UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM 10-Q
☑
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly
period ended Sept 30, 2014
☐
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
For the transition period from ______
to _______
Commission File Number 000-53737
AJ GREENTECH HOLDINGS, LTD.
(Exact name of registrant as specified
in its charter)
Nevada |
|
30-0679981 |
(State of incorporation) |
|
(I.R.S. Employer Identification No.) |
136-20 38th Ave. Unit 3G
Flushing, NY 11354
(Address of Principal Executive Offices)
_______________
718-395-8706
(Issuer Telephone number)
_______________
Check
whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding
12 months (or for such shorter period that the issuer was required to file such reports), and (2)has been subject to such filing
requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).
Yes
☑
No ☐
Indicate by check mark whether
the registrant is a larger accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filer ☐ |
Accelerated filer ☐ |
Non-accelerated filer ☐ |
Smaller reporting company ☑ |
Indicate
by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes ☐
No ☑
State the number of shares outstanding of each of the issuer’s
classes of common equity, as of March 31, 2014: 233,760,148 shares of common stock.
AJ GREENTECH HOLDINGS, LTD.
FORM 10-Q
Sept 30, 2014
INDEX
PART I-- FINANCIAL INFORMATION
Item 1. |
Financial Statements |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 4. |
Control and Procedures |
PART II-- OTHER INFORMATION
Item 1 |
Legal Proceedings |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. |
Defaults Upon Senior Securities |
Item 4. |
Mine Safety Disclosures |
Item 5. |
Other Information |
Item 6. |
Exhibits |
SIGNATURES |
|
AJ Greentech Holdings, Ltd. and Subsidiaries
Sept 30, 2014 and 2013
Index to the consolidated financial
statements
Contents |
Page(s) |
Consolidated Balance Sheets at Sept 30,
2014 (Unaudited) and December 31, 2013 |
F-2 |
Consolidated Statements of Income and
Comprehensive Income for the three Months Ended Sept 30, 2014 and 2013 (Unaudited) |
F-3 |
Consolidated Statement of Stockholders’
Equity for the Year Ended December 31, 2013 and for the Nine Months Ended Sept 30, 2014 |
F-4 |
Notes to the Consolidated Financial Statements |
F-5 |
AJ Greentech Holdings, Ltd. and Subsidiaries |
Consolidated Balance Sheets |
| |
| | | |
| | |
| |
| September
30, 2014 | | |
| December 31, 2013 | |
ASSETS | |
| | | |
| | |
CURRENT ASSETS: | |
| | | |
| | |
Cash | |
| 320,685 | | |
| 140,987 | |
Accounts receivable | |
| 160,413 | | |
| 2,187,035 | |
Inventories | |
| 193,092 | | |
| 89,702 | |
Advance on purchases | |
| | | |
| 8,800 | |
Prepaid value added taxes | |
| | | |
| 47 | |
Prepaid corp. income taxes | |
| | | |
| | |
Prepayments and other current assets | |
| 305,040 | | |
| 1,561 | |
Total Current Assets | |
| 979,230 | | |
| 2,428,132 | |
PROPERTY, PLANT AND EQUIPMENT | |
| | | |
| | |
Property, plant and equipment | |
| 1,207,151 | | |
| 1,229,233 | |
Accumulated depreciation | |
| (70,037 | ) | |
| (71,318 | ) |
PROPERTY, PLANT AND EQUIPMENT, net | |
| 1,137,115 | | |
| 1,157,915 | |
OTHER ASSETS | |
| 6,437 | | |
| 6,555 | |
Total Assets | |
| 2,122,782 | | |
| 3,592,602 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |
| | | |
| | |
CURRENT LIABILITIES: | |
| | | |
| | |
Borrowings | |
| 954,604 | | |
| 1,420,732 | |
Notes payable | |
| 83,094 | | |
| | |
Accounts payable | |
| 43,628 | | |
| 1,335,276 | |
Advances | |
| 142,679 | | |
| | |
Advances from Stockholder, Chairman and CEO | |
| | | |
| 141,504 | |
Tax | |
| 343 | | |
| 1,952 | |
Accrued expenses and other current liabilities | |
| | | |
| 2,147 | |
Total Current Liabilities | |
| 1,224,349 | | |
| 2,901,611 | |
Long Term Debt | |
| 0 | | |
| 60,000 | |
| |
| | | |
| | |
Total Liabilities | |
| 1,224,349 | | |
| 2,961,611 | |
COMMITMENTS AND CONTINGENCIES | |
| | | |
| | |
STOCKHOLDERS' EQUITY: | |
| | | |
| | |
Common stock: | |
| 233,760 | | |
| 233,760 | |
Accumulated deficit | |
| (1,105,897 | ) | |
| (1,105,897 | ) |
Additional paid-in capital | |
| 1,110,240 | | |
| 1,110,240 | |
Retained earnings | |
| (441,861 | ) | |
| (501,239 | ) |
Accumulated other comprehensive income: | |
| | | |
| | |
Foreign currency translation gain(loss) | |
| 1,102,191 | | |
| 894,127 | |
Total Stockholders' Equity | |
| 898,433 | | |
| 630,991 | |
Total Liabilities and Stockholders' Equity | |
| 2,122,782 | | |
| 3,592,602 | |
See accompanying notes to the consolidated
financial statements.
