Quality Online Education Group Inc. - Quarter Report: 2013 March (Form 10-Q)

adgs_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

o 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: 001-34274

ADGS ADVISORY, INC.

(Exact name of registrant as specified in its charter)

Delaware		42-1743717
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

Units 2611-13A, 26/F 113 Argyle Street, Mongkok Kowloon, Hong Kong, SAR		N/A
(Address of principal executive offices)		(Zip Code)

(852) 2374-0002

(Registrant’s Telephone Number, Including Area Code)

Life Nutrition Products, Inc.

(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. x Yes o 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). x Yes o 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	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No

As of August 1, 2013 there were 25,000,000 shares of common stock outstanding with a par value of $0.0001.

Table of Contents

		Page:
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)
	Balance Sheets		3
	Statements of Operations		4
	Statement of Changes in Stockholders’ Deficit		5
	Statements of Cash Flows		6
	Notes to Financial Statements		7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		17
Item 4.	Controls and Procedures		17

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings		19
Item 1A.	Risk Factors		19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		19
Item 3.	Defaults Upon Senior Securities		19
Item 4.	Mine Safety Disclosures		19
Item 5.	Other Information		19
Item 6.	Exhibits		20

Signatures			21

ADGS ADVISORY, INC. (formerly Life Nutrition Products, Inc.)

BALANCE SHEETS

MARCH 31, 2013 AND DECEMBER 31, 2012

	March 31, 2013		December 31, 2012
	(Unaudited)
ASSETS

Current assets	$	-	$	-

Property and equipment, net		-		-

TOTAL ASSETS	$	-	$	-

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:
Accounts payable and accrued expenses	$	123,636		$	82,535
Notes payable		-			160,038

Total current liabilities		123,636			242,573

Stockholders’ deficit:
Preferred stock, $0.0001 par value per share, 2,000,000
authorized, none issued and outstanding		-			-
Common stock, $0.0001 par value per share,
50,000,000 shares authorized, 4,845,000 shares and 4,095,000 shares
Issued and outstanding at March 31, 2013 and December 31,
2012, respectively		485			410
Additional paid-in capital		465,364			427,939
Accumulated deficit		(589,485	)		(670,922	)

Total stockholders’ deficit	$	(123,636	)	$	(242,573	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	-		$	-

See accompanying notes to financial statements.

ADGS ADVISORY, INC. (formerly Life Nutrition Products, Inc.)

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012 (UNAUDITED)

	For the Three Months Ended March 31,
	2013			2012

Revenue	$	-		$	-

Operating expenses:
Selling, general and administrative		53,768			18,808

(Loss) from operations		(53,768	)		(18,808	)
Gain on forgiveness of accounts payable and accrued liabilities		12,667			-
Gain on extinguishment of notes payable		122,538			-
Interest expense		-			1,059

Net income / (loss)	$	81,437		$	(19,867	)

Earnings / (loss) per common share, basic and diluted	$	0.02		$	-

Weighted average shares outstanding, basic and diluted		4,811,667			4,095,000

See accompanying notes to financial statements.

ADGS ADVISORY, INC. (formerly Life Nutrition Products, Inc.)

STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED MARCH 31, 2013 (UNAUDITED)

	Preferred Stock		Preferred Stock		Common Stock		Common Stock		Additional Paid-in		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit			Total

Balance, December 31, 2012		-		-		4,095,000	$	410	$	427,939	$	(670,922	)	$	(242,573	)

Issuance of common stock as settlement of notes payable						750,000		75		37,425		-			37,500

Net income		-		-		-		-		-		81,437			81,437

Balance, March 31, 2013		-		-		4,845,000	$	485	$	465,364	$	(589,485	)	$	(123,636	)

See accompanying notes to financial statements.

ADGS ADVISORY, INC. (formerly Life Nutrition Products, Inc.)

STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012 (UNAUDITED)

	2013			2012
Cash flows from operating activities:
Net income / (loss)	$	81,437		$	(19,867	)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Gain on forgiveness of payable and accrued liabilities		(12,667	)		-
Gain on extinguishment of notes payable		(122,538	)		-
Changes in operating assets and liabilities:
Increase in accounts payable and accrued expenses		53,768			19,867

Net cash (used in) operating activities		-			-

Net change in cash		-			-
Cash, beginning		-			-

Cash, end	$	-		$	-

Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

Supplemental disclosure of non-cash investing and financing activities:
Issuance of common stock as settlement of notes payable	$	37,500		$	-

See accompanying notes to financial statements.

