ITEM 1.
BUSINESS
History and Development of the Company
Uni Core Holdings Corporation (as used in this Annual Report on Form 10-K, unless the context otherwise requires, the terms “we,” “us,” “the Company,” “UCHC,” and “UniCore” refer to Uni Core Holdings Corporation and its subsidiaries) was incorporated as La Med Tech, Inc. under the laws of the State of Utah on March 6, 1985. The Company changed its name to Entertainment Concepts International in 1987, to Lords & Lazarus, Inc. in 1988, and to Utility Communications International, Inc. in 1996 and to Intermost Corporation in 1998 and to Uni Core Holdings Limited in 2009.
From the date of incorporation through October 1998, the Company’s operations were limited to efforts to identify and acquire or merge with, one or more operating businesses. In October 1998, the Company acquired all of the issued shares of Intermost Limited, a British Virgin Islands Company (“IML”), by issuing to the then shareholders of IML a total of 4,970,000 shares of the Company’s common stock, par value $0.001 per share (the “Merger”). Following the Merger, (i) IML became a wholly-owned subsidiary of the Company, (ii) the shareholders of IML held 58.7% of all issued and outstanding shares of the Company, (iii) the Company changed its name to Intermost Corporation, (iv) the Company terminated all its prior business activities and adopted IML’s business plan, and (v) all officers and directors of the Company resigned and were replaced by officers and directors of IML.
In February 2003, the Company reincorporated (changed its domicile) from Utah to the State of Wyoming.
IML was incorporated in January 1998 to develop a Chinese-language Internet business portal and to render services in connection therewith in the People’s Republic of China (“China”). During the period following the Merger, in an effort to implement this business plan, the Company entered into agreements with and completed acquisitions of, some businesses that provided or supported Internet services. The Company also endeavored to develop its own Internet services businesses, including e-commerce business solutions. However, the global decline in the demand for Internet services after mid-2000, which resulted in a significant economic slowdown that affected many of the companies with which we do business, materially undermined the effectiveness of our efforts. While we continued (and still continue) to offer web design and hosting services to customers in China through our subsidiary, ChinaE.com Information Technology Ltd. (“ChinaE”), we also began to look for ways to diversify or expand our business.
In November 2002 ChinaE purchased eight licenses for HanWEB Publishing Server 3.0, an online real time translation engine that translates traditional Chinese characters, used in most of the world, to simplified Chinese characters, which are used only in China, and vice versa, and six licenses for HanVoice Web to Phone Server 1.0, a real time Internet to telephone conversion server for Cantonese, Putonghua and English. These were purchased from KanHan Technologies Ltd. (“KanHan”) at a cost of $150K. The Company was one of two distributors of these licenses in China.
With the assistance of KanHan, the Company opened an office in Guangzhou in April 2003. The office was staffed with two persons who were responsible for introducing these products to businesses and government agencies in Guangdong Province. For a period of approximately one year, KanHan subsidized the costs related to maintaining this office and developing a market for these products. The amount of the subsidy was approximately $12,800 per month. The office was closed in March 2004 and the Company is no longer receiving the subsidy, although it continues to market the licenses.
In May 2003, the Company’s wholly owned subsidiary, IMOT Information Technology (Shenzhen) Ltd. (“IMOT Technology”), received approval from the governments of Shenzhen and Shanghai for its proposed acquisition of 51% of the issued and outstanding shares of Shanghai Newray Photographic Equipment Co., Ltd. (“Shanghai Newray”) from Shanghai Newray Business Development Co., Ltd. (“Shanghai Newray Business”), the owner of 75.5% of the issued and outstanding capital stock of Shanghai Newray. Shanghai Newray is located in Shanghai and is engaged in the sale of digital photographic equipment. Approval of the governments of Shenzhen and Shanghai was required to complete the acquisition, which was memorialized in a Shareholding Transfer Agreement entered into on May 23, 2003 between IMOT Technology and Shanghai Newray Business.
Pursuant to the Shareholding Transfer Agreement, IMOT Technology paid Shanghai Newray Business Rmb200,000 (approximately $24,000) in cash to reimburse Shanghai Newray Business for certain expenses related to the acquisition and agreed to transfer to Shanghai Newray Business 4 million shares of the Company’s restricted common stock. The cash used to reimburse Shanghai Newray Business for its expenses was paid with the Company’s funds.
On October 3, 2003 IMOT Technology entered into an agreement for the acquisition of 25% of the issued and outstanding shares of Shanghai Fortune Venture Limited (“Shanghai Fortune”) from certain shareholders of Shanghai Fortune. Shanghai Fortune has the right to operate equity exchange transactions in Shanghai, and through its investment in Xi’an Assets and Equity Exchange, operate an equity exchange in Xi’an. In China, equity, including intellectual property rights, may be listed on and transferred through such exchanges. The share transfer was approved by the government of Shanghai on April 12, 2004. The consideration for this acquisition was Rmb600,000 (approximately $72,464) in cash plus 10 million shares of our restricted common stock. The value of the common stock was determined to be $0.24 per share, based upon the average of the closing prices for the 10-day period from September 22, 2003 to October 1, 2003. The shares were issued on April 14, 2004.
On May 23, 2006, UCHC signed an agreement to sell the 25% shareholding investment in Shanghai Fortune to Mr. Li Laohu. The net asset value of Shanghai Fortune as of December 31, 2005, the latest audited financial statements date, was Rmb21,957,791. The consideration received by UCHC for the sale of the 25% shareholding was agreed at redemption of 6.5 million shares of restricted common stock of UCHC with a value of US$0.18 per share, which was the closing price of UCHC share of common stock as of May 23, 2006, held and transferred by Mr. Li Laohu, Mr. Li Xiaoqin and Ms. Huang Xiujuan.
Since December 6, 2002, Shanghai Fortune has been an official registered member of the Shanghai Technology Exchange (the “STE”) and was entitled to conduct exchange business with the STE. The STE was the major entity in the Shanghai Equity Exchange Market. Shanghai Fortune had the exclusive right to manage and operate the North Shanghai Branch (the “NSB”) of the STE. The NSB had the right to conduct the same exchange business as STE and share 80% of the profits with the STE.
