| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| Delaware | 42-1743717 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
20 Broad Street, 7th Floor New York, New York | 10005 | |
| (Address of principal executive offices) | (Zip Code) |
| Large accelerated filer | o | Accelerated filer | o |
| Non-accelerated filer | o | Smaller reporting company | x |
| Page: | ||||||
| PART I. FINANCIAL INFORMATION | ||||||
| Item 1. | Financial Statements (unaudited) | |||||
| Balance Sheets | 3 | |||||
| Statements of Operations | 4 | |||||
| Statement of Changes in Stockholders’ Deficit | 5 | |||||
| Statements of Cash Flows | 6 | |||||
| Notes to Financial Statements | 7 | |||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | |||||
| Item 4. | Controls and Procedures | |||||
| Part II. OTHER INFORMATION | ||||||
| Item 1. | Legal Proceedings | |||||
| Item 1A. | Risk Factors | |||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |||||
| Item 3. | Defaults Upon Senior Securities | |||||
| Item 4. | Mine Safety Disclosures | |||||
| Item 5. | Other Information | |||||
| Item 6. | Exhibits | 22 | ||||
| Signatures | 23 | |||||
June 30, 2012 | December 31, 2011 | |||||||||||||||
| (Unaudited) | ||||||||||||||||
| ASSETS | ||||||||||||||||
| Current assets | $ | - | $ | - | ||||||||||||
| Property and equipment, net | - | - | ||||||||||||||
| TOTAL ASSETS | $ | - | $ | - | ||||||||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 58,581 | $ | 17,198 | ||||
| Note payable | 160,038 | 160,038 | ||||||
| Total current liabilities | 218,619 | 177,236 | ||||||
| Stockholders’ deficit: | ||||||||
| Preferred stock, $0.0001 par value per share, 2,000,000 authorized, none issued and outstanding | - | - | ||||||
| Common stock, $0.0001 par value per share, | ||||||||
| 50,000,000 shares authorized, 4,095,000 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively | 410 | 410 | ||||||
| Additional paid-in capital | 427,939 | 427,939 | ||||||
| Accumulated deficit | (646,968 | ) | (605,585 | ) | ||||
| Total stockholders’ deficit | (218,619 | ) | (177,236 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | - | $ | - | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 37,065 | $ | 17,198 | ||||
| Note payable | 160,038 | 160,038 | ||||||
| Total current liabilities | 197,103 | 177,236 | ||||||
| Stockholders’ deficit: | ||||||||
| Preferred stock, $0.0001 par value per share, 2,000,000 authorized, none issued and outstanding | - | - | ||||||
| Common stock, $0.0001 par value per share, | ||||||||
| 50,000,000 shares authorized, 4,095,000 and 16,877,900 shares issued and outstanding shares as of March 31, 2012 and December 31, 2011, respectively | 410 | 410 | ||||||
| Additional paid-in capital | 427,939 | 427,939 | ||||||
| Accumulated deficit | (625,452 | ) | (605,585 | ) | ||||
| Total stockholders’ deficit | (197,103 | ) | (177,236 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | - | $ | - | ||||
For the Three Months Ended June, 30 | For the Six Months Ended June, 30 | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenue | $ | - | $ | - | $ | $ | - | |||||||||
| Operating expenses: | ||||||||||||||||
Selling, general and administrative | 20,203 | 16,355 | 39,011 | 37,981 | ||||||||||||
| (Loss) from operations | (20,203 | ) | (16,355 | ) | (39,011 | ) | (37,981 | ) | ||||||||
| Interest expense | 1,313 | 1,597 | 2,372 | 2,285 | ||||||||||||
Net (loss) | $ | (21,516 | ) | $ | (17,952 | ) | $ | (41,383 | ) | $ | (40,266 | ) | ||||
| 2012 | 2011 | |||||||
| Revenue | $ | - | $ | - | ||||
| Operating expenses: | ||||||||
| Selling, general and administrative | 18,808 | 21,626 | ||||||
| (Loss) from operations | (18,808 | ) | (21,626 | ) | ||||
| Interest expense | 1,059 | 688 | ||||||
| Net (loss) | $ | (19,867 | ) | $ | (22,314 | ) | ||
| (Loss) per common share, basic and diluted | $ | (0.00 | ) | $ | (0.01 | ) | ||
Weighted average shares outstanding, basic and diluted | $ | 8,647,814 | $ | 17,689,867 | ||||
| (Loss) per common share, basic and diluted | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.00 | ) | ||||
| Weighted average shares outstanding, basic and diluted | 4,095,000 | 4,095,000 | 4,095,000 | 4,095,000 |
| Preferred | Preferred | Common | Common | Additional | Preferred | Preferred | Common | Common | Additional | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock | Stock | Stock | Stock | Paid-in | Accumulated | Stock | Stock | Stock | Stock | Paid-in | Accumulated | |||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | Shares | Amount | Shares | Amount | Capital | Deficit | Total | |||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2011 | - | $ | - | 4,095,000 | $ | 410 | $ | 427,939 | $ | (605,585 | ) | $ | (177,236 | ) | - | $ | - | 4,095,000 | $ | 410 | $ | 427,939 | $ | (605,585 | ) | $ | (177,236 | ) | ||||||||||||||||||||||||||||
