RAYONT INC. - Quarter Report: 2014 March (Form 10-Q)

acug_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2014

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from __________ to __________

SEC File No. 333-179082

A & C United Agriculture Developing Inc.

(Exact name of registrant as specified in its charter)

Nevada		100		27-5159463
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		IRS I.D.

Oak Brook Pointe, Suite 500, 700 Commerce Drive, Oak Brook, Illinois		60523
(Address of principal executive offices)		(Zip Code)

Issuer’s telephone number: 630-288-2500

N/A

(Former name, former address and former three months, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 x No o

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 x No o

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). Yes o No x

As of May 14, 2014, there were 36,611,495 shares issued and outstanding of the registrant’s common stock.

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis or Plan of Operation.	4

Item 3.	Quantitative and Qualitative Disclosure about Market Risk	11

Item 4.	Controls and Procedures.	11

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings.	12

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	12

Item 3.	Defaults Upon Senior Securities	12

Item 4.	Mine Safety Disclosures	12

Item 5.	Other Information	12

Item 6.	Exhibits.	13

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

A & C United Agriculture Developing Inc

(A Development Stage Enterprise)

Unaudited Financial Statements

As of March 31, 2014

Table of Contents

Balance Sheet			F-1

Statement of Loss			F-2

Statement of Stockholders Equity			F-3

Statement of Cash Flows			F-4

Notes to Financial Statements			F-5

Exhibit A			F-15

A & C United Agriculture Developing Inc

(A Development Stage Enterprise)

BALANCE SHEET

	March 31,			September 30,
	2014			2013
	(unaudited)			(audited)
ASSETS
Current assets:
Cash and cash equivalents	$	83,195		$	384,675
Accounts receivable		247,347			124,085
Inventory		30,500			2,216
Total Current Assets	$	361,042		$	510,976
Other current assets:
Prepaid expense	$	689		$	170
Loan to shareholder		47,329			46,884
Prepaid to Supplier		111,000			18,200
Total Other Current Assets	$	159,018		$	65,254
Property, plant and equipment, net	$	20,404		$	23,125
Other assets:
Deferred interest expense		221			284
Total Other Assets	$	221		$	284
TOTAL ASSETS	$	540,685		$	599,639

LIABILITIES & EQUITY
Current liabilities:
Account payable	$	10,826		$	-
Credit card payable		2,243			4,717
Total current liabilities	$	13,069		$	4,717
Other current liabilities:
Loan from officer/shareholders	$	709		$	-
Payroll liabilities		1,382			1,382
Total other current liabilities	$	2,091		$	1,382
Long term liabilities:
Car loan		16,091			20,689
Total long term liabilities	$	16,091		$	20,689
Total liabilities	$	31,251		$	26,788

Stockholders' Equity:
Common stock, $0.001 par value; 500,000,000 shares authorized; 36,611,495 shares issued and outstanding.	$	36,612		$	36,362
Paid-in capital		873,838			824,088
Deficit accumulated during the development stage		(401,304	)		(287,906	)
Accumulated other comprehensive income (loss)		288			307
Total stockholders' equity	$	509,434		$	572,851
TOTAL LIABILITIES & EQUITY	$	540,685		$	599,639

F-1

A & C United Agriculture Developing Inc

(A Development Stage Enterprise)

STATEMENT OF LOSS

	Six Months Ended			Six Months Ended			Three Months Ended			Three Months Ended			Cumulative from February 7, 2011 (Date of Inception) Through
	March 31,			March 31,			March 31,			March 31,			March 31,
	2014			2013			2014			2013			2014
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

Revenues	$	361,870		$	614,144		$	149,027		$	227,059		$	1,506,099
Cost of Goods Sold	$	324,538		$	567,729		$	135,687		$	210,118		$	1,369,629
	$	37,332		$	46,415		$	13,340		$	16,941		$	136,470
Operating expenses:
Research and development	$	-		$	-		$	-		$	-		$	-

Selling, general and administrative expenses	$	148,009		$	108,730		$	61,026		$	57,483		$	530,964

Depreciation and amortization expenses	$	2,721		$	1,360		$	1,361		$	1,360		$	6,802
Total Operating Expenses	$	150,730		$	110,090		$	62,387		$	58,843		$	537,766

Operating Income (Loss)	$	(113,398	)	$	(63,675	)	$	(49,047	)	$	(41,902	)	$	(401,296	)

Investment income, net	$	-		$	-		$	-		$	-		$	-
Interest Expense, net	$	-		$	-		$	-		$	-		$	8
Income (Loss) before income taxes	$	(113,398	)	$	(63,675	)	$	(49,047	)	$	(41,902	)	$	(401,304	)
Income (Loss) tax expense	$	-		$	-		$	-		$	-		$	-
Net Income (Loss)	$	(113,398	)	$	(63,675	)	$	(49,047	)	$	(41,902	)	$	(401,304	)