AJ Greentech Holdings, Ltd. and Subsidiaries |
Consolidated Statements of Operations and Comprehensive Income |
| |
| |
|
| |
| September 30,
2014 | | |
| September 30, 2013 | |
NET REVENUES | |
| 1,166,074 | | |
| 480,725 | |
COST OF GOODS SOLD | |
| 1,018,055 | | |
| 468,158 | |
GROSS PROFIT | |
| 148,019 | | |
| 12,567 | |
OPERATING EXPENSES: | |
| | | |
| | |
Selling and General and administrative expenses | |
| 63,644 | | |
| 485,714 | |
Total operating expenses | |
| 84,375 | | |
| (473,147 | ) |
Income from interest | |
| | | |
| | |
Interest Expense | |
| (24,997 | ) | |
| | |
Other Income (expenses) | |
| | | |
| | |
INCOME BEFORE INCOME TAXES | |
| 59,378 | | |
| (473,147 | ) |
INCOME TAX PROVISION | |
| | | |
| 648 | |
Loss from operation of the entities spun off | |
| | | |
| | |
NET INCOME (LOSS) | |
| 59,378 | | |
| (473,795 | ) |
OTHER COMPREHENSIVE INCOME: | |
| | | |
| | |
Foreign currency translation gain | |
| 208,064 | | |
| 32,508 | |
COMPREHENSIVE INCOME | |
| 267,442 | | |
| (441,287 | ) |
NET INCOME (LOSS) PER
COMMON SHARE - BASIC AND DILUTED: | |
| | | |
| | |
Net loss per common share
- basic and diluted | |
| 0.00 | | |
| (0.01 | ) |
Weighted Average Common Shares Outstanding - basic
and diluted | |
| 33,760,148 | | |
| 33,760,148 | |
See accompanying
notes to the consolidated financial statements.
AJ Greentech Holdings, Ltd. and Subsidiaries |
Consolidated Statement of Stockholders’ Equity |
For the Year Ended Sep 30, 2014 and 2013 |
|
| |
| Number of Shares | | |
| Amount | | |
| Additional Paid-in Capital | | |
| Retained Earnings | | |
| Foreign Currency Translation Gain | | |
| Accumulated Surplus/Deficit | | |
| Total Stockholders' Equity | |
Balance, December 31, 2012 | |
| 33,760,148 | | |
| 33,760 | | |
| 1,030,240 | | |
| 54,298 | | |
| 878,928 | | |
| (1,702,621 | ) | |
| 294,605 | |
Issuance of common stock for debt cancellation of $180,000, Nov. 18 2013 | |
| 180,000,000 | | |
| 180,000 | | |
| 0 | | |
| | | |
| | | |
| | | |
| 180,000 | |
Issuance of common shares for cash at $0.005 per share, Nov. 18 2013 | |
| 20,000,000 | | |
| 20,000 | | |
| 80,000 | | |
| | | |
| | | |
| | | |
| 100,000 | |
Net income/loss | |
| | | |
| | | |
| | | |
| (555,537 | ) | |
| | | |
| | | |
| (555,537 | ) |
Foreign currency translation gain | |
| | | |
| | | |
| | | |
| | | |
| 32,508 | | |
| | | |
| 32,508 | |
Foreign currency translation loss | |
| | | |
| | | |
| | | |
| | | |
| (17,309 | ) | |
| | | |
| (17,309 | ) |
Accumulated Surplus/Deficit | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 596,724 | | |
| 596,724 | |
Balance, December 31, 2013 | |
| 233,760,148 | | |
| 233,760 | | |
| 1,110,240 | | |
| (501,239 | ) | |
| 894,127 | | |
| (1,105,897 | ) | |
| 630,991 | |
Net income/loss | |
| | | |
| | | |
| | | |
| 59,378 | | |
| | | |
| | | |
| 59,378 | |
Foreign currency translation loss | |
| | | |
| | | |
| | | |
| | | |
| 208,064 | | |
| | | |
| 208,064 | |
Accumulated Surplus/Deficit | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance, Sep 30, 2014 | |
| 233,760,148 | | |
| 233,760 | | |
| 1,110,240 | | |
| (441,861 | ) | |
| 1,102,191 | | |
| (1,105,897 | ) | |
| 898,433 | |
See accompanying notes to
the consolidated financial statements.
AJ Greentech Holdings, Ltd. and Subsidiaries
Sept 30, 2014 and 2013
Notes to the Consolidated Financial
Statements
(Unaudited)
Note 1 – Organization and Operations
AJ Greentech Holdings Ltd. is a Nevada
corporation incorporated on August 30, 2006, under the name Gateway Certifications, Inc. On Novermber 16, 2009, our
corporate name was changed to American Jianye Greentech Holdings, Ltd. and on February 13, 2014, our corporate name was changed
to AJ Greentech Holdings, Ltd.
AJ Greentech Holdings Ltd. through its
wholly-owned subsidiary, Jih Chih International Ltd. a corporation organized under the laws of Taiwan, The Republic of China is
engaged in the business of marketing, manufacturing and distributing of green energy.
From November 2009 until October, 2013,
through our China subsidiaries, we were engaged in design, marketing and distributing of alcohol base clean fuel which are designed
to use less fossil fuel and have less pollution than traditional fuel.
