Ridgedale Holdings Inc. - Quarter Report: 2013 March (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ YES  ☐ NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ YES  ☐ NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. ☒ YES  ☐ NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

78,273,000 common shares issued and outstanding as of May 20, 2013.

UAN POWER CORP.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1.   Financial Statements

Our unaudited consolidated interim financial statements for the three and nine month periods ended March 31, 2013 form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.

Uan Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Consolidated Balance Sheets

The accompanying notes are an integral part of these financial statements

Uan Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Consolidated Statements of Operations

(Unaudited)

The accompanying notes are an integral part of these financial statements

Uan Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Consolidated Statements of Comprehensive Income

(Unaudited)

The accompanying notes are an integral part of these financial statements

Uan Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Unaudited)

The accompanying notes are an integral part of these financial statements

UAN Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS

Nature of Business

UAN Power Corp. (“UAN Power”), formerly known as Gulf Shores Investments, Inc., was originally incorporated in the State of Nevada on May 8, 2009. UAN Power completed the reincorporation in Delaware under the name UAN Power Corp. on November 14, 2011.

UAN Power has commenced revenue-generating operations in the quarter ended December 31, 2011 (see Note 10), and, in accordance with ASC Topic 915, is considered a development stage company. UAN Power is intended to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other similar business combination with an operating business (a “Target Business”). All activity from inception (May 8, 2009) through UAN Power’s initial public offering on July 14, 2010 was related to UAN Power’s formation and capital raising activities. Activities since UAN Power’s initial public offering related to the identification and investigation of a Target Businesses. UAN Power’s plan is to identify a quality investment opportunity in an operating business, which can benefit from the reverse merger transaction to become a publicly traded company and to subsequently utilize the public equity markets to finance its growth strategy.

On May 11, 2012, UAN Power through its director, established UAN Lee Agricultural Technology Holding Limited (“UAN Lee”) in Hong Kong in pursue of a possible joint venture.

On May 16, 2012, UAN Power officially entered into a joint venture agreement with Mr. Yuan-Hao Chang, a shareholder of UAN Power, to develop, own and operate an agricultural business in China, PRC (the “Joint Venture”). UAN Power intends to rely on Mr. Chang’s experience and knowledge in organic fertilizers and farming to plant and grow various fruits in China, and to harvest and sell the produced crops and goods for a profit.

On July 2, 2012, UAN Power (through its director and UAN Lee) and Mr. Chang established UAN Sheng Agricultural Technology Development Limited Company (“UAN Sheng”) in China, PRC. As at October 11, 2012, both parties have completed their initial capital contribution to UAN Sheng pursuant to the Joint Venture agreement.

As at October 16, 2012, UAN Lee became wholly owned subsidiary of UAN Power with 3,510,000 capital shares authorized at HKD1.00 par value and 3,510,000 shares issued and outstanding.

UAN Power and its subsidiaries – UAN Lee and UAN Sheng shall be collectively referred throughout as the “Company”.

To summarize the paragraphs above, the organization and ownership structure of the Company is currently as follows:

UAN Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and should be read in conjunction with the Company’s audited financial statements and footnotes thereto for the year ended June 30, 2012, included in the Company’s Form 10-K filed on October 15, 2012. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The financial statements reflect all adjustments (consisting primarily of normal recurring adjustments) that are, in the opinion of management necessary for a fair presentation of the Company’s financial position and results of operations. The operating results for the nine months ended March 31, 2013are not necessarily indicative of the results to be expected for any other interim period of a future year.

Basis of Presentation

The Company has prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America.

The consolidated financial statements include the accounts of the Company and its subsidiaries. Significant inter-company transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Discontinued Operations

In November 2012, the Company ceased its Taiwan’s business operations. The Consolidated Financial Statements have been recast to present the Taiwan’s business operation as discontinued operations as described in “Note 12 - Discontinued Operations.” Unless noted otherwise, discussion in the Notes to Consolidated Financial Statements pertain to continuing operations.

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported net income or losses.

Cash and Cash Equivalents

Cash and cash equivalents are all highly liquid instruments purchased with a maturity of three months or less to the extent the funds are not being held for investment purposes.

UAN Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Unaudited)

Revenue Recognition

The Company is a development stage company as such has realized no product and or directly related expenses.

The Company entered into a joint venture agreement to develop, own and operate an agricultural business in China, PRC. The Company does not expect to generate any significant revenues over the next twelve months.

Inventory

The Company recognize all direct and indirect costs of growing crops in accordance to ASC 905-330-25 "Agriculture Inventory Recognition". ASC 905-330-25 requires all direct and indirect costs of growing crops to accumulate as inventory until the time of harvest. Some crop costs such as soil preparation, which are incurred before planting are deferred and allocated until harvest. Inventories are stated at the lower of cost or market determined on a weighted average basis.

Fixed Assets

Fixed assets are recorded at cost and are depreciated or amortized using the straight-line method over the estimated useful lives of the assets:

Land Use Rights

Land use rights are recorded at cost and amortized over the shorter of the estimated useful life or the expected useful life of the land use rights for thirty-four years and six months.

Appropriation to Statutory Reserve

Pursuant to the laws applicable to the China, PRC, entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC (“PRC GAAP”) at each year-end). For foreign invested enterprises and joint ventures in China, PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). The Company did not make any appropriations to the reserve funds mentioned above due to lack of profits after tax in PRC since commencement of operations.

Advertising Costs

The Company’s policy regarding advertising is to expense advertising when incurred.

Income Taxes

The Company provides for income taxes under ASC 740, “Accounting for Income Taxes.” ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.