Net income (loss) per common share- Basics	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.01	)
Net income (loss) per common share- Diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	$	(19	)	$	100		$	(19	)	$	-		$	288
Other comprehensive income (loss)	$	(19	)	$	100		$	(19	)	$	-		$	288
Comprehensive Income (Loss)	$	(113,417	)	$	(63,575	)	$	(49,066	)	$	(41,902	)	$	(401,016	)

F-2

A & C United Agriculture Developing Inc

(A Development Stage Enterprise)

STATEMENT OF STOCKHOLDERS EQUITY

The Period February 7, 2011 ( Date of Inception)

through March 31, 2014

							Deficit
							Accumulated			Accumulated
					Additional		During the			Other			Total
	Common Stock				Paid-in		Development			Comprehensive			Stockholders'
	Shares		Amount		Capital		Stage			Income (Loss)			Equity

Issuance of common stocks to shareholders @0.001 per share on February 7, 2011		30,000,000	$	30,000	$	-							$	30,000

Issuance of common stocks to shareholders @0.1 per share on May 31, 2011		4,449,495	$	4,450	$	440,500							$	444,950

Adjustment for Exchange rate changes										$	207		$	207

Net loss for the year ended September 30, 2011							$	(37,543	)				$	(37,543	)

Balance, September 30, 2011		34,449,495	$	34,450	$	440,500	$	(37,543	)	$	207		$	437,614

Issuance of common stocks to Michael Williams @0.2 per share on July 16, 2012		150,000	$	150	$	29,850							$	30,000

Issuance of common stocks to Pivo Associates Inc @0.2 per share on July 20, 2012		25,000	$	25	$	4,975							$	5,000

Adjustment for currency rate exchange										$	-		$	-

Net loss for the year ended September 30, 2012							$	(117,317	)				$	(117,317	)

Balance, September 30, 2012		34,624,495	$	34,625	$	475,325	$	(154,860	)	$	207		$	355,297

Issuance of common stocks to Shareholders @ 0.2 per share on December 31, 2012		1,675,000	$	1,675	$	333,325							$	335,000

Issuance of common stocks to Shareholders @ 0.25 per share on March 12, 2013		50,000	$	50	$	12,450							$	12,500

Issuance of common stocks to Blue Future @ 0.25 per share on April 29, 2013		12,000	$	12	$	2,988							$	3,000

Adjustment for currency rate exchange										$	100		$	100

Net loss for the year ended September 30, 2013							$	(133,046	)				$	(133,046	)

Balance, September 30, 2013		36,361,495	$	36,362	$	824,088	$	(287,906	)	$	307		$	572,851

Issuance of common stocks to Griffin Produce @ 0.2 per share on December 26, 2013		250,000	$	250	$	49,750							$	50,000

Adjustment for currency rate exchange										$	(19	)	$	(19	)

Net loss for the period ended March 31, 2014							$	(113,398	)				$	(113,398	)

Balance, March 31, 2014		36,611,495	$	36,612	$	873,838	$	(401,304	)	$	288		$	509,434

F-3

A & C United Agriculture Developing Inc

(A Development Stage Enterprise)

STATEMENT OF CASH FLOWS

	Six Months Ended			Six Months Ended			Three Months Ended			Three Months Ended			Cumulative from February 7, 2011 (Date of Inception) Through
	March 31,			March 31,			March 31,			March 31,			March 31,
	2014			2013			2014			2013			2014
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Operating Activities:
Net income (loss)	$	(113,398	)	$	(63,675	)	$	(49,047	)	$	(41,902	)	$	(401,304	)

Adjustments to reconcile net income to net cash provided by operating activities:
Non-cash portion of share based legal fee expense	$	-			12,500			-			12,500			64,450
Non-cash portion of share based consulting fee expense	$	50,000			-			-			-			70,500
Depreciation expenses	$	2,721			1,360			1,361			1,360			6,802
Deferred interest expense	$	63			(347	)		32			(347	)		(221	)
Inventory	$	(28,284	)		239,000			110,106			71,600			(30,500	)
Accounts Receivable	$	(123,262	)		(227,059	)		(39,262	)		(146,974	)		(247,347	)
Prepaid expense	$	(519	)		15,288			(518	)		3,394			(689	)
Prepaid to supplier	$	(92,800	)		-			(111,000	)		117,500			(111,000	)
Payroll Liabilities	$	-			1,918			-			1,918			1,382
Account payable	$	10,826			(551	)		10,629			(25,000	)		10,826
Credit card payable	$	(2,474	)		(748	)		360			(1,121	)		2,243
Unearned revenue	$	-			(80,000	)		-			-			-
Net cash provided by operating activities	$	(297,127	)	$	(102,314	)	$	(77,339	)	$	(7,072	)	$	(634,858	)

Investing Activities:
Purchase of property, plant and equipment		-			(27,206	)		-			(27,206	)		(27,206	)
Net cash provided by investing activities	$	-		$	(27,206	)	$	-		$	(27,206	)	$	(27,206	)