Shanghai Fortune was also a founder and major participant in the Yangtze River Delta Equity Exchange Market Place (the “YRDE”). The YRDE included more than 14 major exchanges in Shanghai and the surrounding cities and was the largest equity exchange market place in China.
However, in December 2003, the STE and another exchange were merged into the Shanghai United Assets and Equity Exchange (the “SUAEE”). The SUAEE is a non-profit government-sponsored organization.
As a result of the merger of the STE, although Shanghai Fortune continues to maintain its membership, it is currently still unclear how the NSB and the YRDE will conduct business going forward, and how Shanghai Fortune will participate in the equity exchange markets following the issuance of final regulations by the local PRC government. Due to the uncertainty of the content and timing of governmental regulations, UCHC entered into the May 23, 2006 agreement for the sale of its interest in Shanghai Fortune for $1.17 million
On August 10, 2004, we purchased 51% of the issued and outstanding shares of Golden Anke Technology Ltd. (“Golden Anke”) from two of its shareholders, Tu Guoshen and Li Zhiquan, for UCHC Technology for $3.24 million, payable by issuance of 12 million shares of our common stock. The value of our common stock was determined by applying a 20% discount to the average closing price during the period from January 20 to March 19, 2004.
On or about February 15, 2007 we sold approximately two percent (2%) of the outstanding shares in Golden Anke to an unaffiliated minority stockholder so that this minority stockholder could seek an independent listing of Golden Anke on a UK exchange, thus reducing our ownership from approximately 51% to approximately 49%. We recently discovered that Golden Anke is no longer seeking a public listing and negotiated an exit settlement under which it will buy back our 49% ownership interest for US$1 million. To date we have collected $200,000 of this amount.
In September 2, 2004, IML incorporated a 100% owned subsidiary, ChinaE.com Technology (Shenzhen) Ltd. (“ChinaE Tech”), to take over the business of ChinaE to provide and support Internet services including, but not limited to, web-hosting, web design, domain name registration and software development.
On December 8, 2004, IMOT Technology entered into an agreement for the acquisition of 15% of the issued and outstanding shares of Shenzhen International Hi-Tech Exchange (“Hi-Tech Exchange”) from Shenzhen Merchant Technology Investment Co., Ltd. Hi-Tech Exchange is an enterprise authorized by the People’s Republic of China’s government to carry out business in the transfer of hi-tech property rights and corporate equity interests. The share transfer was approved by the government of Shenzhen on February 25, 2005. The consideration for this acquisition was 2,470,355 shares of our common stock. The value of the common stock was determined to be $0.22 per share based upon the average of the closing prices for the period from October 18, 2004 to November 18, 2004. The shares were issued on February 28, 2005. Subsequently, on December 8, 2006, we redeemed all of these 2,470,355 shares for an aggregate redemption price of US$805,214.75.
On January 6, 2005, all necessary government approvals were obtained to complete the transfer of 80% of the issued and outstanding shares of Hainan Concord Financial Products Development Co., Ltd. (“Hainan Concord”) from Guangzhou Ditai Communication Co., Ltd. and Zhai Xiya to IMOT Technology. Pursuant to the Share Transfer Agreement signed on December 11, 2004 the purchase price paid for the stock was $917,874. On January 12, 2005 we issued to the selling shareholders 5 million shares of our restricted common stock, in full payment of the purchase price. The value of our common stock was determined by applying a 15% discount to the average closing price for the 10 day trading period from November 16, 2004 to November 30, 2004. Hainan Concord’s principal business is to issue and manage multi-functional membership cards for the people who participate in private equity exchange in Hainan. Hainan Concord also provides financial institutions with research and development services for their financial products and instruments.
On October 19, 2005, all necessary government approvals were obtained to complete the transfer of 21% of the issued and outstanding shares of Hainan Special Economic Zone Equity Exchange Center (the “Exchange Center”) from Hainan Concord Investment Holding Co., Ltd. and Guangzhou Keensheng Science and Technology Development Co., Ltd. Pursuant to the Stock Exchange Agreement, the Company issued to the Exchange Center Stockholders 5 million shares of the Company’s common stock having a value of RMB8,799,350 (approximately US$1,085,000). The consideration for the transaction was agreed to after arm’s-length negotiations between the unrelated parties. On October 19, 2005, we issued to the selling shareholders 5 million shares of our common stock in full payment of the purchase price.
On July 13, 2006, IML incorporated a 100% owned subsidiary, Leader Palace International Ltd. (“LPI”), to explore businesses in Taiwan region. LPI started to negotiate an investment in touch panel manufacturing and such negotiations are still ongoing.
On December 15, 2009, the Company entered into five sale and purchase agreements with the shareholders of APT Paper Group Limited (“APT”) to purchase all shares of APT at a consideration of not less than US$22,000,000 which will be paid by way of the Company shares fixed at the share price of US$0,05. The acquisition of APT was completed on May 31, 2010 and the Company has aggregately issued 440 million Company shares on Jun 1, 2010 for exchange as consideration for the APT shares. The business of APT is manufacturing paper packaging products. After the acquisition, the Company controls the new combined companies and the Company’s original senior management team remained on the same original position oversight of the operation of the entire group of companies.
On December 21, 2009 the registrant entered into an Investment Cooperation Agreement with the shareholders of SPA to acquire approximately 51% of SPA in consideration for 11,000,000 registrant common shares. The transaction took the registrant longer than anticipated to complete. In January, 2011 the registrant closed a first tranche and acquired approximately 21% of SPA by issuance of 4,000,000 shares of registrant common stock.
On July 10, 2013 the registrant announced that it had completed the acquisition (the “Acquisition”) of 51% of Shaanxi Prosperous Agriculture Co., Ltd. (“SPA”), an agricultural products wholesale company located in Xi’an City, Shaanxi Province of China. The transaction was completed through its subsidiary IMOT Information Technology (Shenzhen) Limited. As part of the transaction the registrant loaned 4.85 million RMB to SPA. SPA specializes in market segment where customers can buy the company’s products through local stores in the agricultural products network. SPA will remain a subsidiary of UCHC after its acquisition. The Acquisition was final upon completion of an audit.
On June 30, 2013, Shaanxi Prosperous Agriculture Co., Ltd is processing to acquire 80% interest in Xi’an Zoyo Management Consulting Co. Ltd., (XZMC) a company registered in Shaanxi, China. XZMC provides enterprise consulting, marketing, distribution planning, corporate image building and computer graphic design and advertising design for small agricultural business.
