by financing activities of $804,048.
Our net cash provided by financing activities since inception on May 8, 2009 was $2,442,282.
Plan of Operations
In May 2011, we commenced limited operations under our current business model of identifying one or more businesses to merge with or acquire. As described above, in August 2011, we entered into a technology license and technology transfer agreement, under which we licensed the rights to develop, manufacture, market, sell and import products which incorporate or rely upon certain “Triops” technologies and processes in Taiwan, the People’s Republic of China, the United States, Japan and Korea. We began our initial operations using this license in August 2011.
On May 16, 2012, we entered into a joint venture agreement with Mr. Yuan-Hao Chang, a shareholder of our company, under which we intended to develop, own and operate an agricultural business in China, PRC and to rely on Mr. Chang’s experience and knowledge in organic fertilizers and farming to plant and grow various fruits in China, and to harvest and sell the produced crops and goods for a profit. We commenced initial operations in July 2012.
In November 2012, we ceased our limited business operations and disposed the assets in Taiwan where we had entered into a technology licensing and transfer agreement to obtain the rights to develop, manufacture, market, sell and import products which incorporate or rely upon certain “Triops” technologies and processes in Taiwan, the People’s Republic of China, the United States, Japan and Korea.
In September 2014, due to lack of revenue generated in our agricultural operations, management of our company decided to abandon our agricultural business plan through UAN Sheng in order to seek the acquisition of an operating business by merger, share exchange, asset acquisition or other business combination.
We have a limited operating budget and must maintain tight expense controls. However, we will need to obtain additional financing to effectively implement our business plan. If we do not obtain additional financing, we will continue to operate on a reduced budget until such time as more capital can be raised or we may be forced to curtail or discontinue operations. In addition, we are actively pursuing a new business opportunity that would require additional funding over the next twelve months. There can be no assurance that we will be able to raise additional capital, on terms favorable to us or at all.
We will require additional funds to fund our budgeted expenses over the next 12 months. 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 still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable. We need to raise additional funds in the immediate future in order to proceed with our budgeted expenses.
Specifically, we estimate our operating expenses and working capital requirements for the next 12 months to be as follows:
Critical Accounting Policies
Basis of Presentation
Our company has prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America.
The consolidated financial statements include the accounts of our company and our subsidiaries. Significant inter-company transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Discontinued Operations
In November 2012, our company ceased our Taiwan’s business operations. The Consolidated Financial Statements have been recast to present the Taiwan’s business operation as discontinued operations as described in “Note 12 - Discontinued Operations.” Unless noted otherwise, discussion in the Notes to Consolidated Financial Statements pertain to continuing operations.
Reclassification
Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported net income or losses.
Cash and Cash Equivalents
Cash and cash equivalents are all highly liquid instruments purchased with a maturity of three months or less to the extent the funds are not being held for investment purposes.
Concentrations of Credit Risk
Our company's operations are carried out in China. Accordingly, our company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in China, and by the general state of the China's economy. Our company's operations in China are subject to specific considerations and significant risks not typically associated with companies in North America. Our company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.
Financial instruments which potentially subject our company to concentrations of credit risk consist principally of cash. All of our company’s cash is maintained with state-owned banks within China of which no deposits are covered by insurance. Our company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.
Revenue Recognition
Our company is a development stage company as such has realized no product and or directly related expenses.
Our company entered into a joint venture agreement to develop, own and operate an agricultural business in China, PRC. Our company does not expect to generate any significant revenues over the next twelve months.
Inventory
Our company recognizes all direct and indirect costs of growing crops in accordance to ASC 905-330-25 "Agriculture Inventory Recognition". ASC 905-330-25 requires all direct and indirect costs of growing crops to accumulate as inventory until the time of harvest. Some crop costs such as soil preparation, which are incurred before planting are deferred and allocated until harvest. Growing crops consist of crop land lease, crops for growing crops, seeds and seeding plants costs, and production fees paid to growers. Inventories are stated at the lower of cost or market determined on a weighted average basis.
Fixed Assets
Fixed assets are recorded at cost and are depreciated or amortized using the straight-line method over the estimated useful lives of the assets:
Machinery and Equipment 10 years
Electronic Equipment 3 years
Office Furniture and Others 5 years
Land Use Rights
Land use rights are recorded at cost and amortized over the shorter of the estimated useful life or the expected useful life of the land use rights for thirty-four years and six months.
Appropriation to Statutory Reserve
Pursuant to the laws applicable to the China, PRC, entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC (“PRC GAAP”) at each year-end). For foreign invested enterprises and joint ventures in China, PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). Our company did not make any appropriations to the reserve funds mentioned above due to lack of profits after tax in PRC since commencement of operations.
Advertising Costs
Our company’s policy regarding advertising is to expense advertising when incurred.
Income Taxes
Our company provides for income taxes under ASC 740, “Accounting for Income Taxes.” ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.
Impairment of Long-Lived Assets
Our company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, our company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, our company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Stock-Based Compensation
Our company records stock-based compensation in accordance with ASC 718 (formerly SFAS No. 123R, “Share Based Payments”), using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.
Fair Value of Financial Instruments
The standard for “Disclosures about Fair Value of Financial Instruments,” defines financial instruments and requires fair value disclosures of those financial instruments. Our company adopts the standard “Fair Value Measurements,” which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosures requirements for fair value measures. Current assets and current liabilities qualified as financial instruments and management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their current interest rate is equivalent to interest rates currently available. The three levels are defined as follows:
·Level 1 ─ inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
·Level 2 ─ inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
·Level 3 ─ inputs to the valuation methodology are unobservable and significant to the fair value.
As of the balance sheet date, the estimated fair values of the financial instruments were not materially different from their carrying values as presented due to the short maturities of these instruments and that the interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profile at respective period-ends. Determining which category an asset or liability falls within the hierarchy requires significant judgment. Our company evaluates the hierarchy disclosures each quarter.
Segment Reporting and Geographic Information
Our company reports operations under one business segments-Agriculture.
Geographic Information as of June 30, 2014 and for the year ended June 30, 2013 are as follows:
Foreign Currency Translation
The functional currency of UAN Power operations in United States is U.S. Dollar (“USD”).
The functional currency of UAN Power’s discontinued operations in Taiwan is New Taiwan Dollar (“TWD”).
The functional currency of UAN Lee’s operations in Hong Kong is Hong Kong Dollar (“HKD”).
The functional currency of UAN Sheng’s operations in China, PRC is Chinese Yuan Renminbi (“RMB”).
Transactions denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the date of the transactions. Exchange gains or losses on transactions are included in earnings.
