MULIANG VIAGOO TECHNOLOGY, INC. - Quarter Report: 2018 June (Form 10-Q)

NOTE 12 – INCOME TAXES (CONTINUED)  

The tax effects of temporary differences that give rise to the Company’s net deferred tax assets as follows: 

NOTE 13 – BUSINESS SEGMENTS

The revenues and cost of goods sold from operation consist of the following:

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations should also be read in conjunction with our unaudited consolidated financial statements and the notes to those financial statements appearing elsewhere in this report. The following discussion contains forward-looking statements relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report. 

Business Overview

We are principally engaged in the fertilizer processing and distribution business in the People’s Republic of China (“PRC”).

Through our patented technology, we process crop straw (including corn, rice, wheat, cotton, and other crops) into high quality organic nutritious fertilizer rich in small molecules, easily absorbed by crops in 3 hours. Straws are common agricultural by-product. In PRC, farmers usually burn the straw down to remove the straws efficiently in order to continue farming on the same land. These activities have resulted in serious air pollution and damage the surface structure of the soil. We change waste into treasure by recycling the straws into organic fertilizer, and effectively reduced air pollution. The straw organic fertilizer we produce does not contain the heavy metals, antibiotics, and harmful bacteria that is common in the traditional manure fertilizer. The organic matter content in our organic fertilizer is also much higher than the national standard. It can effectively reduce the use of chemical fertilizers and pesticides, and reduce the penetration of large chemical fertilizers and pesticides into the soil and thus avoid water pollution. Therefore, our fertilizer can effectively improve soil, improve soil fertility, and improve the quality and safety of agricultural products.

We are committed to ensuring the quality and safety of agricultural products as the center of the company’s industry. Therefore, we are actively evaluating and operating the sales of high-quality and safe agricultural products (food) while providing high-quality and safe straw organic fertilizer for agricultural production. And has cooperated with the Ministry of Science and Technology of China, the Ministry of Agriculture, the General Administration of Quality Supervision, Inspection and Quarantine, and other relevant departments of the state wisdom of large agriculture cooperation, operating and sales of national wisdom large agriculture certified quality traceable agricultural products (food), and plans to establish only sales quality can be guaranteed And agricultural products (food) electronic trading platform with safe shell traceability.

In addition, in 2014, we rented 350 mu (about 57.66 acres) of mountainous land as apple farm and use our own fertilizer, to demonstrate the advantages of our straw organic fertilizer. We did not generate any revenue for apple sales for the six months ended June 30, 2018 and 2017, as apples were not ripe for sale until the fourth quarter each year. In addition, we expect our apple trees to become commercially productive in the fourth quarter of 2019.

Currently, all of our production takes place in the fertilizer plants located in Weihai City, Shandong Province, PRC. All of our fertilizer plants in Weihai City produced the straw organic fertilizer, which is our main product currently and in the near future. We decided to make technological improvement for our existing straw organic fertilizer production lines in the following aspects: (1) adopt more advanced automatic control technology for raw material feed to shorten the feeding time of raw material, and (2) manufacture powdery organic fertilizer instead of granular organic fertilizer production in order to avoid the drying and cooling process. We estimated we would be able to increase our production capacity significantly through the technical improvement.

We have fertilizer facility and new fertilizer plants in the suburb of Shanghai City. The new plant located in Shanghai was completed in June 2016. Due to the requirements for urban environmental protection, we are not using the fertilizer plants in Shanghai City to manufacture straw organic fertilizer currently. We leased an 8,165-square-meter factory area to Yu Shuai (Shanghai) Industrial Development Co., Ltd. as office and warehouse from January 1, 2018 to December 31, 2027 with an annual rent of $320,631 for the first three years. The rent will increase by 10% every three years according to the agreement. In addition, we have leased a 1,500-square-meter factory area to Shanghai Yanwu standard parts Co., Ltd. for a period of five years from June 29, 2017, with an annual rent of $45,493 for the first three years and an annual rent of $47,768 for the last two years.

On October 16, 2017, we entered into a lease agreement to rent the land use right of an area of 15 mu (about 2.47 acres), located in Shanghai City, to China Huaxi Limited Company, from November 21, 2017 to November 20, 2027. The annual rent was $97,980 for the first three years. The rent will increase by 10% every three years according to the agreement.