As of June 30, 2014, the Company has completely disposed the entire paper business in the APT group of companies located at Shenzhen, Suzhou and Qingdao.
As of June 30, 2014, the Company determined to provide impairment on the entire investment of SPA located in Xi’an due to continuous unsatisfactory operation resulting and negative performance.
UCHC management believes that future profit of UCHC will come from the new joint venture projects and new investment opportunities.
Management is continuing its efforts to identify and explore joint venture projects and acquisition, merger and development opportunities.
Products and Services
Paper Products
Starting from October 1998, there was a decrease in China’s exports with issues on wooden packaging. The Chinese Government had requested urgent resolution on related strategies and tactics to resolve the issues. This is the main reason and force seeking replacement to wooden packaging materials, honeycomb paper material is an ideal substitute and quickly became popular in the industry of packaging.
Our subsidiary, APT entered into the business at the very early stage of the industry when honeycomb paper products were still an unknown industry to most of the paper products companies. APT highly promoted the products and became the industry leader in the Pearl River Delta Region having a significant market share.
As of June 30, 2014, the Company has completely disposed the entire paper business in the APT group of companies located at Shenzhen, Suzhou and Qingdao.
Agriculture Products
Shaanxi Prosperous Agriculture Company Limited ("Prosperous Agriculture"), one of UCHC's subsidiaries, further strengthens its operation and innovate services by introducing a new model of promotion service "Double Hundred" before the beginning of the selling season to expand the depth of the direct sales chain system operation.
To execute the "Double Hundred" program, every direct sales store locates 100 high-quality growers and opens 100 road shows in the respective region. The launch of this program allows Prosperous Agriculture to get closer to the farmers to achieve a seamless connection in order to gain the recognition and support of the farmers. Furthermore, the foundation of direct sales chain store operation shall become much stronger through the integration of distinct dominant resources to achieve in-depth operation and promotion, and to raise the reputation and brand awareness of the direct sales chain model.
As of June 30, 2014, the Company determined to provide impairment on the entire investment of SPA located in Xi’an due to continuous unsatisfactory operation resulting and negative performance.
Competition
Paper Products
Due to increased global awareness of environmental protection in recent years, the demand for honeycomb paper products continues to increase. It therefore attracts many speculators to invest in this high potential industry, most of which are smaller processing plants with a much smaller cost base than us and, therefore, enjoy a very big advantage in lower product costs.
As of June 30, 2014, the Company has completely disposed the entire paper business in the APT group of companies located at Shenzhen, Suzhou and Qingdao.
Agriculture Products
Prosperous Agriculture, 51% of which is owned by UCHC, is headquartered in Xi'an, Shaanxi Province, China. Prosperous Agriculture manufactures and distributes agricultural brands and also establishes a national agricultural resources chain direct sales platform through the opening and acquiring of agricultural resources direct sales outlets and dealers, and by working with well-known manufacturers of agricultural products. Prosperous Agriculture integrated more than 2,000 agricultural resources.
Regulation
Since we operate principally through our subsidiaries in China, we are subject to and affected by the many laws, regulations, administrative determinations, court decisions and similar constraints that apply to business operations located in China.
China has enacted regulations governing Internet connection and the distribution of information via the Internet. Pursuant to Article 6 of the Revised Provisional Regulations Governing the Management of Chinese Computer Information Networks Connected to International Networks, individuals or entities operating computer networks within China, which are connected to the Internet and conduct international information exchange, must use the international access channels provided by the Ministry of Information Industry (“MII”) and obtain various licenses and approvals. Our relevant subsidiaries have secured the necessary licenses and approvals, and access the Internet through ChinaNet, an approved channel of MII.
The operation of our equity exchange will be largely dependent upon the development of China’s policies and laws relating to the transfer of private and state-owned equity. The transfer and management of state-owned equity are subject to the supervision of the Administrative Bureau of State-owned Assets, whereas the equity of privately-owned enterprises must be transferred in compliance with the Company Law and related regulations. After February 17, 2012, the Company is no longer engaging in equity exchange business.
According to the Provisional Procedures on the Administration of the Transfer of State-owned Equity in Enterprises, all the transfers of state-owned equity must be carried out through duly authorized equity exchange centers. NSB and Xi’an Assets and Equity Exchange have secured the necessary licenses and approvals for their operations and qualify to transfer state-owned equity.
We work diligently to assure compliance with all applicable regulations which impact our business, including cooperating with the MII, the Ministry of Public Security and the Administrative Bureau of State-owned Assets. There can be no assurance, however, that additional regulations will not be enacted that might adversely affect our operations.
Employees
As of June 30, 2014, we employed 6 part-time employees consisting of 2 management executives and 4 administrative & clerical staff. None of our employees is member of any labor union, and we have never experienced any business interruption as a result of any labor disputes. We do not provide any special benefit or incentive programs for our employees. We believe that we enjoy good relations with all of our employees.
ITEM 1A.
ITEM 1A.
RISK FACTORS
In addition to other information in this Annual Report, including the risk factors presented in our Management’s Discussion and Analysis elsewhere herein, the following risk factors should be carefully considered in evaluating our business since it operates in a highly changing and complex business environment that involves numerous risks, some of which are beyond our control. The following discussion highlights a few of these risk factors, any one of which may have a significant adverse impact on our business, operating results and financial condition. As a result of the risk factors set forth below and elsewhere in this Annual Report, and the risks discussed in our other Securities and Exchange Commission filings, actual results could differ materially from those projected in any forward-looking statements.
We face significant risks, and the risks described below may not be the only risks we face. Additional risks that we do not know of or that we currently consider immaterial may also impair our business operations. If any of the events or circumstances described in the following risk factors actually occurs, our business, financial condition or results of operations could be harmed and the trading price of our common stock could decline.
Our success depends on identifying and closing acquisitions of emerging and growing businesses in China.
Our success is largely dependent on our identifying good acquisition targets, negotiating and structuring transactions that are beneficial to us, closing those transactions, finding suitable management to operate those businesses and successfully operate and grow the businesses we acquire.
We must work cooperatively with governmental authorities.