UAN Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Unaudited)

Impairment of Long-Lived Assets

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

Stock-based compensation

The Company records stock-based compensation in accordance with ASC 718 (formerly SFAS No. 123R, “Share Based Payments”), using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

Fair Value of Financial Instruments

The standard for “Disclosures about Fair Value of Financial Instruments,” defines financial instruments and requires fair value disclosures of those financial instruments. The Company adopts the standard “Fair Value Measurements,” which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosures requirements for fair value measures. Current assets and current liabilities qualified as financial instruments and management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their current interest rate is equivalent to interest rates currently available. The three levels are defined as follows:

As of the balance sheet date, the estimated fair values of the financial instruments were not materially different from their carrying values as presented due to the short maturities of these instruments and that the interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profile at respective period-ends. Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates the hierarchy disclosures each quarter.

UAN Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Unaudited)

Segment Reporting and Geographic Information

The Company reports operations under one business segments-Agricultural Development.

Geographic Information as of March 31, 2013 and for the nine months ended March 31, 2013 and 2012 as follows:

Foreign Currency Translation

The functional currency of UAN Power operations in United States is U.S. Dollar (“USD”). 

The functional currency of UAN Power’s discontinued operations in Taiwan is New Taiwan Dollar (“TWD”).

The functional currency of UAN Lee’s operations in Hong Kong is Hong Kong Dollar (“HKD”).

The functional currency of UAN Sheng’s operations in China, PRC is Chinese Yuan Renminbi (“RMB”).

Transactions denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the date of the transactions. Exchange gains or losses on transactions are included in earnings.

The financial statements of the Company are translated into U.S. dollars in accordance with the standard, “Foreign Currency Translation,” codified in ASC 830, using rates of exchange at the end of the period for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses and historical rates for equity. Translation adjustments resulting from the process of translating the local currency combining financial statements into U.S. dollars are included in determining comprehensive income. At March 31, 2013, the cumulative translation adjustment was $15,898. For the nine months ended March 31, 2013 and 2012, net other comprehensive income (loss) was $(6,061) and $3,963, respectively.

The exchange rates used to translate TWD amounts into USD at (1USD=TWD) as follows:

The exchange rates used to translate HKD amounts into USD at (1USD=HKD) as follows:

UAN Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Unaudited)

The exchange rates used to translate RMB amounts into USD at (1USD=RMB) as follows:

Comprehensive Income

The Company adopted FASB Accounting Standards Codification 220, “Comprehensive Income,” which establishes standards for reporting and presentation of comprehensive income (loss) and its components in a full set of general-purpose financial statements. The Company has chosen to report comprehensive income (loss) in the statements of income and comprehensive income. Comprehensive income (loss) is comprised of net income and all changes to stockholders’ equity except those due to investments by owners and distributions to owners.

Basic (Loss) per Common Share

Basic (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of March 31, 2013 and 2012, respectively; however, if present, a separate computation of diluted loss per share would not have been presented, as these common stock equivalents would have been anti-dilutive due to the Company’s net loss.

UAN Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Unaudited)

 Recently Issued Accounting Pronouncements

In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters. This standard provides additional guidance with respect to the reclassification into income of the cumulative translation adjustment (CTA) recorded in accumulated other comprehensive income associated with a foreign entity of a parent company. The ASU differentiates between transactions occurring within a foreign entity and transactions/events affecting an investment in a foreign entity. For transactions within a foreign entity, the full CTA associated with the foreign entity would be reclassified into income only when the sale of a subsidiary or group of net assets within the foreign entity represents the substantially complete liquidation of that foreign entity. For transactions/events affecting an investment in a foreign entity (for example, control or ownership of shares in a foreign entity), the full CTA associated with the foreign entity would be reclassified into income only if the parent no longer has a controlling interest in that foreign entity as a result of the transaction/event. In addition, acquisitions of a foreign entity completed in stages will trigger release of the CTA associated with an equity method investment in that entity at the point a controlling interest in the foreign entity is obtained. This ASU is effective prospectively beginning January 1, 2014, with early adoption permitted. This ASU would impact the Company’s consolidated results of operations and financial condition only in the instance of an event/transaction as described above.

In February 2013, the FASB issued ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. Under this standard, an entity is required to provide information about the amounts reclassified out of accumulated other comprehensive income (“AOCI”) by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in the financial statements. For the Company, this ASU is effective beginning January 1, 2013, and interim periods within those annual periods. The adoption of this standard is not expected to have an impact on the Company’s financial results or disclosures.

In July 2012, the FASB issued ASU No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment. Under this standard, entities testing long-lived intangible assets for impairment now have an option of performing a qualitative assessment to determine whether further impairment testing is necessary. If an entity determines, on the basis of qualitative factors, that the fair value of the indefinite-lived intangible asset is more-likely-than-not less than the carrying amount, the existing quantitative impairment test is required. Otherwise, no further impairment testing is required. For the Company, this ASU is effective beginning January 1, 2013, with early adoption permitted under certain conditions. The adoption of this standard is not expected to have a material impact on the Company’s consolidated results of operations or financial condition.

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

UAN Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 3 - GOING CONCERN

These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. For the three months ended March 31, 2013, the Company incurred a net loss of $106,489, and a net loss of $489,892 for the nine months ended March 31, 2013; and had an accumulated deficit of $895,970 as of March 31, 2013. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company’s future business. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 4 - STOCKHOLDERS’ EQUITY

The stockholders’ equity section of the Company’s balance sheet contains the following classes of capital stock as of March 31, 2013:

Preferred stock, $0.00001 par value, 20,000,000 shares authorized 0 shares issued and outstanding.

Common Stock, $0.00001 par value, 250,000,000 shares authorized 78,273,000 shares issued and outstanding.

