UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2014
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission File Number: 333-171891
Apple Green Holding, Inc.
(Exact name of registrant as specified in its charter)
| Nevada | 27-3436055 | |
| (State
or other jurisdiction
of incorporation or organization) |
(I.R.S. Employer Identification No.) |
30, Jalan PJS 7/19, Bandar Sunway, 46150 Petaling Jaya, Selangor, Malaysia.
(Address of Principal Executive Offices)
Tel. +603 5636 1869
Fax +603 5636 1771
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ 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 large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☐ | Smaller reporting company | ☒ |
(Do not check if 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 ☐
As of October 27, 2014, there were 10,200,000 shares of the issuer’s common stock issued and outstanding.
TABLE OF CONTENTS
| Page No. | ||
| PART I – FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements | 3 |
| Balance Sheets at March 31, 2014 (unaudited) and December 31, 2013 | 3 | |
| Statement of Operations | 4 | |
| Statement of Cash Flows | 5 | |
| Notes to Financial Statements (unaudited) | 6 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 10 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 11 |
| Item 4. | Controls and Procedures. | 11 |
PART II – OTHER INFORMATION
| Item 1. | Legal Proceedings. | 13 |
| Item 1A. | Risk Factors. | 13 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 13 |
| Item 3. | Defaults Upon Senior Securities. | 13 |
| Item 4. | Mine Safety Disclosures. | 13 |
| Item 5. | Other Information. | 13 |
| Item 6. | Exhibits. | 13 |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this report contain or may contain forward-looking statements. These statements, identified by words such as “plan”, “anticipate”, “believe”, “estimate”, “should”, “expect” and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward - looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward- looking statements. These factors include, but are not limited to, our ability to secure suitable financing to continue with our existing business or change our business and conclude a merger, acquisition or combination with a business prospect, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this report in its entirety, including but not limited to our financial statements and the notes thereto and the risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (the “SEC”), particularly our quarterly reports on Form 10-Q and our current reports on Form 8-K. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward- looking statements, to report events or to report the occurrence of unanticipated events.
OTHER PERTINENT INFORMATION
When used in this report, the terms, “we,” the “Company,” “our,” and “us” refers to Apple Green Holding, Inc., a Nevada corporation.
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Apple Green Holding, Inc.
(A
Development Stage Company)
Balance Sheets
| March 31 | December | |||||||
| 2014 | 31, | |||||||
| Unaudited | 2013 | |||||||
| $ | $ | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | - | $ | - | ||||
| Total current assets | - | - | ||||||
| TOTAL ASSETS | $ | - | $ | - | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable & accrued liabilities | $ | 41,692 | $ | 29,610 | ||||
| Due to related party | 9,275 | 9,275 | ||||||
| Total liabilities | $ | 50,967 | $ | 38,885 | ||||
| STOCKHOLDERS’ DEFICIENCY | ||||||||
| Capital Stock (Note 5) | ||||||||
| Authorized: | ||||||||
| 200,000,000 preferred shares, $0.0001 par value, 500,000,000 common shares, $0.0001 par value. | ||||||||
| Issued and outstanding shares: | ||||||||
| 0 preferred shares, | ||||||||
| 10,200,000 common shares at March 31, 2014 and December 31, 2013. | $ | 1,020 | $ | 1,020 | ||||
| Additional paid-in capital | 19,980 | 19,980 | ||||||
| Accumulated deficit | (71,967 | ) | (59,885 | ) | ||||
| Total Stockholders’ Deficiency | (50,967 | ) | (38,885 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | $ | - | $ | - | ||||
The accompanying notes are an integral part of these financial statements.
| -3- |
Apple Green Holding, Inc.
(A Development Stage Company)
Statement of Operations
| Three Months | Three Months | For the Period from Inception November 15, | ||||||||||
| Ended | Ended | 2010 to | ||||||||||
| March 31, | March 31, | March 31, | ||||||||||
| 2014 | 2013 | 2014 | ||||||||||
| REVENUES | $ | - | $ | - | $ | - | ||||||
| EXPENSES | ||||||||||||
| General & Administrative | $ | - | $ | 1,499 | $ | 16,561 | ||||||
| Professional Fees | $ | 12,082 | $ | 3,500 | $ | 55,406 | ||||||
| (12,082 | ) | (4,999 | ) | (71,967 | ) | |||||||
| Loss Before Income Taxes | $ | (12,082 | ) | $ | (4,999 | ) | $ | (71,967 | ) | |||
| Provision for Income Taxes | - | - | - | |||||||||
| Net Loss | $ | (12,082 | ) | $ | (4,999 | ) | $ | (71,967 | ) | |||
| PER SHARE DATA: | ||||||||||||
| Basic and diluted loss per common share | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | |||
| Basic and diluted weighted average common shares outstanding | 10,200,000 | 10,200,000 | 10,011,972 | |||||||||
The accompanying notes are an integral part of these financial statements.
| -4- |
Apple Green Holding, Inc.