On October 31, 2013, pursuant to agreements
with one of our former directors, we transferred the stock in our China subsidiaries to the former director in exchange for cancellation
of debt totaling $240,000. As a result of the transfer of the subsidiaries, we were no longer engaged in the China
cleanfuel business. We transferred the stock of the China subsidiaries because we felt that, it not our best interest
to continue China cleanfuel business as a result of our decreasing revenue, continued losses and inability to raise capital for
our business
At December 31, 2013, the assets and liabilities
of the spun off subsidiaries were not included in assets or liabilities of the Company. For the year ended December
31, 2013, the results of operations of the spun off entities through September 30, 2013 are reflected as a net loss from spun
off entities. At September 30, 2014, the result of the operations of the Taiwan subsidiary is reflected as the operation of the
firm.
As a result of the above transactions, we
plan to focus on providing greentech products outside of China. Even though the company has disposed China branches, the company's
new management will continue to expand the current green energy and technology business in the United States and globally, at
the same time to explore many other green and renewable energy such as solar, wind power, sea power by signing licensing agreement
or joint venture with other research institutes.
Note 2 – Summary of Significant
Accounting Policies
Basis of Presentation - Unaudited Interim Financial
Information
The accompanying
unaudited interim consolidated financial statements and related notes have been prepared in accordance with accounting principles
generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules
and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial
statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring
accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim
results are not necessarily indicative of the results for the full year. These unaudited interim consolidated financial
statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December
31, 2013 and notes contained in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2014.
Principles of Consolidation
All inter-company
balances and transactions have been eliminated.
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 earnings.
Use of Estimates and Assumptions
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 and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period.
The Company’s
significant estimates and assumptions include the fair value of financial instruments; allowance for doubtful accounts; inventory
valuation and obsolescence; the carrying value, recoverability and impairment, if any, of long-lived assets, including the values
assigned to and the estimated useful lives of property, plant and equipment, and land use rights; interest rate; revenue recognized
or recognizable; sales returns and allowances; valued added tax rate; income tax rate and related tax provision, reporting currency
of the Company, functional currency of the PRC subsidiaries, and foreign currency exchange rate. Those significant accounting estimates
or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions,
and certain estimates or assumptions are difficult to measure or value.
Management bases
its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial
statements taken as a whole 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.
Management regularly
evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts
and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates
are adjusted accordingly. Actual results could differ from those estimates.
Fair Value of Financial Instruments
The Company follows
paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments
and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to
measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in
accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value
measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37
establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3)
broad levels. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1 |
|
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
Level 2 |
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
Level 3 |
|
Pricing inputs that are generally observable inputs and not corroborated by market data. |
Fair Value of Non-Financial Assets
or Liabilities Measured on a Recurring Basis
The Company’s
non-financial assets include inventories. The Company identifies potentially excess and slow-moving inventories by evaluating
turn rates, inventory levels and other factors. Excess quantities are identified through evaluation of inventory aging, review
of inventory turns and historical sales experiences. The Company provides lower of cost or market reserves for such identified
excess and slow-moving inventories. The Company establishes a reserve for inventory shrinkage, if any, based on the historical
results of physical inventory cycle counts.
Carrying Value, Recoverability
and Impairment of Long-Lived Assets
The Company has
adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived
assets, which include property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.
The Company assesses
the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related
long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts.
Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally
determined using the asset’s expected future discounted cash flows or market value, if readily determinable. When long-lived
assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally
estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.
The Company considers
the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance
or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the
manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or
changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased
competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory
changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the
occurrence of such events.
The key assumptions
used in management’s estimates of projected cash flow deal largely with forecasts of sales levels, gross margins, and operating
costs of the manufacturing facilities. These forecasts are typically based on historical trends and take into account recent developments
as well as management’s plans and intentions. Any difficulty in manufacturing or sourcing raw materials on a cost effective
basis would significantly impact the projected future cash flows of the Company’s manufacturing facilities and potentially
lead to an impairment charge for long-lived assets. Other factors, such as increased competition or a decrease in the desirability
of the Company’s products, could lead to lower projected sales levels, which would adversely impact cash flows. A significant
change in cash flows in the future could result in an impairment of long lived assets.
The impairment
charges, if any, is included in operating expenses in the accompanying consolidated statements of income and comprehensive income
(loss).
Cash Equivalents
The Company considers
all highly liquid investments with maturities of six months or less at the time of purchase to be cash equivalents.
Accounts Receivable and Allowance
for Doubtful Accounts
Accounts receivable
are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company follows paragraph 310-10-50-9 of the
FASB Accounting Standards Codification to estimate the allowance for doubtful accounts. The Company performs on-going credit evaluations
of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined
by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off
experience, customer specific facts and economic conditions.
Outstanding account
balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate
of the amount of probable credit losses in the Company’s existing accounts receivable. Bad debt expense is included in general
and administrative expenses, if any. Pursuant to paragraph 310-10-50-2 of the FASB Accounting Standards Codification account balances
are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered
remote. The Company has adopted paragraph 310-10-50-6 of the FASB Accounting Standards Codification and determine when receivables
are past due or delinquent based on how recently payments have been received.
The Company does
not have any off-balance-sheet credit exposure to its customers.
Advance on Purchases
Advance on purchases
primarily represent amounts paid to vendors for future delivery of products ranging from three (3) months to nine (9) months, all
of which were fully or partially refundable depending upon the terms and conditions of the purchase agreements.