ADGS ADVISORY, INC. (formerly Life Nutrition Products, Inc.)

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

GENERAL

Organization and Business Nature

Life Nutrition Products, Inc. (now known as ADGS Advisory, Inc.) was originally organized as a New Jersey limited liability company in February 2005 under the name of Life Nutrition Products, LLC (“LNP”). On September 24, 2007, Life Nutrition Products, Inc. (the “Company”), a Delaware Corporation was formed and merged with LNP. Under the terms of the merger, 10 million shares of common stock were issued to the LNP Members to acquire all of LNP’s membership interests. After the merger, 10 million shares of common stock were outstanding, all of which were owned by LNP’s two founders, Michael M. Salerno, President and Richard G. Birn, Vice President.

LNP’s previous primary business purpose was to market over-the-counter, all-natural dietary supplements under the trade names: Trim For Life3 Appetite Control and Trim For Life3 Energy Formula. The Trim For Life3 Appetite Control Formula is patent pending and supported by scientific studies. The Trim For Life3 Energy Formula is a proprietary formula blend. The Company is no longer pursuing this business.

On September 7, 2010, the Company entered into a Share Exchange Agreement (“Share Exchange Agreement”) with Conqueror Group Limited, a Hong Kong corporation (“Conqueror”) and Acumen Charm Ltd., a British Virgin Islands corporation (“Conqueror Shareholder”). Pursuant to the Share Exchange Agreement, at the closing of the transaction contemplated in the Agreement (“Transaction”), the Company will acquire 100% of the issued and outstanding capital stock of Conqueror from the Conqueror Shareholder, making Conqueror a wholly-owned subsidiary of the Company.

On November 17, 2010, the parties entered into a First Amendment to the Share Exchange Agreement (“First Amendment”) which, among other things, provided that 1,004,900 shares shall be redeemed by the Company contemporaneously with the execution of the First Amendment at an aggregate redemption price of $55,270 (“Group B Redemption Price”) and 12,782,900 shares shall be redeemed by the Company at or before the closing at an aggregate redemption price of $49,731 (“Group C Redemption Price”) pursuant to mutually acceptable and duly executed redemption agreements.

Contemporaneously with the execution of the First Amendment, Conqueror loaned the Company the principal amount of $55,270 in exchange for which the Company delivered a promissory note to Conqueror which proceeds were used to pay the Group B Redemption Price.

The First Amendment further provided that at or before the closing, Conqueror shall loan the Company the principal amount of $49,731 which shall be paid from the funds remaining in escrow (“Remaining Escrow Funds”) pursuant to the Escrow Agreement dated as of August 13, 2010, as amended on August 30, 2010, by and among Conqueror, the Company and Cyruli Shanks Hart & Zizmor LLP, in exchange for which the Company shall deliver a promissory note to Conqueror which proceeds shall be used to pay the Group C Redemption Price.

The First Amendment also provided that in the event that the closing does not occur for any reason on or before January 31, 2011, then, among other things, the Remaining Escrow Funds shall be paid to the Company and used to promptly redeem 12,782,900 shares as provided therein at the Group C Redemption Price, and the then officers and directors of the Company shall resign with immediate effect and appoint such persons as designated by Conqueror as officers and directors.

The Closing was to transpire on or before January 31, 2011 but, as of the date hereof, has not occurred. As a result, on May 11, 2011, and in accordance with the terms of the First Amendment, the Remaining Escrow Funds were paid to the Company and were used to redeem 12,782,900 shares at the Group C Redemption Price and the Company delivered a promissory note to Conqueror in the principal amount of $49,731. On May 11, 2011, Michael M. Salerno, the Company’s sole officer and director, resigned as an officer and director of the Company, and appointed Chu Zhanjun and Li Gang as directors, and Chu Zhanjun as President, Chief Executive Officer and Principal Financial Officer of the Company, each a designee of Conqueror.

ADGS ADVISORY, INC. (formerly Life Nutrition Products, Inc.)