The financial statements of our company are translated into U.S. dollars in accordance with the standard, “Foreign Currency Translation,” codified in ASC 830, using rates of exchange at the end of the period for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses and historical rates for equity. Translation adjustments resulting from the process of translating the local currency combining financial statements into U.S. dollars are included in determining comprehensive income.
At June 30, 2014 and 2013 the cumulative translation adjustment was $37,891 and $23,352, respectively. For the year ended June 30, 2014 and 2013, net other comprehensive income was $11,454 and $5,008, respectively.
The exchange rates used to translate TWD amounts into USD at (1USD=TWD) as follows:
The exchange rates used to translate HKD amounts into USD at (1USD=HKD) as follows:
The exchange rates used to translate RMB amounts into USD at (1USD=RMB) as follows:
Comprehensive Income
Our company adopted FASB Accounting Standards Codification 220, “Comprehensive Income,” which establishes standards for reporting and presentation of comprehensive income (loss) and its components in a full set of general-purpose financial statements. Our company has chosen to report comprehensive income (loss) in the statements of income and comprehensive income. Comprehensive income (loss) is comprised of net income and all changes to stockholders’ equity except those due to investments by owners and distributions to owners.
Basic (Loss) per Common Share
Basic (loss) per share is calculated by dividing our company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing our company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of June 30, 2014 and 2013, respectively; however, if present, a separate computation of diluted loss per share would not have been presented, as these common stock equivalents would have been anti-dilutive due to our company’s net loss.
Recently Issued Accounting Pronouncements
In August 2014, the Financial Accounting Standards Board issued ASU No. 2014-15, Presentation of Financial Statements- Going Concern (Subtopic 205-40). This standard is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments contained in this ASU apply to all companies and not-for-profit organizations. The amendments are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company is currently assessing this ASU’s impact on the Company’s consolidated results of operations and financial condition.
In June 2014, the Financial Accounting Standards Board issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The amendments in this Update remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. For public business entities, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915.
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive model to be used in the accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard’s stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle the ASU includes provisions within a five step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when (or as) an entity satisfies a performance obligation. The standard also specifies the accounting for some costs to obtain or fulfill a contract with a customer and requires expanded disclosures about revenue recognition. The standard provides for either full retrospective adoption or a modified retrospective adoption by which it is applied only to the most current period presented. This ASU is effective January 1, 2017. The Company is currently assessing this ASU’s impact on the Company’s consolidated results of operations and financial condition.
In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. This standard will have the impact of reducing the frequency of disposals reported as discontinued operations, by requiring such a disposal to represent a strategic shift that has or will have a major effect on an entity’s operations and financial results. However, existing provisions that prohibit an entity from reporting a discontinued operation if it has certain continuing cash flows or involvement with the component after disposal are eliminated by this standard. The ASU also expands the disclosures for discontinued operations and requires new disclosures related to individually significant disposals that do not qualify as discontinued operations. This ASU is effective prospectively beginning January 1, 2015. Early adoption is, however, permitted. This ASU would impact the Company’s consolidated results of operations and financial condition only in the instance of a disposal as described above.
In July 2013, the FASB issued ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” This standard requires that an unrecognized tax benefits, or a portion of an unrecognized tax benefit be presented on a reduction to a deferred tax asset for an NOL carryforward, a similar tax loss, or a tax credit carryforward with certain exceptions to this rule. If certain exception condition exists, an entity should present an unrecognized tax benefit in the financial statements as a liability and should not net the unrecognized tax benefit with a deferred tax asset. This standard is effective for fiscal years and interim periods within those years beginning after December 15, 2013. Our company does not expect the adoption of the new provisions to have a material impact on our financial condition or results of operations.
Our company believes that there were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.
Item 7A.
Item 7A. 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 8.
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
UAN Power Corp.
(A Development Stage Company)
We have audited the accompanying balance sheets of UAN Power Corp. as of June 30, 2014 and 2013, and the related statements of operations, comprehensive income (loss), stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended June 30, 2014, and for the period from May 8, 2009 (date of inception) to June 30, 2014. UAN Power Corp.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of UAN Power Corp. as of June 30, 2014 and 2013, and the results of operations and cash flows for each the years in the two-year ended June 30, 2014, and for the period from May 8, 2009 (date of inception) to June 30, 2014 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has incurred accumulated deficits of $1,872,636 as of June 30, 2014. The Company incurred a net loss of $985,976 and $570,381 for the years ended June 30, 2014 and 2013, respectively. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans concerning this matter are also described in Note 3. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Yichien Yeh, CPA
Oakland Gardens, New York
October 10, 2014
Uan Power Corp. and Subsidiaries
(A Development Stage Company)
Consolidated Balance Sheets
The accompanying notes are an integral part of these financial statements.
Uan Power Corp. and Subsidiaries
(A Development Stage Company)
Consolidated Statements of Operations
(unaudited)
The accompanying notes are an integral part of these financial statements.
Uan Power Corp. and Subsidiaries
(A Development Stage Company)
Consolidated Statements of Comprehensive Income (Loss)
(unaudited)
The accompanying notes are an integral part of these financial statements.
Uan Power Corp. and Subsidiaries
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
From May 8, 2009 (Inception) to June 30, 2014
The accompanying notes are an integral part of these financial statements.
Uan Power Corp. and Subsidiaries
(A Development Stage Company)
Consolidated Statements of Cash Flows
(unaudited)
The accompanying notes are an integral part of these financial statements.
UAN Power Corp. and Subsidiaries
(A Development Stage Company)
Notes to Consolidated Financial Statements
NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS
Nature of Business
UAN Power Corp. (“UAN Power”), formerly known as Gulf Shores Investments, Inc., was originally incorporated in the State of Nevada on May 8, 2009. UAN Power completed a reincorporation in Delaware under the name UAN Power Corp. on November 14, 2011.
UAN Power was originally intended to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other similar business combination with an operating business.
On May 11, 2012, UAN Power through its director, established UAN Lee Agricultural Technology Holding Limited (“UAN Lee”) in Hong Kong in pursue of a possible joint venture.
On May 16, 2012, UAN Power officially entered into a joint venture agreement with Mr. Yuan-Hao Chang, a shareholder of UAN Power, to develop, own and operate an agricultural business in China, PRC (the “Joint Venture”). UAN Power will rely on Mr. Chang’s experience and knowledge in organic fertilizers and farming to plant and grow various fruits in China, and to harvest and sell the produced crops and goods for a profit.
On July 2, 2012, UAN Power (through its director and UAN Lee) and Mr. Chang established UAN Sheng Agricultural Technology Development Limited Company (“UAN Sheng”) in China, PRC. As at October 11, 2012, both parties have completed their initial capital contribution to UAN Sheng pursuant to the Joint Venture agreement.