Financing Activities:
Loan from shareholders	$	709		$	-		$	(2,088	)	$	-		$	709
Loan to shareholders		(445	)		(70,000	)	$	(2,049	)		(48,000	)		(47,329	)
Long term Loans		(4,598	)		25,286		$	(2,299	)		25,286			16,091
Proceeds from issuance of common stock		-			335,000			-			-			775,500
Net cash provided by financing activities	$	(4,334	)	$	290,286		$	(6,436	)	$	(22,714	)	$	744,971

Effect of Exchange Rate on Cash	$	(19	)	$	100		$	(19	)	$	-		$	288
Net increase (decrease) in cash and cash equivalents	$	(301,480	)	$	160,866		$	(83,794	)	$	(56,992	)	$	83,195
Cash and cash equivalents at beginning of the period	$	384,675		$	181,879		$	166,989		$	399,737		$	-
Cash and cash equivalents at end of the period	$	83,195		$	342,745		$	83,195		$	342,745		$	83,195

F-4

A & C UNITED AGRICULTURE DEVELOPING INC
NOTES TO FINANCIAL STATEMENTS

NOTE A – BUSINESS DESCRIPTION

A & C United Agriculture Developing Inc., or the “Company,” is a Nevada corporation formed on February 7, 2011. Our principal executive office is located at Oak Brook Pointe, Suite 500, 700 Commerce Drive, Oak Brook IL 60523. Tel: 630-288-2500.

In addition to the U.S. operation, the Company established a subsidiary A & C Agriculture Developing (Europe) AB in Stockholm, Sweden in October 24, 2013, which is located at Gamla Sodertaljevagen 134A, 141 70 Segeltorp, Sweden.

A & C United Agriculture Developing Inc., a vertically integrated "seed to table" agriculture company is engaged in standardized vegetable seed-selecting, planting, growing, harvesting, cool chain transportation, processing and final product selling.

Andy Liu and Charlie Huang, our two founders, driven by the sense of mission and duty to provide safe, high-quality and affordable vegetable products in China for her current and future generations, formed the company in state of Nevada, USA at 2011.

The Company, in addition to its existing seeds export from U.S and Europe to China, will continue leveraging the resources obtained via strategic alliances in the future on both sides of the Pacific Ocean, and applying America’s advanced agriculture technologies and quality control/ management practices to build and enhance the entire vegetable production chain in China that will also be utilizing large-scale, mechanization and standardization. As a food-safety oriented company, around the production chain, it will be building systems that support the two-way traceability and recall capability for its products to comply with and exceed local and global food safety requirements from field to supermarket, year round.

Development Stage Company

The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards (SFAS) ASC 915, “Development Stage Entities”. The Company has devoted substantially all of its efforts to establishing a new business and for which either of the following conditions exists: planned principal operations have not commenced; or the planned principal operations have commenced, and rising of capital and attempting to raise sales.

F-5

A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

NOTE B – SIGNIFICANT ACCOUNTING POLICIES

Basis of accounting

The financial statements reflect the assets, revenues and expenditures of the Company on the accrued basis of accounting. The Company’s fiscal year end is the last day of September 30.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect certain amounts reported in the financial statements and disclosures. Accordingly, actual results could differ from those estimates.

Concentration of credit risk

The Company maintains its cash in bank accounts which, at times, may exceed the federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash.

Cash and Cash Equivalents

The Company considers all highly-liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of March 31, 2014, the company had cash and cash equivalents of $ 83,195.

Property, Plant, and Equipment Depreciation

Property, plant, and equipment are stated at cost. Depreciation is being provided principally by straight line methods over the estimated useful lives of the assets. Expenditures for maintenance and repairs, which do not improve or extend the expected useful lives of the assets, are expensed to operations while major repairs are capitalized.

The vehicle was recorded as fixed asset to depreciate over 5 years with straight line method. On December 5, 2012, the Company purchased a $ 27,206 passenger vehicle.

As of March 31, 2014, the company has property, plant, and equipment at a net cost of $ 20,404, and $ 6,802 of accumulated depreciation expense was recorded.

F-6

A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Prepaid Expense

As of March 31, 2014, the Company prepaid insurance expense of $ 689, and prepaid $ 111,000 to supplier to seeds purchase in next quarter.

Stock-Based Compensation

The Company accounts for stock issued for services using the fair value method. In accordance with FASB ASC 718, Stock-Based Compensation, the measurement date of shares issued for services is the date at which the counterparty’s performance is complete.

On June 30, 2011, 344,495 shares was issued to Michael Williams @ $0.1 per share for legal service value $ 34,450.

On July 16, 2012, 150,000 shares were issued to Michael Williams for legal services of $30,000 at $0.20 per share.

On June 20, 2012, 25,000 shares were issued to Pivo Associates for services of $5,000 at $0.20 per share.

On March 12, 2013, 50,000 shares were issued to three shareholders @ $ 0.25 per share for consulting service value $ 12,500.