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1.	GENERAL (continued)

Organization and Business Nature (continued)

On December 7, 2012, the Company entered into a share exchange agreement (the “Original Exchange Agreement”) with ADGS Advisory Limited, a Hong Kong corporation (“ADGS”) and ADGS Advisory (Holding) Limited, a British Virgin Islands corporation (“ADGS Holding”). Pursuant to the Original Exchange Agreement, at the closing of the transaction contemplated thereunder (the “ADGS Transaction”), the Company agreed to acquire 100% of the issued and outstanding capital stock of ADGS, making ADGS a wholly-owned subsidiary of the Company. On March 28, 2013, the Company entered into an amendment (the “Amendment”) to the Original Exchange Agreement (the Original Exchange Agreement, as amended is referred to herein as the “Exchange Agreement”) pursuant to which the Company agreed to acquire all of the outstanding shares of Almonds Kisses Limited (BVI), a British Virgin Islands company (“Almonds Kisses BVI”), from the eight shareholders of Almonds Kisses BVI (the “Shareholders”), instead of the shares of ADGS, on the same terms and conditions set forth in the Exchange Agreement. Almonds Kisses BVI is the owner of 100% of the issued and outstanding capital stock of ADGS. The Original Exchange Agreement incorrectly indicated that such owner was ADGS Holdings which error was corrected in the Amendment.

During the three months ended March 31, 2013, and as a condition to the closing of the ADGS Transaction, the Company issued 750,000 shares of common stock to a designee of Conqueror pursuant to a subscription agreement dated January 5, 2013 between Conqueror and the Company whereby Conqueror agreed to accept 750,000 shares (at a market price of $0.05 or $37,500 in the aggregate) in exchange for funds advanced and other loans made by Conqueror to the Company prior to the date thereof in the amount of $160,038 which resulted a gain of $122,538.

On April 12, 2013, the ADGS Transaction closed whereby the Company acquired all of the issued and outstanding capital stock of Almonds Kisses BVI pursuant to the Exchange Agreement in exchange for an aggregate of 20,155,000 newly issued shares of the Company’s common stock which were issued to the eight former shareholders of Almonds Kisses BVI. As a result, on April 12, 2013, Almonds Kisses BVI became the Company’s wholly-owned subsidiary and the former shareholders of Almonds Kisses BVI became the Company’s controlling shareholders, and Almond Kisses BVI in turn owns all of the issued and outstanding capital stock of ADGS. Almond Kisses (BVI) also owns all of the issued and outstanding capital stock of Vantage Advisory Limited, a Hong Kong corporation. ADGS owns 80% of ADGS Tax Advisory Limited (“ADGS Tax”) which is a Hong Kong incorporated holding company, and ADGS Tax owns a 30% interest in Dynamic Golden Limited which is also a Hong Kong incorporated company.

Concurrent with the consummation of the ADGS Transaction, the officers and directors who were designees of Conqueror resigned as officers and directors of the Company, and Li Lai Ying was elected as the Chief Executive Officer, Chief Financial Officer and Secretary of the Company, and Tso Yin Yee was elected as the Chief Operating Officer of the Company. In addition, Li Lai Ying, Tso Yin Yee and Pang Yiu Kwong were elected to the Board of Directors of the Company.

Pursuant to a Certificate of Amendment to its Certificate of Incorporation filed with the State of Delaware and effective as of July 19, 2013, the Company changed its corporate name from “Life Nutrition Products, Inc.” to “ADGS Advisory, Inc.”

Going Concern

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern. The Company has suffered recurring losses and experiences a deficiency of cash flow from operations. These matters raise substantial doubt about the Company's ability to continue as a going concern. The continued operations of the Company are dependent upon the Company’s ability to raise capital and/or generate positive cash flows from operations. Management may achieve profitability and generate positive cash flows through possible acquisition or merger. However, there is no guarantee that a suitable offer may exist or that funding will be available to close on such a transaction. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

ADGS ADVISORY, INC. (formerly Life Nutrition Products, Inc.)

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting and Presentation

The unaudited interim financial statements of the Company as of March 31, 2013 and for the three months ended March 31, 2013 and 2012 have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission (the “SEC”) which apply to interim financial statements. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the periods presented. The results of operations for the three months ended March 31, 2013 are not necessarily indicative of the results to be expected for future quarters or for the year ending December 31, 2013.

Certain information and disclosures normally included in the notes to financial statements have been condensed or omitted as permitted by the rules and regulations of the SEC, although the Company believes the disclosure is adequate to make the information presented not misleading. The interim consolidated financial information should be read in conjunction with the financial statements and the notes thereto, included in the Company’s Form 10-K for the year ended December 31, 2012, previously filed with the SEC.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.