| Net (loss) | - | - | - | - | - | (19,867 | ) | (19,867 | ) | - | - | - | - | - | (41,383 | ) | (41,383 | ) | ||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2012 | - | $ | - | 4,095,000 | $ | 410 | $ | 427,939 | $ | (625,452 | ) | $ | (197,103 | ) | ||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2012 | - | $ | - | 4,095,000 | $ | 410 | $ | 427,939 | $ | (646,968 | ) | $ | (218,619 | ) | ||||||||||||||||||||||||||||||||||||||||||
| 2012 | 2011 | |||||||||||||||
| 2012 | 2011 | |||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net (loss) | $ | (19,867 | ) | $ | (22,314 | ) | ||||||||||
Net (loss) | $ | (41,383 | ) | $ | (40,266 | ) | ||||||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||||
| Depreciation | - | 308 | - | 900 | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||
| Increase in accounts payable and accrued expenses | 19,867 | 3,688 | 41,383 | 17,142 | ||||||||||||
| Net cash (used in) operating activities | - | (18,318 | ) | - | (22,224 | ) | ||||||||||
| Cash flows from financing activities: | ||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||
| Repayment of stock | - | (49,729 | ) | |||||||||||||
| Advance from Conqueror | - | 18,749 | - | 72,795 | ||||||||||||
| Repayment of loan | - | (910 | ) | |||||||||||||
Net cash provided by financing activities | - | (18,749 | ) | - | 22,156 | |||||||||||
| Net change in cash | - | (431 | ) | - | (68 | ) | ||||||||||
| Cash, beginning | - | 68 | - | 68 | ||||||||||||
| Cash, end | $ | - | $ | 499 | $ | - | $ | - | ||||||||
| Supplemental disclosure of cash flow information: | ||||||||||||||||
| Cash paid for interest | $ | - | $ | - | $ | - | $ | - | ||||||||
| Cash paid for income taxes | $ | - | $ | - | $ | - | $ | - | ||||||||
| 1. | GENERAL Organization and Business Nature Life Nutrition Products, Inc. was originally organized as a New Jersey limited liability company in February 2005 under the name of Life Nutrition Products, LLC (“LNP”). On September 24, 2007, Life Nutrition Products, Inc. (the “Company”), a Delaware Corporation was formed and merged with LNP. Under the terms of the merger, 10 million shares of common stock were issued to the LNP Members to acquire all of LNP’s membership interests. After the merger, 10 million shares of common stock were outstanding, all of which were owned by LNP’s two founders, Michael M. Salerno, President and Richard G. Birn, Vice President. LNP’s previous primary business purpose was to market over-the-counter, all-natural dietary supplements under the trade names: Trim For Life3 Appetite Control and Trim For Life3 Energy Formula. The Trim For Life3 Appetite Control Formula is patent pending and supported by scientific studies. The Trim For Life3 Energy Formula is a proprietary formula blend. The Company is no longer pursuing this business. On September 7, 2010, the Company entered into a Share Exchange Agreement (“Share Exchange Agreement”) with Conqueror Group Limited, a Hong Kong corporation (“Conqueror”) and Acumen Charm Ltd., a British Virgin Islands corporation (“Conqueror Shareholder”). Pursuant to the Share Exchange Agreement, at the closing of the transaction contemplated in the Agreement (“Transaction”), the Company will acquire 100% of the issued and outstanding capital stock of Conqueror from the Conqueror Shareholder, making Conqueror a wholly-owned subsidiary of the Company. On November 17, 2010, the parties entered into a First Amendment to the Share Exchange Agreement (“First Amendment”) which, among other things, provided that 1,004,900 shares shall be redeemed by the Company contemporaneously with the execution of the First Amendment at an aggregate redemption price of $55,270 (“Group B Redemption Price”) and 12,782,900 shares shall be redeemed by the Company at or before the closing at an aggregate redemption price of $49,731 (“Group C Redemption Price”) pursuant to mutually acceptable and duly executed redemption agreements. Contemporaneously with the execution of the First Amendment, Conqueror loaned the Company the principal amount of $55,270 in exchange for which the Company delivered a promissory note to Conqueror which proceeds were used to pay the Group B Redemption Price. |