We are engaged in business in a country with a planned economy heavily influenced by government activities and we must work cooperatively with a variety of national, federal, regional, state, provincial, and local government authorities and entities. The economy of China differs significantly from the economies of the “Western” industrialized nations in such respects as structure, level of development, gross national product, growth rate, capital reinvestment, resource allocation, self-sufficiency, rate of inflation and balance of payments position, among others. Only recently has the Chinese government encouraged substantial private economic activities. The Chinese economy has experienced significant growth in the past several years, but such growth has been uneven among various sectors of the economy and geographic regions. Actions by the Chinese government to control inflation have significantly restrained economic expansion in the recent past. Similar actions by the Chinese government in the future could have a significant adverse effect on economic conditions in China and the results of operations of the Company.
If we deliver products with defects, our credibility will be harmed and the sales and market acceptance of our products will decrease.
Our product and services are complex and may at times contain errors, defects and “bugs.” If we deliver products with errors, defects or bugs, our credibility and the market acceptance and sales of our products would be harmed. Further, if our products contain errors, defects or bugs, we may be required to expend significant capital and resources to alleviate such problems. We may agree to indemnify our customers in some circumstances against liability arising from defects in our products. Defects could also lead to liability, and, as a result of product liability lawsuits against us or against our customers. We carry product and information liability and errors and omissions insurance, but in the event that we are required to defend more than a few such actions, or in the event that we are found liable in connection with such an action, our business and operations may be severely and materially adversely affected.
We compete with large companies.
We operate in a highly competitive industry. Although we believe that some of our technology is unique, can be protected, and, if adopted, will confer benefits that will be otherwise unavailable for some time, we face very large competitors with greater resources which may adopt various strategies to block or slow our market penetration, thereby straining our more limited resources. We are aware of efforts by competitors to introduce doubt about our financial stability as we compete to make sales and win customers and business. Large competitors may also seek to hinder our operations through attempts to recruit key staff with exceptionally attractive terms of employment, including signing bonuses, or by the offer of highly competitive terms to potential or newly acquired customers.
We will need to continue our product development efforts.
We believe that our market will be characterized by increasing technical sophistication. We also believe that our eventual success will depend on our ability to continue to provide increased and specialized technical expertise. There is no assurance that we will not fall technologically behind competitors with greater resources. Although we believe that we enjoy a lead in our product development, and are hopeful that our patents provide some protection, we will likely need significant additional capital in order to continue to enjoy such a technological lead over competitors with more resources.
If we are unable to protect our intellectual property, our competitive position would be adversely affected.
We may rely on patent protection, as well as trademark and copyright law, trade secret protection and confidentiality agreements with our employees and others to protect our intellectual property. Despite our precaution, unauthorized third parties may copy our products and services or reverse engineer or obtain and use information that we regard as proprietary. We have filed eleven patent applications with the United States Patent and Trademark Office and intend to file more. Six patents have been granted; however, we do not know if the remaining applications will be granted or whether we will be successful in prosecuting any future patents. In addition, the laws of some foreign countries do not protect proprietary rights to the same extent as do the laws of the United States. Our means of protecting our proprietary rights may not be adequate and third parties may infringe or misappropriate our patents, copyrights, trademarks and similar proprietary rights. If we fail to protect our intellectual property and proprietary rights, our business, financial condition and results of operations would suffer. We believe that we do not infringe upon the proprietary rights of any third party, and no third party has asserted an infringement claim against us. It is possible, however, that such a claim might be asserted successfully against us in the future. We may be forced to suspend our operations, or to pay significant amounts to defend our rights, and a substantial amount of the attention of our management may be diverted from our ongoing business, all of which would materially adversely affect our business.
We focus on the research and development of our proprietary technologies and the marketing of our first product.
We believe that these technologies are the basis for marketable commercial products. However, there can be no assurance of this, and it is possible that our proprietary technologies and products will have no commercial benefit or potential. In addition, from our inception to the present, we have not recognized any substantial operating revenues.
We depend on our key personnel and may have difficulty attracting and retaining the skilled staff we need to execute our growth plans.
Our success will be dependent largely upon the efforts of our management team. The loss of key staff could have a material adverse effect on our business and prospects. To execute our plans, we will have to attract and retain current employees. Competition for highly skilled employees with technical, management, marketing, sales, product development and other specialized training is intense. We may not be successful in attracting or retaining such qualified personnel. Specifically, we may experience increased costs in order to retain skilled employees. If we are unable to attract or retain experienced employees as needed, we would be unable to execute our business plan.
We may face rapid technological change.
The market for our products and services may be characterized by rapidly changing technologies, extensive research and the introduction of new products and services. We believe that our future success will depend in part upon our ability to continue to enhance our existing products and to develop, manufacture and market new products and services. As a result, we expect to continue to make a significant investment in engineering, research and development. During the fiscal years 2009 and 2010, we spent Rmb75,000_($US10,985) and Rmb420,321 ($US63,418), respectively; the cost of such activities were borne by the Company, not customers. There can be no assurance that we will be able to develop and introduce new products and services or enhance our initial products in a timely manner to satisfy customer needs, achieve market acceptance or address technological changes in our target markets. Failure to develop products and services and introduce them successfully and in a timely manner could adversely affect our competitive position, financial condition and results of operations.
If we experience rapid growth, we will need to manage such growth well.
We may experience substantial growth in the size of our staff and the scope of our operations, resulting in increased responsibilities for management. To manage this possible growth effectively, we will need to continue to improve our operational, financial and management information systems, will possibly need to create entire departments that do not now exist, and hire, train, motivate and manage a growing number of staff. Due to a competitive employment environment for qualified technical, marketing and sales personnel, we expect to experience difficulty in filling our needs for qualified personnel. There can be no assurance that we will be able to effectively achieve or manage any future growth, and our failure to do so could delay product development cycles and market penetration or otherwise have a material adverse effect on our financial condition and results of operations.
We could face information and product liability risks and may not have adequate insurance.
Our products may be used in connection with critical business applications. We may become the subject of litigation alleging that one or more of our products are ineffective or disruptive in our treatment of data, or with regard to critical business information. Thus, we may become the target of lawsuits from injured or disgruntled businesses or other users. In the event that we are required to defend more than a few such actions, or in the event that we are found liable in connection with such actions, our business and operations may be severely and materially adversely affected.
Future profitability is not guaranteed.