(A Development Stage Company)
Statement of Cash Flows
| Three Months | Three Months | For
the Period from Inception November 15, | ||||||||||
| Ended | Ended | 2010 to | ||||||||||
| March 31, | March 31, | March 31, | ||||||||||
| 2014 | 2013 | 2014 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
| Net Loss | $ | (12,082 | ) | $ | (4,999 | ) | $ | (71,967 | ) | |||
| Changes in Operating Assets and Liabilities: | ||||||||||||
| (Increase) or decrease in accounts payable and accrued liabilities | 12,082 | 420 | 41,692 | |||||||||
| Net cash used in operating activities | - | (4,579 | ) | (30,275 | ) | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
| Increase in note payable | - | 6,000 | - | |||||||||
| Common stock issued for cash | - | - | 21,000 | |||||||||
| Due to Related Party | - | 9,275 | ||||||||||
| Net cash provided by financing activities | - | 6,000 | 30,275 | |||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | - | 1,421 | - | |||||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | - | 16 | - | |||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | - | $ | 1,588 | $ | - | ||||||
Supplemental Cash Flow Disclosures: | ||||||||||||
| Cash paid for: | ||||||||||||
| Interest expense | $ | - | $ | - | $ | - | ||||||
| Income taxes | $ | - | $ | - | $ | - | ||||||
The accompanying notes are an integral part of these financial statements.
| -5- |
Apple Green Holding, Inc.
(A Development Stage Company)
Notes
to Interim Financial
Statements
March 31, 2014
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
Apple Green Holding, Inc. (the “Company”), formerly known as Blue Sun Media Inc., is a development stage company, incorporated in the State of Nevada on November 15, 2010.
On January 10, 2014, the Company entered into a Share Exchange Agreement with Apple Green International Limited, a Seychelles company (AGIL”) and its sole shareholder, Apple Green Venture Sdn. Bhd., a Malaysia company (“AGIL Stockholder”), pursuant to which the Company acquired from AGIL Stockholder all of the outstanding shares of AGIL in exchange for the issuance of 389,800,000 shares of its Common Stock (the “Reverse Merger”). AGIL, through its affiliated entities located and operating in the Malaysia, is engaged in producing and providing organic fertilizer and develop a solid waste management.
On September 12, 2014, the Company, AGIL, and AGIL Shareholder entered into a Mutual Rescission Agreement and General Release as of January 31, 2014 (the “Rescission Agreement”), according to which the Company, AGIL, and AGIL Shareholder rescind and terminate the Share Exchange Agreement and related documents (the “Rescission”). According to the Rescission Agreement, 389,800,000 shares of Common Stock owned by AGIL Shareholder shall be cancelled so that the AGIL Shareholder shall have no ownership interest in the Company’s Shares or any equity interests of the Company as of such date. All AGIL shares owned or controlled by the Company which are issued and outstanding immediately prior to January 31, 2014 shall be returned to the AGIL Shareholder pursuant to this Rescission Agreement and the Company shall have no ownership interest in AGIL of such date. As a result of the Rescission, the Company became a shell company. AGIL is not and has never been a subsidiary of the Company and the parties are returned to their respective positions immediately prior to the Share Exchange Agreement and Reverse Merger as if the transaction has never occurred.
Since the Rescission, the Company became a shell company and plans to pursue acquisitions of other business the Board of Directors may approve from time to time. The Company will seek potential acquisitions and plans to conduct due diligence investigations on available candidates. However, there can be no assurance that the Company will successfully make an acquisition or that such acquisition will be successful for the Company and its shareholders. Possible acquisition candidates will be examined based on competitive position as compared to other companies of similar size and experience within the industry segment as well as within the industry as a whole; the cost of participation by the Company; and the accessibility of required management expertise, personnel, raw materials services, professional assistance, and other items. The Company is unable to predict when it may participate in a business opportunity. It anticipates, however, that the analysis of specific proposals and the selection of a business opportunity may take several months or more.