| 1. | GENERAL (continued) Organization and Business Nature (continued) The First Amendment further provided that at or before the closing, Conqueror shall loan the Company the principal amount of $49,731 which shall be paid from the funds remaining in escrow (“Remaining Escrow Funds”) pursuant to the Escrow Agreement dated as of August 13, 2010, as amended on August 30, 2010, by and among Conqueror, the Company and Cyruli Shanks Hart & Zizmor LLP, in exchange for which the Company shall deliver a promissory note to Conqueror which proceeds shall be used to pay the Group C Redemption Price. The First Amendment also provided that in the event that the closing does not occur for any reason on or before January 31, 2011, then, among other things, the Remaining Escrow Funds shall be paid to the Company and used to promptly redeem 12,782,900 shares as provided therein at the Group C Redemption Price, and the then officers and directors of the Company shall resign with immediate effect and appoint such persons as designated by Conqueror as officers and directors. The Closing was to transpire on or before January 31, 2011 but, as of the date hereof, has not occurred. As a result, on May 11, 2011, and in accordance with the terms of the First Amendment, the Remaining Escrow Funds were paid to the Company and were used to redeem 12,782,900 shares at the Group C Redemption Price and the Company delivered a promissory note to Conqueror in the principal amount of $49,731. On May 11, 2011, Michael M. Salerno, the Company’s sole officer and director, resigned as an officer and director of the Company, and appointed Chu Zhanjun and Li Gang as directors, and Chu Zhanjun as President, Chief Executive Officer and Principal Financial Officer of the Company, each a designee of Conqueror. Going Concern The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern. The Company has suffered recurring losses and experiences a deficiency of cash flow from operations. These matters raise substantial doubt about the Company's ability to continue as a going concern. The continued operations of the Company are dependent upon the Company’s ability to raise capital and/or generate positive cash flows from operations. Management may achieve profitability and generate positive cash flows through possible acquisition or merger. However, there is no guarantee that a suitable offer may exist or that funding will be available to close on such a transaction. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. |
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. Cash and Cash Equivalents For purposes of the cash flow statements, the Company considers investments with an initial maturity of three months or less to be cash equivalents. Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are computed on the straight-line method based on the estimated useful lives of the assets. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred. Revenue Recognition The Company recognizes revenue upon shipment of goods, and the price is fixed and determinable, and collectability is reasonably assured. Net (Loss) Per Share of Common Stock Net loss per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents are not included in the computation of diluted earnings per share as the result is anti-dilutive for the periods presented. |
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Income Taxes The Company accounts for income taxes in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740-10 prescribes detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements in accordance with generally accepted accounting standards. Tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized. Federal, state and local income tax returns for the years prior to 2008 are no longer subject to examination by tax authorities. The Company did not have any uncertain tax positions. The tax effect of temporary differences, primarily net operating loss carry forwards, gave rise to the Company’s deferred tax asset in the accompanying June 30, 2012 and December 31, 2011 balance sheets. Because of the current uncertainty of realizing the benefit of the tax carry forward, a valuation allowance equal to the tax benefit for deferred taxes has been established. The full realization of the tax benefit associated with the carry forward depends predominantly upon the Company’s ability to generate taxable income during the carry forward period. |
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Income Taxes As of June 30, 2012, the Company has net operating loss carry forwards of approximately $646,000 that can be utilized to offset future taxable income for Federal income tax purposes through 2032. Utilization of these net loss carry forwards is subject to the limitations of Internal Revenue Code Section 382. Significant components of the Company’s deferred tax assets and liabilities are summarized as follows: |