We have not recognized any substantial operating revenues to date. Assuming we can attract sufficient financing, and revenues increase, there is no assurance that our plans will be realized or that we will achieve break-even status or profitability in the future.
Changes to financial accounting standards may affect our results of operations and cause us to change business practices.
We prepare financial statements in conformity with U.S. generally accepted accounting principles. These accounting principles are subject to interpretation by the American Institute of Certified Public Accountants, the Public Company Accounting Oversight Board, the SEC and various other bodies formed to interpret and create appropriate accounting principles. A change in those principles can have a significant effect on our reported results and may affect our reporting of transactions completed before a change is announced. Changes to those rules or the questioning of current practices may adversely affect our reported financial results or the way we conduct business. For example, accounting principles affecting many aspects of our business, including rules relating to equity-related compensation, have recently been revised. The Financial Accounting Standards Board and other agencies finalized changes to U.S. generally accepted accounting principles that required us, starting January 1, 2006, to record a charge to earnings for employee stock option grants and other equity incentives. We will have significant ongoing accounting charges resulting from option grant and other equity incentive expensing that could reduce net income or increase losses. In addition, since we historically used equity-related compensation as a component of our total employee compensation program, the accounting change could make the use of equity-related compensation less attractive and therefore make it more difficult to attract and retain employees.
There is a limited market for our common stock and we do not anticipate paying cash dividends.
Our common stock is not listed on any exchange and trades in the over-the-counter (the “OTC”) market in the United States. Additionally, one stockholder holds a majority of our stock. As such, the market for our common stock is limited and is not regulated by the rules and regulations of any exchange in the United States or China. Further, the price of our common stock and its trading volume in the OTC market may be subject to wide fluctuations. Our stock price could decline regardless of our actual operating performance, and stockholders could lose a substantial part of their investment as a result of industry or market-based fluctuations. Our stock trades relatively thinly. If a more active public market for our stock is not sustained, it may be difficult for stockholders to sell shares of our common stock, in which case they may sustain significant losses or lose their entire investments. Because we do not anticipate paying cash dividends on our common stock for the foreseeable future, stockholders will not be able to receive a return on their shares unless they are able to sell them. The market price of our common stock will likely fluctuate in response to a number of factors, including but not limited to, the following:
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sales, sales cycle and market acceptance or rejection of our products;
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economic conditions within our industry;
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our failure to meet performance estimates or the performance estimates of securities analysts;
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the timing of announcements by us or our competitors of significant products, contracts or acquisitions or publicity regarding actual or potential results or performance thereof; and
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domestic Chinese and international economic, business and political conditions.
Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our stock price.
Section 404 of the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the SEC require annual management assessments of the effectiveness of our internal control over financial reporting and a report by our independent registered public accounting firm attesting to and reporting on these assessments. If we fail to adequately maintain compliance with, or maintain the adequacy of, our internal control over financial reporting, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the SEC. If we cannot favorably assess, or our independent registered public accounting firm is unable to provide an unqualified attestation report on our assessment of the effectiveness of our internal control over financial reporting, investor confidence in the reliability of our financial reports may be adversely affected, which could have a material adverse effect on our stock price.
Enforceability of Civil Liabilities Against Foreign Persons.
Although the Company is a Wyoming corporation, we engage in business primarily in China, our factories, properties, equipment and other assets are located outside the United States in China and our officers and directors are located outside the United States in China. Therefore, investors and stockholders may have considerable difficulty in bringing an original action in courts in the United States or in China under the civil liability provisions of the U.S. federal securities laws, against the Company, its factories or its officers and directors. Investors and stockholders also may have considerable difficulty in effecting service of process in the United States on our officers and directors or in enforcing in courts in China judgments of United States courts against them based on the U.S. federal securities laws.
ITEM 1B.
ITEM 1B.
UNRESOLVED STAFF COMMENT
Not applicable.
ITEM 2.
ITEM 2.
PROPERTY
Our principal executive office consists of approximately 30 square meters of office space that is located at Room 721, World Financial Center, Shennan East Road, Shenzhen City, Guangdong Province, People’s Republic of China (“PRC”), 518008. The premises are leased from a related third party with free rental.
All of our office facilities are in good condition and we believe they are adequate to support our operations for the foreseeable future.
ITEM 3.
ITEM 3.
LEGAL PROCEEDINGS
The Company and its subsidiaries did not have any pending or threatened legal proceedings outstanding as at June 30, 2014.
ITEM 4.
ITEM 4.
MINE SAFETY DISCLOSURE
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 Over-The-Counter Electronic Bulletin Board (the “OTC Bulletin Board”), and is traded under the symbol “UCHC”.
The following table represents the high and low bid prices for our common stock on the OTC Bulletin Board for each quarter during the last two fiscal years.
The above bid information reflects inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
Holders. As of September 24, 2014, there were approximately 623 holders of record of the Company’s common stock. This number does not include an indeterminate number of shareholders whose shares are held by brokers in street name.
Dividends. We have never declared or paid any cash dividend on our common stock and do not expect to declare or pay any cash dividend in the foreseeable future.
Recent Purchases and Sales of Unregistered Securities. In the fiscal year ended June 30, 2014, the Company issued common stock to various parties and redeemed common stock. The following transactions have not been reported by the Company in previous quarterly reports. The value of the common stock for each issuance was based on one of the following: the market price of the shares on the date of the transactions, the market price of the shares on the date the negotiations between the parties began or on the fair value of services received. The issuances were as follows:
On December 21, 2009, Uni Core Holdings Corporation (UCHC) entered into Investment Cooperation Agreement (Agreement) with the shareholders of Shaanxi Prosperous Agriculture Company Limited (Prosperous Agriculture) to acquire 51% equity of Prosperous Agriculture by two phrases and exchanged in total 11 millions of UCHC shares.
The first phrase of 21% equity of Prosperous Agriculture transferred to UCHC’s subsidiaries, IMOT Information Technology (Shenzhen) Limited (IMOTSZ), was approved by PRC authority on December 24, 2010. According to the term of the Agreement, UCHC had allotted 4 million shares at $0.1 per share to the parties below on January 18, 2011:
The second phrase of 30% equity of Prosperous Agriculture transferred to UCHC’s subsidiaries, IMOT Information Technology (Shenzhen) Limited, was approved by PRC authority on December 1, 2011.