On May 23, 2011, a majority of the shareholders of the Company entered into a stock purchase agreement that resulted in a change in control of the Company and the appointment of a new Board of Directors.

On May 23, 2011, the Company entered into a Return to Treasury Agreement with a shareholder, pursuant to which 48,275,000 shares of the Common Stock beneficially owned by the shareholder immediately after the stock purchase described in the preceding paragraph were retired for $1.

On July 25, 2011 the Company completed a privately placed equity financing, in which 48,275,000 shares of common stock were issued for a purchase price of $.01 per share. The total proceeds of the offering were $465,506 net, of $17,244 costs of issuance.

On June 30, 2012, certain shareholders and founders of the Company forgive debt in the amount of $33,448 and contributed as paid-in capital of the Company.

NOTE 5 – INVENTORY

The balances of inventory are as follows:

UAN Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 6 – FIXED ASSETS

The balances of fixed assets are as follows:

The depreciation and amortization expense for the three months ended March 31, 2013 and 2012 were $878 and $0, respectively; and for the nine months ended March 31, 2013 and 2012 were $1,796 and $0, respectively.

NOTE 7 – LAND USE RIGHTS

The balances of intangible assets are as follows:

The amortization expense for the three months ended March 31, 2013 and 2012 were $802 and $0, respectively; and for nine months ended March 31, 2013 and 2011 were $2,407 and $0, respectively.

NOTE 8 - RELATED PARTY TRANSACTIONS

On June 30, 2012, the founders and shareholders of the Company forgave certain indebtedness owed to them which was advanced to commence the Taiwan operations, resulting in an increase to the Company’s paid in capital of $33,448.

As of March 31, 2013, Parashar Patel, the Company’s Chief Executive Officer, had an outstanding receivable amount of $3,549 from the Company which he has advanced the amount to the Company to pay administrative and operating expenses. Mr. Patel provides various consulting and professional services to the Company for which he is compensated. Consulting and professional fees paid to Mr. Patel were $2,500 and $7,800 for the three months ended March 31, 2013 and 2012, respectively, and $27,000 and $31,500 for the nine months ended March 31, 2013 and 2012, respectively.

As of March 31, 2013, Yuan-Hao (Michael) Chang (Shareholder of the Company) has an outstanding receivable amount of $28,475 from the Company which he has the amount advanced to the Company to pay administrative and operating expenses. Mr. Chang provides various consulting and professional services to the Company for which he is compensated. Consulting and professional fees paid to Mr. Chang were $7,500 and $0 for the three months ended March 31, 2013 and 2012 respectively, and $7,500 and $0 for the nine months ended March 31, 2013 and 2012 respectively.

As of March 31, 2013, Yuan-Hao (Michael) Chang (Shareholder of the Company) has an outstanding receivable amount of $300,395 from the Company which he has advanced the amount to the Company as capital investment in the joint venture to develop, own, and operate an agricultural business in China, PRC (Refer to Note 10).

As of March 31, 2013, the Company has an outstanding payable amount of $20,000 to UAN Cultural & Creative Co., Ltd, an affiliated company which the shareholders and directors of the Company have certain ownership.

The amounts above are due on demand and non-interest bearing.

UAN Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 9 – CONVERTIBLE NOTES PAYABLE – RELATED PARTIES

On May 31, 2012, the Company entered into Promissory Note agreements to borrow $350,000 from Wan-Fang Liu, Wen-Cheng Huang, and Tsu-Yung Hsu who are Shareholders and/or Directors of the Company, collectively the “Holders” for operational and possible investment opportunities. The maturity of the Notes is May 31, 2017 and bear interest at 4% per annum.

On December 1, 2012, the Company and the Holders entered into an amendment agreement to amend the Original Promissory Notes dated May 31, 2012 above, to add an automatic conversion clause to the terms of the Notes.

On December 1, 2012, the Company entered into a convertible note agreement with Yuan-Hao (Michael) Chang (Shareholder of the Company) for the outstanding amounts of HKD 1,222,726 ($157,691) which was advanced to the Company as investment capital in UAN Sheng. The maturity of this Note is December 1, 2017 and bear interest at 4% per annum.

The aggregate outstanding principal and all unpaid accrued interest due under the Convertible Notes above shall be automatically converted in to a number of units of Common Stock of the Company equal to (i) the aggregate outstanding principal and unpaid accrued interested due under the Note one year from issuance date, divided by $0.02 (Two cents), subject to appropriate adjustment in the event of any unit distribution, unit reverse split, combination, reclassification or other similar recapitalization affecting such units.

Interest expenses incurred on the Notes for the three and nine months ended March 31, 2013 was $5,077 and $12,603, respectively. Interest payable on the Notes at March 31, 2013 was $13,769.

NOTE 10 – COMMITMENTS & CONTINGENCIES

Joint Venture Agreement

On May 16, 2012, the Company entered into a Joint Venture Agreement with Mr. Yuan-Hao Chang (Shareholder of the Company) to develop, own, and operate an agricultural business in China, PRC. The Company will exploit Mr. Chang’s unique experience, skills, knowledge, and techniques in organic fertilizer and farming to plant and grow various fruits in China, and to harvest and sell the produced crops and goods for profits.

Pursuant to the agreement, the Company will own 66% and shall contribute $462,000 as initial capital before October 31, 2012. By October 16, 2012, the Company has contributed $462,000 and the State Administration of Industry and Commerce (SAIC) of China has issued the Joint Venture’s Capital Contribution Verification Report, Business License and Permits for the establishment of the Joint Venture. As of March 31 2013, the Company has contributed a total of $605,300 as investment capital.

UAN Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Unaudited)

Office Space Lease

In June 2012, the Company entered into a six-year operating lease for a facility in China to meet its needs under the Joint Venture Agreement.