Inventories
Inventory Valuation
The Company values
inventories, consisting of raw materials, packaging material and finished goods, at the lower of cost or market. Cost is determined
on the first-in and first-out (“FIFO”) method for raw materials and packaging materials and the weighted average cost
method for finished goods. Cost of finished goods comprises direct labor, direct materials, direct production cost and an allocated
portion of production overhead. The Company reduces inventories for the diminution of value, resulting from product obsolescence,
damage or other issues affecting marketability, equal to the difference between the cost of the inventory and its estimated market
value. Factors utilized in the determination of estimated market value include (i) current sales data and historical
return rates, (ii) estimates of future demand, (iii) competitive pricing pressures, (iv) new product introductions, (v) product
expiration dates, and (vi) component and packaging obsolescence.
Property, Plant and Equipment
Property, plant
and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are
charged to operations as incurred. Depreciation of property, plant and equipment is computed by the straight-line method (after
taking into account their respective estimated residual values) over the assets estimated useful lives ranging from five (5) years
to twenty (20) years. Upon sale or retirement of property, plant and equipment, the related cost and accumulated depreciation are
removed from the accounts and any gain or loss is reflected in the consolidated statements of income and comprehensive income.
Leasehold improvements, if any, are amortized on a straight-line basis over the term of the lease or the estimated useful lives,
whichever is shorter. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.
Construction in
progress represents direct costs of construction or the acquisition cost of long-lived assets. Under U.S. GAAP, all costs associated
with construction of long-lived assets should be reflected as long-term as part of construction-in-progress. Capitalization of
these costs ceases and the construction in progress is transferred to property, plant and equipment when substantially all of the
activities necessary to prepare the long-lived assets for their intended use are completed. No depreciation is provided until the
construction of the long-lived assets is complete and ready for their intended use.
Customer Deposits
Customer deposits
primarily represent amounts received from customers for future delivery of products, all of which were fully or partially refundable
depending upon the terms and conditions of the sales agreements.
Related Parties
The Company follows
subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related
party transactions.
Pursuant to Section
850-10-20 the related parties include a. affiliates of the Company; b. entities for which investments in their equity
securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15,
to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension
and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management
of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the
management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing
its own separate interests; and g. other parties that can significantly influence the management or operating policies of
the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the
other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
The financial statements
shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and
other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation
of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the
nature of the relationship(s) involved; ; b. a description of the transactions, including transactions to which no amounts
or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information
deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts
of transactions for each of the periods for which income statements are presented and the effects of any change in the method
of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the
date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
Revenue Recognition
The Company’s
revenue recognition policies are in compliance with ASC 605 (Originally issued as Staff Accounting Bulletin (SAB) 104). Revenue
is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery
is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received
before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue. Discounts
provided to customers by the Company at the time of sale are recognized as a reduction in sales as the products are sold. Sales
taxes are not recorded as a component of sales.
Shipping
and Handling Costs
The Company accounts
for shipping and handling fees in accordance with paragraph 605-45-45-19 of the FASB Accounting Standards Codification. While
amounts charged to customers for shipping products are included in revenues, the related costs are classified in cost of goods
sold as incurred.
Foreign Currency Transactions
The Company applies
the guidelines as set out in Section 830-20-35 of the FASB Accounting Standards Codification (“Section 830-20-35”)
for foreign currency transactions. Pursuant to Section 830-20-35 of the FASB Accounting Standards Codification, foreign currency
transactions are transactions denominated in currencies other than U.S. Dollar, the Company’s reporting currency or Taiwanese
New Dollar or TWD, the Company’s Taiwanese operating subsidiaries' functional currency. Foreign currency transactions may
produce receivables or payables that are fixed in terms of the amount of foreign currency that will be received or paid. A change
in exchange rates between the functional currency and the currency in which a transaction is denominated increases or decreases
the expected amount of functional currency cash flows upon settlement of the transaction. That increase or decrease in expected
functional currency cash flows is a foreign currency transaction gain or loss that generally shall be included in determining net
income for the period in which the exchange rate changes. Likewise, a transaction gain or loss (measured from the transaction date
or the most recent intervening balance sheet date, whichever is later) realized upon settlement of a foreign currency transaction
generally shall be included in determining net income for the period in which the transaction is settled. The exceptions to this
requirement for inclusion in net income of transaction gains and losses pertain to certain intercompany transactions and to transactions
that are designated as, and effective as, economic hedges of net investments and foreign currency commitments. Pursuant to Section
830-20-25 of the FASB Accounting Standards Codification, the following shall apply to all foreign currency transactions of an enterprise
and its investees: (a) at the date the transaction is recognized, each asset, liability, revenue, expense, gain, or loss arising
from the transaction shall be measured and recorded in the functional currency of the recording entity by use of the exchange rate
in effect at that date as defined in section 830-10-20 of the FASB Accounting Standards Codification; and (b) at each balance sheet
date, recorded balances that are denominated in currencies other than the functional currency or reporting currency of the recording
entity shall be adjusted to reflect the current exchange rate.
Income Taxes
The Company accounts for income taxes
in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based
on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted
tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the
change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management,
it is more likely than not that some or all of any deferred tax assets will not be realized.
The Company adopted ASC 740-10-25, Income
Taxes- Overall-Recognition, on January 1, 2007, which provides criteria for the recognition, measurement, presentation and disclosure
of uncertain tax position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely
than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the
position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit
that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize any additional
liabilities for uncertain tax positions as a result of the implementation of ASC 740-10-25.