As at October 16, 2012, UAN Lee became wholly owned subsidiary of UAN Power with 3,510,000 capital shares authorized at HKD1.00 par value and 3,510,000 shares issued and outstanding.
UAN Power and its subsidiaries - UAN Lee and UAN Sheng shall be collectively referred throughout as the “Company”.
The Company’s business operation is to develop, own, and operate an agricultural business. The Company has not yet generated revenues from its planned principal operation and is considered a development stage company in accordance with ASC Topic 915-15.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company has prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America.
The consolidated financial statements include the accounts of the Company and its subsidiaries. Significant inter-company transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Discontinued Operations
In November 2012, the Company ceased its Taiwan’s business operations. The Consolidated Financial Statements have been recast to present the Taiwan’s business operation as discontinued operations as described in “Note 12 - Discontinued Operations.” Unless noted otherwise, discussion in the Notes to Consolidated Financial Statements pertain to continuing operations.
Reclassification
Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported net income or losses.
Cash and Cash Equivalents
Cash and cash equivalents are all highly liquid instruments purchased with a maturity of three months or less to the extent the funds are not being held for investment purposes.
Concentrations of Credit Risk
The Company's operations are carried out in China. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in China, and by the general state of the China's economy. The Company's operations in China are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. All of the Company’s cash is maintained with state-owned banks within China of which no deposits are covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.
Revenue Recognition
The Company is a development stage company as such has realized no product and or directly related expenses.
The Company entered into a joint venture agreement to develop, own and operate an agricultural business in China, PRC. The Company does not expect to generate any significant revenues over the next twelve months.
Inventory
The Company recognizes all direct and indirect costs of growing crops in accordance to ASC 905-330-25 "Agriculture Inventory Recognition". ASC 905-330-25 requires all direct and indirect costs of growing crops to accumulate as inventory until the time of harvest. Some crop costs such as soil preparation, which are incurred before planting are deferred and allocated until harvest. Growing crops consist of crop land lease, crops for growing crops, seeds and seeding plants costs, and production fees paid to growers. Inventories are stated at the lower of cost or market determined on a weighted average basis.
Fixed Assets
Fixed assets are recorded at cost and are depreciated or amortized using the straight-line method over the estimated useful lives of the assets:
Machinery and Equipment 10 years
Electronic Equipment 3 years
Office Furniture and Others 5 years
Land Use Rights
Land use rights are recorded at cost and amortized over the shorter of the estimated useful life or the expected useful life of the land use rights for thirty-four years and six months.
Appropriation to Statutory Reserve
Pursuant to the laws applicable to the China, PRC, entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC (“PRC GAAP”) at each year-end). For foreign invested enterprises and joint ventures in China, PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). The Company did not make any appropriations to the reserve funds mentioned above due to lack of profits after tax in PRC since commencement of operations.
Advertising Costs
The Company’s policy regarding advertising is to expense advertising when incurred.
Income Taxes
The Company provides for income taxes under ASC 740, “Accounting for Income Taxes.” ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Stock-based compensation
The Company records stock-based compensation in accordance with ASC 718 (formerly SFAS No. 123R, “Share Based Payments”), using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.
Fair Value of Financial Instruments
The standard for “Disclosures about Fair Value of Financial Instruments,” defines financial instruments and requires fair value disclosures of those financial instruments. The Company adopts the standard “Fair Value Measurements,” which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosures requirements for fair value measures. Current assets and current liabilities qualified as financial instruments and management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their current interest rate is equivalent to interest rates currently available. The three levels are defined as follows:
·Level 1 ─ inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
·Level 2 ─ inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
·Level 3 ─ inputs to the valuation methodology are unobservable and significant to the fair value.
As of the balance sheet date, the estimated fair values of the financial instruments were not materially different from their carrying values as presented due to the short maturities of these instruments and that the interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profile at respective period-ends. Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates the hierarchy disclosures each quarter.
Segment Reporting and Geographic Information
The Company reports operations under one business segments-Agriculture.
Geographic Information as of June 30, 2014 and for the year ended June 30, 2014 and 2013 as follows:
Foreign Currency Translation
The functional currency of UAN Power operations in United States is U.S. Dollar (“USD”).
The functional currency of UAN Power’s discontinued operations in Taiwan is New Taiwan Dollar (“TWD”).
The functional currency of UAN Lee’s operations in Hong Kong is Hong Kong Dollar (“HKD”).
The functional currency of UAN Sheng’s operations in China, PRC is Chinese Yuan Renminbi (“RMB”).
Transactions denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the date of the transactions. Exchange gains or losses on transactions are included in earnings.
The financial statements of the Company are translated into U.S. dollars in accordance with the standard, “Foreign Currency Translation,” codified in ASC 830, using rates of exchange at the end of the period for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses and historical rates for equity. Translation adjustments resulting from the process of translating the local currency combining financial statements into U.S. dollars are included in determining comprehensive income.
At June 30, 2014 and 2013, the cumulative translation adjustment was $37,891 and $23,352, respectively. For the year ended June 30, 2014 and 2013, net other comprehensive income was $11,454 and $5,008, respectively.
The exchange rates used to translate TWD amounts into USD at (1USD=TWD) as follows:
The exchange rates used to translate HKD amounts into USD at (1USD=HKD) as follows:
The exchange rates used to translate RMB amounts into USD at (1USD=RMB) as follows:
Comprehensive Income
The Company adopted FASB Accounting Standards Codification 220, “Comprehensive Income,” which establishes standards for reporting and presentation of comprehensive income (loss) and its components in a full set of general-purpose financial statements. The Company has chosen to report comprehensive income (loss) in the statements of income and comprehensive income. Comprehensive income (loss) is comprised of net income and all changes to stockholders’ equity except those due to investments by owners and distributions to owners.
Basic (Loss) per Common Share
Basic (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of June 30, 2014 and 2013, respectively; however, if present, a separate computation of diluted loss per share would not have been presented, as these common stock equivalents would have been anti-dilutive due to the Company’s net loss.
Recently Issued Accounting Pronouncements
In August 2014, the Financial Accounting Standards Board issued ASU No. 2014-15, Presentation of Financial Statements- Going Concern (Subtopic 205-40). This standard is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments contained in this ASU apply to all companies and not-for-profit organizations. The amendments are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company is currently assessing this ASU’s impact on the Company’s consolidated results of operations and financial condition.
In June 2014, the Financial Accounting Standards Board issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The amendments in this Update remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. For public business entities, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915.