In August 2012, the Company entered into a one-year operating lease for a facility in China to meet its needs under the Joint Venture Agreement.

Future lease commitments are as follows:

Farm Land Lease

In October 2012, the Company entered into a 20 years land lease consisting of 13.97 acres of land for its agricultural business in China. The lease expires on December 26, 2032. The land is separated into 3 sections consisting of 6.13 acres for Section A, 4.55 acres for Section B, and 3.29 acres for Section C.

Future lease commitments are payable on October 31st of each year as follows:

Section A is based on the current year’s national market purchase price of approximately 551lbs (250kg) of grains.

Section B is based on the current year’s national market purchase price of approximately 441lbs (200kg) of grains.

Section C is based on the current year’s national market purchase price of approximately 331lbs (150kg) of grains.

In November 2012, the Company entered into a 13 years land and housing facility lease consisting of 13.97 acres of land for its agricultural business in China. The lease expires on December 26, 2032. Future lease commitments are payable on August 1st of each year based on the market purchase price of approximately 49,604lbs (22,500kg) of grains.

In December 2012, the Company entered into a month to month office space lease in Michigan state for $200 a month.

Total rent expenses for the leases above were $12,998 for the three months ended March 31, 2013; and $16,159 for nine months ended March 31, 2013, respectively.

UAN Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 11 – INCOME TAXES

UAN Power was established under the laws of the State of Delaware and is subject to U.S. federal income tax and Delaware state income tax.

UAN Power Taiwan Branch was established in Taiwan, ROC and is subject to Taiwan, ROC tax laws.

The Company has not made a provision for U.S. income taxes on undistributed earnings of oversea subsidiaries-UAN Lee and UAN Sheng with which the Company intends to continue to reinvest. It is not practicable to estimate the amount of additional tax that might be payable on the foreign earnings if they were remitted as dividends, or lent to the Company, or if the Company should sell its stock in these subsidiaries.

UAN Lee was established in Hong Kong and is subject to Hong Kong tax laws. However, there is no Hong Kong based income; therefore, there is no income tax impact from Hong Kong.

UAN Sheng was established in China and is subject to China tax laws. However, there is no income tax for agricultural business in China.

At March 31, 2013, the Company has cumulative U.S. federal net operating loss carry forwards of approximately $857,000 available to offset future taxable income. These net operating losses are not likely to be fully realized, and consequently a full valuation allowance has been established relating to such deferred tax assets. This cumulative tax loss expires as early as June 30, 2029.

Reconciliation of statutory rates to effective tax rates as follows:

UAN Power Corp. and Subsidiaries

fka Gulf Shores Investments, Inc.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 12 – DISCONTINUED OPERATIONS

In November 2012, the Company ceased its limited business operations in Taiwan where the Company had entered into a Technology Licensing & Transfer Agreement to obtain the rights to develop, manufacture, market, sell and import products which incorporate or rely upon certain “Triops” technologies and processes in Taiwan, The People’s Republic of China, the United States, Japan and Korea (the “Taiwan Business”). In accordance with the applicable accounting guidance for the ceased operations, the results of the Taiwan Business are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented.

Summarized financial information for discontinued operations is as follow:

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

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “could”, “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.

As used in this quarterly report, the terms “we”, “us”, “our” and “our company” mean UAN Power Corp., and our subsidiaries UAN Lee Agricultural Technology Holding Limited, a Hong Kong company, and UAN Sheng Agricultural Technology Development Limited Company, a People’s Republic of China company, unless otherwise indicated.

Overview

Our company was originally incorporated in the State of Nevada on May 8, 2009. We completed the reincorporation of our company in Delaware under the name UAN Power Corp. on November 14, 2011.

Our company was originally organized to seek opportunities to manage income producing commercial and residential real estate properties. Our company’s initial focus was on Florida and the southeastern region of the United States, particularly where it perceived there to be the potential to manage undervalued and distressed properties.

With a change in control on May 23, 2011, we stopped pursuing that business. Our company’s new business is to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other business combination with one or more entities that have operating businesses. Except as described below, we are not targeting any specific industry. We seek businesses that are profitable, with positive cash flow, with significant growth potential and that can benefit from (i) the advantages that typically accrue to a public company, such as greater visibility, greater ability to finance growth through acquisition, and greater ability to attract talent by offering incentive and contingent compensation, and (ii) the strategic, financial and operational expertise and experience our management can offer on an ongoing basis.

Our company is currently considered to be a “blank check” company. The Securities and Exchange Commission (“SEC”) defines those companies as any (i) “development stage company that has no specific business plan or purpose or has indicated that its business is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person; and (ii) is issuing a ‘penny stock’,” within the meaning of Rule 3a51-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Under Rule 12b-2 under the Exchange Act, our company also qualifies as a “shell company,” because it has no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our equity or debt securities until we have successfully concluded a business combination. Our company intends to comply with the periodic reporting requirements of the Exchange Act for so long as it is subject to those requirements.

There exists substantial doubt about our ability to continue as a going concern because we will be required to obtain additional capital in the future to continue our operations. If adequate capital cannot be obtained on a timely basis and on satisfactory terms, our operations will be materially negatively impacted. There can be no assurance that we will be able to raise additional capital, on terms favorable to us or at all.

On May 23, 2011, our company and our principal shareholders, including David Dreslin, our former president, chief financial officer and treasurer, entered into a stock purchase agreement resulting in a change in control of our company. Pursuant to that agreement, Wan-Fang Liu, Yuan-Hao Chang and Pei-Chi Yang purchased an aggregate of 77,775,000 outstanding shares of our company’s common stock, par value $0.00001, from those principal shareholders for an aggregate purchase price of $200,000. The source of the funds for the purchase of the common stock was from the individual purchasers.