On April 29, 2013, 12,000 shares were issued to Blue Future, Inc for consulting and advising services of $3,000 at $0.25 per share.

On December 26, 2013, 250,000 shares were issued to Griffin Produce Company, Inc @ $0.2 per share for consulting and advising service value $ 50,000.

Basics and Diluted Net Loss per Common Share

The Company computes per share amounts in accordance with Statement of Financial Accounting Standards (SFAS) ASC 260, Earnings per Share (EPS). ASC 260 requires presentation of basis and diluted EPS. Basic EPS is computed by dividing the income (loss) available to Common Shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock and common stock equivalents outstanding during the periods.

The Company only issued one type of shares, i.e., common shares only. There are no other types securities were issued. Accordingly, the diluted and basics net loss per common share are the same.

F-7

A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Inventory

The inventory was valued at cost of purchase from suppliers. As of March 31 2014, the Company has $ 30,500 various vegetable seeds in stock. And the inventories purchase from USA were stored at the garage of Yidan Liu’s house at no charges and written agreement; and the inventories purchase from Europe were stored at the garage of Jun Huang’s house at Sweden at no charges and written agreement.

Long Term Liabilities

In December 5th, 2012, the Company purchased a vehicle at a financing amount of $ 27,585.36 with 36 monthly equal payments. As of March 31, 2014, the Company has a net car loan of $ 16,091.

Revenue Recognition

In accordance with the FASB Accounting Standards Codification (ASC) 605-15-25 “Revenue Recognition for Sales of Product”, the Company recognizes revenue when it is realized or realizable and earned. The revenue from the product sales transaction shall be recognized at time of sale if the following conditions are met:

·	The seller’s price to the buyer is substantially fixed or determinable at the date of sale.

·	The buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product.

·	The buyer’s obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product.

·	The buyer acquiring the product for resale has economic substance apart from that provided by the seller.

·	The seller does not have significant obligations for future performance to directly bring about resale of the product by the buyer.

·	The amount of future returns can be reasonably estimated.

Revenues include sales of seeds in Asia, Europe, and North America.

The Company had total revenue of $ 149,027 and $ 227,059 for the fiscal quarter ended March 31, 2014 and 2013 respectively and $ 1,506,099 for the period of February 7, 2011 to March 31, 2014.

F-8

A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cost of Goods Sold

The Company’s purchase cost is primarily from supplier, U.S seed companies. Based upon management’s experience in the industry, we believe vegetable seeds supply in United State for the varieties we intend to sell is plenty. We believe that with advanced technology and mature global seed accessibility, U.S seed companies can provide the varieties Chinese end users are looking for. We are focused on finding the right variety. We first will collect specifications from Chinese end users, and then we will match them with the variety here. We ask samples or sometimes we purchase small amount of seed. We will then try them in various locations in China at different planting season. The challenge we have is that not all the varieties we may initially select will prove to work in China. The trial cycle can be over a year in some cases.

We do not anticipate offering any material right of return on our product although we may reimburse buyers on a case-by-case basis if seed which passed our trials does not perform well for a particular grower through no fault of the grower.

The Company had $ 140,606 inventory as of December 31, 2013.

From the period of January 1, 2014 to March 31, 2014, the Company purchase $ 23,085 vegetable seeds from US suppliers, and $ 954 from Europe supplier; and a cost amount of $ 134,145 have been sold to Asia and China; and there are $ 30,500 inventories as of March 31, 2014.

For the fiscal quarter ended March 31, 2014, the Company had related cost of goods sold expense and freight cost of $ 1,542.

As a result, a total of $ 135,687 and $ 210,118 cost of goods sold was recorded for the fiscal quarter ended March 31, 2014 and 2013; and $ 1,369,629 cost of good sold was recorded for the period of February 7, 2011 to March 31, 2014.

Comprehensive Income

The company’s comprehensive income is comprised of net income, unrealized gains and losses on marketable securities classified foreign currency translation adjustments, and unrealized gains and losses on derivative financial instruments related to foreign currency hedging.

F-9

A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Operating Leases

The Company entered into a lease for its corporate offices in under terms of non-cancelable operating leases. The lease term is from March 1, 2014 through February 29, 2015 and requires a roughly $170 monthly lease payment, and this office is located at 700 Commerce Drive, STE 500, Oak Brook IL 60523, USA.

Operating Expense

Operation expense consists of selling, general and administrative expenses, and depreciation expense.

For the fiscal quarter ended March 31, 2014 and 2013, there was a total of $ 62,387, and $ 58,843 operating expenses respectively.

For the six months period ended March 31, 2014 and 2013, there was a total of $ 150,730, and $ 110,090 operating expenses respectively.

For the cumulative period from February 7, 2011 (Date of Inception) to March 31, 2014, there was a total of $ 537,766 operating expenses.

The Details were showed in Exhibit A.