Pending negotiation and consummation of an acquisition, the Company anticipates that it will have, aside from carrying on its search for an acquisition candidate, no business activities, and, thus, will have no source of revenue. Should the Company incur any significant liabilities prior to a combination with a private company, it may not be able to satisfy such liabilities as are incurred. If the Company's management pursues one or more combination opportunities beyond the preliminary negotiations stage and those negotiations are subsequently terminated, it is foreseeable that such efforts will exhaust the Company's ability to continue to seek such combination opportunities before any successful combination can be consummated. In that event, the Company's common stock will become worthless and holders of the Company's common stock will receive a nominal distribution, if any, upon the Company's liquidation and dissolution.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
Basis of Presentation
The accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles (US GAAP) for interim financial information and in accordance with professional standards promulgated by the Public Company Accounting Oversight Board (PCAOB). They reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the three months ended March 31, 2014, respectively along with the period November 15, 2010 (date of inception) to March 31, 2014.
Accounting Basis
The Company is currently a development stage enterprise reporting under the provisions of Accounting Standards Codification (“ASC”) 915, Development Stage Entity. These financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.
Going Concern
These financial statements have been prepared on a going concern basis. The Company has incurred losses since inception resulting in an accumulated deficit of $71,967 at March 31, 2014 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.
Management has plans to seek additional capital through a private placement of its common stock or further director loans as needed. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue.
Cash and Cash Equivalents
Cash and cash equivalents are reported in the balance sheet at cost, which approximates fair value. For the purpose of the financial statements cash equivalents include all highly liquid investments with maturity of three months or less.
| -6- |
Apple Green Holding, Inc.
(A Development Stage Company)
Notes
to Interim Financial
Statements
March 31, 2014
Fair Value of Financial Instruments
The fair value of cash and cash equivalents and accounts payable approximates the carrying amount of these financial instruments due to their short maturity.
Earnings (Loss) per Share
The Company adopted ASC 260, Earnings per Share. Basic earnings (loss) per share are calculated by dividing the Company’s net income available to common shareholders by the weighted average number of common shares outstanding during the year. The diluted earnings (loss) per share are calculated by dividing the Company’s net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding for the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity. There are no diluted shares outstanding.
Dividends
The company has not adopted any policy regarding payment if dividends. No dividends have been paid during the period shown.
Income Taxes
The Company adopted ASC 740, Income Taxes, at its inception. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. No deferred tax assets or liabilities were recognized as of March 31, 2014.
Advertising
The Company will expense advertising cost as incurred. The advertising since inception has been zero.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Revenue and Cost Recognition
The Company has no current source of revenue; therefore the Company has not yet adopted any policy regarding the recognition of revenue or cost.
Related Parties
Related parties, which can be a corporation, individual, investor or another entity are considered to be related if the party has the ability, directly or indirectly, to control the other party or exercise significant influence over the Company in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence. The Company has these relationships.
Property
The Company does not own any real estate or other properties. The Company’s office is located No. 30 Jalan PJS 7/19 Bandar Sunway, 46150, Petaling Jaya, Selangor Darul Ehsan, Malaysia. The business office is rent premises of its subsidiary (SSM), no charge to the Company.
Recently Issued Accounting Pronouncements
Recent pronouncements issued by the Financial Accounting Standards Board (“FASB”) or other authoritative standards groups with future effective dates are either not applicable or are not expected to be significant to the financial statements of the Company.
| -7- |
Apple Green Holding, Inc.
(A Development Stage Company)
Notes to Interim Financial Statements
March 31, 2014
NOTE 3. INCOME TAXES
The Company provides for income taxes under ASC Topic 740 which requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect currently.
ASC Topic 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company’s opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset.
The Company utilizes the asset and liability method for financial reporting of income taxes. Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and the tax basis of assets and liabilities, and are measured by applying enacted rates and laws to taxable years in which such differences are expected to be recovered or settled. Any changes in tax rates or laws are recognized in the period when such changes are enacted.