On May 23, 2011, we entered into a further agreement with Ms. Liu, pursuant to which 48,275,000 shares of the common stock purchased by Ms. Liu were immediately returned to our company in consideration of the payment of $1.00. These shares were subsequently sold in a private placement for a purchase price of $0.01 per share and aggregate gross proceeds of $482,750 on July 25, 2011.

Immediately prior to the completion of the stock purchase and cancellation described above, Mr. Dreslin, who owned 59,925,000 shares, or approximately 77% of the common stock of our company, was the largest shareholder of our company. Upon completion of these transactions, Ms. Liu owned 27,500,000 shares, or approximately 91.7% of the common stock, and became the largest shareholder of our company.

Upon the completion of these transactions, we had a change in directors and management of our company.

In August 2011, we entered into a technology license and technology transfer agreement, under which we licensed the rights to develop, manufacture, market, sell and import products which incorporate or rely upon certain “Triops” technologies and processes in Taiwan, the People’s Republic of China, the United States, Japan and Korea, in exchange for a one-time licensing fee of $100,000. Triops are prehistoric creatures also known as dinosaur shrimp that are brought to life by adding water to eggs that are in suspended animation. We have not yet begun significant operations using this license.

In connection with the license, we also entered into a tenancy agreement under which we leased space in Taiwan for a two-year period. The tenancy agreement requires rental payments of approximately $5,000 per month. In addition, we provided the landlord with a deposit of $13,800 upon the execution of the lease.

In September 2011, we entered into our first sales agency agreement related to the Triops technology and we purchased $99,850 of leasehold improvements associated with the tenancy agreement described above.

In December 2011, we established a Taiwan branch of UAN Power Corp.

On May 16, 2012, we entered into a joint venture agreement with Mr. Yuan-Hao Chang, a shareholder of our company, under which we intended to develop, own and operate an agricultural business in the People’s Republic of China. We intend to rely on Mr. Chang’s experience and knowledge in organic fertilizers and farming to plant and grow various fruits in China, and to harvest and sell the produced crops and goods for a profit.

On May 31, 2012, we entered into a term promissory note with Ms. Liu for the principal sum of $200,000 with a maturity date of May 31, 2017. The note may be paid in full or in part at the option of our company at any time prior to the maturity date without penalty, with interest accrued as at the date of prepayment. The note bears interest at 4.00% per annum and shall be computed on the basis of a year of 360 days for the number of days actually elapsed.

Also on May 31, 2012, we entered into a term promissory note with Wen-Chung Huang for the principal sum of $100,000 with a maturity date of May 31, 2017. The note may be paid in full or in part at the option of our company at any time prior to the maturity date without penalty, with interest accrued as at the date of prepayment. The note bears interest at 4.00% per annum and shall be computed on the basis of a year of 360 days for the number of days actually elapsed.

Also on May 31, 2012, we entered into a term promissory note with Tzu-Yung Hsu for the principal sum of $50,000 with a maturity date of May 31, 2017. The note may be paid in full or in part at the option of our company at any time prior to the maturity date without penalty, with interest accrued as at the date of prepayment. The note bears interest at 4.00% per annum and shall be computed on the basis of a year of 360 days for the number of days actually elapsed.

On July 2, 2012, UAN Sheng (Fujian) Agricultural Technology Development Limited Company (“UAN Sheng”), a company established by the board of directors of our company, entered into a renting agreement with Jianyang City Construction Supervision Team Masha (“Jianyang Construction”) whereby Jianyang Construction has agreed to lease a business location (gross area of 170.661 m²) to UAN Sheng for a term of six years. The store location is Room 204, No. 2 Building, 342 West Marsha Street, Culture Plaza Masha Town, Jianyang City. The monthly rent for the location is RMB¥26000 which must be paid on a quarterly basis, pursuant to the terms of the renting agreement.

Effective July 3, 2012, our subsidiary, UAN Sheng, and UAN Lee Agricultural Technology Holding Limited, entered into a partnership agreement with Jianyang City Jinxiong Agricultural and Forestry Professional Cooperative (“Jinxiong”) to develop technology in the Greater China Region for the cultivation of tropical peach trees in Masha Town, Taiwan and to promote tropical peaches as the region’s major agricultural product (the “Proposition”).

Pursuant to the terms of the Proposition, UAN Sheng will provide tree species and personnel to undertake the anticipated tree cultivation. The property, provided by Jinxiong, consists of 300 acres of agricultural land located in Liutian Village, Masha Town, Jianyan City, Fujian Province. UAN Sheng will acquire 70% of the Proposition’s earnings and Jinxiong will acquire the remaining 30% of the Proposition’s earnings, after tax deductions. In addition, the taxes allocated on the Proposition will be distributed pro-rated to the interests of each party, as UAN Sheng will be responsible for 70% of the taxes due and Jinxiong will be responsible for the remaining 30% of the taxes due. Furthermore, both parties will each acquire 50% of the government agricultural subsidiary.

On July 7, 2012, UAN Sheng entered into a transfer agreement with Guifang Chen, whereby Guifang Chen has agreed to transfer a factory building and land use rights on a property in the city of Jianyang. Guifang Chen shall transfer to UAN Sheng the use and rights of 7.53 acres of land located in Liangdong Village, Shuishang Xian, Masha Town, Jianyang City and all current factory equipment, effective July 9, 2012 and until December 31, 2046. Guifang Chen will be compensated an aggregate of RMB¥650,000 by UAN Sheng, which includes a deposit of RMB¥200,000 to be paid upon execution of the transfer agreement and the balance was paid in one payment in July, 2012. As per the terms of the transfer agreement, UAN Sheng will be responsible for the all taxes and fees related to the transfer.

