Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Dec. 31, 2013 | Feb. 13, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'American Nano Silicon Technologies, Inc. | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Dec-13 | ' |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001415917 | ' |
Current Fiscal Year End Date | '--09-30 | ' |
Entity Common Stock, Shares Outstanding | ' | 46,917,445 |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Entity Incorporation, State Country Name | 'California | ' |
Entity Incorporation, Date of Incorporation | 6-Sep-96 | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
CONSOLIDATED BALANCE SHEETS | ' | ' |
Cash and cash equivalents | $532,111 | $75,901 |
Accounts receivable, net | 314,922 | 338,312 |
Inventory, net of reserve | 319,317 | 433,811 |
Advance Payments | 284,178 | 289,368 |
Prepaid expense and other receivables | 98,839 | 66,042 |
Prepaid value-added tax | 113,319 | 123,157 |
Total current assets | 1,662,686 | 1,326,591 |
Property, plant and equipment, net | 22,727,597 | 22,786,880 |
Land use rights, net | 1,013,326 | 1,013,848 |
Total other assets | 1,013,326 | 1,013,848 |
Total Assets | 25,403,609 | 25,127,319 |
Accounts payable | 169,271 | 187,605 |
Short term loans | 6,853,204 | 5,345,800 |
Taxes payable | 52,213 | 55,926 |
Due to related parties-current portion | 7,427,244 | 5,500,997 |
Long term loans-current portion | 2,469,542 | 2,438,187 |
Accrued expenses and other payables | 945,881 | 1,042,734 |
Total current liabilities | 17,917,355 | 14,571,249 |
Long term loans | 480,324 | 1,020,224 |
Due to related parties | 0 | 1,415,868 |
Total long-term liabilities | 480,324 | 2,436,092 |
Total liabilities | 18,397,679 | 17,007,341 |
Commitment and contingencies | ' | ' |
Common stock, $0.0001 par value, 200,000,000 shares authorized; 46,917,445 shares issued and outstanding as of December 31, 2013 and September 30, 2013, respectively | 4,692 | 4,692 |
Additional paid-in-capital | 14,555,929 | 14,474,258 |
Accumulated other comprehensive income | 2,339,087 | 2,291,219 |
Accumulated deficit | -9,893,777 | -8,650,191 |
Total stockholders' equity | 7,005,931 | 8,119,978 |
Total Liabilities and Stockholders' Equity | $25,403,610 | $25,127,319 |
CONSOLIDATED_BALANCE_SHEETS_PA
CONSOLIDATED BALANCE SHEETS PARENTHETICAL (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
CONSOLIDATED BALANCE SHEETS PARENTHETICAL | ' | ' |
Common stock par value | $0.00 | $0.00 |
Common stock shares authorized | 200,000,000 | 200,000,000 |
Common stock shares issued | 46,917,445 | 46,917,445 |
Common stock shares outstanding | 46,917,445 | 46,917,445 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ' | ' |
Revenues | $345,870 | $33,396 |
Cost of Goods Sold | 749,960 | 31,676 |
Gross Profit(Loss) | -404,090 | 1,720 |
Research and development expense | 16,483 | 0 |
Selling, general and administrative | 244,668 | 760,220 |
Total operating expenses | 261,151 | 760,220 |
Loss from operations | -665,241 | -758,500 |
Interest expense - related party | -155,716 | -29,490 |
Interest expense, net | -424,508 | -238,427 |
Change in fair value of derivative liabilities | 0 | 358,400 |
Other income | 1,977 | 222,416 |
Total other income(expense) | -578,247 | 312,899 |
Loss Before Income Taxes | -1,243,488 | -445,601 |
Provision for Income Taxes | 98 | 83 |
Net Loss | -1,243,586 | -445,684 |
Foreign currency translation adjustment | 47,868 | -61,834 |
Comprehensive Loss | ($1,195,718) | ($507,518) |
Loss per common share - Basic and diluted | ($0.03) | ($0.01) |
Weighted average number of common shares - Basic and diluted | 46,917,445 | 39,061,840 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ' | ' |
Net Loss | ($1,243,586) | ($445,684) |
Change in fair value of derivative liabilities | 0 | -358,400 |
Depreciation and amortization | 371,452 | 361,061 |
Stock based compensation expense | ' | ' |
Imputed interest expense for non interest bearing related party loans | 81,671 | 29,490 |
Impairment of property, plant and equipment | ' | ' |
Change in accounts receivable | 25,408 | -8,440 |
Change in inventory | 116,876 | -74,521 |
Change in advances to suppliers | 6,952 | -149,787 |
Change in prepaid expense and other receivables | -32,313 | -709,347 |
Change in accounts payable | -19,441 | -47,736 |
Change in taxes payable | 6,523 | -7,934 |
Change in accrued expenses and other payables | -102,865 | 109,089 |
Cash used in operating activities | -789,323 | -1,302,209 |
Additions to property and equipment | -165,775 | -54,563 |
Cash used in investing activities | -165,775 | -54,563 |