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive model to be used in the accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard’s stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle the ASU includes provisions within a five step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when (or as) an entity satisfies a performance obligation. The standard also specifies the accounting for some costs to obtain or fulfill a contract with a customer and requires expanded disclosures about revenue recognition. The standard provides for either full retrospective adoption or a modified retrospective adoption by which it is applied only to the most current period presented. This ASU is effective January 1, 2017. The Company is currently assessing this ASU’s impact on the Company’s consolidated results of operations and financial condition.
In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. This standard will have the impact of reducing the frequency of disposals reported as discontinued operations, by requiring such a disposal to represent a strategic shift that has or will have a major effect on an entity’s operations and financial results. However, existing provisions that prohibit an entity from reporting a discontinued operation if it has certain continuing cash flows or involvement with the component after disposal are eliminated by this standard. The ASU also expands the disclosures for discontinued operations and requires new disclosures related to individually significant disposals that do not qualify as discontinued operations. This ASU is effective prospectively beginning January 1, 2015. Early adoption is, however, permitted. This ASU would impact the Company’s consolidated results of operations and financial condition only in the instance of a disposal as described above.
In July 2013, the FASB issued ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” This standard requires that an unrecognized tax benefits, or a portion of an unrecognized tax benefit be presented on a reduction to a deferred tax asset for an NOL carryforward, a similar tax loss, or a tax credit carryforward with certain exceptions to this rule. If certain exception condition exists, an entity should present an unrecognized tax benefit in the financial statements as a liability and should not net the unrecognized tax benefit with a deferred tax asset. This standard is effective for fiscal years and interim periods within those years beginning after December 15, 2013. The Company does not expect the adoption of the new provisions to have a material impact on our financial condition or results of operations.
The Company believes that there were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations.
NOTE 3 - GOING CONCERN
These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business.
For the year ended June 30, 2014, the Company had a net loss of $985,976; and had an accumulated deficit of $1,872,636 as of June30, 2014.
The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company’s business. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. 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 the Company be unable to continue as a going concern.
NOTE 4 - STOCKHOLDERS’ EQUITY
The stockholders’ equity section of the Company’s balance sheet contains the following classes of capital stock as of June 30, 2014:
Preferred stock, $0.00001 par value, 20,000,000 shares authorized 0 shares issued and outstanding.
Common Stock, $0.00001 par value, 250,000,000 shares authorized 78,273,000 shares issued and outstanding.
NOTE 5 - INVENTORY
The balances of inventory are as follows:
NOTE 6 - FIXED ASSET
The balances of fixed assets are as follows:
The depreciation for the year ended June 30, 2014 and 2013 were $7,878 and $2,978, respectively.
Depreciation were allocated as follows:
NOTE 7 - LAND USE RIGHTS
The balances of intangible assets are as follows:
The amortization for the year ended June 30, 2014 and 2013 were $4,880 and $3,279, respectively.
NOTE 8 - RELATED PARTY TRANSACTIONS
As of June 30, 2014, Parashar Patel, (Chief Executive Officer and Director of the Company), had an outstanding receivable amount of $4,550 from the Company which he has advanced the amount to the Company to pay administrative and operating expenses. Mr. Patel provides various consulting and professional services to the Company for which he is compensated. The consulting and professional fees were $24,000 and $37,950 for the year ended June 30, 2014 and 2013, respectively.
As of June 30, 2014, Syuan Jhu Lin (Shareholder of the Company) has an outstanding receivable amount of $72,940 from the Company which she has advanced the amount to the Company to pay administrative and operating expenses.
As of June 30, 2014, Yuan-Hao (Michael) Chang (Shareholder of the Company) has an outstanding receivable amount of $28,475 from the Company which he has advanced the amount to the Company to pay administrative and operating expenses.
As of June 30, 2014, Mr. Chang has an outstanding receivable amount of $221,456 from the Company which he has advanced the amount to the Company as capital investment in a joint venture to develop, own, and operate an agricultural business in China, PRC (Refer to Note 9 &10).
Mr. Chang also provides various public relation and professional services to the Company for which he is compensated. The public relation and professional fees were $23,500 and $15,000 for the year ended June 30, 2014 and 2013 respectively. As of June 30, 2014, the outstanding public relation and professional fees payable to Mr. Chang was $23,500.
As of June 30, 2014, the Company has an outstanding payable amount of $100,480 to Mr. Chang (Non-Controlling Interest Owner of Uan Sheng, PRC Operating Company) which he has advanced the amount to the Company as working capital Company to pay administrative and operating expenses.
As of June 30, 2014, Wan-Fang Liu (Director of the Company) has an outstanding receivable amount of $417,747 from the Company which she has advanced the amount to the Company as capital investment in a joint venture to develop, own, and operate an agricultural business in China, PRC and to acquire additional 24% non-controlling interest. (Refer to Note 9 & 10).
As of June 30, 2014, Ms. Liu has an outstanding receivable amount of $53,764 from the Company which she has advanced the amount to the Company to pay administrative and operating expenses.
As of June 30, 2014, the Company has an outstanding payable amount of $20,000 to UAN Cultural & Creative Co., Ltd, an affiliated company which the shareholders and directors of the Company have certain ownership.
As of June 30, 2014, Mr. Chi-Hung Cheng (Prior Director of the Company) has an outstanding receivable amount of $52,500 from the Company which he has advanced the amount to the Company to pay administrative and operating expenses.
The amounts above are due on demand and non-interest bearing.
NOTE 9 - CONVERTIBLE NOTES PAYABLE - RELATED PARTIES
On May 31, 2012, the Company entered into Promissory Note agreements for the outstanding amount of $350,000 with Wan-Fang Liu, Wen-Cheng Huang, and Tsu-Yung Hsu who are Shareholders and/or Directors of the Company, collectively the “Holders” for operational and possible investment opportunities. The maturity of the Notes is May 31, 2017 and bear interest at 4% per annum.
On December 1, 2012, the Company and the Holders entered into an amendment agreement to amend the Original Promissory Notes dated May 31, 2012 above, to add an automatic conversion clause to the terms of the Notes.
On December 1, 2012, the Company entered into a convertible note agreement with Yuan-Hao (Michael) Chang (Shareholder of the Company) for the outstanding amounts of HKD 1,222,726 ($157,691) which he has advanced the amount to the Company as capital investment in a joint venture to develop, own, and operate an agricultural business in China, PRC (Refer to Note 10). The maturity of this Note is December 1, 2017 and bear interest at 4% per annum.