Cash and Cash Equivalents

For purposes of the cash flow statements, the Company considers investments with an initial maturity of three months or less to be cash equivalents.

Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization are computed on the straight-line method based on the estimated useful lives of the assets. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred.

Revenue Recognition

The Company recognizes revenue upon shipment of goods, and the price is fixed and determinable, and collectability is reasonably assured.

Net (Loss) Per Share of Common Stock

Net loss per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents are not included in the computation of diluted earnings per share as the result is anti-dilutive for the periods presented.

ADGS ADVISORY, INC. (formerly Life Nutrition Products, Inc.)

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes

The Company accounts for income taxes in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC 740-10 prescribes detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements in accordance with generally accepted accounting standards. Tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized. Federal, state and local income tax returns for the years prior to 2008 are no longer subject to examination by tax authorities. As of March 31, 2013, the Company has not filed the required Federal and State tax filings for the tax year 2011 and 2012. No interest or penalties were recorded during the three months ended March 31, 2013 and 2012.

The tax effect of temporary differences, primarily net operating loss carry forwards, gave rise to the Company’s deferred tax asset in the accompanying March 31, 2013 and December 31, 2012 balance sheets. Because of the current uncertainty of realizing the benefit of the tax carry forward, a valuation allowance equal to the tax benefit for deferred taxes has been established. The full realization of the tax benefit associated with the carry forward depends predominantly upon the Company’s ability to generate taxable income during the carry forward period.

ADGS ADVISORY, INC. (formerly Life Nutrition Products, Inc.)

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes

As of March 31, 2013, the Company has net operating loss carry forwards of approximately $589,000 that can be utilized to offset future taxable income for Federal income tax purposes through 2033. Utilization of these net loss carry forwards is subject to the limitations of Internal Revenue Code Section 382.

Fair Value Measurements

The Company follows ASC 820, which defines fair value, provides a consistent framework for measuring fair value under GAAP and expands fair value financial statement disclosure requirements. ASC 820’s valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. ASC 820 classifies these inputs into the following hierarchy:

Level 1 Inputs – Quoted prices for identical instruments in active markets.

Level 2 Inputs – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 Inputs – Instruments with primarily unobservable value drivers.

As of March 31, 2013 and December 31, 2012, none of the assets and liabilities was required to be reported at fair value on a recurring basis. Carrying values of non-derivative financial instruments, including accounts payable and accrued expenses, approximate fair values due to the short term nature of these financial instruments. There are no changes in methods or assumptions during the periods.

ADGS ADVISORY, INC. (formerly Life Nutrition Products, Inc.)

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

3.	RECENTLY ISSUED ACCOUNTING STANDARDS

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's financial condition, results of operations, or disclosures.

4.	PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

	March 31, 2013			December 31, 2012			Estimated useful lives
	(Unaudited)

Computer equipment	$	4,324		$	4,324			3 years
Website development		4,315			4,315			3 years
Less: accumulated depreciation		(8,639	)		(8,639	)

	$	-		$	-

5.	NOTES PAYABLE

Notes payable consist of the following:

	March 31, 2013			December 31, 2012
	(Unaudited)

Note payable to Conqueror Group Limited bears interest at 5%, originally due May 17, 2011, currently due on demand	$	55,270		$	55,270
Note payable to Conqueror Group Limited bears interest at 5% and due November 11, 2011, currently due on demand		49,730			49,730
Advances from Conqueror Group Limited no interest bearing and due on demand		55,038			55,038
750,000 shares have been issued to exchange for the notes payable		(160,038	)		-

	$	-		$	160,038

The interest accrued $9,667 was waived with the notes payable in exchange for the 750,000 shares (Note 1).

ADGS ADVISORY, INC. (formerly Life Nutrition Products, Inc.)

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

6.	STOCKHOLDERS’ DEFICIT

We have authorized 2,000,000 shares of blank check preferred stock, none of which are issued and outstanding.