Auditors will start to evaluate the net assets value of 51% equity of Prosperous Agriculture in late of April 2012.
During this financial year, for the reason of services rendered, we issued totaling 28,000,000 shares of common stock at fair market value to Brighton Capital Ltd, George Capps, TG Private Equity Inc, DC Global Consultancy Ltd, Region Capital Ltd, Hung Kwok Wing & FG Management Co. Ltd. In addition, the company issued 170,334,867, 190,643,687 and 341,650,000 to Asher Enterprises, Inc., Magna Group, LLC, and Tonaquint, Inc. respectively for the purpose of convertible loan in cash.
Stock options issued to directors at fair market value, including of Fred Peck, Chia Hsun Wu, Shinohara Hiroshi & Thomas Lee, the company issued 19,000,000 in total for last year
On 13 March 2012, we issued 50,000,000 to FG Management Co. Ltd. for compensation the disposition of collateral under secured convertible promissory note 5 September 2011 During July 2011 to June 2012, we issued 20,000,000 shares to FG Management Co., Ltd. and 8,000,000 shares to another six parties.
On 17 Sep 2012, stock options issued to directors at fair market value, including of Fred Peck, Chia Hsun Wu, Shinohara Hiroshi & Thomas Lee, the company issued 266,666,664 in total for this year
During the fiscal year July 1, 2012 to June 30, 2013, we issued 2,563,333,333 to Global Golden Group Investment Co Ltd; 800,000,000 to FG Management Co. Ltd, 533,333,333 to Wise Alliance Management Ltd.
During this year, we issued 100,000 (original 500,000,000 before 5,000:1 reversed stock split) to Global Golden Group Investments Company Limited, 589,737 to Asher Enterprises, Inc; 377,025 to Tonaquint Inc, 1,079,519 to Magna Equities II, LLC.
Securities Authorized for Issuance Under Equity Compensation Plans. On December 1, 2003 our Board of Directors adopted and on January 28, 2004 our stockholders approved the Intermost Corporation 2003 Equity Incentive Plan (“Plan”) pursuant to which the Board of Directors may grant awards of shares of our common stock and options to purchase shares of our common stock to our employess, officers and directors and our consultants independent contractors and advisers. As of June 30, 2014, no awards had been granted from the Plan. See “Other Compensation and Employment Arrangements” under “Item 11. EXECUTIVE COMPENSATION,” for more information.
ITEM 6.
ITEM 6.
SELECTED FINANCIAL DATA
We are a “smaller reporting company” and, pursuant to Item 301(c) of Regulation S-K, we are not required to provide the information required by this Item.
ITEM 7.
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Critical Accounting Policies and Estimates
Management’s discussion and analysis of results of operations and financial condition are based upon the Company’s consolidated financial statements, set forth elsewhere in the Annual Report. These statements have been prepared in accordance with generally accepted accounting principles as used in the United States. These principles require management to make certain estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
The following critical accounting policies rely upon assumptions, judgments and estimates and were used in the preparation of the Company’s consolidated financial statements:
Revenue Recognition
Revenues are recognized (i) with respect to services, at the time a project (or a milestone thereof) is completed and accepted by the customer, and (ii) with respect to products, at the time products are delivered to customers and collectability for such sales is reasonably assured. We have adopted ASC 605 “Revenue Recognition”. The Company recognizes revenue when the significant risks and rewards of ownership have been transferred to the customer pursuant to PRC law, including factors such as when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, sales and value-added tax laws have been complied with, and collectability is probable.
Revenue from maintenance contracts is recognized on a straight-line basis over the term of the maintenance contract, generally twelve months. The unearned portion of maintenance revenue is classified as deferred revenue and amortized over the life of the contract.
Revenue represents the invoiced value of goods sold recognized upon the delivery of goods to customers. Revenue is recognized when all of the following criteria are met:
- Persuasive evidence of an arrangement exists;
- Delivery has occurred or services have been rendered;
- The seller’s price to the buyer is fixed or determinable; and
- Collection is reasonably assured.
Accounts Receivable
Accounts receivable is carried at the net invoiced value charged to customer. The Company records an allowance for doubtful accounts to cover estimated credit losses. Management reviews and adjusts this allowance periodically based on historical experience and its evaluation of the collectability of outstanding accounts receivable. The Company evaluates the credit risk of its customers utilizing historical data and estimates of future performance.
Long-lived assets and goodwill
The Company periodically evaluates the carrying value of long-lived assets held or used whenever events and circumstances indicate that the carrying value of the asset may no longer be recoverable. An impairment loss, measured on the fair value of the asset, is recognized if expected future undiscounted cash flows are less than the carrying value of the assets.
We evaluate goodwill, at a minimum, on an annual basis and whenever events and changes in circumstances suggest that the carrying amount may not be recoverable in accordance with ASC 350 “Intangibles - Goodwill and Other,” formerly SFAS No. 142 “Goodwill and Other Intangible Assets.”, goodwill is no longer subject to amortization. Rather, goodwill is subject to at least an annual assessment for impairment, applying a fair-value based test. Fair value is generally determined using a discounted cash flow analysis.
The annual test of the potential impairment of goodwill requires a two-step process. Step one of the impairment test involves comparing the estimated fair values of reporting units with their aggregate carrying values, including goodwill. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, step two must be performed to determine the amount, if any, of the goodwill impairment loss. If the carrying amount is less than fair value, further testing of goodwill impairment is not performed.
Step two of the goodwill impairment test involves comparing the implied fair value of the reporting unit’s goodwill against the carrying value of the goodwill. Under step two, determining the implied fair value of goodwill requires the valuation of a reporting unit’s identifiable tangible and intangible assets and liabilities as if the reporting unit had been acquired in a business combination on the testing date. The difference between the fair value of the entire reporting unit as determined in step one and the net fair value of all identifiable assets and liabilities represents the implied fair value of goodwill. The goodwill impairment charge, if any, would be the difference between the carrying amount of goodwill and the implied fair value of goodwill upon the completion of step two.
For purposes of the step one analyses, determination of reporting units’ fair value is based on the income approach, which estimates the fair value of our reporting units based on discounted future cash flows.