Proceeds from bank note payable | 0 | 714,603 |
Proceeds (repayment) of related parties loans, net | 466,697 | -106,454 |
Proceeds from short term loans | 1,470,922 | 476,402 |
Proceeds (repayment) of long term loans | -527,906 | 1,070,970 |
Cash provided by financing activities | 1,409,713 | 2,155,521 |
Effect of exchange rate changes on cash and cash equivalents | 1,595 | 4,109 |
Increase in cash and cash equivalents | 456,210 | 802,858 |
Cash and Cash Equivalents - Beginning of the period | 75,901 | 56,661 |
Cash and Cash Equivalents - End of the period | 532,111 | 859,519 |
Cash paid for interest expense | 461,816 | 208,281 |
Cash paid for income tax | $97 | $414 |
Note_1_Organization_and_Basis_
Note 1 - Organization and Basis of Presentation | 3 Months Ended |
Dec. 31, 2013 | |
Notes | ' |
Note 1 - Organization and Basis of Presentation | ' |
Note 1 – Organization and Nature of Business | |
American Nano-Silicon Technologies, Inc. (the “Company” or “ANNO”) was incorporated in the State of California on September 6, 1996. Since 2006, the Company has been primarily engaged in the business of manufacturing and distributing refined consumer chemical products through its subsidiaries, Nanchong Chunfei Nano-Silicon Technologies Co., Ltd. (“Nanchong Chunfei”), Sichuan Chunfei Refined Chemicals Co., Ltd. (“Chunfei Chemicals”), and Sichuan Hedi Veterinary Medicines Co., Ltd. (“Hedi Medicines”). | |
On May 28, 2013, the Company assigned 10% of the equity in Chunfei Chemicals to each of Mr. Fachun Pu, Mr. Qiwei Zhang and Mr. Jianbo Liu, and assigned 5% of the equity in Hedi Medicines to Mr. Fachun Pu, and the assignees paid to the Company cash equal to the registered equity amount. At the same time, Messrs Pu, Zhang and Liu agreed to hold those equity interests solely for the benefit of the Company, to pay over to the Company any distributions or dividends they receive, to vote their interests as directed by the Company, and to resell the interests to the Company at its option for cash equal to the registered equity amount. |
Note_2_Summary_of_Significant_
Note 2 - Summary of Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2013 | |
Notes | ' |
Note 2 - Summary of Significant Accounting Policies | ' |
Note 2 – Summary of Significant Accounting Policies | |
Basis Of Presentation and Consolidation | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United Stated of America (“US GAAP”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. | |
The unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of December 31, 2013 and the results of operations and cash flows for the three month periods ended December 31, 2013 and 2012. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three months ended December 31, 2013 are not necessarily indicative of the results to be expected for any subsequent periods or for the entire year ending September 30, 2014. The balance sheet at September 30, 2013 has been derived from the audited financial statements at that date. | |
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended September 30, 2013 as included in our Annual Report on Form 10-K. | |
Reclassifications | |
Certain amounts of prior period were reclassified for presentation purposes. | |
Fair Value of Financial Instruments | |
The Company adopted the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: | |
Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. | |
Level 2- Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. | |
Level 3- Inputs are unobservable inputs which reflect the reporting entity’s own assumptions. | |
The carrying amounts reported in the balance sheets for cash, taxes payable, construction security deposit, due to related parties, prepaid expenses, other receivables, advance to suppliers, short-term loan, accounts payable, advance from customers, other payables and accrued expenses approximate their fair market value based on the short-term nature of these instruments. The carrying value of the long-term debt approximates fair value based on market rates and terms currently available to the Company. | |
Taxation | |
Income taxes | |
The Company accounts for income tax under the provisions of ASC 740-10-25, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the events that have been included in the financial statements or tax returns. Deferred income taxes are recognized for all significant temporary differences between tax and financial statements bases of assets and liabilities. Valuation allowances will also be established against net deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. | |