The aggregate outstanding principal and all unpaid accrued interest due under the Convertible Notes above shall be automatically converted in to a number of units of Common Stock of the Company equal to (i) the aggregate outstanding principal and unpaid accrued interested due under the Note one year from issuance date, divided by $0.02 (Two cents), subject to appropriate adjustment in the event of any unit distribution, unit reverse split, combination, reclassification or other similar recapitalization affecting such units.
Interest expenses incurred on the notes for the year ended June 30, 2014 and 2013 was $20,308 and $17,679, respectively. Interest payable on the Notes at June 30, 2014 was $39,153.
NOTE 10 - COMMITMENTS & CONTINGENCIES
Joint Venture Agreement
On May 16, 2012, the Company entered into a Joint Venture Agreement with Mr. Yuan-Hao Chang (Shareholder of the Company) to develop, own, and operate an agricultural business in China, PRC. The Company will exploit Mr. Chang’s unique experience, skills, knowledge, and techniques in organic fertilizer and farming to plant and grow various fruits in China, and to harvest and sell the produced crops and goods for profits.
Pursuant to the agreement, the Company will own 66% and shall contribute $462,000 as initial capital before October 31, 2012. By October 16, 2012, the Company has contributed $462,000 and the State Administration of Industry and Commerce (SAIC) of China has issued the Joint Venture’s Capital Contribution Verification Report, Business License and Permits for the establishment of the Joint Venture.
On December 1, 2013, the Company acquired additional interests and increased its ownership to 90%.
Office Space Lease
In June 2012, the Company entered into a six-year operating lease for a facility in China to meet its needs under the Joint Venture Agreement.
In August 2012, the Company entered into a one-year operating lease for a facility in China to meet its needs under the Joint Venture Agreement. The lease agreement has not been extended and the Company does not intend to extend the lease agreement. The Company is currently leasing the facility on a month to month basis.
Future lease commitments are as follows:
Farm Land Lease
In October 2012, the Company entered into a 20 years land lease consisting of 13.97 acres of land for its agricultural business in China. The lease expires on December 26, 2032. The land is separated into 3 sections consisting of 6.13 acres for Section A, 4.55 acres for Section B, and 3.29 acres for Section C.
Future lease commitments are payable on October 31st of each year as follows:
Section A is based on the current year’s national market purchase price of approximately 551lbs (250kg) of grains.
Section B is based on the current year’s national market purchase price of approximately 441lbs (200kg) of grains.
Section C is based on the current year’s national market purchase price of approximately 331lbs (150kg) of grains.
In November 2012, the Company entered into a 13 years land and housing facility lease consisting of 13.97 acres of land for its agricultural business in China. The lease expires on December 26, 2032. Future lease commitments are payable on August 1st of each year based on the market purchase price of approximately 49,604lbs (22,500kg) of grains.
In December 2012, the Company entered into a month to month office space lease in Michigan State for $200 a month.
Total rent expenses for the leases above were $23,971 and $7,010 for year ended June 30, 2014 and 2013, respectively.
NOTE 11 - INCOME TAXES
UAN Power was established under the laws of the State of Delaware and is subject to U.S. federal income tax and Delaware state income tax.
The Company has not made a provision for U.S. income taxes on undistributed earnings of oversea subsidiaries-UAN Lee and UAN Sheng with which the Company intends to continue to reinvest. It is not practicable to estimate the amount of additional tax that might be payable on the foreign earnings if they were remitted as dividends, or lent to the Company, or if the Company should sell its stock in these subsidiaries.
UAN Lee was established in Hong Kong and is subject to Hong Kong tax laws. However, there is no Hong Kong based income; therefore, there is no income tax impact from Hong Kong.
UAN Sheng was established in China and is subject to China tax laws. However, there is no income tax for agricultural business in China.
At June 30, 2014, the Company has cumulative U.S. federal net operating loss carry forwards of approximately $936,000 available to offset future taxable income. These net operating losses are not likely to be fully realized, and consequently a full valuation allowance has been established relating to such deferred tax assets. This cumulative tax loss expires as early as June 30, 2029.
NOTE 12 - DISCONTINUED OPERATIONS
In November 2012, the Company ceased its limited business operations in Taiwan where the Company had entered into a Technology Licensing & Transfer Agreement to obtain the rights to develop, manufacture, market, sell and import products which incorporate or rely upon certain “Triops” technologies and processes in Taiwan, The People’s Republic of China, the United States, Japan and Korea (the “Taiwan Business”). In accordance with the applicable accounting guidance for the ceased operations, the results of the Taiwan Business are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented.
Summarized financial information for discontinued operations is as follow:
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
There were no disagreements related to accounting principles or practices, financial statement disclosure, internal controls or auditing scope or procedure during the two fiscal years and interim periods.
Item 9A.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that the information disclosed in the reports we file with the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer), as appropriate, to allow timely decisions regarding required disclosure.
Management, including our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer), evaluated the effectiveness of our disclosure controls and procedures, as of June 30, 2014, in accordance with Rules 13a-15(b) and 15d-15(b) of the Securities and Exchange Act of 1934, as amended are not effective to ensure the information required to be disclosed by us in the reports that we file or submit under the Securities and Exchange Act of 1934, as amended is recorded, processed, summarized and reported within the time period specified in SEC rules and forms.
Our management, including our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer), do not expect that our disclosure controls, and procedures or internal controls will prevent all possible error and fraud. Our disclosure controls and procedures are, however, designed to provide reasonable assurance of achieving their objectives, and our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) have concluded that our financial controls and procedures are not effective at that reasonable assurance level.
Management's Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is the process designed by and under the supervision of our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer), or the persons performing similar functions, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America. These officers have evaluated the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control over Financial Reporting - Guidance for Smaller Public Companies.
Our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) have assessed the effectiveness of our internal control over financial reporting as of June 30, 2014, and concluded that it was effective based on those criteria.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Commission that permit our company to provide only management's report in this annual report.
Changes in Internal Controls
During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B.
Item 9B. Other Information
Effective November 18, 2013, Chung Hua Yang resigned as chief financial officer of our company. The resignation was not the result of any disagreements with our company regarding our operations, policies, practices or otherwise.
Effective November 28, 2013, we appointed Yun-Mi Han as chief financial officer of our company.
Effective November 29, 2013, Syuan-Jhu Lin resigned as chairman and as a director of our company and Li-Feng Lee resigned as a director of our company. Their resignations were not the result of any disagreements with our company regarding our operations, policies, practices or otherwise.
Effective November 29, 2013, we appointed our director, Wan-Fang Liu, as chairman of our company.
Effective December 23, 2013, we appointed Dr. Hans C. Justice Chang as chief operating officer of our company.
PART III
Item 10.