On August 8, 2012, UAN Sheng, entered into a leasing agreement with Yongliang Yang, whereby Yang has agreed to lease a property for residential use to UAN Sheng for a period of 12 months, effective August 10, 2012. The property, of approximately 119.48 m², is located at No. 818 South Jiahe, Tongyou Street, Jianyang City, Fujian Province and is bound by a monthly payment of RMB¥200. Once expired, the lease agreement may be negotiated to be extended.

In conjunction with the partnership agreement, on October 18, 2012, UAN Sheng entered into a concession agreement with Lin Changbin, whereas UAN Sheng has agreed to lease from Lin Changbin the rights to a property of 300 acres, containing approximately 8,800 pear trees, in Erlian Shan of Zhuzhou Village, from October 18, 2012 to December 31, 2025. Pursuant to the terms of the concession agreement, UAN Sheng will pay a sapling fee of an aggregate of RMB¥500,000 to Lin Changbin which includes a deposit of RMB¥100,000 paid immediately upon signing of the concession agreement and the balance was paid in one payment in October, 2012.

In November 2012, we ceased our limited business operations and disposed of the assets in Taiwan where we had entered into a technology licensing and transfer agreement to obtain the rights to develop, manufacture, market, sell and import products which incorporate or rely upon certain “Triops” technologies and processes in Taiwan, the People’s Republic of China, the United States, Japan and Korea.

On December 1, 2012, we entered into a convertible promissory note with Yuan-Hao Chang for the principal sum of $157,691 with a maturity date of December 1, 2017. The note may be paid in full or in part at the option of our company at any time prior to the maturity date without penalty, with interest accrued as at the date of prepayment. The note bears interest at 4.00% per annum and shall be computed on the basis of a year of 360 days for the number of days actually elapsed. On December 1, 2013, the aggregate outstanding principal and all unpaid accrued interest due under the note shall automatically be converted into a number of units of common shares of our company equal to the aggregate outstanding principal and unpaid accrued interest, divided by $0.02. No fractional units will be issued in connection with any conversion. Fractional units will be rounded to the nearest whole number.

On December 31, 2012, we entered into a global amendment to the term promissory notes dated May 31, 2012 with each of Wan-Fang Liu, Wen-Chan Huang and Tsu-Yung Hsu. The amendment provides for the conversion of the aggregate outstanding principal and all unpaid accrued interest due under the notes into a number of units of common shares of our company equal to the aggregate outstanding principal and unpaid accrued interest, divided by $0.02. No fractional units will be issued in connection with any conversion. Fractional units will be rounded to the nearest whole number.

Results of Operations

For the three-month period ended March 31, 2013 and March 31, 2012

We realized revenues of $Nil in the three-month period ended March 31, 2013 and $Nil for the three-month period ended March 31, 2012.

Cost of sales was $Nil for the three-month ended March 31, 2013 and $Nil for the three-month ended March 31, 2012.

Expenses

Operating expenses for three month period ended March 31, 2013 increased by $37,694 or approximately 60% compared to the comparative period in 2012 primarily as a result of an increase in consulting fees – related party and general and administrative expenses. Our company commenced operations of our agricultural business in China in July 2012.

For the nine-month period ended March 31, 2013 and March 31, 2012

We realized revenues of $Nil and $Nil in the nine-month periods ended March 31, 2013 and March 31, 2012, respectively.

Cost of sales was $Nil and $Nil for the nine-months ended March 31, 2013 and March 31, 2012, respectively.

Expenses

Operating expenses for the nine-month period ended March 31, 2013 increased by $164,017 or approximately 90% compared to the comparative period in 2012 primarily as a result of increases consulting fees – related party and general and administrative expenses. Our company commenced operations of our agricultural business in China in July 2012. The significant portion of general and administrative expenses incurred were wages and benefits of $98,886, rent expense of $16,159, and travel and transportation expense of $61,259.

Liquidity and Capital Resources

Working Capital

Cash Flows

As of March 31, 2013, we had a cash balance of $94,132 as compared to $41,501 as of June 30, 2012.

Our working capital as of March 31, 2013 was $48,245 compared to our working capital of $354,867 at June 30, 2012.

Our total assets as of March 31, 2013 were $742,471, compared to $570,325 at June 30, 2012. The significant increase in our assets resulted from commencing our initial operations under the joint venture agreement, which resulted from the acquisition of land use rights of $108,877, the purchase of other fixed assets of $155,415, and increase in inventory of $363,400.

Our total liabilities at March 31, 2013 were $765,662, compared to $410,393 at June 30, 2012. The increase resulted primarily from amounts due to related parties of $332,419, other current liabilities of $13,769 and amounts due to an affiliated company or $20,000.

As a result, our net cash used in operating activities was $637,427 and $140,308 for the nine months ended March 31, 2013 and 2012, respectively.

Our net cash provided by investing activities increased for the nine months ended March 31, 2013 as compared to the same period in March 31, 2012 as a result of our joint venture investment. The net cash provided by investing activities for the nine months ended March 31, 2013 was $52,159, and net cash used in investing activities was $199,850 for the nine months ended March 31, 2012. The net cash used in investing activities for the nine months ended March 31, 2012 resulted from discontinued operations.

In July 2011, we completed a private placement financing resulting in proceeds of $465,506 (net of expenses). From time to time our officers and shareholders have advanced money to our company as working capital. For the nine months ended March 31, 2013 and 2012, net cash provided by financing activities was $644,960 and $429,621, respectively.