Uncertain tax positions | |
During the course of business, there are certain transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes may be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of a tax audit or changes in the tax law. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. | |
Value Added Tax | |
Value added tax is imposed on goods sold in or imported in the PRC. Value added tax payable in the People’s Republic of China is charged on an aggregated basis at a rate of 13% or 17% (depending on the type of goods involved) on the full price collected for the goods sold or, in the case of taxable services provided, at a rate of 17% on the charges for the taxable services provided, but excluding, in respect of both goods and services, any amount paid in respect of value added tax included in the price or charges, and less any deductible value added tax already paid by the taxpayer on purchases of goods and services in the same financial year. The value added tax refundable for the Company as of December 31, 2013 and September 30, 2013 was $113,319 and $123,157, respectively. | |
Earnings (Loss) Per Share | |
Earnings per share are calculated in accordance with the FASB ASC 260, “Earnings per share.” Basic earnings per share are based upon the weighted average number of common shares outstanding, but excluding shares issued as compensation that have not yet vested. Diluted earnings per share are based on the assumption that all dilutive convertible shares and stock options were converted or exercised, and that all unvested shares have vested. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. | |
Concentration of Credit Risk | |
Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of advances to suppliers and other receivables arising from its normal business activities. The Company does not require collateral or other security to support these receivables. The company routinely assesses the financial strength of its debtors and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts. | |
Foreign Currency Translation | |
The Company’s principal country of operations is the PRC. The financial position and results of operations of the Company are determined using the local currency, Renminbi (“RMB”), as the functional currency. Foreign currency transactions are translated at the applicable rates of exchange in effect at the transaction dates. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. Revenues and expenses are translated at the average exchange rates in effect during the reporting period. Equity accounts are translated in the historical exchange rate when the transactions took place. | |
Asset and liability accounts at December 31, 2013 and September 30, 2013 were translated at 6.1125 RMB to $1.00 and at 6.1501 RMB to $1.00, respectively, which were the exchange rates on the balance sheet dates. Equity accounts were stated at their historical rate. The average translation rates applied to the statements of income and cash flows for the three months ended December 31, 2013 and 2012 were 6.1275 RMB and 6.2972 RMB to $1.00, respectively. | |
RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC, which are determined largely by supply and demand. | |
Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders' equity as "Accumulated Other Comprehensive Income". Gain or loss from translation adjustments is included in the statement of operations. | |
Note_3_Going_Concern
Note 3 - Going Concern | 3 Months Ended |
Dec. 31, 2013 | |
Notes | ' |
Note 3 - Going Concern | ' |
Note 3 – Going Concern | |
As shown in the accompanying financial statements, the Company’s current liabilities exceed its current assets by $16.3 million as of December 31, 2013. The Company suspended manufacturing operations in May 2011 as part of an effort to relocate the production facilities. The Company resumed limited production on January 2, 2012. The current cash and inventory level will not be sufficient to support the Company’s resumption of its normal operations and repayments of the loans. In addition, the Company has suffered negative cash flows for the past two years. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The Company will need additional funds to meet its operating and financing obligations until sufficient cash flows are generated from anticipated production to sustain operations and to fund future development and financing obligations. We expect, but provide no assurance, that affiliate companies owned by the Company’s largest shareholder and president, Mr. Pu Fachun, will continue to provide necessary funding for the Company’s normal operations. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. | |