We determined the fair value of each reporting unit using the income approach, which utilizes a discounted cash flow model, as we believe that this approach best approximates the reporting unit’s fair value at this time. Judgments and assumptions related to revenue, operating income, future short-term and long-term growth rates, weighted average cost of capital, interest, capital expenditures, cash flows, and market conditions are inherent in developing the discounted cash flow model. The circumstances leading to the impairment are attributed to the changes in the competitive environment and forecasted results of our business operations. We considered historical rates and current market conditions when determining the discount and growth rates to use in our analyses.
Overview
We believe that the People’s Republic of China represents an exciting emerging world market whose role in the global economy is increasing steadily. China’s economic growth rate, measured by its gross domestic product, has consistently been higher than 7% per year over each of the past 10 years. This economic growth is attributable to many factors, including investment in the country’s infrastructure, increased privatization of businesses and an abundant source of labor. Currently, we offer products and services to businesses and consumers located primarily in China. Our plan is to take advantage of China’s economic growth to expand our existing businesses and, possibly, in the future, to sell our products and services outside of China. We also have begun to acquire diverse businesses that are not dependent on, or directly related to, each other. We believe that diversification is a good hedge against the collapse of a single industry, such as the global collapse of the technology industry that occurred in 2000. We expect that any acquisitions we make will improve our financial condition, although we cannot guarantee any such result.
In response to the economic recovery, we began to diversify our business, so that we will no longer be dependent on one market for revenue. Generally, the issuance of our common stock represents some or all of the purchase price we pay for an acquired business. We believe that the continued active trading of our common stock will be important to the principals of target companies and future acquisitions may be dependent on the active trading of our common stock. However, our common stock has not been actively traded and, if our common stock continues to trade with limited volume and at current levels we may not be able to make acquisitions as planned.
During the fiscal year ended June 30, 2014 we incurred a net income of $14,197,015. Our auditor, Albert Wong & Co., CPA, has issued a “going concern” opinion for our financial statements as of June 30, 2014, as a result of our significant accumulated deficit, and our continuing to experience negative cash flows.
Results of Operations
Following is summary financial information reflecting our operations for the periods indicated
Year Ended June 30, 2014 Compared to Year Ended June 30, 2013
Net revenues.
Net revenues for the year ended June 30, 2014 decreased by $3,088K, or 45.93%, to $3,635K from $6,723K for the year ended June 30, 2013. The reasons for the decrease were due to the unsatisfactory operation efficiency and negative sales performance.
Net revenues during fiscals 2014 and 2013 were derived principally from sales of paper products.
The following table reflects the total net revenues and percentage of net revenues by major category and location for the periods indicated:
Costs of Revenues.
Costs of revenues consist principally of the production cost of paper products and agricultural products wholesale for the year ended June 30, 2014. Costs of revenues consist principally of the production cost of paper products for the year ended June 30, 2013. The costs of revenues for the year ended June 30, 2014 and 2013 consist principally of direct material cost, direct labor, manufacturing overhead, depreciation, and other costs including travel employee benefits and office expenses.
The following table reflects the principal components of costs of revenues and the percentage of net revenues represented by each component for the periods indicated:
Compared to the 2013 fiscal year, the total costs of revenues for the 2014 fiscal year decreased by $3,062K, or 46.30%, to $3,552K. The reason for the decrease was due to the proportional reduction from the volume and amount of sales.
Selling, General and Administrative Expense.
Selling, general and administrative expense (“SG&A”) consists principally of (1) sales commissions, advertising, trade show and seminar expenses, and direct-field sales expense, (2) salaries for administrative and sales staff, (3) corporate overhead, and (4) allowances for bad and doubtful accounts. The following table reflects the principal components of SG&A and the percentage of net revenues represented by each component for the periods indicated:
The principal components of SG&A during the 2014 year were sales and marketing salaries and commissions, other marketing expenditures, administrative salaries and benefits, and other corporate overhead expenses, which include legal and professional fees, general office expenses, traveling expenses, general employee benefit expense, depreciation, consultancy fees, and allowance for bad and doubtful accounts.
For the 2014 fiscal year, total SG&A increased by $2,524K or 131%, to $4,446K as compared to $1,922K for the 2013 fiscal year. Sales and marketing salaries and commissions increased by $354K or 132% during the 2014 fiscal year, to $622K, as compared to $286K for the 2013 fiscal year. Other sales and marketing expenses increased by $530K or 132% during the 2014 fiscal year, to $933K, as compared to $403K for the 2013 fiscal year. Rental obligation increased by $293K or 131% during the 2014 fiscal year, to $517K, as compared to $224K for the 2013 fiscal year. During the 2014 fiscal year, administrative salaries increased by $393K or 131%, to $692K, as compared to $299K in the 2013 fiscal year. Other corporate overhead expense increased during the 2014 fiscal year by $954K or 131.32%, to $1,681K, as compared to $727K in the 2013 fiscal year. The SG&A expenses increased due to operation expenses substantially increased to get rid of the unprofitable operation units and rising operation cost in PRC.
Minority Interest.
On July 10, 2013 the registrant announced that it had completed the acquisition (the “Acquisition”) of 51% of Shaanxi Prosperous Agriculture Co., Ltd. (“SPA”), an agricultural products wholesale company located in Xi’an City, Shaanxi Province of China.
On June 30, 2013, Shaanxi Prosperous Agriculture Co., Ltd is still in under processing to acquire 80% interest in Xi’an Zoyo Management Consulting Co. Ltd., (XZMC) a company registered in Shaanxi, China. XZMC provides enterprise consulting, marketing, distribution planning, corporate image building and computer graphic design and advertising design for small agricultural business.
As of June 30, 2014, the minority interest was reduced to zero after the provision of impairment on the entire investment in the SPA operation located at Xi’an.
Loss from operation, Income before tax and net income
Loss from operation was increased from $1,812,871 at 2013 to $4,652,728 at 2014 due to the gross profits reduced by $26,715 and operation expenses increased by $2,813,142. The gross profits reduced due to the sales reduction and the operation expenses increased due to operation expenses substantially increased to get rid of the unprofitable operation units and rising operation cost in PRC.
The income before tax increased from loss of $14,052,917 at 2013 to income of $14,917,988 at 2014 due to the $19,570,716 gain on disposal of APT group of companies located at Qingdao and impairment of SPA group of companies located at Xi’an.