Limited Operating History

We have an extremely limited operating history and have generated no significant independent financial history. Our business plan changed significantly in May 2011, and we have not demonstrated that we will be able to execute that plan.

Future financing may not be available to us on acceptable terms or at all. If financing is not available or is not available on satisfactory terms, we may be unable to continue our operations. Any equity financing that may be available will result in dilution of the interests of our existing shareholders.

Plan of Operations

In May 2011, we commenced limited operations under our current business model of identifying one or more businesses to merge with or acquire. As described above, in August 2011, we entered into a technology license and technology transfer agreement, under which we licensed the rights to develop, manufacture, market, sell and import products which incorporate or rely upon certain “Triops” technologies and processes in Taiwan, the People’s Republic of China, the United States, Japan and Korea. We began our initial operations using this license in August 2011.

On May 16, 2012, we entered into a joint venture agreement with Mr. Yuan-Hao Chang, a shareholder of our company, under which we intend to develop, own and operate an agricultural business in China, PRC. We intend to rely on Mr. Chang’s experience and knowledge in organic fertilizers and farming to plant and grow various fruits in China, and to harvest and sell the produced crops and goods for a profit. We commenced initial operations in July 2012.

In November 2012, we ceased our limited business operations and disposed the assets in Taiwan where we had entered into a technology licensing and transfer agreement to obtain the rights to develop, manufacture, market, sell and import products which incorporate or rely upon certain “Triops” technologies and processes in Taiwan, the People’s Republic of China, the United States, Japan and Korea.

We will evaluate our performance over the next twelve months of operations as we attempt to emerge from the development stage. We have a limited operating budget and must maintain tight expense controls. However, we will need to obtain additional financing to effectively implement our business plan. If we do not obtain additional financing, we will continue to operate on a reduced budget until such time as more capital can be raised or we may be forced to curtail or discontinue operations. In addition, we are actively pursuing a new business opportunity that would require additional funding over the next twelve months. There can be no assurance that we will be able to raise additional capital, on terms favorable to us or at all.

We will require additional funds to fund our budgeted expenses over the next 12 months. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable. We need to raise additional funds in the immediate future in order to proceed with our budgeted expenses.

Specifically, we estimate our operating expenses and working capital requirements for the next 12 months to be as follows:

Critical Accounting Policies

The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and should be read in conjunction with our company’s audited financial statements and footnotes thereto for the year ended June 30, 2012, included in our company’s Form 10-K filed on October 15, 2012. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. However, our company believes that the disclosures are adequate to make the information presented not misleading. The financial statements reflect all adjustments (consisting primarily of normal recurring adjustments) that are, in the opinion of management necessary for a fair presentation of our company’s financial position and results of operations. The operating results for the three and nine months ended March 31, 2013 are not necessarily indicative of the results to be expected for any other interim period of a future year.

Basis of Presentation

Our company has prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America.

The consolidated financial statements include the accounts of our company and its subsidiaries. Significant inter-company transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Discontinued Operations

In November 2012, our company ceased its Taiwan’s business operations. The Consolidated Financial Statements have been recast to present the Taiwan’s business operation as discontinued operations as described in “Note 12 - Discontinued Operations.” Unless noted otherwise, discussion in the Notes to Consolidated Financial Statements pertain to continuing operations.

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported net income or losses.

Cash and Cash Equivalents

Cash and cash equivalents are all highly liquid instruments purchased with a maturity of three months or less to the extent the funds are not being held for investment purposes.

Revenue Recognition

Our company is a development stage company as such has realized no product and or directly related expenses.

Our company entered into a joint venture agreement to develop, own and operate an agricultural business in China, PRC. Our company does not expect to generate any significant revenues over the next twelve months.

Inventory

Our company recognizes all direct and indirect costs of growing crops in accordance to ASC 905-330-25 "Agriculture Inventory Recognition". ASC 905-330-25 requires all direct and indirect costs of growing crops to accumulate as inventory until the time of harvest. Some crop costs such as soil preparation, which are incurred before planting are deferred and allocated until harvest. Inventories are stated at the lower of cost or market determined on a weighted average basis.

Fixed Assets

Fixed assets are recorded at cost and are depreciated or amortized using the straight-line method over the estimated useful lives of the assets:

Land Use Rights

Land use rights are recorded at cost and amortized over the shorter of the estimated useful life or the expected useful life of the land use rights for thirty-four years and six months.

Appropriation to Statutory Reserve

Pursuant to the laws applicable to the China, PRC, entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC (“PRC GAAP”) at each year-end). For foreign invested enterprises and joint ventures in China, PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). Our company did not make any appropriations to the reserve funds mentioned above due to lack of profits after tax in PRC since commencement of operations.

Advertising Costs

Our company’s policy regarding advertising is to expense advertising when incurred.

Income Taxes

Our company provides for income taxes under ASC 740, “Accounting for Income Taxes.” ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.

Impairment of Long-Lived Assets

Our company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, our company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, our company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

Stock-Based Compensation

Our company records stock-based compensation in accordance with ASC 718 (formerly SFAS No. 123R, “Share Based Payments”), using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

Fair Value of Financial Instruments

The standard for “Disclosures about Fair Value of Financial Instruments,” defines financial instruments and requires fair value disclosures of those financial instruments. Our company adopts the standard “Fair Value Measurements,” which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosures requirements for fair value measures. Current assets and current liabilities qualified as financial instruments and management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their current interest rate is equivalent to interest rates currently available. The three levels are defined as follows:

Level 1 ─ inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 ─ inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3 ─ inputs to the valuation methodology are unobservable and significant to the fair value.