16,300,000 | |
Note_4_Inventory
Note 4 - Inventory | 3 Months Ended | ||
Dec. 31, 2013 | |||
Notes | ' | ||
Note 4 - Inventory | ' | ||
Note 4 – Inventory | |||
The inventory as of December 31, 2013 and September 30, 2013 consisted of the following: | |||
31-Dec-13 | 30-Sep-13 | ||
Raw materials | $ 58,628 | $ 128,669 | |
Packing supplies | 37,002 | 40,393 | |
Work in process | 109,890 | 60,032 | |
Finished goods | 113,797 | 204,717 | |
Total | $319,317 | $433,811 |
Note_5_Related_Party_Transacti
Note 5 - Related Party Transactions | 3 Months Ended | ||
Dec. 31, 2013 | |||
Notes | ' | ||
Note 5 - Related Party Transactions | ' | ||
Note 5 – Related Party Transactions | |||
The Company periodically borrows money from its shareholders to finance the operations. The details of loans from related parties are as follows: | |||
31-Dec-13 | 30-Sep-13 | ||
Short term: | |||
Chunfei Real Estate | $1,132,096 | $856,163 | |
Sichuan Chunfei Daily Chemical | 484,924 | 364,723 | |
Sichuan Shubei Feed Co.Ltd. | 63,313 | 16,260 | |
Sichuan Lanmate Technology Co. Ltd. | 2,951,848 | 2,614,811 | |
Jian Zhou, a shareholder | 32,720 | - | |
Pu Fachun | 2,762,343 | 1,649,040 | |
Total | $7,427,244 | $5,500,997 | |
Long term: | |||
Pu Fachun | $ - | $1,415,868 | |
Total | $ - | $1,415,868 | |
Sichuan Chunfei Daily Chemicals Co. Ltd (“Daily Chemical”) and Sichuan Chunfei Real Estate (“Chunfei Real Estate”) are owned by Mr. Pu Fachun. Sichuan Shubei Feed Co.Ltd. is owned by Mr. Pu Xidi, son of Mr. Pu Fachun. Sichuan Lanmate Technology Co., Ltd. is owned by Mr. Zhang Qiwei, a member of the Company’s Board of Directors. | |||
The Company recorded imputed interest at 6% per annum and recorded $81,671 and $29,490 for non-interest bearing related party loans for the three months ended December 31, 2013 and 2012, respectively. |
Note_6_Short_Term_Loans
Note 6 - Short Term Loans | 3 Months Ended | ||
Dec. 31, 2013 | |||
Notes | ' | ||
Note 6 - Short Term Loans | ' | ||
Note 6 – Short Term Loans | |||
The short term loans as of ecember 31, 2013 and September 30, 2013 consisted of the following: | |||
31-Dec-13 | 30-Sep-13 | ||
a) Loan payable to Nanchong City Bureau of Finance due on demand at fixed interest rate of 0.465% per month | $ 654,400 | $ 650,400 | |
b) Loan payable to Nanchong Commercial Bank due on January 24, 2014, which was paid in full in January 2014, and July 1, 2014, at fixed interest rate of 6.6% per annum, guaranteed by a third party | 1,636,000 | 1,626,000 | |
c) Loan payable to Nanchong Bank of Communications due on July 1, 2014, at floating interest rate, guaranteed by third parties, Mr. Pu Fachun, Zhang Xuchu and Feng Ting, Hedi Medicines | 818,000 | 813,000 | |
d) Individual loans from unrelated parties, which are due on demand and bearing interests from 0% to 72% per annum | 3,744,804 | 2,256,400 | |
Total Short Term Loans | $6,853,204 | $5,345,800 | |
The Company pledged its land use right and its building and equipment to a third party to secure the bank loans. | |||
Note_7_Long_Term_Loans
Note 7 - Long Term Loans | 3 Months Ended | ||
Dec. 31, 2013 | |||
Notes | ' | ||
Note 7 - Long Term Loans | ' | ||
Note 7 – Long Term Loans | |||
The long term loans as of December 31, 2013 and September 30, 2013 consisted of the following: | |||
31-Dec-13 | 30-Sep-13 | ||
a) Individual loans from unrelated parties at monthly interest rate of 0%-6% | $2,849,866 | $3,358,411 | |
b) Individual loans from various investors, bearing interest of 12% per annum and due on July 1, 2015, as extended | 100,000 | 100,000 | |
Less: current portion of long term loans | 2,469,542 | 2,438,187 | |
Total Long Term Loans | $480,324 | $1,020,224 | |
On December 20, 2013, the Company entered into a long term bank loan agreement with Jialing Rural Credit Cooperative Union for $4,744,400 (RMB29,000,000). Pursuant to the Loan Agreement, the principle will be paid on December 19, 2015. The monthly interest rate is 8.97%. The loan was secured by Chunfei Chemicals’ real property and Chunfei Real Estate’s real property. During January 2014, the Company received the fund. |
Note_8_Income_Taxes
Note 8 - Income Taxes | 3 Months Ended | ||||
Dec. 31, 2013 | |||||
Notes | ' | ||||
Note 8 - Income Taxes | ' | ||||
Note 8 – Income Taxes | |||||
The Company’s subsidiaries are governed by the Income Tax Law of the People’s Republic of China. Their income is taxed at the 25% statutory rate. Hedi Medicine has been taxed at a flat rate of 260 RMB per quarter since calendar 2012. | |||||