Item 10.	Directors, Executive Officers and Corporate Governance
The following individuals serve as the directors and executive officers of our company as of the date of this annual report. All directors of our company hold office until the next annual meeting of our shareholders or until their successors have been elected and qualified. The executive officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office.
Business Experience
The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee of our company, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.
Parashar Patel - President, Chief Executive Officer and Director
Parashar Patel has served as president, chief executive officer and a director of our company since May 23, 2011. Mr. Patel has also served as the chief executive officer and member of the board of directors of UAN Cultural & Creative Co., Ltd. since 2010. Since 2008, Mr. Patel has served as chief technical director of Android Inc. in Auburn Hills, Michigan. From 2005 to 2008, he served as chief technical officer of Avanti Systems, Inc. and, while stationed in Taipei, Taiwan and in Shanghai, China, he was responsible for manufacturing quality control and sequenced delivery. Mr. Patel has over 20 years of business and system development and analyses experience with an emphasis on the design, development and deployment of large-scale, real-time transaction processing systems and applications. Mr. Patel was awarded a B.S. in Chemistry and Mathematics from Grand Valley State University in 1975. Our board of directors concluded that Mr. Patel is uniquely qualified to serve as a director and as president and chief executive officer based on his past and current leadership and executive roles, financial skills and business judgment.
Wan-Fang Liu - Director and Chairman
Wan-Fang Liu has served as a director of our company since May 23, 2011 and was appointed as Chairman of our company on November 29, 2013. Ms. Liu has been a member of the board of directors of UAN Cultural & Creative Co., Ltd. since June 2010. Since 2004, Ms. Liu has served as the president of Natural Beauty Inc. of ShenZhen, China, the principal products of which are cosmetics and other beauty products. Natural Beauty is listed on the Hong Kong exchange. Our board of directors has concluded that Ms. Liu is qualified to serve as a director based on her experience with day-to-day business operations and service as a director of another publicly listed company.
Chih-Wei Chuang - Director
Chih-Wei Chuang has served as a director of our company since July 10, 2012. Mr. Chuang has served as a sales manager of Ta Fung Pharmaceutical Co., Ltd., a pharmaceutical corporation, for more than five years, where he has contributed to the increase in the company’s sales. Mr. Chuang is a graduate of the University of Southern Taiwan, Tainan, where he majored in pharmacy and science. Our board of directors has concluded that Mr. Chuang is qualified to serve as a director based on his prior experience and on his particular skills in the area of sales and sales management.
Yun-Mi Han - Chief Financial Officer
Yun-Mi Han has served as chief financial officer of our company since November 28, 2013. From 2008 to 2010, Mr. Han served as financial manager of our company in Taiwan. Yun-Mi Han has served as financial manager of UAN Cultural & Creative Co., Ltd. since 2010 with respect to the company’s previous art gallery business, where he was responsible for the support of artists and management and delivery of artwork in Taiwan. Yun-Mi Han also was responsible for the purchase of patented product from professional industry teams and developed a department for obtaining a patented organic farm and method of planting techniques for the manufacture of nutrition bars at UAN Cultural & Creative Co., Ltd. From 2007 to 2008, Yun-Mi Han served as accounting manager of Dongxin Fishing in China, a Korean company. Dongxin Fishing is a privately held $200 million fishing sales and manufacturing company. Mr. Han earned a bachelor’s degree from Beijing Normal University, graduating in 2008, where he specialized in Chinese and minor in accounting.
Dr. Hans C. Justice Chang - Chief Operating Officer
Dr. Hans C. Justice Chang has served as chief operating officer of our company since December 23, 2013. Dr. Chang, earned his Master’s Degree at the Institute of Business Administration at Oklahoma City University and a Doctoral Degree in Higher Education Administration from Drake University of Iowa in August 1995. Dr. Chang was also a Visiting Scholar of Denver University of Colorado of USA in summer of 1996. Dr. Chang has over 26 years of senior leadership experience and extensive knowledge both academically and internationally in corporate finance, administration management and commercial banking for medium to large enterprises of American, Canadian, Japanese and Taiwan corporations. Since January 2002, Dr. Chang has worked with Ezybonds International Ltd., a Global E-Payment System of England UK., as the Executive Director in charge of structured business strategy and Asian Markets. Previously, Dr. Chang’s work experience included lecturer of Chihlee Institute of Technology: 1987/90, President of Light-Force International Corporation of Japan: 1986/91, General Manager in Taiwan of Nato International Corporation of Canada: 1991/93, General Manager of International Commercial Bank of China in South Africa, 1986/91, Professor of Information Management Department of Nan Hau University: 1996/98, Fellowship of the British Institute of Management of U.K.: 1996/13, General Manager in Taiwan of Amkey Corporation of USA: 1999/04, Chairman of Taiwan Stock Research & Development Association 1989/91, President of Oxford Consultants Corporation: 2001-2013, General Manager in Taiwan of Chief Advisor of Essential Youths Corp. USA: 2004/07, Chairman of Taiwan Consumers Association: 2008-2011, President of Asia-Region of Tien-Shing E-Commerce Corporation: 2009/11, and CEO of Concordia International Foundation of USA.(CIF): 2013.
Board Committees
Our board of directors has not established audit, nominating or compensation committees. Due to our company’s extremely limited operations at the present time, the board of directors believes such committees are unnecessary and currently has no plans to establish these or any other committees of the board.
Terms of Office
Our directors are appointed for one-year terms to hold office until the next annual meeting of our shareholders or until they resign or are removed from office in accordance with our by-laws. Our officers are appointed by our Board of directors and hold office until they resign or are removed by the board.
Family Relationships
There are no family relationships between any of our directors, executive officers and proposed directors or executive officers.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or executive officers has, during the past ten years:
1.been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences);
2.had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;
3.been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
4.been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
5.been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
6.been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26)), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29)), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Conflicts of Interest
There are no conflicts of interest. Further, we have not established any policies to deal with possible future conflicts of interest. -
Audit Committee Financial Expert
We do not have an audit committee financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we have no operations, at the present time, we believe the services of a financial expert are not warranted.
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the Securities and Exchange Commission and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during the year ended April 30, 2014, all filing requirements applicable to its officers, directors and greater than 10% percent beneficial owners were complied with, with the exception of the following:
(1)The named officer, director or greater than 10% stockholder, as applicable, filed a late Form 3 - Initial Statement of Beneficial Ownership of Securities.