Comprehensive Income (Loss)
The Company has
applied section 220-10-45 of the FASB Accounting Standards Codification. This statement establishes rules for the reporting of
comprehensive income and its components. Comprehensive income (loss), for the Company, consists of net income (loss), change in
unrealized loss of marketable securities and foreign currency translation adjustments and is presented in the Company’s Consolidated
Statements of Operations and Comprehensive Income (Loss) and Stockholders’ Equity.
Cash Flows Reporting
The Company adopted
paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments
according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and
uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting
Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow
from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals
of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating
cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current
exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported
as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides
information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph
830-230-45-1 of the FASB Accounting Standards Codification.
Recently
Issued Accounting Pronouncements
In February 2013,
the FASB issued ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other
Comprehensive Income.” This ASU does not change the current requirements for reporting net income or other comprehensive
income in financial statements. However, this guidance requires an entity to provide information about the amounts reclassified
out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of
the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive
income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified
to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified
in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide
additional detail about those amounts. For public entities, the guidance is effective prospectively for reporting periods beginning
after December 15, 2012. For nonpublic entities, the guidance is effective prospectively for reporting periods beginning after
December 15, 2013. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the
Company’s consolidated financial position and results of operations.
In July 2012, the
FASB issued ASU 2012-02, “Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment.”
This ASU simplifies how entities test indefinite-lived intangible assets for impairment, which improves consistency in impairment
testing requirements among long-lived asset categories. These amended standards permit an assessment of qualitative factors to
determine whether it is more likely than not that the fair value of indefinite-lived intangible assets is less than their carrying
value. For assets in which this assessment concludes it is more likely than not that the fair value is more than its carrying value,
these amended standards eliminate the requirement to perform quantitative impairment testing as outlined in the previously issued
standards. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September
15, 2012. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the
Company’s consolidated financial position and results of operations.
Other Recently Issued,
but Not Yet Effective Accounting Pronouncements
Management does
not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material
effect on the accompanying consolidated financial statements.
Note 3 – Accounts Receivable
Accounts receivable
at September 30, 2014 and December 31, 2013 consisted of the following:
| |
September 30, 2014 | |
December 31, 2013 |
Accounts receivable | |
$ | 160,413 | | |
$ | 2,187,035 | |
Allowance for doubtful accounts | |
| | | |
| | |
| |
$ | 160,413 | | |
$ | 2,187,035 | |
Note 4 – Inventories
| |
September 30, 2014 | |
December 31, 2013 |
| Inventory | | |
$ | 193,092 | | |
$ | 89,702 | |
| | | |
| | | |
| | |
| | | |
$ | 193,092 | | |
$ | 89,702 | |
Note 5 – Property, Plant and Equipment
Property, plant and equipment, stated at cost, less accumulated depreciation at Sep
30, 2014 and December 31, 2013 consisted of the following:
| |
September 30, 2014 | |
December 31, 2013 |
Property, Plant and Equipment | |
| 1,207,151 | | |
$ | 1,229,233 | |
Land | |
| 760,768 | | |
| 774,685 | |
Buildings | |
| 373,394 | | |
| 380,224 | |
Equipments | |
| 72,989 | | |
| 74,324 | |
Less: Accumulated depreciation | |
| (70,037 | ) | |
| (71,318 | ) |
| |
$ | 1,137,115 | | |
$ | 1,157,915 | |
Note 6 – Related Party Transactions
| |
September
30, 2014 | |
December
31, 2013 |
| Non-interest
bearing and payable on demand to Chief Executive Officer of the Company | | |
$ | | | |
$ | 60,000 | |
| Non-interest
bearing and payable on demand to its prior directors of the Company | | |
| — | | |
| | |
| Total | | |
$ | | | |
$ | 60,000 | |
Foreign Currency Risk
The Company is
exposed to fluctuations in foreign currencies for transactions denominated in currencies other than TWD, the functional currency
due to the fact the majority of the Company’s purchasing activities are transacted in foreign currencies.
The Company had
no foreign currency hedges in place for the interim period ended September 30, 2014 or 2013 to reduce such exposure.
Note 7 - Foreign Operations
Operations
Substantially all
of the Company’s operations are carried out and all of its assets are located in Taiwan. Accordingly, the Company’s
business, financial condition and results of operations may be influenced by the political, economic and legal environments in
Taiwan. The Company’s business may be influenced by changes in governmental policies with respect to laws and regulations,
monetary policies, anti-inflationary measures, currency fluctuation and remittances and methods of taxation, among other things.
Note 8 – Subsequent Events
The Company has
evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued.
The Management of the Company determined that there were no reportable subsequent events to be disclosed.
Item 2. Management's Discussion and
Analysis Of Financial Condition And Plan Of Operation.
This Quarterly Report contains forward-looking
statements within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions
or strategies for the future, which we indicate by words or phrases such as "anticipate," "expect," "intend,"
"plan," "will," "we believe," "management believes" and similar language. The forward-looking
statements are based on the current expectations of the Company and are subject to certain risks, uncertainties and assumptions,
including those set forth in the discussion under "Management's Discussion and Analysis of Financial Condition and Results
of Operations" in this report. Actual results may differ materially from results anticipated in these forward-looking statements.
We base the forward-looking statements on information currently available to us, and we assume no obligation to update them.
Investors are also advised to refer
to the information in our previous filings with the Securities and Exchange Commission (SEC), especially on Forms 10-K, 10-Q and
8-K, in which we discuss in more detail various important factors that could cause actual results to differ from expected or historic
results. It is not possible to foresee or identify all such factors. As such, investors should not consider any list of such factors
to be an exhaustive statement of all risks and uncertainties or potentially inaccurate assumptions.