Payroll Expense

Started from January 2013, the Company stayed the annually salary amount of Officer Yidan Liu for $ 60,000. The Social Security tax and Medicare tax were paid by both employer and employees in USA; employees also withheld portion of Federal and State tax calculate by each individual’s status. All of the tax was submitted to Internal Revenue Service and local government at a monthly basis.

The total payroll expense for the fiscal quarter ended March 31, 2014 is $16,190, which included the payroll taxes to the government and the net salary to the Officer.

Professional Fees

Professional fees are consist of accounting and auditing fee, legal fee, consulting expenses, SEC filing fee, and other professional expenses. The total professional fees were $ 22,298 and $ 22,869 for the three months period ended March 31, 2014 and 2013 respectively.

F-10

A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements

The following pronouncements have become effective during the period covered by these financial statements or will become effective after the end of the period covered by these financial statements:

Pronouncement	Issued	Title

ASC 605	October 2009	Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements – a consensus of the FASB Emerging Issues Task Force
ASC 860	December 2009	Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets
ASC 505	January 2010	Accounting for Distributions to Shareholders with Components of Stock and Cash – a consensus of the FASB Emerging Issues Task Force
ASC 810	January 2010	Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary – a Scope Clarification
ASC 718	January 2010	Compensation – Stock Compensation (Topic 718): Escrowed Share Arrangements and the Presumption of Compensation
ASC 820	January 2010	Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements
ASC 810	February 2010	Consolidation (Topic 810): Amendments for Certain Investment Funds
ASC 815	March 2010	Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives
ASC-310 Receivables	July 2010	For public entities, the disclosure as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The disclosures about activity that occurs during a reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. For nonpublic entities, the disclosures are effective for annual reporting period ending on or after December 15, 2011.

Management does not anticipate that the adoption of these standards will have a material impact on the financial statements.

F-11

A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

NOTE C – RELATED PARTY TRANSACTIONS

Common Shares Issued to Executive and Non-Executive Officers and Directors

As of March 31, 2014, total 30,235,000 shares were issued to officers and directors as follows:

Name	Title	Share QTY		Amount		Purchase Date	% of Common Share
Jun Huang	Secretary		15,000,000	$	15,000	2/7/2011		40.97	%
Yidan Liu	President		15,000,000	$	15,000	2/7/2011		40.97	%
Ross Rispens	Director		75,000	$	10,000	5/31/2011		0.20	%
Xinyu Wang	Director		10,000	$	1,000	5/31/2011		0.03	%
Manying Chen	Director		50,000	$	5,000	5/31/2011		0.14	%
Minhang Wei	Director		100,000	$	10,000	5/31/2011		0.27	%
Total			30,235,000	$	56,000			82.58	%

_____________

* Based upon total outstanding shares 36,611,495 as of March 31, 2014.

Loans to Officers

As of March 31, 2014, the Company advanced $ 47,329 to the officer, Jun Huang, for operating, and marketing activity of the corporation. The outstanding balance is due on demand and no agreement was signed.

Loans from Officers/Shareholders

As of March 31, 2014, the officer, Yidan Liu, loaned $ 709 to the Company. The outstanding balance is due on demand and no agreement was signed.

F-12

A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

NOTE D – SHAREHOLDERS’ EQUITY

Under the Company’s Articles of Incorporation of the Company, the Company is authorized to issue 500,000,000 shares of common stock with a par value of $0.001.

On February 7, 2011, the Company was incorporated in the State of Nevada.

On February 7, 2011, two founders of the Company, Jun Huang and Yidan Liu purchased 30,000,000 shares at $0.001 per share. The proceeds of $30,000 were received.

On May 31, 2011, additional 4,105,000 shares were issued to 113 shareholders at price of $0.1 per share or $ 410,500 common stock.

On June 30, 2011, 344,495 shares was issued to Michael Williams @ $0.1 per share for legal service value $ 34,450.

On July 16, 2012, 150,000 shares were issued to Michael Williams @ $0.2 per share for legal service value $ 30,000.

On July 20, 2012, 25,000 shares were issued to Pivo Associate Inc @ $0.2 per share for consulting service value $ 5,000.

On December 2012, additional 1,175,000 shares were issued to 12 shareholders and at price of $0.2 per share or $ 235,000 common stock.

On December 2012, 500,000 shares were issued to 7 new shareholders at price of $0.2 per share or $ 100,000 common stock.

On March 12, 2013, 50,000 shares were issued to three shareholders @ $0.25 per share for consulting service value $ 12,500.

On April 29, 2013, 12,000 shares were issued to Blue Future, Inc @ $0.25 per share for consulting and advising service value $ 3,000.

On December 26, 2013, 250,000 shares were issued to Griffin Produce Company, Inc @ $0.2 per share for consulting and advising service value $ 50,000.

Therefore, as of March 31, 2014, there was total of 36,611,495 shares issued and outstanding.

F-13

A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

NOTE E – GOING CONCERN

The Company is currently in the development stage and their activities consist solely of corporate formation, raising capital, and attempting to sell products to generate and increase sales revenues.