Our fertilizer products are sold under our brand names “Zongbao,” “Fukang,” and “Muliang.” Our customers are mainly located in provinces of Jiangsu, Zhejiang and Shandong.

In addition, we have invested $1,516,361 in a goat slaughterhouse located in Shuangbai County, Chuxiong City, Yunnan Province, PRC as of June 30, 2018. The total planned investment of the goat slaughterhouse is $12,086,235 (RMB80,000,000) and is expected to be completed in 2019.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We evaluate, on an on-going basis, our estimates for reasonableness as changes occur in our business environment. We base our estimates on experience, the use of independent third-party specialists, and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are defined as those that are reflective of significant judgments, estimates and uncertainties, and potentially result in materially different results under different assumptions and conditions. We believe the following are our critical accounting policies:

Basis of Presentation

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP.

Going Concern

As reflected in the accompanying consolidated financial statements, we had net accumulated deficit of $13,895,015 and $16,118,404 as of June 30, 2018 and December 31, 2017. Our cash balances as of June 30, 2018 and December 31, 2017 were $20,767 and $9,051, respectively. Our current liabilities were $9,774,952 at June 30, 2018, which is due within the next 12 months. In addition, we had a working capital deficit of $6,038,922 and $10,708,100 at June 30, 2018 and December 31, 2017, respectively. These matters raise doubt about the company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan, raise additional capital, and generate more revenues. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. 

The Company had net cash inflow of $1,984,753 and net cash outflow of $894,141 from its operating activities during the six months ended June 30, 2018 and 2017, respectively. For the six months ended June 30, 2018, the Company issued common stock for a proceeds of $2,344,444. The Company also successfully made a significant net income instead of suffering a loss. All of the above improved the Company’s financial position significantly as of June 30, 2018.The Company expected to generate net income in a larger amount in the near future. 

Principles of Consolidation

The consolidated financial statements include the accounts of Mullan Agritech, Muliang HK, Shanghai Mufeng, Muliang Industry, Zongbao, Fukang, Agritech Development, Zongbao Cangzhou, Muliang Sales, Zhonglian, and Yunnan Muliang. All intercompany transactions and account balances are eliminated in consolidation.

Use of Estimates

In preparing financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates, required by management, include the recoverability of long-lived assets and the valuation of inventories. Actual results could differ from those estimates.

Accounts Receivable

We state accounts receivable at cost, net of allowance for doubtful accounts. Based on our past experience and current practice in the PRC, management provides for an 100% allowance for doubtful accounts equivalent to those accounts that are not collected within one year plus 50% for receivables outstanding for six months old. It is management’s belief that the current bad debt allowance adequately reflects an appropriate estimate based on management’s judgment.

Inventory Valuation

We value our fertilizer inventories at the lower of cost, determined on a weighted average basis, and net realizable value (the estimated market price). Substantially all inventory expenses, packaging and supplies are valued by the weighted average method.

Apple Orchard

Apple Orchard consists primarily of rental for an apple farm, labor cost, fertilizers, apple seeds, apple seedlings and others. The costs to purchase and cultivate apple trees and the expenditures related to labor and materials to plant apple trees until they become commercially productive are capitalized, which require a 2-year period. The estimated production life for apple tree is 10 years, and the costs are amortized without a residual value. Expenses incurred maintaining apple trees during the growth cycle until seedling apple trees or grafted varieties are fruited are capitalized into inventory and included in Work in process—apple orchard, a component of inventories.

Amortized expenses pertaining to apple orchard are included in inventory costs for those apples to be sold and ultimately become a component of cost of goods sold. Similar to other assets, the failure of our apple orchard to be serviceable over the entirety of their anticipated useful lives or to be sold at their anticipated residual value will negatively impact our operating results.

Revenue Recognition

Pursuant to the guidance of ASC Topic 606, the Company recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company recognizes revenues from the sale of its fertilizer products and fertilizer manufacturing equipment upon shipment and transfer of title.

Sales revenue represents the invoiced value of goods, net of value-added tax, or VAT. Our products sold and services provided in China are subject to VAT of 13% of gross sales price before May 1, 2018.The VAT rate changed to 11% from May 1, 2018 according to the announcement of National Tax Bureau dated April 4, 2018. This VAT may be offset by VAT paid by us on raw materials and other materials included in the cost of producing the finished product. We recorded VAT payable and VAT receivable net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables.  