Overview
AJ Greentech Holdings Ltd. through its
wholly-owned subsidiary, Jih Chih International Ltd. a corporation organized under the laws of Taiwan, The Republic of China is
engaged in the business of marketing, manufacturing and distributing of green energy.
From November 2009 until October, 2013,
through our China subsidiaries, we were engaged in design, marketing and distributing of alcohol base clean fuel which are designed
to use less fossil fuel and have less pollution than traditional fuel.
On October 31, 2013, pursuant to agreements
with one of our former directors, we transferred the stock in our China subsidiaries to the former director in exchange for cancellation
of debt totaling $240,000. As a result of the transfer of the subsidiaries, we were no longer engaged in the China cleanfuel
business. We transferred the stock of the China subsidiaries because we felt that, it not our best interest to continue
China cleanfuel business as a result of our decreasing revenue, continued losses and inability to raise capital for our business
On October 31, 2013, Chu Li An acquired,
for nominal consideration, 8,000,000 shares of common stock from the director who acquired the subsidiaries and 12,778,399 shares
of common stock from The Chairman, who was also a director. On November 1, 2013, Chu Li An and the Company entered
into a loan agreement pursuant to which the Chu Li An agreed to lend us $100,000 initially with future loan amount up to $1,000,000,
for which we issued our 6% demand promissory note in the principal amount of $100,000. The securities were issued in
Chu Li An’s name.
On November 18, 2013, we entered into
agreement pursuant to which we issued to Chu Li An and her BVI company, our sole director and chief executive officer, 180,000,000
shares of common stock, in consideration of the cancellation of debt due to Chu Li An in the amount of $180,000.
As a result of the above transactions, we plan
to focus on providing greentech products outside of China. Even though the company has disposed China branches, the company's new
management will continue to expand the current green energy and technology business in the United States and globally, at the same
time to explore many other green and renewable energy such as solar, wind power, sea power by signing licensing agreement or joint
venture with other research institutes.
Results of Operations
For the nine months ended September
30, 2014, we derived our revenues of $1,166,074 from the consulting service, etc., comparing to $480,725 from the sales of methanol-based
and ethanol based fuels to our customers for the nine months ended September 30, 2013.
Our gross profit margin during the nine months ended September
30, 2014 was 13%, compared to 3% for the same period in 2013. This figure represents our regular gross profit margin as a marketing
company and distributor.
Selling, general and administrative
expenses for the nine months ended September 30, 2014 were $63,644 or 5% of net sales, compared to $485,714 or 101% for the same
period of the last fiscal year. Selling, general and administrative expenses consist primarily of payroll, local taxes, investor
relation expenses and professional fees.
Due to the factors discussed above,
income from operations for the nine months ended September 30, 2014 was $59,378, compared to -$473,147 for the same period in
2013.
Our business operates primarily in Taiwanese Dollar (“TWD”),
but we report our results in our SEC filings in U.S. Dollars. The conversion of our accounts from TWD to Dollars results in translation
adjustments. While our net income is added to the retained earnings on our balance sheet; the translation adjustments
are added to a line item on our balance sheet labeled “accumulated other comprehensive income,” since it is more reflective
of changes in the relative values of U.S. and Taiwanese currencies than of the success of our business. During the nine months
ended September 30, 2014, the effect of converting our financial results to Dollars was to add $208,064 to our accumulated other
comprehensive income.
Liquidity and Capital Resources
Overview
We finances our
daily operations mainly by cash flows generated from our business operations and advance from our major shareholders.
Cash
Our cash as of
September 30, 2014 was $320,685, an increase of $179,698 from $140,987 as of December 31, 2013.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet
arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.
Critical Accounting Policies and
Estimates
The Company’s financial statements
are prepared in accordance with accounting principles generally accepted in the United States, which require us to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management
makes these estimates using the best information available at the time the estimates are made. However, actual results could differ
materially from those estimates. The most critical accounting policies are listed below:
Revenue Recognition
The Company applies paragraph 605-10-S99-1
of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable
and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive
evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii)
the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
The Company derives its revenues from
sales contracts with customers with revenues being generated upon the shipment of merchandise. Persuasive evidence of an arrangement
is demonstrated via sales invoice or contract; product delivery is evidenced by warehouse shipping log as well as a signed acknowledgement
of receipt from the customers or a signed bill of lading from the third party trucking company and title transfers upon shipment,
based on free on board (“FOB”) warehouse terms; the sales price to the customer is fixed upon acceptance of the signed
purchase order or contract and there is no separate sales rebate, discount, or volume incentive. When the Company recognizes revenue,
no provisions are made for returns because, historically, there have been very few sales returns and adjustments that have impacted
the ultimate collection of revenues.