There is no guarantee that the Company will be able to raise enough capital or generate revenues to sustain its operations and carry out its business plan. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The financial statements do not include any adjustments relating to the carrying amounts of recorded assets or the carrying amounts and classification of recorded liabilities that may be required should the Company be unable to continue as a going concern.

As of March 31, 2014 the cash and cash equivalent balance was $ 83,195 and there is cumulative net loss of $ 401,304 for the cumulative period from February 7, 2011 (Date of Inception) to March 31, 2014.

F-14

Exhibit A

	Six Months Ended March 31		Six Months Ended March 31		Three Months Ended March 31		Three Months Ended March 31		Cumulative from February 7, 2011 (Date of Inception) Through March 31,
	2014		2013		2014		2013		2014
Expense
Bank Service Charges		301		87		276		27		1,006
Business Licenses and Permits		915		100		814		100		6,831
Meals and Entertainment		6,673		2,189		3,648		1,992		13,574
Membership fee		-		-		-		-		505
Office Supplies		587		97		-		97		6,038
Postage and Delivery		236		346		19		266		734
Printing and Reproduction		-		-		-		-		135
Auto and Truck Expenses		246		47		7		47		1,397
Payroll Expenses		32,337		16,683		16,190		16,683		81,316
Conference & Meeting		-		1,987		-		1,987		2,347
Interest Expense		63		32		32		32		158
Utilities		-		41		-		41		41
Website Expense		96		2,085		96		2,085		2,181
Telephone Expense		-		80		-		80		80
Depreciation Expense		2,721		1,360		1,360		1,360		6,802
Insurance Expense		3,926		466		3,926		394		5,171
Marketing and Promotion Expense		1,798		-		1,159		-		3,602
Travel Expense		19,640		7,106		11,881		4,152		65,248
Professional Fees
Accounting		20,717		25,000		20,717		-		70,717
Consulting Fees		50,000		25,160		-		17,554		114,660
Legal Fee		7,500		16,000		-		3,000		127,750
Transfer Agent fees		500		1,025		300		825		2,850
SEC & EDGAR Filling Fee		1,281		3,052		1,281		1,490		11,757
Professional Fees		79,998		70,237		22,298		22,869		327,734
Software		-		74		-		74		394
Rent Expense		1,193		7,071		682		6,557		12,473
Total Expense		150,730		110,090		62,387		58,843		537,766

F-15

Item 2. Management’s Discussion and Analysis or Plan of Operation.

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-Q.

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

Overview

The Company, in addition to its existing seeds export from U.S to China, will continue leveraging the resources obtained via strategic alliances in the future on both sides of the Pacific Ocean, and applying America’s advanced agriculture technologies and quality control/management practices to build and enhance the entire vegetable production chain in China that will also be utilizing large-scale, mechanization and standardization. As a food-safety oriented company, around the production chain, it will be building systems that support the two-way traceability and recall capability for its products to comply with and exceed local and global food safety requirements from field to supermarket, year round.

While the Company is focusing on providing safe, fresh quality products that are easy to use, appetizing and nutritious, it commits not to compromise quality or harm the environment and ecosystems.

Current Operational Activities

We continue to meet vegetable producers, growers, freezers and processors in California and in China but as of the date of the filing of this report, we have no binding agreement, commitment or understanding with any of them and may never have any such binding agreement, commitment or understanding with any of them in the future.

The trials for carrots in South China were complete. However, due to the cold weather in North America, Dr. Ladd could not finish the work here in United States therefore could not make the trip to China as planned. As an alternative, we will prepare the photographs we took and the analysis of the trials for Dr. Ladd. We will be evaluating the results based on the information we collected for Dr. Ladd.

However, it still remains true that we have no binding agreement, commitment or understanding with Dr. Ladd, Integra Hybrids, LLC or any of their affiliates to develop the carrot market in China or undertake any other activities other than set forth above. There is no assurance that we will ever have a binding agreement, commitment or understanding with Dr. Ladd, Integra Hybrids, LLC or any of their affiliates or that we will develop the carrot market in China or undertake any other similar activities.

In addition, our Stockholm subsidiary has purchased seeds this quarter and plans to start selling them to China in the next fiscal quarter.

During the next 12 months, we anticipate engaging in the following operational activities, although we may vary our plans depending upon operational conditions:

Milestone Table

Event	Actions	Anticipated Time Frame	Total estimated cost

Continue to meet vegetable producers, growers, freezers and processors	Ad hoc business trips	By 12/31/2014	$	15,000
Obtain DTC Eligibility	Hire consulting firm Prepare required documents	By 9/30/2014	$	15,000
Trial Assessment of Carrots	Invite Dr. Ladd to China to review results of harvested crops.	By 6/30/2014	$	5,000

As described in “Liquidity and Capital Resources,” below, we currently have sufficient cash resources to fund all of the anticipated obligations in the chart as well as those set forth in the chart above.