Rent Income

Pursuant to the guidance of ASC Topic 840, rent shall be reported as income by lessors over the lease term as it becomes receivable. The Company currently leased all the building of the plants and the Land use right in Shanghai City to third parties as warehouse and workplace. The Company recognizes building and land use right leasing income over the beneficial period described by the agreement, as the income is realized or realizable and earned.

The related rent expense mainly represents the depreciation expense of the buildings and land use right.

The rent income, net off the rent expense, was presented as other income in the consolidated statements of operations and comprehensive loss.

Income Taxes

We account for income taxes in accordance with Statement of Financial Accounting Standard No. 109, “Accounting for Income Taxes.” We compute our provision for income taxes based on the statutory tax rates and tax planning opportunities available to us in the PRC. Significant judgment is required in evaluating our tax positions and determining our annual tax position.

New Accounting Standards

In January 2017, the Financial Accounting Standard Board (“FASB”) issued guidance, which simplifies the accounting for goodwill impairment. The updated guidance eliminates Step 2 of the impairment test, which requires entities to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value.

In January 2017, the FASB issued guidance, which amended the existing accounting standards for business combinations. The amendments clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.

In August 2017, the FASB issued guidance, which amends the existing accounting standards for derivatives and hedging. The amendment improves the financial reporting of hedging relationships to better represent the economic results of an entity’s risk management activities in its financial statements and made certain targeted improvements to simplify the application of the hedge accounting guidance in current U.S. GAAP.

The Company believes that there were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations.

Results of Operations

We are principally engaged in the organic fertilizer manufacture and distribution business in the PRC.

Currently, about 97% of our revenue is derived from our organic fertilizer business. In 2017, we started promoting our powdery organic fertilizer more aggressively as it was easier to be absorbed by soil and plants, compared with the granular organic fertilizer. As a result, powdery organic fertilizer sales accounted for a majority of our organic fertilizer sales.

During the six months ended June 30, 2018, the Management also started to develop the sales of agricultural products (food). Sales from agricultural products (food) accounted for around 3% of our total sales currently.

For the six months ended June 30, 2018, we received capital contribution of approximately $2.7 million from our shareholder. We also generated a significant net income instead of suffering a loss. All of which improved the Company’s financial position significantly as of June 30, 2018. We expected to generate net income in a larger amount in the near future.

For the Three Months Ended June 30, 2018 and 2017

Revenue. Total revenue for organic fertilizer increased from $70,644 for the three months ended June 30, 2017 to $5,398,429 for the same period in 2018, which represented an increase of $5,327,785, or approximately 75 times. The significant increase in revenue was mainly due to a larger demand for our organic fertilizer products from large scale agricultural companies and farmer professional cooperatives for the three months ended June 30, 2018. We have developed more customers, such as Huizhou Sijilv Agricultural Products Co., Ltd., that are buying a large quantity of our products. We are continuing to obtain more stable customers in 2018.

We also began selling high quality agriculture foods in June 2018, and expect to increase the sales in the near future.

Cost of sales. Cost of sales for organic fertilizer increased from $54,527 for the three months ended June 30, 2017 to $2,784,946 for the three months ended June 30, 2018, which represented an increase of approximately $2,730,419, or 50 times. The significant increase in cost of sales was in line with the significant increase in our revenue from fertilizer sales for the same period.

Gross Profit (loss). The gross profit for organic fertilizer increased significantly from $16,117 for the three months ended June 30, 2017 to gross profit of $2,613,483 for the three months ended June 30, 2018. The gross margin increased from 23% for the three months ended June 30, 2017 to 48% for the three months ended June 30, 2018. The gross margin of 48% represents our normal operation result of sales to final customers. And the significant increase in gross margin was mainly due to a small quantity of depreciation for some idle equipment was recorded as the cost of goods sales unavoidably for the three months ended June 30, 2017. We turned to sell powdery organic fertilizer instead of granular organic fertilizer for the three months ended June 30, 2018, as powdery organic fertilizer has a higher gross margin than granular organic fertilizer. And we expected to maintain the gross margin around 45% in the near future.

The gross profit for agriculture products was $10,942, and gross margin turned to be around 6% for the three months ended June 30, 2018.