June 30, 2012 | December 31, 2011 | |||||||
| Deferred tax asset | $ | 261,000 | $ | 245,000 | ||||
| Less: valuation allowance | (261,000 | ) | (245,000 | ) | ||||
| Net deferred tax asset | $ | - | $ | - | ||||
Fair Value Measurements The Company follows ASC 820, which defines fair value, provides a consistent framework for measuring fair value under GAAP and expands fair value financial statement disclosure requirements. ASC 820’s valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. ASC 820 classifies these inputs into the following hierarchy: Level 1 Inputs – Quoted prices for identical instruments in active markets. Level 2 Inputs – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 Inputs – Instruments with primarily unobservable value drivers. The carrying amounts of the Company’s financial instruments, including accounts payable and accrued expenses and note payable, approximate fair value because of their short-term nature. |
RECENTLY ISSUED ACCOUNTING In December 2011, the FASB issued Accounting Standards Update No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (“ASU No. 2011-11”). The amendments in this ASU require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The Company does not expect that the adoption of ASU No. 2011-11 will have a significant, if any, impact on its financial statements. In September 2011, the FASB issued Accounting Standards Update No. 2011-08, Testing Goodwill for Impairment (“ASU No. 2011-08”), which allows entities to use a qualitative approach to test goodwill for impairment. ASU No. 2011-08 permits an entity to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, it is necessary to perform the currently prescribed two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required. ASU No. 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of the provisions of this ASU did not have a material impact on the Company’s financial statements. In June 2011, the FASB issued Accounting Standards Update No. 2011-05, Presentation of Comprehensive Income (“ASU No. 2011-05”), which improves the comparability, consistency, and transparency of financial reporting and increases the prominence of items reported in other comprehensive income (“OCI”) by eliminating the option to present components of OCI as part of the statement of changes in stockholders’ equity. The amendments in this standard require that all nonowner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The adoption of this standard did not have a material impact on the Company’s financial statements. |
March 31, 2012 | December 31, 2011 | |||||||
| Deferred tax asset | $ | 253,000 | $ | 245,000 | ||||
| Less: valuation allowance | (253,000 | ) | (245,000 | ) | ||||
| Net deferred tax asset | $ | - | $ | - | ||||
| 3. | RECENTLY ISSUED ACCOUNTING STANDARDS (continued) Subsequently in December 2011, the FASB issued Accounting Standards Update No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income (“ASU No. 2011-12”), which indefinitely defers the requirement in ASU No. 2011-05 to present on the face of the financial statements reclassification adjustments for items that are reclassified from OCI to net income in the statement(s) where the components of net income and the components of OCI are presented. The amendments in these standards do not change the items that must be reported in OCI, when an item of OCI must be reclassified to net income, or change the option for an entity to present components of OCI gross or net of the effect of income taxes. The amendments in ASU No. 2011-05 and ASU No. 2011-12 are effective for interim and annual periods beginning after December 15, 2011 and are to be applied retrospectively. The adoption of the provisions of ASU No. 2011-05 and ASU No. 2011-12 did not have a material impact on the Company’s financial statements. In May 2011, the FASB issued Accounting Standards Update No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU No. 2011-04”), which amends current guidance to result in common fair value measurements and disclosures between accounting principles generally accepted in the United States of America and International Financial Reporting Standards. The amendments explain how to measure fair value. They do not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial reporting. ASU No. 2011-04 clarifies the application of certain existing fair value measurement guidance and expands the disclosures for fair value measurements that are estimated using significant unobservable inputs (Level 3 inputs). The amendments in ASU No. 2011-04 are effective for interim and annual periods beginning after December 15, 2011. The adoption of the provisions of ASU No. 2011-04 did not have a material impact on the Company’s financial statements. |