Emerging Growth Company

We are an emerging growth company under the JOBS Act. We shall continue to be deemed an emerging growth company until the earliest of:

(a)

the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;

(b)	the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective IPO registration statement;

(c)	the date on which such issuer has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or

(d)	the date on which such issuer is deemed to be a ‘large accelerated filer’, as defined in section 240.12b-2 of title 17, Code of Federal Regulations, or any successor thereto.’.

As an emerging growth company we are exempt from Section 404(b) of Sarbanes Oxley. Section 404(a) requires Issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures. Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting. As an emerging growth company we are also exempt from Section 14A (a) and (b) of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes. These exemptions are also available to us as a Smaller Reporting Company.

We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the Jobs Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

Results of Operations

For the fiscal quarter ended March 31, 2014 vs. 2013

Revenue

There was $ 149,027 and $ 227,059 revenue generated for the fiscal quarter ended March 31, 2014 and 2013. Our revenue generation declined this quarter due to decreased demand on some varieties.

Cost of Revenue

There was $ 135,687 and $ 210,118 cost of goods sold incurred for the fiscal quarter ended March 31, 2014 and 2013 respectively. The cost of goods sold declined due to the decreasing of revenue.

Expense

Our expenses consist of selling, general and administrative expenses and depreciation expense as follows:

For the fiscal quarter ended March 31, 2014 and 2013, there was a total of $ 62,387 and $ 58,843 operating expenses respectively. $22,298 out of the total $ 62,387 was professional service fee due to the Company’s filling of a registration statement with the SEC and securing qualification for quotation of its securities from FINRA, and $22,869 out of the total $58,843 was professional service fee due to the Company’s filling of a registration statement with the SEC and securing qualification for quotation of its securities from FINRA.

For the cumulative period from February 7, 2011 (Date of Inception) to March 31, 2014, there was a total of $537,766 operating expenses.

	Three Months Ended March 31,		Three Months Ended March 31,		Cumulative from February 7, 2011 (Date of Inception) Through March 31,
	2014		2013		2014
Expense
Bank Service Charges		276		27		1,006
Business Licenses and Permits		814		100		6,831
Meals and Entertainment		3,648		1,992		13,574
Membership fee		-		-		505
Office Supplies		-		97		6,038
Postage and Delivery		19		266		734
Printing and Reproduction		-		-		135
Auto and Truck Expenses		7		47		1,397
Payroll Expenses		16,190		16,683		81,316
Conference & Meeting		-		1,987		2,347
Interest Expense		32		32		158
Utilities		-		41		41
Website Expense		96		2,085		2,181
Telephone Expense		-		80		80
Depreciation Expense		1,360		1,360		6,802
Insurance Expense		3,926		394		5,171
Marketing and Promotion Expense		1,159		-		3,602
Travel Expense		11,881		4,152		65,248
Professional Fees
Accounting		20,717		-		70,717
Consulting Fees		-		17,554		114,660
Legal Fee		-		3,000		127,750
Transfer Agent fees		300		825		2,850
SEC & EDGAR Filling Fee		1,281		1,490		11,757
Professional Fees		22,298		22,869		327,734
Software		-		74		394
Rent Expense		682		6,557		12,473
Total Expense		62,387		58,843		537,766

Income & Operation Taxes

We are subject to income taxes in the U.S.

We paid no income taxes in USA for the fiscal quarter ended March 31, 2014 due to the net operation loss in the USA.

Net Loss

We incurred net losses of $ 49,047 and $ 41,902 for the fiscal quarter ended March 31, 2014 and 2013, and net losses of $401,304 for period from February 7, 2011 to March 31, 2014.

For the six month period ended March 31, 2014 vs. 2013

Revenue

There was $ 361,870 and $ 614,144 revenue generated for the six month period ended March 31, 2014 and 2013. Our revenue generation declined this quarter due to decreased demand on some varieties.

Cost of Revenue

There was $ 324,538 and $ 567,729 cost of goods sold incurred for the six month period ended March 31, 2014 and 2013 respectively. The cost of goods sold declined due to the decreasing of revenue.

Expense

Our expenses consist of selling, general and administrative expenses and depreciation expense as follows:

For the six month period ended March 31, 2014 and 2013, there was a total of $ 150,730 and $ 110,090 operating expenses respectively. $79,998 out of the total $ 150,730 was professional service fee due to the Company’s filling of a registration statement with the SEC and securing qualification for quotation of its securities from FINRA, and $70,237 out of the total $110,090 was professional service fee due to the Company’s filling of a registration statement with the SEC and securing qualification for quotation of its securities from FINRA.

For the cumulative period from February 7, 2011 (Date of Inception) to March 31, 2014, there was a total of $537,766 operating expenses.