Expenses. We incurred $141,085 in selling expenses for the three months ended June 30, 2018, compared to $15,600 for the three months ended June 30, 2017. We incurred $278,984 in general and administrative expenses for the three months ended June 310 2018, compared to $259,840 for the three months ended June 30, 2017. Selling, general and administrative expenses increased by $144,629, or 53% for the three months ended June 30, 2018 as compared to the same period in 2017. Our selling expenses increased by $125,485 and our general and administrative expenses increased by $19,144. The increase in our selling expenses was mainly due to the increase in salaries expense, travelling expense, etc., for selling department. Our general and administrative expenses maintained stable for the three months ended June 30, 2018, and is expected to increase for the next quarter, as our sales continued to grow.

Interest income (expense). We incurred $115,988 in interest expense during the three months ended June 30, 2018, compared with interest expense of $122,254 for the three months ended June 30, 2017.

Net Income (loss). Our net income was $2,147,182 for the three months ended June 30, 2018, compared with net loss of $337,274 for the three months ended June 30, 2017. We ceased to incur losses and began to turn a profit because we increased our revenue and gross profit significantly for the three months ended June 30, 2018.

For the Six Months Ended June 30, 2018 and 2017

Revenue. Revenue for organic fertilizer increased from $154,135 for the six months ended June 30, 2017 to $6,586,449 for the same period in 2018, which represented an increase of $6,432,314, or approximately 42 times. The significant increase in revenue was mainly due to a larger demand for our organic fertilizer products from large scale agricultural companies and farmer professional cooperatives for the six months ended June 30, 2018. We developed more customers, such as Huizhou Sijilv Agricultural Products Co., Ltd., that are buying a large quantity of our products. We are continuing to obtain more stable customers in 2018.

We also started to sell high quality agriculture foods in June 2018, and expected to increase the sales of this business segment significantly in the near future.

Cost of sales. Cost of sales for organic fertilizer increased from $123,265 for the six months ended June 30, 2017 to $2,467,725 for the six months ended June 30, 2018, which represented an increase of approximately $3,344,460, or 27 times. The significant increase in cost of sales was in line with the significant increase in our revenue from fertilizer sales for the same period.

Gross Profit (loss). The gross profit for organic fertilizer increased significantly from $30,870 for the six months ended June 30, 2017 to gross profit of $3,118,724 for the six months ended June 30, 2018. The gross margin increased from 20% for the six months ended June 30, 2017 to 47% for the six months ended June 30, 2018. The gross margin of 47% represents our normal operation result of sales to final customers. The significant increase in gross margin was mainly due to a small quantity of depreciation for some idle equipment was recorded as the cost of goods sales unavoidably for the six months ended June 30, 2017. We turned to sell powdery organic fertilizer instead of granular organic fertilizer for the six months ended June 30, 2018, as powdery organic fertilizer has a higher gross margin than granular organic fertilizer. And we expect to maintain the gross margin around 45% in the near future.

The gross profit for agriculture foods was $10,942, and gross margin turned to be around 6% for the six months ended June 30, 2018.

Expenses. We incurred $164,402 in selling expenses for the six months ended June 30, 2018, compared to $70,541 for the six months ended June 30, 2017. We incurred $671,494 in general and administrative expenses for the six months ended June 310 2018, compared to $676,377 for the six months ended June 30, 2017. Selling, general and administrative expenses increased by $88,978, or 12% for the six months ended June 30, 2018 as compared to the same period in 2017. Our selling expenses increased by $93,861 and our general and administrative expenses decreased by $4,883. The increase in our selling expenses was mainly due to the increase in salaries expense, travelling expense, etc., for selling department. Our general and administrative expenses maintained stable for the six months ended June 30, 2018, and is expected to increase for the next quarter, as our sales continue to grow.

Interest income (expense). We incurred $224,069 in interest expense during the six months ended June 30, 2018, compared with interest expense of $253,056 for the six months ended June 30, 2017.

Net Income (loss). Our net income was $2,195,053 for the six months ended June 30, 2018, compared with net loss of $937,752 for the six months ended June 30, 2017. We ceased to incur losses and began to turn a profit because we increased our revenue and gross profit significantly for the six months ended June 30, 2018.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise operate on an ongoing basis. At June 30, 2018 and December 31, 2017 our working capital deficit was $6,038,922 and $10,708,100, respectively, mainly reflecting increases in our current assets, including $2,147,214 increase in account receivable, with a decrease in our current liabilities such as due to related party.

We have financed our operations over the six months ended June 30, 2018 and 2017 primarily through proceeds from stock issuance and advances from related parties, and cash from borrowings under our lines of credit with various lenders and related parties in the PRC.