The following table reconciles the U.S. statutory rates to the Company’s effective tax rate for the three months ended December 31, 2013 and 2012: | |||||
Three Months Ended December 31, | |||||
2013 | 2012 | ||||
US statutory income tax rate | 35% | 35% | |||
Non-taxable item in US | 0% | -28% | |||
Change in valuation allowance – US | -35% | -7% | |||
China income tax statutory rate | 25% | 25% | |||
Change in valuation allowance - China | -25% | -25% | |||
Effective rate | - | - | |||
As of December 31, 2013, net operating loss carry forwards for United States and China income tax purposes amounted to $2.5 million and $11.5 million, which may be available to reduce future years' taxable income. These carry forwards will expire, if not utilized, beginning in 2028 through 2033 for U.S tax purpose and 2017 to 2018 for China income tax purposes. Management believes that the realization of the benefits arising from the losses recognized in the US is uncertain due to the Company's business operations being primarily conducted in China and foreign income not being recognized in the United States for federal income tax purposes. It is also uncertain that the China business operations will generate taxable income in the future. Accordingly, the Company has provided a 100% valuation allowance as of the balance sheet dates, for the temporary differences related to the loss carry-forwards. | |||||
The following table reconciles the changes in deferred tax asset for the three months ended December 31, 2013 and 2012: | |||||
$2,500,000 | |||||
$11,500,000 | |||||
31-Dec-13 | 31-Dec-12 | ||||
United States: | |||||
Deferred tax asset-beginning | $ 855,293 | $ 658,622 | |||
Addition: loss carry-forward | 2,514 | 177,947 | |||
Valuation allowance-beginning | -855,293 | -658,622 | |||
Addition: valuation allowance | (2,514) | (177,947) | |||
Deferred tax asset net | $ - | $ - | |||
China: | |||||
Deferred tax asset-beginning | $ 2,084,623 | $ 185,246 | |||
Addition: loss carry-forward | 309,077 | 26,275 | |||
Valuation allowance-beginning | -2,084,623 | -185,246 | |||
Addition: valuation allowance | (309,077) | (26,275) | |||
Deferred tax asset net | $ - | $ - | |||
The Company’s open tax years for its federal and state income tax returns are for the tax years after 2010. These tax returns are subject to examination by the tax authorities. |
Note_9_Earnings_loss_Per_Share
Note 9 - Earnings (loss) Per Share | 3 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Notes | ' | ||||||
Note 9 - Earnings (loss) Per Share | ' | ||||||
Note 9 – Earnings (Loss) Per Share | |||||||
The Company presents earnings (loss) per share on a basic and diluted basis. Basic earnings (loss) per share has been computed by dividing net earnings by the weighted average number of shares outstanding. Diluted earnings (loss) per share has been computed by dividing net earnings by the weighted average number of shares outstanding including the dilutive effect of equity securities. For the three months ended December 31, 2013, the weighted average number of shares calculated for diluted EPS excludes the potential common stock that would be exercised under the warrants granted to investors because of their anti-dilutive effect. | |||||||
The following is a reconciliation of the basic and diluted earnings (loss) per share computation: | |||||||
Three Months Ended December 31, | |||||||
2013 | 2012 | ||||||
Net loss | ($1,243,586) | $ (445,684) | |||||
Weighted average common shares | |||||||
(denominator for basic loss per share) | 46,917,445 | 39,061,840 | |||||
Effect of dilutive securities: | |||||||
Warrants | - | - | |||||
Weighted average common shares | |||||||
(denominator for diluted loss per share) | 46,917,445 | 39,061,840 | |||||
Basic and diluted loss per share | $ (0.03) | $ (0.01) | |||||
Note_10_Risk_Factors
Note 10 - Risk Factors | 3 Months Ended |
Dec. 31, 2013 | |
Notes | ' |
Note 10 - Risk Factors | ' |
Note 10 – Risk Factors | |
Concentrations | |
For the three months ended December 31, 2013, three customers accounted for 67.7%, 12.8% and 11.3% of total sales, and two vendors accounted for 43.7% and 19.9% of total purchases. | |
We generated very limited sales and made very limited purchases in the three months ended December 31, 2012. Therefore we did not rely on any particular customer or vendor for the period. | |
None of the vendors and customers mentioned above is a related party to the Company. | |
Operations in the PRC | |