	Six Months Ended		Six Months Ended		Cumulative from February 7, 2011 (Date of Inception) Through
	March 31,		March 31,		March 31,
	2014		2013		2014
Expense
Bank Service Charges		301		87		1,006
Business Licenses and Permits		915		100		6,831
Meals and Entertainment		6,673		2,189		13,574
Membership fee		-		-		505
Office Supplies		587		97		6,038
Postage and Delivery		236		346		734
Printing and Reproduction		-		-		135
Auto and Truck Expenses		246		47		1,397
Payroll Expenses		32,337		16,683		81,316
Conference & Meeting		-		1,987		2,347
Interest Expense		63		32		158
Utilities		-		41		41
Website Expense		96		2,085		2,181
Telephone Expense		-		80		80
Depreciation Expense		2,721		1,360		6,802
Insurance Expense		3,926		466		5,171
Marketing and Promotion Expense		1,798		-		3,602
Travel Expense		19,640		7,106		65,248
Professional Fees
Accounting		20,717		25,000		70,717
Consulting Fees		50,000		25,160		114,660
Legal Fee		7,500		16,000		127,750
Transfer Agent fees		500		1,025		2,850
SEC & EDGAR Filling Fee		1,281		3,052		11,757
Professional Fees		79,998		70,237		327,734
Software		-		74		394
Rent Expense		1,193		7,071		12,473
Total Expense		150,730		110,090		537,766

Income & Operation Taxes

We are subject to income taxes in the U.S.

We paid no income taxes in USA for the six month period ended March 31, 2014 due to the net operation loss in the USA.

Net Loss

We incurred net losses of $ 113,398 and $ 63,675 for the six month period ended March 31, 2014 and 2013, and net losses of $401,304 for period from February 7, 2011 to March 31, 2014.

Liquidity and Capital Resources

	At March 31,		At March 31,		At September 30,
	2014		2013		2013

Current Ratio*		34.30		291.01		94.48
Cash	$	83,195	$	342,745	$	384,675
Working Capital***	$	504,900	$	638,315	$	570,131
Total Assets	$	540,685	$	666,709	$	599,639
Total Liabilities	$	31,251	$	27,487	$	26,788

Total Equity	$	509,434	$	639,222	$	572,851

Total Debt/Equity**		0.06		0.04		0.05

___________

* Current Ratio = Current Assets /Current Liabilities.

** Total Debt / Equity = Total Liabilities / Total Shareholders’ Equity.

*** Working Capital = Current Assets - Current Liabilities.

The Company had cash and cash equivalents of $83,195 and $342,745 at fiscal quarter ended March 31, 2014 and 2013 and the working capital of $ 504,900 and $ 638,315 with liabilities of $ 31,251 and $ 27,487.

As of March 31, 2014, we have $ 83,195 in cash, and $ 247,347 account receivable. As shown in the Milestone Table above, we need a minimum of approximately $50,000 in funds to finance our business in the next 12 months. This amount does not include all our costs which we will incur irrespective of our business development activities, including bank service fees and those costs associated with SEC requirements associated with staying public, estimated to be approximately $70,000 annually. Accordingly, we estimate our total need for funds for operations in the next 12 months is $120,000. Accordingly, as we anticipate an average monthly burn rate of no more than $10,000 during the next 12 months, we believe we have sufficient cash available, from cash on hand and collection of receivables, to fund all of our operational and SEC filing needs during the next 12 months.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

Not applicable.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company has established disclosure controls and procedures to ensure that information required to be disclosed in this quarterly report on Form 10-Q was properly recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. The Company’s controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers to allow timely decisions regarding required disclosure.

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) at March 31, 2014 based on the evaluation of these controls and procedures required by paragraph (b) of Rule 13a-15 or Rule 15d-15 under the Exchange Act. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer/Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer/Chief Financial Officer concluded that, at March 31, 2014, our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company's internal control over financial reporting that occurred during the Company's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

None.

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

None

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosure.

Not applicable.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits.

(a)

Exhibits.

Exhibit No.		Document Description

31.1		CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

32.1 *		CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002

Exhibit 101		Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.**

101.INS		XBRL Instance Document**

101.SCH		XBRL Taxonomy Extension Schema Document**

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document**

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document**

101.LAB		XBRL Taxonomy Extension Label Linkbase Document**

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document**

____________

* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

A & C United Agriculture Developing Inc.,

a Nevada corporation

Title	Name	Date	Signature

Principal Executive Officer	Yidan (Andy) Liu	May 15, 2014	/s/ Yidan (Andy) Liu

In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

SIGNATURE	NAME	TITLE	DATE

/s/ Yidan (Andy) Liu	Yidan (Andy) Liu	Principal Executive Officer,	May 15, 2014
		Principal Financial Officer and Principal Accounting Officer

EXHIBIT INDEX

Exhibit No.		Document Description

31.1		CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

32.1 *		CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002

Exhibit 101		Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.**

101.INS		XBRL Instance Document**

101.SCH		XBRL Taxonomy Extension Schema Document**

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document**

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document**

101.LAB		XBRL Taxonomy Extension Label Linkbase Document**

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document**

_________________