As of the balance sheet date, the estimated fair values of the financial instruments were not materially different from their carrying values as presented due to the short maturities of these instruments and that the interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profile at respective period-ends. Determining which category an asset or liability falls within the hierarchy requires significant judgment. Our company evaluates the hierarchy disclosures each quarter.

Segment Reporting and Geographic Information

Our company reports operations under one business segments-Agricultural Development.

Geographic information as of March 31, 2013 and for the nine months ended March 31, 2013 and 2012 as follows:

Foreign Currency Translation

The functional currency of UAN Power operations in United States is U.S. Dollar (“USD”). 

The functional currency of UAN Power’s discontinued operations in Taiwan is New Taiwan Dollar (“TWD”).

The functional currency of UAN Lee’s operations in Hong Kong is Hong Kong Dollar (“HKD”).

Transactions denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the date of the transactions. Exchange gains or losses on transactions are included in earnings.

The financial statements of our company are translated into U.S. dollars in accordance with the standard, “Foreign Currency Translation,” codified in ASC 830, using rates of exchange at the end of the period for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses and historical rates for equity. Translation adjustments resulting from the process of translating the local currency combining financial statements into U.S. dollars are included in determining comprehensive income. At March 31, 2013, the cumulative translation adjustment was $15,930. For the nine months ended March 31, 2013 and 2012, net other comprehensive income (loss) was $(6,012) and $3,963, respectively.

The exchange rates used to translate TWD amounts into USD at (1USD=TWD) as follows:

The exchange rates used to translate HKD amounts into USD at (1USD=HKD) as follows:

The exchange rates used to translate RMB amounts into USD at (1USD=RMB) as follows:

Comprehensive Income

Our company adopted FASB Accounting Standards Codification 220, “Comprehensive Income,” which establishes standards for reporting and presentation of comprehensive income (loss) and its components in a full set of general-purpose financial statements. Our company has chosen to report comprehensive income (loss) in the statements of income and comprehensive income. Comprehensive income (loss) is comprised of net income and all changes to stockholders’ equity except those due to investments by owners and distributions to owners.

Basic (Loss) per Common Share

Basic (loss) per share is calculated by dividing our company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing our company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of March 31, 2013 and 2012, respectively; however, if present, a separate computation of diluted loss per share would not have been presented, as these common stock equivalents would have been anti-dilutive due to our company’s net loss.

Recently Issued Accounting Pronouncements

In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters. This standard provides additional guidance with respect to the reclassification into income of the cumulative translation adjustment (CTA) recorded in accumulated other comprehensive income associated with a foreign entity of a parent company. The ASU differentiates between transactions occurring within a foreign entity and transactions/events affecting an investment in a foreign entity. For transactions within a foreign entity, the full CTA associated with the foreign entity would be reclassified into income only when the sale of a subsidiary or group of net assets within the foreign entity represents the substantially complete liquidation of that foreign entity. For transactions/events affecting an investment in a foreign entity (for example, control or ownership of shares in a foreign entity), the full CTA associated with the foreign entity would be reclassified into income only if the parent no longer has a controlling interest in that foreign entity as a result of the transaction/event. In addition, acquisitions of a foreign entity completed in stages will trigger release of the CTA associated with an equity method investment in that entity at the point a controlling interest in the foreign entity is obtained. This ASU is effective prospectively beginning January 1, 2014, with early adoption permitted. This ASU would impact our company’s consolidated results of operations and financial condition only in the instance of an event/transaction as described above.

In February 2013, the FASB issued ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. Under this standard, an entity is required to provide information about the amounts reclassified out of accumulated other comprehensive income (“AOCI”) by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in the financial statements. For our company, this ASU is effective beginning January 1, 2013, and interim periods within those annual periods. The adoption of this standard is not expected to have an impact on our company’s financial results or disclosures.

In July 2012, the FASB issued ASU No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment. Under this standard, entities testing long-lived intangible assets for impairment now have an option of performing a qualitative assessment to determine whether further impairment testing is necessary. If an entity determines, on the basis of qualitative factors, that the fair value of the indefinite-lived intangible asset is more-likely-than-not less than the carrying amount, the existing quantitative impairment test is required. Otherwise, no further impairment testing is required. For our company, this ASU is effective beginning January 1, 2013, with early adoption permitted under certain conditions. The adoption of this standard is not expected to have a material impact on our company’s consolidated results of operations or financial condition.

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

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

Item 3.   Quantitative and Qualitative Disclosure About Market Risks

We are a “smaller reporting company” and are not required to provide the information under this item.

Item 4.   Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Controls

During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION 

Item 1.   Legal Proceedings

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, executive officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.

Item 1A.   Risk Factors

We are a “smaller reporting company” and are not required to provide the information under this item.

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

None.

Item 3.   Defaults Upon Senior Securities

None.

Item 4.   Mine Safety Disclosures

Not applicable.

Item 5.   Other Information

Effective January 25, 2013, Wen-Cheng Huang resigned as a Director and Chairman of the Board of Directors of our company. Wen-Cheng Huang’s resignation was not the result of any disagreements with our company regarding our operations, policies, practices or otherwise.

Effective April 23, 2013, Tzu-Yung Hsu resigned as a Director of the Board of Directors of our company. Tzu-Yung Hsu’s resignation was not the result of any disagreements with our company regarding our operations, policies, practices or otherwise.

Concurrently on April 23, 2013, Syuan-Jhu Lin consented to and was appointed as a Director and Chairman of the Board of Directors of our company. Further, Li-Feng Lee also consented to and was appointed as a Director of the Board of Directors of our company.

Our board of directors now consists of Parashar Patel, Wan-Fang Liu, Chih-Hung Cheng, Chih-Wei Chuang, Syuan-Jhu Lin and Li-Feng Lee.

Item 6.   Exhibits

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.