The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and the legal environments in the PRC as well as by the general state of the PRC’s economy. The Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. |
Note_11_Commitment_and_Conting
Note 11 - Commitment and Contingencies | 3 Months Ended |
Dec. 31, 2013 | |
Notes | ' |
Note 11 - Commitment and Contingencies | ' |
Note 11 – Commitment and Contingencies | |
LITIGATION | |
During the 2013 fiscal year, Jian Zhou, a shareholder, commenced a legal action against American Nano Silicon Technologies, Inc. Mr. Zhou alleges that he is entitled to 857,142 shares of American Nano common stock in connection with the acquisition of Nanchong Chunfei by American Nano in 2007. In response to the allegation, American Nano has asserted that all of the shares to which Mr. Zhou was entitled were issued to him. The trial court has dismissed Mr. Zhou’s claim, and he has appealed the dismissal to the court of appeals. |
Note_12_Subsequent_Event
Note 12 - Subsequent Event | 3 Months Ended |
Dec. 31, 2013 | |
Notes | ' |
Note 12 - Subsequent Event | ' |
NOTE 12 –SUBSEQUENT EVENT | |
The Company has evaluated subsequent events for purposes of recognition or disclosure through the date these financial statements were issued, and has determined that there was no material event that occurred subsequent to December 31, 2013. |
Note_2_Summary_of_Significant_1
Note 2 - Summary of Significant Accounting Policies: Basis of Accounting (Policies) | 3 Months Ended |
Dec. 31, 2013 | |
Policies | ' |
Basis of Accounting | ' |
Basis Of Presentation and Consolidation | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United Stated of America (“US GAAP”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. | |
The unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of December 31, 2013 and the results of operations and cash flows for the three month periods ended December 31, 2013 and 2012. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three months ended December 31, 2013 are not necessarily indicative of the results to be expected for any subsequent periods or for the entire year ending September 30, 2014. The balance sheet at September 30, 2013 has been derived from the audited financial statements at that date. | |
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended September 30, 2013 as included in our Annual Report on Form 10-K. |
Note_2_Summary_of_Significant_2
Note 2 - Summary of Significant Accounting Policies: Reclassifications (Policies) | 3 Months Ended |
Dec. 31, 2013 | |
Policies | ' |
Reclassifications | ' |
Reclassifications | |
Certain amounts of prior period were reclassified for presentation purposes. |
Note_2_Summary_of_Significant_3
Note 2 - Summary of Significant Accounting Policies: Fair Value of Financial Instruments (Policies) | 3 Months Ended |
Dec. 31, 2013 | |
Policies | ' |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments | |
The Company adopted the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: | |
Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. | |
Level 2- Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. | |
Level 3- Inputs are unobservable inputs which reflect the reporting entity’s own assumptions. | |
The carrying amounts reported in the balance sheets for cash, taxes payable, construction security deposit, due to related parties, prepaid expenses, other receivables, advance to suppliers, short-term loan, accounts payable, advance from customers, other payables and accrued expenses approximate their fair market value based on the short-term nature of these instruments. The carrying value of the long-term debt approximates fair value based on market rates and terms currently available to the Company. |
Note_2_Summary_of_Significant_4
Note 2 - Summary of Significant Accounting Policies: Income Taxes (Policies) | 3 Months Ended |
Dec. 31, 2013 | |
Policies | ' |
Income Taxes | ' |
Income taxes | |
The Company accounts for income tax under the provisions of ASC 740-10-25, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the events that have been included in the financial statements or tax returns. Deferred income taxes are recognized for all significant temporary differences between tax and financial statements bases of assets and liabilities. Valuation allowances will also be established against net deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. | |
Note_2_Summary_of_Significant_5
Note 2 - Summary of Significant Accounting Policies: Uncertain Tax Positions (Policies) | 3 Months Ended |
Dec. 31, 2013 | |
Policies | ' |