PROPERTY AND EQUIPMENT Property and equipment consists of the following: |
June 30, 2012 | December 31, 2011 | Estimated useful lives | ||||||||||
| Computer equipment | $ | 4,324 | $ | 4,324 | 3 years | |||||||
| Website development | 4,315 | 4,315 | 3 years | |||||||||
| Less: accumulated depreciation | (8,639 | ) | (8,639 | ) | ||||||||
| $ | - | $ | - | |||||||||
| 5. | NOTES PAYABLE Notes payable consist of the following: |
June 30, 2012 | December 31, 2011 | |||||||
| Note payable to Conqueror Group Limited bears interest at 5%, originally due May 17, 2011, currently due on demand | $ | 55,270 | $ | 55,270 | ||||
| Note payable to Conqueror Group Limited bears interest at 5% and due November 11, 2011, currently due on demand | 49,730 | 49,730 | ||||||
| Advances from Conqueror Group Limited no interest bearing and due on demand | 55,038 | 55,038 | ||||||
| $ | 160,038 | $ | 160,038 | |||||
March 31, 2012 | December 31, 2011 | Estimated Useful Lives | |||||||
| Computer equipment | $ | 4,324 | $ | 4,324 | 3 years | ||||
| Website development | 4,315 | 4,315 | 3 years | ||||||
| Less: accumulated depreciation and amortization | (8,639 | ) | (8,639 | ) | |||||
| $ | - | $ | - | ||||||
| 6. | STOCKHOLDERS’ DEFICIT We have authorized 2,000,000 shares of blank check preferred stock, none of which are issued and outstanding.
15 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. FORWARD LOOKING STATEMENT This report contains certain forward-looking statements and information relating to the Company that are based on the beliefs and assumptions made by the Company’s management as well as information currently available to the management. When used in this document, the words “anticipate”, “believe”, “estimate”, and “expect” and similar expressions, are intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. The Company does not intend to update these forward-looking statements. APPLICATION OF CRITICAL ACCOUNTING PRACTICES This Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Quarterly Report for the three month period ended Our significant accounting policies are more fully described in We review our estimates and assumptions on an on-going basis. Our estimates are based on our historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions, but we do not believe such differences will materially affect our financial position or results of operations. OVERVIEW AND PLAN OF OPERATION Life Nutrition Products, Inc. (the “Company”, “we”, “us” and “our”) was previously a dietary supplement company specializing in the development, marketing and distribution of all natural, proprietary, dietary supplements under the names Trim For Life3® Appetite Control and Trim For Life3® Energy Formula. In our original business plan, we outlined a marketing strategy to compete more effectively in the dietary supplement marketplace. However, due to a lack of available financing, we were unable to implement the marketing strategy or invest in product expansion. We are no longer pursuing this business. As a result, we began to explore other viable options that may provide the potential to generate a positive cash flow to accommodate the costs of being a public company. With volatile economic conditions and unknown opportunities, we were unable to adequately determine if there are indeed, business opportunities that would lend to the Company acquiring additional capital or having the available resources to construct such a deal. Our common stock is traded in the over-the-counter market under the symbol “LIPN”. Since January 20, 2009, it has been listed on the OTC Bulletin Board. As a public company with the potential for shares to trade on the open market, we believe the Company may be in a better position to raise additional capital to meet our operating costs. However, we cannot claim nor guarantee that by having Company stock publicly quoted that it will provide the opportunity to raise additional capital. 