The Company markets and distributes
ethanol and methanol based alternative fuel for automobile use and follows Section 605-45-45 (formerly EITF 99-19) (“ASC
Section 605-45-45”) of the FASB Accounting Standards Codification for revenue recognition to report revenue gross as a principal
for its sales since the Company (1) acts as principal in the transaction, (2) takes title to the products, (3) has risks and rewards
of ownership, such as the risk of loss for collection, delivery, or returns, and (4) does not act as an agent or broker (including
performing services, in substance, as an agent or broker) with compensation on a commission or fee basis on its sales. The management
of the Company determined that the Company should report revenue based on the gross amount billed to a customer when considering
each of the following eight (8) indicators of gross revenue reporting listed in ASC Paragraph 605-45-45-4 through 605-45-45-14
as specified (1) The entity is the primary obligor in the arrangement — The Company signs a product sales agreement with
its customer and represents in writing that the Company is responsible for fulfillment, including the acceptability of the product(s)
or service(s) ordered or purchased by the customer; (2) The entity has general inventory risk (before customer order is placed
or upon customer return); (3) The entity has latitude in establishing price — The Company has reasonable latitude, within
economic constraints, to establish the exchange price with a customer for the product or service; (4) The entity changes the product
or performs part of the service — The Company developed a method for blending the raw materials in its manufacturing process,
through its proprietary technology, catalysts can be mixed with fuel and alcohols to become a finished product to be sold after
pumping and piping; (5) The entity has discretion in supplier selection — The Company has multiple suppliers for the products
ordered by a customer and discretion to select the supplier that will provide the product(s) or service(s) ordered by a customer;
(6) The entity is involved in the determination of product or service specifications — The Company determines the nature,
type, characteristics, or specifications of the product(s) or service(s) ordered by the customer; (7) The entity has physical
loss inventory risk of purchased inventories after customer order; and (8) The entity has credit risk — The Company is responsible
for collecting the sales price from its customer but must pay the amount owed to its supplier after the supplier performs, regardless
of whether the sales price is fully collected.
Foreign Currency Translation
The Company follows Section 830-10-45
of the FASB Accounting Standards Codification (“Section 830-10-45”) for foreign currency translation to translate
the financial statements of the foreign subsidiary from the functional currency, generally the local currency, into U.S. Dollars.
Section 830-10-45 sets out the guidance relating to how a reporting entity determines the functional currency of a foreign entity
(including of a foreign entity in a highly inflationary economy), re-measures the books of record (if necessary), and characterizes
transaction gains and losses. the assets, liabilities, and operations of a foreign entity shall be measured using the functional
currency of that entity.
The functional currency of the Company
is Taiwanese New Dollar (“TWD”).The current exchange rates used by the Company as of September 30, 2014 to translate
the TWD to the U.S. Dollars are 30.4878:1. Revenues and expenses are translated using the prevailing average exchange rates at
30.0300:1 for the nine months ended June 30, 2014, respectively. Translation adjustments are included in other comprehensive income
(loss).
Impact of Accounting Pronouncements
There were no recent accounting pronouncements
that have had a material effect on the Company’s financial position or results of operations.
Item 3. Quantitative and Qualitative
Disclosures About Market Risk.
Not required for smaller reporting companies.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Regulations under the Securities Exchange
Act of 1934 (the “Exchange Act”) require public companies to maintain “disclosure controls and procedures,”
which are defined as controls and other procedures that are designed to ensure that information required to be disclosed by the
issuer in the reports that it files or submits 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. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports
that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal
executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding
required disclosure.
We conducted an evaluation, with the
participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures
as of March 31, 2014. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as
of March 31, 2014, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material
weaknesses described below.
In light of the material weaknesses
described below, we performed additional analysis to ensure our financial statements were prepared in accordance with generally
accepted accounting principles. Accordingly, we believe that the financial statements included in this report fairly present, in
all material respects, our financial condition, results of operations and cash flows for the periods presented.
A material weakness is a control deficiency
(within the meaning of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 2) or combination of control
deficiencies that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements
will not be prevented or detected. Management has identified the following two material weaknesses which have caused management
to conclude that, as of March 31, 2014, our disclosure controls and procedures were not effective at the reasonable assurance level:
1. We do not have
written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial
reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us for the quarter ending March 31,
2014. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our
assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a
material weakness.
2. We do not have
sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation
of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the
initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals.
Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures
and has concluded that the control deficiency that resulted represented a material weakness.
To address these material weaknesses,
management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present,
in all material respects, our financial position, results of operations and cash flows for the periods presented.
Management's Report on Internal Control Over Financial
Reporting
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule
13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the issuer’s
principal executive and principal financial officers and effected by the issuer’s board of directors, management and other
personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with accounting principles generally accepted in the United States of America and includes
those policies and procedures that:
• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions
of the assets of the issuer;
• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with accounting principles generally accepted in the United States of America and that receipts and expenditures of the Company
are being made only in accordance with authorizations of management and directors of the issuer; and
• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s
assets that could have a material effect on the financial statements
Because of its inherent limitations,
internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have
inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect
to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that
material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However,
these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the
process safeguards to reduce, though not eliminate, this risk.
As of the end of our most recent quarter,
management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal
control over financial reporting established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded
that, as of June 30, 2013, such internal control over financial reporting was not effective. This was due to deficiencies that
existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls
and that may be considered to be material weaknesses.
The matters involving internal control
over financial reporting that our management considered to be material weaknesses under the standards of the Public Company Accounting
Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of
a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring
of required internal controls and procedures; and (2) inadequate segregation of duties consistent with control objectives of having
segregation of the initiation of transactions, the recording of transactions and the custody of assets. The aforementioned material
weaknesses were identified by our Chief Financial Officer in connection with the review of our financial statements as of June
30, 2013.
Management believes that the material
weaknesses set forth in items (1) and (2) above did not have an effect on our financial results. However, management believes that
the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in
ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a
material misstatement in our financial statements in future periods.