As of March 31, 2014, the Company has $28,067 in gross deferred tax assets resulting from net operating loss carry-forwards. A valuation allowance has been recorded to fully offset these deferred tax assets because the Company’s management believes future realization of the related income tax benefits is uncertain. Accordingly, the net provision for income taxes is zero for the period November 15, 2010 (inception) to March 31, 2014. As of March 31, 2014, the Company has federal net operating loss carry forwards of approximately $71,967 available to offset future taxable income through 2030. The difference between the tax provision at the statutory federal income tax rate on March 31, 2014 and the tax provision attributable to loss before income taxes is as follows:
For
the period November 15, (Date
of Inception) through | ||||
| Statutory federal income taxes | 34.0% | |||
| State taxes, net of federal benefits | 5.0% | |||
| Valuation allowance | (39.0)% | |||
| Income tax rate | - | |||
The Company has filed income tax returns since the date of inception.
| -8- |
Apple Green Holding, Inc.
(A Development Stage Company)
Notes to Interim Financial Statements
March 31, 2014
NOTE 4. STOCKHOLDERS’ EQUITY
On March 19, 2014, the Company increase the total authorized shares from 520,000,000 shares to 700,000,000 shares, consisting of 500,000,000 shares of common stock, par value $0.0001 per share, and 200,000,000 shares of preferred stock, par value $0.0001 per share.
Preferred Stock
As of March 31, 2014, the Company has 200,000,000 Preferred shares at $0.0001 par value authorized, however none are issued nor outstanding.
Common Stock
On December 7, 2010, the Company issued 9,000,000 of its $0.0001 par value common stock at $0.001 per share for $9,000 cash to the founder of the Company.
On May 18, 2011, the Company issued 1,200,000 shares common stock at $0.01 per share yielding net proceeds of $12,000 pursuant to the Registration Statement on Form S-1, initially filed on January 27, 2011 and declared effective on April 28, 2011.
On January 10, 2014, the Company issued 389,800,000 shares of common stock to Apple Green Venture Sdn. Bhd. In consideration of the all of the equity interests of AGIL.
On September 12, 2014, the Company, AGI, and Shareholder entered into a Rescission Agreement, according to which 389,800,000 shares of Common Stock owned by AGIL Shareholder shall be cancelled so that the Shareholder shall have no ownership interest in the Company’s Shares or any equity interests of the Company as of such date. All AGIL shares owned or controlled by the Company which are issued and outstanding immediately prior to January 31, 2014 shall be delivered to the AGIL Shareholder pursuant to this Rescission Agreement and the Company shall have no ownership interest in AGIL as of January 31, 2014.
As of March 31, 2014, there are 500,000,000 Common Shares at $0.0001 par value authorized with 10,200,000 issued and outstanding.
NOTE 5. RELATED PARTY TRANSACTIONS
Due to Related Party — As of March 31, 2014, the Company had borrowed from Vincent Loy Ghee Yaw, its Chairman of the Board of Directors the sum of $9,275 which not bears any interest and is due on demand. The Company used the proceeds of the loans from Vincent Loy Ghee Yaw.
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Parties are also considered to be related if they are subject to common control or common significant influence. The due from/to related parties represented the advances from or to the Company’s directors. Such advances are non-interest bearing and due upon demand.
NOTE 6. GOING CONCERN
As of March 31, 2014, the accompanying financial statements have been presented on the basis that it is a going concern in the development stage, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
For the period November 15, 2010 (date of inception) through March 31, 2014 the Company has had a net loss of $71,967 consisting of SEC audit and review fees, Nevada state taxes, and incorporation fees for the Company to initiate its SEC reporting requirements.
As of March 31, 2014, the Company has not yet emerged from the development stage. In view of these matters, recoverability of any asset amounts shown in the accompanying audited financial statements is dependent upon the Company’s ability to begin operations and to achieve a level of profitability. Since inception, the Company has financed its activities principally from the sale of equity securities. The Company intends on financing its future development activities and its working capital needs largely from loans and the sale of public equity securities with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.
NOTE 7. CONCENTRATION OF RISKS
Cash Balances
The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (FDIC). All other deposit accounts at FDIC-insured institutions were insured up to at least $250,000 per depositor. The Company had no deposits in excess of insured amounts as of March 31, 2014.
NOTE 8. SUBSEQUENT EVENTS
In accordance with ASC 855, Subsequent Events, the Company has evaluated subsequent events through the date of issuance of the unaudited interim financial statements. During this period, the Company did not have any material recognizable subsequent events.
| -9- |
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The following discussion should be read in conjunction with Apple Green Holding, Inc.’s (“Apple Green,” the “Company,” “we,” “our,” “us,”) Condensed Consolidated Financial Statements and the related Notes contained elsewhere in this quarterly report on Form 10-Q . All statements in the following discussion that are not reports of historical information or descriptions of current accounting policy are forward-looking statements. Please consider our forward-looking statements in light of the factors that may affect operating results set forth herein.