16 Our current operating costs are minimal due to limited business activities, but we do incur an expense in ongoing legal and professional services to meet our SEC obligations as a publicly held company. The Company may continue to meet these expenses by opting to raise additional capital through sales of our common stock, loans from our board of directors and affiliates, and/or other transactions to meet these obligations. On September 7, 2010, we entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Conqueror Group Limited, a Hong Kong corporation (“Conqueror”) and Acumen Charm Ltd., a British Virgin Islands corporation (the “Conqueror Shareholder”). Pursuant to the Share Exchange Agreement, at the closing of the transaction contemplated in the Share Exchange Agreement (the “Transaction”), the Company will acquire 100% of the issued and outstanding capital stock of Conqueror from the Conqueror Shareholder, making Conqueror a wholly-owned subsidiary of the Company. There was no prior relationship between the Company and any of its affiliates and the Conqueror Shareholder and any of its affiliates. Conqueror owns 100% of the equity interest of Shenyang Kai Xin, a wholly-owned foreign enterprise incorporated in the People’s Republic of China (“PRC”), which entity has entered into contractual arrangements with Liaoning New Land Food & Beverage Co., Limited (“NLFB”) and Liaoning New Land Fast Frozen Food Co. Limited (“NLFF”), each a company incorporated in the PRC, which arrangements give Conqueror effective control of the business of NLFB and NLFF. NLFB is principally engaged in the processing and distribution of raspberry and blueberry drinks, wines and other related products in China, and NLFF is principally engaged in the cultivation, processing and distribution of fresh and frozen raspberries in the domestic market in China and internationally. In consideration for the purchase of the Conqueror Shareholder’s interest in Conqueror, the Company will issue to designees of the Conqueror Shareholder a total of 23,905,000 newly issued shares of the Company’s common stock. The closing of the Transaction is conditioned upon, among other things, satisfactory due diligence investigations by the parties, the cancellation of a total of 13,787,800 shares of the Company’s common stock by certain shareholders of the Company, the ability of certain designees of Conqueror to purchase a total of 4,010,000 shares of the Company’s common stock from non-affiliated shareholders of the Company in unrelated transactions, the accuracy at closing of the representations made by the parties in the Share Exchange Agreement, and the obtaining of necessary consents. The First Amendment to the Share Exchange Agreement (the “First Amendment”) was entered into on November 17, 2010 by the Company with Conqueror and the Conqueror Shareholder. The First Amendment amends the terms of the Share Exchange Agreement in which 1,004,900 shares shall be redeemed by the Company contemporaneously with the execution of the First Amendment at an aggregate redemption price of $55,270 (the “Group B Redemption Price”) and 12,782,900 shares shall be redeemed by the Company at or before the closing at an aggregate redemption price of $49,731 (the “Group C Redemption Price”) pursuant to mutually acceptable and duly executed redemption agreements. Contemporaneously with the execution of the First Amendment, Conqueror loaned the Company the principal amount of $55,270 in exchange for which the Company delivered a promissory note to Conqueror which proceeds were used to pay the Group B Redemption Price. The First Amendment further provides that at or before the closing, Conqueror shall loan the Company the principal amount of $49,731 which shall be paid from the funds remaining in escrow (the “Remaining Escrow Funds”) pursuant to the Escrow Agreement dated as of August 13, 2010, as amended on August 30, 2010, by and among Conqueror, the Company and Cyruli Shanks Hart & Zizmor LLP, in exchange for which the Company shall deliver a promissory note to Conqueror which proceeds shall be used to pay the Group C Redemption Price. The First Amendment also provides that in the event that the closing does not occur for any reason on or before January 31, 2011, then, among other things, the Remaining Escrow Funds shall be paid to the Company and used to promptly redeem 12,782,900 shares as provided therein at the Group C Redemption Price, and the then officers and directors of the Company shall resign with immediate effect and appoint such persons as designated by Conqueror as officers and directors. 