Code of Ethics
We have adopted a Code of Ethics that applies to, among other persons, our company’s principal executive officers and senior financial executives, as well as persons performing similar functions. As adopted, our Code of Ethics sets forth written policies to promote:
·honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
·full, fair, accurate, timely and understandable disclosure in all reports and documents that the Corporation files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Corporation that are within the Senior Officer’s area of responsibility;
·compliance with applicable governmental laws, rules and regulations;
·the prompt internal reporting of violations of the Code; and
·accountability for adherence to the Code.
Our Code of Ethics was filed with the Securities and Exchange Commission as Exhibit 14.1 to our annual report on Form 10-K on October 15, 2012. We will provide a copy of the Code of Ethics to any person without charge, upon request. Requests can be sent to: UAN Power Corp., 102 North Avenue, Mount Clemens, Michigan 48043.
Item 11.
Item 11. Executive Compensation
The particulars of the compensation paid to the following persons:
(a)our principal executive officer;
(b)our principal financial officer;
(c)each of our three most highly compensated executive officers who were serving as executive officers at the end of the years ended June 30, 2014 and 2013; and
(d)up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended June 30, 2014 and 2013,
whom we will collectively refer to as the named executive officers of our company, are set out in the following summary compensation table, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000 for the respective fiscal year:
(1)Parashar has acted as our president, chief executive officer and a director since May 23, 2011.
(2)Chung Hua Yang resigned as chief financial officer of our company on November 18, 2013.
(3)Yun-Mi Han has acted as our chief financial officer since November 28, 2013.
Narrative Disclosure to Summary Compensation Table
There are no employment contracts, compensatory plans or arrangements, including payments to be received from our company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with our company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of our company. -
Stock Option Plan
Currently, we do not have a stock option plan in favor of any director, officer, consultant or employee of our company.
Stock Options/SAR Grants
During our fiscal year ended June 30, 2014 there were no options granted to our named officers or directors.
Outstanding Equity Awards at Fiscal Year End
No equity awards were outstanding as of the year ended June 30, 2014.
Long-Term Incentive Plan Awards
No awards under any long-term incentive plan were made from inception through June 30, 2014 to any of the executive officers named in the Summary Compensation Table.
Director Compensation
Directors are permitted to receive fixed fees and other compensation for their services as directors. The board of directors has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors in such capacity.
We have determined that none of our directors are independent directors, as that term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(15) of the NASDAQ Marketplace Rules.
Employment Agreements
We do not currently have employment agreements in place with any of our officers.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.
Indebtedness of Directors, Senior Officers, Executive Officers and Other Management
None of our directors or executive officers or any associate or affiliate of our company during the last two fiscal years, is or has been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of October 9, 2014, by: (i) each of our directors; (ii) each of our named executive officers; and (iii) each person or group known by us to beneficially own more than 5% of our outstanding shares of common stock. Unless otherwise indicated, the shareholders listed below possess sole voting and investment power with respect to the shares they own.
* Less than 1 percent.
(1)Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares).In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided .In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on October 9, 2014. As of October 9, 2014, there were 78,273,000 shares of our company’s common stock issued and outstanding.
(2)Parashar has acted as our president, chief executive officer and a director since May 23, 2011.
(3)Wan-Fang Liu has acted as a director of our company since May 23, 2011 and was appointed as Chairman of our company on November 29, 2013.
(4)Chih-Wei Chuang has acted as a director of our company since July 10, 2012.
(5)Yun-Mi Han has acted as our chief financial officer since November 28, 2013.
(6)Dr. Hans C. Justice Chang has acted as our chief operating officer since December 23, 2013.
To our knowledge, there are no arrangements, including any pledge by any person of our common stock that may result in a change in control of our company at a future date.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Related-Party Transactions
Transactions with related parties, including, but not limited to, members of our board of directors, are reviewed and approved by all members of the board of directors. In the event a transaction with a member of the board is contemplated, the director having a beneficial interest in the transaction is not allowed to participate in the decision-making and approval process. The policies and procedures surrounding the review, approval or ratification of related party transactions are not in writing, nevertheless, such reviews, approvals and ratifications of related party transactions are documented in the minutes of the meetings of the board of directors as appropriate and any such transactions are committed to writing between the related party and our company in an executed engagement agreement.
As of June 30, 2014, Parashar Patel, our chief executive officer and director, had an outstanding receivable amount of $4,550 from our company which he has advanced the amount to our company to pay administrative and operating expenses. Mr. Patel provides various consulting and professional services to our company for which he is compensated. The consulting and professional fees were $24,000 and $37,950 for the years ended June 30, 2014 and 2013, respectively.
As of June 30, 2014, Syuan Jhu Lin, our former chairman of the board of directors and a director of our company, has an outstanding receivable amount of $72,490 from our company which she has advanced the amount to our company to pay administrative and operating expenses.
As of June 30, 2014, Yuan-Hao (Michael) Chang, a shareholder of our company, has an outstanding receivable amount of $28,475 from our company which he has advanced the amount to our company to pay administrative and operating expenses.
As of June 30, 2014, Mr. Chang has an outstanding receivable amount of $221,456 from our company which he has advanced the amount to our company as capital investment in a joint venture to develop, own, and operate an agricultural business in China, PRC.
Mr. Chang also provides various public relation and professional services to our company for which he is compensated. The public relation and professional fees were $23,500and $15,000 for the years ended June 30, 2014 and 2013 respectively. As of June 30, 2014, the outstanding public relation and professional fees payable to Mr. Chang was $23,500.
As of June 30, 2014, our company has an outstanding payable amount of $100,480 to Mr. Chang, joint venture of our company which he has advanced the amount to our company as working capital for our company to pay administrative and operating expenses.
As of June 30, 2014, Wan-Fang Liu (Director of the Company) has an outstanding receivable amount of $417,747 from the Company which she has advanced the amount to the Company as capital investment in a joint venture to develop, own, and operate an agricultural business in China, PRC and to acquire additional 24% non-controlling interest. (Refer to Note 9 & 10).
As of June 30, 2014, Ms. Liu has an outstanding receivable amount of $53,764 from the Company which she has advanced the amount to the Company to pay administrative and operating expenses.
As of June 30, 2014, our company has an outstanding payable amount of $20,000 to UAN Cultural & Creative Co., Ltd, an affiliated company which the shareholders and directors of our company have certain ownership.
As of June 30, 2014, Mr. Chi-Hung Cheng (Prior Director of the Company) has an outstanding receivable amount of $52,500 from the Company which he has advanced the amount to the Company to pay administrative and operating expenses.
The amounts above are due on demand and non-interest bearing.
Independence of the Board of Directors
We do not currently have formal policies and procedures for the review, approval, or ratification of transactions with related persons. However, our board carefully reviews all transactions between our company and related persons to determine whether the relationship is in the best interest of our company and that the terms of any agreement are no less favorable to our company then they would be if the relationship was with an unrelated third party.