Overview
Apple Green Holding, Inc. (the “Company” or “Apple Green”), formerly known as Blue Sun Media Inc., was incorporated in the State of Nevada on November 15, 2010.
Rescission of Reverse Merger
On January 10, 2014, the Company entered into a Share Exchange Agreement with Apple Green International Limited, a Seychelles company (AGIL”) and its sole shareholder Apple Green Venture Sdn. Bhd, a Malaysia company (“AGIL Stockholder”), according to which the Company acquired from AGIL Stockholder all of the outstanding shares of AGIL in exchange for the issuance of 389,800,000 shares of its Common Stock (the “Reverse Merger”). AGIL, through its affiliated entities located and operating in the Malaysia, is engaged in producing and providing organic fertilizer and develop a solid waste management.
On September 12, 2014, the Company, AGIL, and AGIL Shareholder entered into a Mutual Rescission Agreement and General Release as of January 31, 2014 (the “Rescission Agreement”), according to which the Company, AGIL, and AGIL Shareholder rescind and terminate the Share Exchange Agreement and related documents (the “Rescission”). According to the Rescission Agreement, 389,800,000 shares of Common Stock owned by AGIL Shareholder shall be cancelled so that the AGIL Shareholder shall have no ownership interest in the Company’s Shares or any equity interests of the Company as of such date. All AGIL shares owned or controlled by the Company which are issued and outstanding immediately prior to January 31, 2014 shall be returned to the AGIL Shareholder pursuant to this Rescission Agreement and the Company shall have no ownership interest in AGIL. As a result of the Rescission, the Company became a shell company. AGIL is not and has never been a subsidiary of the Company and the parties are returned to their respective positions immediately prior to the Share Exchange Agreement and Reverse Merger as if the transaction has never occurred.
Since the Rescission, the Company became a shell company and plans to pursue acquisitions of other business the Board of Directors may approve from time to time. The Company will seek potential acquisitions and plans to conduct due diligence investigations on available candidates. However, there can be no assurance that the Company will successfully make an acquisition or that such acquisition will be successful for the Company and its shareholders. Possible acquisition candidates will be examined based on competitive position as compared to other companies of similar size and experience within the industry segment as well as within the industry as a whole; the cost of participation by the Company; and the accessibility of required management expertise, personnel, raw materials services, professional assistance, and other items. The Company is unable to predict when it may participate in a business opportunity. It anticipates, however, that the analysis of specific proposals and the selection of a business opportunity may take several months or more.
Pending negotiation and consummation of an acquisition, the Company anticipates that it will have, aside from carrying on its search for an acquisition candidate, no business activities, and, thus, will have no source of revenue. Should the Company incur any significant liabilities prior to a combination with a private company, it may not be able to satisfy such liabilities as are incurred. If the Company's management pursues one or more combination opportunities beyond the preliminary negotiations stage and those negotiations are subsequently terminated, it is foreseeable that such efforts will exhaust the Company's ability to continue to seek such combination opportunities before any successful combination can be consummated. In that event, the Company's common stock will become worthless and holders of the Company's common stock will receive a nominal distribution, if any, upon the Company's liquidation and dissolution.
| -10- |
Results of Operations
The following discussion should be read in conjunction with the condensed financial statements and segment data and in conjunction with the Company’s Form 10Q for the period ended March 31, 2014. Results of interim periods may not be indicative of results for the full year.
The Company did not generate any revenue during the three months ended March 31, 2014.
Total expenses for the three (3) months ending March 31, 2014 were $12,082 resulting in an operating loss as compared to total expenses of $4,999 for the period ended March 31, 2013. The increase in expenses was due primarily to an increase professional fee in the quarter ended March 31, 2014. Basic net loss per share amounting to $0.00 for the three (3) months ending March 31, 2014. General and Administrative expenses fees for the three (3) months ending March 31, 2014 is arise from professional fees of $12,082 for accounting and legal services.
Liquidity and Capital Resources
Net cash provided by operating activities for the quarter ended March 31, 2014 was nil compared to net cash used in operating activities for the quarter ended March 31, 2013 of $4,579.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable to a smaller reporting company.
ITEM 4. CONTROLS AND PROCEDURES
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 Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’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 company; |
| -11- |
| ● | 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 company; and | |
| ● | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’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 March 31, 2014 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, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
The matters involving internal controls and procedures 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; (2) inadequate segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of March 31, 2014.