17 The closing was to occur on or before January 31, 2011 but did it did not happen by that date. As a result, as of May 11, 2011, and in accordance with the terms of the First Amendment, the Remaining Escrow Funds were paid to the Company and were used to redeem 12,782,900 shares at the Group C Redemption Price and the Company delivered a promissory note to Conqueror in the principal amount of $49,731. In addition, on May 11, 2011, Michael M. Salerno, the Company’s sole officer and director, resigned as an officer and director of the Company, and appointed Chu Zhanjun and Li Gang as directors, and Chu Zhanjun as President, Chief Executive Officer and Principal Financial Officer of the Company, each a designee of Conqueror. As a result, a change in control has occurred, due to the resignation of Mr. Salerno as sole officer and director, appointment of Mr. Chu as President, Chief Executive Officer and Principal Financial Officer of the Company, and appointment of Mr. Chu and Mr. Li as directors. As of the date hereof, we do not expect that the transaction contemplated by the Share Exchange Agreement will be completed at any time in future. Management believes an opportunity may avail itself as a result of being a reporting company with common stock quoted on the OTCBB. Management believes there are savvy investors and/or businesses that understand the value of a public company and may be interested in the investment of capital, a merger or an acquisition. As a reporting company, our view of the Company value Economic conditions may be somewhat unsettled and may cause uneasiness with prospective businesses and speculative investors. Management believes there is a viable market of prospects that are searching for a public company in which they could invest, merge or acquire. However, we cannot guarantee nor claim that the Company will be able to find a suitable opportunity. RESULTS OF OPERATIONS Revenue was $0 for the three and six months ended June 30, 2012 compared to $0 for the three and six months ended June 30, 2011. Gross profit was $0 for the three and six months ended June 30, 2012 compared to $0 for the three and six months ended June 30, 2011. There was no cost of revenues for the three and six months ended June 30, 2012 compared to no cost of revenues for the three and six months ended June 30, 2011. Selling, general and administrative expenses were $20,203 and $39,011 for the three and six months ended June 30, 2012 compared to $16,355 and $37,981 for the three and six months ended June 30, 2011, an increase of $3,848 and $1,030, respectively, which increase was primarily due to higher professional fees related to maintaining the Company’s status as a public company. Interest expense was $1,313 and $2,372 for the three and six months ended June 30, 2012 compared to $1,597 and $2,285 for the three and six months ended June 30, 2011. IMPACT OF INFLATION Inflation has not had a material effect on our results of operations. LIQUIDITY AND CAPITAL RESOURCES Net cash used in operating activities was $0 for the There was no cash provided by or used in investing activities for the As of Obligations are being met on a month-to-month basis as cash becomes available. There can be no assurances that the Company’s present flow of cash will be sufficient to meet current and future obligations. The Company has incurred losses since its inception, and continues to require additional capital to fund its operations and meet SEC requirements of being a publicly held company. As such, the Company’s ability to pay its already incurred obligations is mostly dependent on the Company raising additional capital in the form of equity or debt. OFF-BALANCE SHEET ARRANGEMENTS We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital resources. Item 3. Quantitative and Qualitative Disclosures About Market Risk. We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. 19 Item 4. Controls and Procedures.
Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer has concluded that, as of The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) inadequate segregation of duties consistent with control objectives; and (2) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of Management believes that the material weaknesses set forth in items (1) and (2) above did not have an effect on our financial results. At this time, the Company does not have an audit committee and relies on its Board of Directors and executive management to monitor internal controls and procedures to ensure the Company is meeting its SEC obligations. (b) Changes in Internal Control over Financial Reporting There have not been any changes in the Company’s internal control over financial reporting during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. (c) Inherent Limitations on Effectiveness of Controls Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Item 1. Legal Proceedings There are no material pending legal proceedings to which the Company is a party or to which any of its property is subject. Item 1A. Risk Factors We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. None. Item 3. Defaults Upon Senior Securities None. Item 4. Mine Safety Disclosures None. Item 5. Other Information. None. 21 Item 6. Exhibits.
22 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.
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