We have authorized 50,000,000 shares of common stock, par value $.0001 per share. In connection with the share exchange agreement (see Note 1), the Company redeemed and cancelled a total of 13,787,800 shares of its common stock, cancelling 12,782,900 in 2011 and 1,004,900 in 2010. During the three months ended March 31, 2013, a total of an additional 750,000 shares have been issued in exchange for settlement of the notes payable in the amount of $160,038 pursuant to a subscription agreement dated January 5, 2013. As of March 31, 2013 and December 31, 2012, there are 4,845,000 shares and 4,095,000 issued and outstanding, respectively.

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

FORWARD LOOKING STATEMENT

This report contains certain forward-looking statements and information relating to the Company that are based on the beliefs and assumptions made by the Company’s management as well as information currently available to the management. When used in this document, the words “anticipate”, “believe”, “estimate”, and “expect” and similar expressions, are intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. The Company does not intend to update these forward-looking statements.

APPLICATION OF CRITICAL ACCOUNTING PRACTICES

This Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Quarterly Report for the three month period ended March 31, 2013 on Form 10-Q should be read in conjunction with the accompanying Financial Statements and related notes. Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Our significant accounting policies are more fully described in notes to the financial statements. 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, liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities. Actual results could differ from those estimates under different assumptions or conditions.

We review our estimates and assumptions on an on-going basis. Our estimates are based on our historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions, but we do not believe such differences will materially affect our financial position or results of operations.

OVERVIEW AND PLAN OF OPERATION

Life Nutrition Products, Inc. (now known as ADGS Advisory, Inc.) (the “Company”, “we”, “us” and “our”), which was incorporated in the State of Delaware in September 2007, was previously a dietary supplement company specializing in the development, marketing and distribution of all natural, proprietary, dietary supplements under the names Trim For Life3® Appetite Control and Trim For Life3® Energy Formula.

In our original business plan, we outlined a marketing strategy to compete more effectively in the dietary supplement marketplace. However, due to a lack of available financing, we were unable to implement the marketing strategy or invest in product expansion. We are no longer pursuing this business. As a result, we began to explore other viable options that may provide the potential to generate a positive cash flow to accommodate the costs of being a public company. With volatile economic conditions and unknown opportunities, we were unable to adequately determine if there are indeed, business opportunities that would lend to the Company acquiring additional capital or having the available resources to construct such a deal.

On September 7, 2010, we entered into a Share Exchange Agreement (the “Conqueror Share Exchange Agreement”) with Conqueror Group Limited, a Hong Kong corporation (“Conqueror”) and Acumen Charm Ltd., a British Virgin Islands corporation (the “Conqueror Shareholder”). Pursuant to the Conqueror Share Exchange Agreement, at the closing of the transaction contemplated in the Conqueror Share Exchange Agreement (the “Conqueror Transaction”), the Company was to acquire 100% of the issued and outstanding capital stock of Conqueror from the Conqueror Shareholder, making Conqueror a wholly-owned subsidiary of the Company. There was no prior relationship between the Company and any of its affiliates and the Conqueror Shareholder and any of its affiliates.

Through contractual arrangements, Conqueror has effective control over two businesses in the PRC, one principally engaged in the processing and distribution of raspberry and blueberry drinks, wines and other related products in China, and the other principally engaged in the cultivation, processing and distribution of fresh and frozen raspberries in the domestic market in China and internationally.

The Closing was to transpire on or before January 31, 2011 but it did not occur by that date. However, as of May 11, 2011, among other things, Michael M. Salerno, the Company’s then sole officer and director, resigned as an officer and director of the Company, and appointed Chu Zhanjun and Li Gang as directors, and Chu Zhanjun as President, Chief Executive Officer and Principal Financial Officer of the Company, each a designee of Conqueror. As a result, a change in control occurred, due to the resignation of Mr. Salerno as sole officer and director, appointment of Mr. Chu as President, Chief Executive Officer and Principal Financial Officer of the Company, and appointment of Mr. Chu and Mr. Li as directors. At the time, the parties anticipated that the transaction contemplated by the Conqueror Share Exchange Agreement would not be completed at any time in future.

RESULTS OF OPERATIONS

No revenue had been generated for both the three months periods ended March 31, 2013 and 2012.

Gross profit was $0 for both the three months ended March 31, 2013 and 2012. There was no cost of revenues for both the three months periods ended March 31, 2013 and 2012.