Management believes that the material weaknesses set forth in items (2) and (3) 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.
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 will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, 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.
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.
Changes in internal controls over financial reporting
There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
| -12- |
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 1A. RISK FACTORS.
Not applicable to a smaller reporting company.
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.
| 31.1 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer | |
| 31.2 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal financial and accounting officer | |
| 32.1 | Section 1350 Certification of principal executive officer and principal financial and accounting officer | |
| 101* | Interactive Data Files of Financial Statements and Notes. |
* In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed”.
| -13- |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Apple Green Holding, Inc. | ||
| BY: | /s/ Vincent Loy Ghee Yaw | |
| Name: | Vincent Loy Ghee Yaw | |
| Title: | Chief Executive Officer, Director | |
| Dated: | October 27, 2014 | |
-14-
Exhibit 31.1
RULE 13A-14(A)/15D-14(A) CERTIFICATION
I, Vincent Loy Ghee Yaw, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the period ended March 31, 2014 of Apple Green Holding, Inc.;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;
4. The registrant’s other certifying officer(s) 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 15-d-15(f)) for the registrant and 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, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this 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 an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) 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 reasonably 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.
/s/ Vincent Loy Ghee Yaw
Name: Vincent Loy Ghee Yaw
Title: Principal Executive Officer
Dated: October 27, 2014
Exhibit 31.2
RULE 13A-14(A)/15D-14(A) CERTIFICATION
I, Choy Chean Yen, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the period ended March 31, 2014 of Apple Green Holding, Inc.;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;
4. The registrant’s other certifying officer(s) 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 15-d-15(f)) for the registrant and 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, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this 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 an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) 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 reasonably 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.
/s/ Choy Chean Yen
Name: Choy Chean Yen
Principal Financial and Accounting Officer
Dated: October 27, 2014
Exhibit 32.1
SECTION 1350 CERTIFICATION
In connection with the quarterly report of Apple Green Holding, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2014 as filed with the Securities and Exchange Commission (the “Report”), each of the undersigned hereby certifies, in his capacity as an officer of the Company, for the purpose of 18 U.S.C. SS. 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002, that to the best of his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Dated: October 27, 2014
/s/ Vincent Loy Ghee Yaw
Name: Vincent Loy Ghee Yaw
Title: Principal Executive Officer
/s/ Choy Chean Yen
Name: Choy Chean Yen
Title: Principal Financial and Accounting Officer
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
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Stockholders' Equity
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3 Months Ended |
|---|---|
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Mar. 31, 2014
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| Stockholders' Equity [Abstract] | |
| STOCKHOLDERS' EQUITY | NOTE 4.STOCKHOLDERS’EQUITY
On March 19, 2014, the Company increase the total authorized shares from 520,000,000 shares to 700,000,000 shares, consisting of 500,000,000 shares of common stock, par value $0.0001 per share, and 200,000,000 shares of preferred stock, par value $0.0001 per share.
Preferred Stock
As ofMarch31,2014,theCompanyhas 200,000,000 Preferred shares at $0.0001 par value authorized,howevernoneareissuednor outstanding.
Common Stock
On December 7, 2010, the Company issued 9,000,000 of its $0.0001 par value common stock at $0.001 per share for $9,000 cash to the founder of the Company.
On May 18, 2011, the Company issued 1,200,000 shares common stock at $0.01 per share yielding net proceeds of $12,000 pursuant to the Registration Statement on Form S-1, initially filed on January 27, 2011 and declared effective on April 28, 2011.
On January 10, 2014, the Company issued 389,800,000 shares of common stock to Apple Green Venture Sdn. Bhd. In consideration of the all of the equity interests of AGIL.
On September 12, 2014, the Company, AGI, and Shareholder entered into a Rescission Agreement, according to which 389,800,000 shares of Common Stock owned by AGIL Shareholder shall be cancelled so that the Shareholder shall have no ownership interest in the Company’s Shares or any equity interests of the Company as of such date. All AGIL shares owned or controlled by the Company which are issued and outstanding immediately prior to January 31, 2014 shall be delivered to the AGIL Shareholder pursuant to this Rescission Agreement and the Company shall have no ownership interest in AGIL as of January 31, 2014.
As ofMarch31,2014,thereare500,000,000CommonSharesat$0.0001parvalueauthorizedwith 10,200,000issuedandoutstanding. |