This quarterly report does not include
an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's
report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC
that permit the Company to provide only the management's report in this annual report.
Management's Remediation Initiatives
In an effort to remediate the identified
material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following
series of measures:
We intend to our personnel resources
and technical accounting expertise within the accounting function. First, we intend to create a position to segregate duties consistent
with control objectives of having separate individuals perform (i) the initiation of transactions, (ii) the recording of transactions
and (iii) the custody of assets. Second, we intend to create a senior position to focus on financial reporting and standardizing
and documenting our accounting procedures with the goal of increasing the effectiveness of the internal controls in preventing
and detecting misstatements of accounting information. Third, we plan to appoint one or more outside directors to our board of
directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the
oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates
and assumptions made by management when funds are available to us. We anticipate the costs of implementing these remediation initiatives
will be approximately $37,500 to $50,000 a year in increased salaries, legal and accounting expenses.
Management believes that the appointment
of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning
audit committee and a lack of a majority of outside directors on our Board.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
To the best knowledge of the officers and directors, the
Company was not a party to any legal proceeding or litigation as of September 30, 2014.
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits.
Exhibit |
|
Description of Exhibit |
31.1 |
|
Chief Executive Officer Certification of Periodic Financial Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 |
|
Chief Financial Officer Certification of Periodic Financial Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1 |
|
Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 |
32.2 |
|
Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 |
101 |
|
The following materials from AJ Greentech Holdings, Ltd.’s Quarterly Report on Form 10-Q for the period ended March 31, 2014 are formatted in eXtensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheet; (ii) the Condensed Consolidated Statement of Operations;, (iii) the Condensed Consolidated Statements of Cash Flows, and (iv) Notes to Condensed Consolidated Financial Statements. This Exhibit 101 is deemed not filed for purposes of Sections 11 or 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections |
SIGNATURES
In accordance with the requirements of
the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
AJ GREENTECH HOLDINGS
LTD. |
|
|
Date:
November 13, 2014 |
By: |
/s/
Chu Li An |
|
|
Chu
Li An
CEO |
|
|
(Principal Executive
Officer) |
|
|
Date:
November 13, 2014 |
By: |
/s/
Chu Li An |
|
|
Chu
Li An
Chief Financial Officer |
|
|
(Principal Accounting
Officer) |
Exhibit
31.1
CHIEF EXECUTIVE
OFFICER CERTIFICATION OF PERIODIC FINANCIAL REPORT
PURSUANT
TO SECTION 302 OF THE
SARBANES-OXLEY
ACT OF 2002
I, Chu Li An, certify that:
1. I have reviewed this quarterly report
on Form 10-Q of AJ Greentech Holdings, Ltd. (the “Registrant”);
2. Based on my knowledge, this quarterly
report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial
statements, and other financial information included in this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report;
4. The Registrant’s other certifying
officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the Registrant, and we have:
a) designed such
disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the Registrant is made known to us by others within those entities, particularly during
the period in which this quarterly report is being prepared;
b) designed such
internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
c) evaluated the
effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and
d) disclosed in
this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s
most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of the annual report) that has materially
affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting;
5. The Registrant’s other certifying
officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s
auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
a) all significant
deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable
likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b) any fraud, whether
or not material, that involves management or other employees who have a significant role in the Registrant’s internal control
over financial reporting.
Date: November 13, 2014 |
|
/s/ Chu
Li An |
|
Name: Chu Li An
Title: CEO
(Principal Executive Officer) |
Exhibit 31.2
CHIEF FINANCIAL
OFFICER CERTIFICATION OF PERIODIC FINANCIAL REPORT
PURSUANT
TO SECTION 302 OF THE
SARBANES-OXLEY
ACT OF 2002
I, Chu Li An, certify that:
1. I have reviewed this quarterly report
on Form 10-Q of AJ Greentech Holdings, Ltd. (the “Registrant”);
2. Based on my knowledge, this quarterly
report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial
statements, and other financial information included in this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report;
4. The Registrant’s other certifying
officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the Registrant, and we have:
a) designed such
disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the Registrant is made known to us by others within those entities, particularly during
the period in which this quarterly report is being prepared;
b) designed such
internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
c) evaluated the
effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and
d) disclosed in
this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s
most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of the annual report) that has materially
affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting;
5. The Registrant’s other certifying
officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s
auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
a) all significant
deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable
likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b) any fraud, whether
or not material, that involves management or other employees who have a significant role in the Registrant’s internal control
over financial reporting.
Date: November 13, 2014 |
|
/s/ Chu
Li An |
|
Name: Chu Li An
Title: Chief Financial Officer
(Principal Accounting Officer) |
Exhibit 32.1
CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED
PURSUANT TO
SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report
of AJ Greentech Holdings, Ltd. (the "Company") on Form 10-Q for the period ending September 30, 2014, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"), I, Chu Li An , CEO of the Company, certify,
pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) the Report
fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information
contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Date: November 13, 2014 |
|
/s/ Chu
Li An |
|
Name: Chu Li An
Title: CEO
(Principal Executive Officer) |
This certification accompanies this
Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by
such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of
1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.
SUIC Worldwide (PK) (USOTC:SUIC)
Historical Stock Chart
From Sep 2024 to Oct 2024
SUIC Worldwide (PK) (USOTC:SUIC)
Historical Stock Chart
From Oct 2023 to Oct 2024