The Selling, general and administrative expenses were $53,768 and $18,808 for the three months ended March 31, 2013 and 2012, respectively, of which the increase was primarily due to a substantial increase in legal fees incurred in connection with the ADGS Transaction. During the three month period ended March 31, 2013, there was further a gain on forgiveness of accounts payable and accrued liabilities of $12,667 and a gain on extinguishment of notes payable of $122,538 which notes payable were exchanged for 750,000 shares of common stock, as compared to the three months ended March 31, 2012 in which there were no comparable items.

Interest expense was $0 and $1,059 for the three months ended March 31, 2013 and 2012, respectively. Interest accrued was waived with the notes payable in exchange for the 750,000 shares.

There was a net gain of $81,437 for the three months ended March 31, 2013 due to the gain on forgiveness of accounts payable and accrued liabilities of $12,667 and gain on extinguishment of notes payable of $122,538 as described above, offset by the loss from operations of $53,768 resulting from no revenues and selling, general and administrative expenses of $53,768. This compares to the net loss of $19,867 for the three months ended March 31, 2012 due primarily to loss from operations of $18,808 resulting from no revenues and selling, general and administrative expenses of $18,808.

IMPACT OF INFLATION

Inflation has not had a material effect on our results of operations.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by or used in operating activities was $0 for the three months ended March 31, 2013 due to the net gain of $81,437 and the increase in accounts payable and accrued expenses of 53,768, offset by the gain on forgiveness of payable and accrued liabilities of $12,667 and gain on extinguishment of notes payable of $122,538. Net cash provided by or used in operating activities was $0 for the three months ended March 31, 2012 due to a net loss of $19,867 offset by an increase in accounts payable and accrued expenses of $19,867.

There was no net cash provided by or used in financing activities and investing activities for both the three months ended March 31, 2013 and 2012.

As of March 31, 2013, we had working capital deficit of $123,636 and a total stockholders’ deficit of $123,636, compared to working capital deficit of $242,573 and a total stockholders’ deficit of $242,573 as of December 31, 2012. On March 31, 2013, we had no cash and no assets, and total liabilities of $123,636 compared to no cash and no assets and total liabilities of $242,573 as of December 31, 2012.

Obligations are being met on a month-to-month basis as cash becomes available. There can be no assurances that the Company’s present flow of cash will be sufficient to meet current and future obligations. The Company has incurred losses since its inception, and continues to require additional capital to fund its operations and meet SEC requirements of being a publicly held company. As such, the Company’s ability to pay its already incurred obligations is mostly dependent on the Company raising additional capital in the form of equity or debt.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital resources.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4. Controls and Procedures.

(a) Evaluation of disclosure controls and procedures

Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer has concluded that, as of March 31, 2013, these disclosure controls and procedures were not effective to ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rule and forms; and (ii) accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

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) inadequate segregation of duties consistent with control objectives; and (2) 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, 2013.

Management believes that the material weaknesses set forth in items (1) and (2) above did not have an effect on our financial results. At this time, the Company does not have an audit committee and relies on its Board of Directors and executive management to monitor internal controls and procedures to ensure the Company is meeting its SEC obligations.

(b) Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

There are no material pending legal proceedings to which the Company is a party or to which any of its property is subject.

Item 1A. Risk Factors

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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

During the three months ended March 31, 2013, and as a condition to the closing of the ADGS Transaction, we issued 750,000 shares of common stock to Wang Yu Long, a designee of Conqueror, pursuant to a subscription agreement dated January 5, 2013 between Conqueror and the Company whereby Conqueror agreed to accept 750,000 shares in exchange for funds advanced and other loans made by Conqueror to the Company prior to the date thereof in the amount of $160,038. The securities were issued in reliance upon the exemption from registration pursuant to Section 4(2) of the Securities Act and Regulation S thereunder. Wang Yu Long is not a “US Person” (as defined in Rule 902 of Regulation S) and the certificate representing the shares issued has been endorsed with a restrictive legend consistent with that exemption.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act)

31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act)

32.1		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

101*		The following financial information from our Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statement of Changes in Stockholders’ Deficit, (iv) the Statements of Cash Flows and (v) Notes to Financial Statements

In accordance with Rule 406T of Regulation S-T, the XBRL information in Exhibit 101 to this quarterly report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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.

	ADGS ADVISORY, INC.
	(Registrant)

Date: August 2, 2013	By:	/s/ Li Lai Ying
		Li Lai Ying
		Chief Executive Officer and Chief Financial Officer
		(Principal Executive Officer and Principal Financial Officer)