Except as otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.
Our board of directors consists of six directors. Our securities are not listed on a national securities exchange, or an inter-dealer quotation system which has requirements that a majority of the board of directors be independent. Under NASDAQ Rule 5605(a)(2)(A), a director is not considered to be independent if he or she also is an executive officer or employee of the corporation. Under such definition,one of our directors, Chih-Wei Chuang, would be considered independent. We are not currently required to comply with the director independence requirements of any national securities exchange. Prior to having our securities listed on any national securities exchange, we would be required to appoint directors who meet the independence requirements of the applicable exchange.
Item 14.
Item 14. Principal Accounting Fees and Services
The aggregate fees billed for the most recently completed fiscal year ended June 30, 2014 and for fiscal year ended June 30, 2013 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.
Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.
PART IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules(a) Financial Statements
(1)Financial statements for our company are listed in the index under Item 8 of this document
(2)All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto.
(b) Exhibits
Exhibit
Number Description
(3) Articles of Incorporation; Bylaws
3.1 Corporate Charter (incorporated by reference to our Registration Statement on Form S-1 filed on September 28, 2009).
3.2 Articles of Incorporation (incorporated by reference to our Registration Statement on Form S-1 filed on September 28, 2009).
3.3 Bylaws (incorporated by reference to our Registration Statement on Form S-1 filed on September 28, 2009).
3.4 Certificate of Amendment (incorporated by reference to our Current Report on Form 8-K filed on September 5, 2014)
(10) Material Contracts
10.1 Stock Purchase Agreement dated May 23, 2011 between our company and David Dreslin, Entrust of Tampa Bay FBO Edward G. Mass, and Entrust of Tampa Bay FBO Van Nguyen and Michael Toups (incorporate by reference to our Current Report on Form 8-K filed on May 24, 2011).
10.2 Return to Treasury Agreement dated May 23, 2011 between our company and Wan-Fang Liu (incorporate by reference to our Current Report on Form 8-K filed on May 24, 2011).
10.3 Stock Purchase Agreement dated May 23, 2011 between our company and David Dreslin, Entrust of Tampa Bay FBO Edward G. Mass, and Entrust of Tampa Bay FBO Van Nguyen and Michael Toups (incorporated by reference to our General Statement of Acquisition of Beneficial Ownership on Schedule 13D filed on June 7, 2011).
10.4 Form of Subscription Agreement (incorporated by reference to our Current Report on Form 8-K filed on July 28, 2011).
10.5 License and Technology Transfer Agreement dated September 14, 2011 between our company and Professor S.H. Hsu (incorporated by referenced to our Quarterly Report on Form 10-K filed on November 21, 2011).
10.6. Tenancy Agreement dated August 25, 2011 between Ideal Development Enterprise Co., Ltd. (incorporated by referenced to our Quarterly Report on Form 10-K filed on November 21, 2011).
10.7 Agent Contract dated September 23, 2011 between our company and Uan Biotech Co., Ltd. (incorporated by reference to our Quarterly Report on Form 10-Q filed on February 17, 2012).
10.8 Sales Contract dated September 8, 2011 between our company and Asia News Network Co., Ltd. (incorporated by reference to our Quarterly Report on Form 10-Q filed on February 17, 2012).
10.9 Promissory Note dated May 31, 2012 between our company and Wan-Fang Liu (incorporated by reference to our Annual Report on Form 10-K filed on October 15, 2012).
10.10 Promissory Note dated May 31, 2012 between our company and Wen-Cheng Huang (incorporated by reference to our Annual Report on Form 10-K filed on October 15, 2012).
10.11 Promissory Note dated May 31, 2012 between our company and Tzu-Yung Hsu (incorporated by reference to our Annual Report on Form 10-K filed on October 15, 2012).
10.12 Joint Venture Agreement dated May 16, 2012 between our company and Yuan-Hao Chang (incorporated by reference to our Annual Report on Form 10-K filed on October 15, 2012).
10.14 Concession Agreement dated October 18, 2012 between UAN Sheng (Fujian) Agricultural Technology Co. Ltd. and Lin Changbin (incorporated by reference to our Current Report on Form 8-K filed on December 31, 2012).
10.16 Renting Agreement dated July 2, 2012 between UAN Sheng (Fujian) Agricultural Technology Co. Ltd. and Jianyang City Construction Supervision Team Masha Squadron (incorporated by reference to our Current Report on Form 8-K filed on December 31, 2012).
Exhibit
Number Description
10.17 Lease Agreement dated August 8, 2012 between UAN Sheng (Fujian) Agricultural Technology Co. Ltd. and Yongliang Yang (incorporated by reference to our Current Report on Form 8-K filed on December 31, 2012).
10.18 Convertible Promissory Note dated December 1, 2012 between our company and Yuan-Hao (Michael) Chang (incorporated by reference to our Current Report on Form 10-Q filed on March 18, 2013).
10.19 Global Amendment to Term Promissory Notes dated December 1, 2012 between our company and each of Wan-Fang Liu, Wen-Cheng Huang and Tsu-Yung Hsu. (incorporated by reference to our Current Report on Form 10-Q filed on March 18, 2013).
(14) Code of Ethics
14.1 Code of Ethics (incorporated by reference to our Annual Report on Form 10-K filed on October 15, 2012).
(21) Subsidiaries of Registrant
21.1
UAN Lee Agricultural Technology Holding Limited in Hong Kong.
UAN Sheng Agricultural Technology Development Limited Company in China, People’s Republic of China.
(31) Rule 13a-14(a)/15d-14(a) Certifications
31.1* Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2* Certification of the Principal Financial Officer and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(32) Section 1350 Certifications
32.1* Certification of the Principal Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2* Certification of the Principal Financial Officer and Principal Accounting Officer pursuant to 18 U.S.C. 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(101)** Interactive Data Files
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
* Filed herewith.
** Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
UAN POWER CORP.
Dated: October 14, 2014 By: /s/ Parashar Patel
Parashar Patel
President, Chief Executive Officer and Director
(Principal Executive Officer)
Dated: October 14, 2014 By: /s/ Yun-Mi Han
Yun-Mi Han
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Dated: October 14, 2014 By: /s/ Parashar Patel
Parashar Patel
President, Chief Executive Officer and Director
(Principal Executive Officer)
Dated: October 14, 2014 By: /s/ Wan-Fang Liu
Wan-Fang Liu
Chairman and Director
Dated: October 14, 2014 By: /s/ Chih-Hung Cheng
Chih-Hung Cheng
Director