The components of cash flows are discussed below: 

Cash Used in Operating Activities

Net cash provided by operating activities was $1,984,753 for the six months ended June 30, 2018. The net cash inflow consisted primarily of net income of $2,195,053 which was adjusted by depreciation and amortization of $504,757. The Company had an increase of $144,926 in other payable, an increase of $594,598 in our advance from customers, an increase of $125,658 in account payable-related party, which were offset by an increase of $2,147,214 in accounts receivable, an increase of $273,463 in inventory, and an increase of $94,546 in advance to suppliers.

Net cash used in operating activities was $894,141 for the six months ended June 30, 2017. Cash used in operating activities for the six months ended June 30, 2017 consisted primarily of net loss of $937,752 which was adjusted by depreciation and amortization of $382,517, bad debt expense of $21,895. The Company had a decrease of $340,649 in account receivable, a decrease of $70,009 in our inventories, a decrease of $42,297 in prepaid expense, an increase of $649,462 in other payable which were offset by a decrease of $1,431,382 in accounts payable and accrued payables, and an increase of $2,551 in advances to suppliers.

Cash Provided by (used in) Investing Activities

Net cash used in investing activities was $1,590,483 for the six months ended June 30, 2018. The activities primarily consisted of purchase of plant and equipment of $73,603, and investment in construction in progress of $1,516,880.

Net cash provided by investing activities was $1,327,559 for the six months ended June 30, 2017. The activities primarily consisted of investment in apple orchard growing crops of $53,837 and plant and equipment of $5,010, offset by the repayment from our related party of $1,387,133 for the six months ended June 30, 2017.

Cash Used in Financing Activities

Net cash used in financing activities was $381,928 for the six months ended June 30, 2018. During the period, cash used in financing activities consisted of the repayment to related parties of $3,522,824, repayment of short term loan of $785,361, and offset by proceeds from stock issuance of $2,344,444, and proceeds from long-term loans of $1,581,813. 

Net cash used in financing activities was $315,252 for the six months ended June 30, 2017. During the period, cash used in financing activities consisted of the capital borrowing of $29,406 paid to related parties, repayment of $285,846 for short term borrowing.

We anticipate that our current cash reserves plus cash from our operating activities will not be sufficient to meet our ongoing obligations and fund our operations for the next twelve months. As a result, we will need to seek additional funding in the near future. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of capital contribution from our current shareholders, equity financing from the sale of shares of our common stock or renewing our current obligations with loaners. We may also seek to obtain short-term loans from our directors or unrelated parties. Additional funding may not be available, or at acceptable terms, to us at this time. If we are unable to obtain additional financing, we may be required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results.  

Contractual Commitments and Commitments for Capital Expenditure

Contractual Commitments

The following table summarizes our contractual obligations at June 30, 2018 and the effect those obligations are expected to have on our liquidity and cash flow in future periods.

Commitments for Capital Expenditure

We have invested $1,071,476 in a goat slaughterhouse located in Shuangbai County, Chuxiong City, Yunnan Province, PRC as of June 30, 2018. We expect to outlay additional capital to complete the slaughterhouse in 2019.

Off Balance Sheet Items

We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course of business, we enter into operating lease commitments, purchase commitments and other contractual obligations. These transactions are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable because we are a smaller reporting company. 

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are not effective as of June 30, 2018 to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure for the reason described below.

Because of our limited operations, we have limited number of employees which prohibits a segregation of duties. In addition, we lack a formal audit committee with a financial expert. As we grow and expand our operations we will engage additional employees and experts as needed. However, there can be no assurance that our operations will expand.

Changes in Internal Control Over Financial Reporting

During the three months ended June 30, 2018, there has been no change in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. We will continue to monitor the deficiencies identified in internal controls and make changes that our management deems necessary.  

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

There are no other actions, suits, proceedings, inquiries or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. 

Item 1A. Risk Factors.

Not applicable because we are a smaller reporting company. 

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

There were no unregistered sales of the Company’s equity securities during the three months ended June 30, 2018, that were not otherwise disclosed in a Current Report on Form 8-K.  

Item 3. Defaults Upon Senior Securities.

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company. 

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information. 

There is no other information required to be disclosed under this item which was not previously disclosed.

Item 6. Exhibits.

+ In accordance with the SEC Release 33-8238, deemed being furnished and not filed.

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.