The net income increased from loss of $14,052,917 at 2013 to $14,197,015 at 2014 was derived from the 2014 net income from income before tax and minority interests net of $720,973 on written-off of 2014 minority interest to reflect the impairment of the investment in SPA group of companies.
Liquidity and Capital Resources
To date, we have funded our operations with cash from our operating activities, sales of our securities and by using our common stock to make acquisitions and purchases.
At June 30, 2014 we had cash and cash equivalents of $24K and net current liabilities of $647K as compared to $270K of cash and cash equivalents and $17,574K of net current liabilities as of June 30, 2013.
Net cash provided by (used in) operating activities totaled $(3,551)K during the 2014 fiscal year while net cash generated from operating activities was $3,129K during the 2013 fiscal year. Cash used in operating activities was partially derived from the $19,571K gain on disposal of subsidiaires and for the payment of operating expenses.
Net cash used in investing activities was $0K for the 2014 fiscal year while net cash used in investing activities was $44,846K for the 2013 fiscal year. During 2014, the company did not have activities in investing activities and therefore have no cash generated or used in investing activities.
Net cash provided by financing activities was $41K for the 2014 fiscal year while net cash provided by financing activities was $709K for the 2013 fiscal year. Funds provided by financing activity were mainly from the issuance of common stocks during the 2014 fiscal year derived from the loan providers exercise their right to convert debt into common stock in according with the agreement.
We had no long term debt as of June 30, 2014. Except as otherwise described herein, we have no plans to make any major capital expenditures during the next 12 months and we are not aware of any trends or uncertainties that could affect sales of our products. We do not have any off balance sheet arrangements.
We have implemented various cost management measures to reduce our overhead. The Company will likely need to borrow money or obtain additional equity financing in order to sustain operations. At present, we have no commitments, arrangements or understandings for funding and there is no assurance that necessary funding will be available to us, or that any such funding would be on acceptable terms. If we need financing and cannot obtain it, we may be required to severely curtail, or even cease, our operations.
Factors Affecting Revenues and Profitability. Our operating results have been, and will continue to be, affected by a wide variety of factors that could have a material adverse effect on revenues and profitability during any particular period. Some of these factors include:
●
Our ability to successfully implement our business plan;
●
Whether or not we will be able to obtain the additional capital necessary to support our operations;
●
Whether or not we will find joint venture prospects or acquisition prospects with which to enhance our business;
●
Whether or not we can successfully integrate acquisitions that we make into our business;
●
The level and rate of acceptance of our products and services by the Chinese people;
●
Continued growth in the use of the Internet in China;
●
Entry of new competition (including established companies from outside China and companies with substantially greater resources) into our market;
●
Fluctuations in the level of orders for services delivered in a quarter;
●
Rescheduling or cancellation of orders by customers;
●
Competitive pressures on selling prices;
●
Changes in product, service or customer mix;
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Rapid changes in technology, which result in our technology becoming obsolete;
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Availability and cost of computer technicians;
●
Loss of any strategic relationships;
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Loss of our largest customers;
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Our ability to introduce new products and services on a timely basis;
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New product and service introductions by our competitors;
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Fluctuations in exchange rates, and
●
Adverse changes in the general economic, social or political conditions in the People’s Republic of China.
ITEM 7A.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 8.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Refer to Item 15 Financial Statement Schedules, pages to.
ITEM 9.
Item 9.01 Financial Statement and Exhibits.
Exhibit 99.2(a) - The audited financial statements of Shaanxi Prosperous Agriculture Co. Ltd. and Xi’an Zoyo Management and Consulting Co., Ltd. for the years ended December 31, 2012 and 2011.
On August 5, 2013 the Registrant had filed a Current Report to report the principal executive officer Chia-Hsun Wu, Chief Executive Officer resigned on 1 August, 2013.
On September 9, 2013 the Registrant had filed a Current Report to report the following matters:
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers.
On August 1, 2013 the registrant’s Chief Financial Officer and Secretary, Mr. Thomas Lee, and one of the registrant’s directors, Mr. Chia Hsun Wu, resigned. Neither Mr. Lee nor Mr. Wu have reported any disagreement with the Company as a reason for his resignation.
On August 1, 2013 the registrant’s Board of Directors appointed Mr. I Hsiu Peng as a director of the registrant to fill the vacancy created by the resignation of Mr. Wu. Additionally, Mr. Peng was appointed by the registrant’s Board of Directors to act as the registrant’s Chief Executive Officer and Mr. Yi Sun Liu was appointed by the registrant’s Board of Directors to act as the registrant’s Chief Financial Officer and Secretary.
Mr. Peng graduated from Chinese Culture University with a Master of Business Administration. Mr. Peng is currently the founder and Managing Director of both Uwin Venture Investment Co. Ltd. and Wonderful Bio-Tec Co. Ltd. Prior to starting his own business, Mr. Peng had served various executive positions, including Director of Fast Technologies Inc. and Managing Director of Yi-Cheng Preparatory Institute.
Mr. Liu has over 15 years’ experience in various industries, including investment, transportation services, banking and technology. Prior to being appointed as CFO of UCHC, Mr. Liu held various senior management positions with various companies.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following auditor’s report and financial statements are filed as part of this annual report:
ALBERT WONG & CO., LLP
CERTIFIED PUBILC ACCOUNTANTS
139 Fulton Street, Suite 818B,
New York, NY 10038-2532
Tel : 212-226-9088
Fax: 212-437- 2193
To:
The board of directors and stockholders of
Uni Core Holdings Corporation
Report of Independent Registered Public Accounting Firm
We have audited the accompanying consolidated balance sheet of Uni Core Holdings Corporation and subsidiaries as of June 30, 2014 and 2013 and the related consolidated statements of income, stockholders' equity and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
We were not engaged to examine management’s assertion about the effectiveness of the Company’s internal control over financial reporting as of June 30, 2014 and 2013 included in the Company’s Item 9A
Item 15. Exhibits and Financial Statement Schedules (II)
NONE
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.
Dated: October 13, 2014
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature
Title
Date: October 13, 2014
/s/ Fred Peck
Director
Fred Peck
/s/ Peng I-Hsiu
Chief Executive Officer
Peng I-Hsiu
/s/Hiroshi Shinohara
Director
Hiroshi Shinohara