Uncertain Tax Positions | ' |
Uncertain tax positions | |
During the course of business, there are certain transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes may be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of a tax audit or changes in the tax law. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. |
Note_2_Summary_of_Significant_6
Note 2 - Summary of Significant Accounting Policies: Earnings (loss) Per Share (Policies) | 3 Months Ended |
Dec. 31, 2013 | |
Policies | ' |
Earnings (loss) Per Share | ' |
Earnings (Loss) Per Share | |
Earnings per share are calculated in accordance with the FASB ASC 260, “Earnings per share.” Basic earnings per share are based upon the weighted average number of common shares outstanding, but excluding shares issued as compensation that have not yet vested. Diluted earnings per share are based on the assumption that all dilutive convertible shares and stock options were converted or exercised, and that all unvested shares have vested. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. |
Note_2_Summary_of_Significant_7
Note 2 - Summary of Significant Accounting Policies: Concentration of Credit Risk (Policies) | 3 Months Ended |
Dec. 31, 2013 | |
Policies | ' |
Concentration of Credit Risk | ' |
Concentration of Credit Risk | |
Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of advances to suppliers and other receivables arising from its normal business activities. The Company does not require collateral or other security to support these receivables. The company routinely assesses the financial strength of its debtors and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts. |
Note_2_Summary_of_Significant_8
Note 2 - Summary of Significant Accounting Policies: Foreign Currency Translation (Policies) | 3 Months Ended |
Dec. 31, 2013 | |
Policies | ' |
Foreign Currency Translation | ' |
Foreign Currency Translation | |
The Company’s principal country of operations is the PRC. The financial position and results of operations of the Company are determined using the local currency, Renminbi (“RMB”), as the functional currency. Foreign currency transactions are translated at the applicable rates of exchange in effect at the transaction dates. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. Revenues and expenses are translated at the average exchange rates in effect during the reporting period. Equity accounts are translated in the historical exchange rate when the transactions took place. | |
Asset and liability accounts at December 31, 2013 and September 30, 2013 were translated at 6.1125 RMB to $1.00 and at 6.1501 RMB to $1.00, respectively, which were the exchange rates on the balance sheet dates. Equity accounts were stated at their historical rate. The average translation rates applied to the statements of income and cash flows for the three months ended December 31, 2013 and 2012 were 6.1275 RMB and 6.2972 RMB to $1.00, respectively. | |
RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC, which are determined largely by supply and demand. | |
Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders' equity as "Accumulated Other Comprehensive Income". Gain or loss from translation adjustments is included in the statement of operations. |
Note_4_Inventory_Schedule_of_I
Note 4 - Inventory: Schedule of Inventory, Current (Tables) | 3 Months Ended | ||
Dec. 31, 2013 | |||
Tables/Schedules | ' | ||
Schedule of Inventory, Current | ' | ||
31-Dec-13 | 30-Sep-13 | ||
Raw materials | $ 58,628 | $ 128,669 | |
Packing supplies | 37,002 | 40,393 | |
Work in process | 109,890 | 60,032 | |
Finished goods | 113,797 | 204,717 | |
Total | $319,317 | $433,811 |
Note_5_Related_Party_Transacti1
Note 5 - Related Party Transactions: Schedule of Related Party Transactions (Tables) | 3 Months Ended | ||
Dec. 31, 2013 | |||
Tables/Schedules | ' | ||
Schedule of Related Party Transactions | ' | ||
31-Dec-13 | 30-Sep-13 | ||
Short term: | |||
Chunfei Real Estate | $1,132,096 | $856,163 | |
Sichuan Chunfei Daily Chemical | 484,924 | 364,723 | |
Sichuan Shubei Feed Co.Ltd. | 63,313 | 16,260 | |
Sichuan Lanmate Technology Co. Ltd. | 2,951,848 | 2,614,811 | |
Jian Zhou, a shareholder | 32,720 | - | |
Pu Fachun | 2,762,343 | 1,649,040 | |
Total | $7,427,244 | $5,500,997 | |
Long term: | |||
Pu Fachun | $ - | $1,415,868 | |
Total | $ - | $1,415,868 |
Note_6_Short_Term_Loans_Schedu
Note 6 - Short Term Loans: Schedule of Debt (Tables) | 3 Months Ended | ||
Dec. 31, 2013 | |||
Tables/Schedules | ' | ||
Schedule of Debt | ' | ||
31-Dec-13 | 30-Sep-13 | ||
a) Loan payable to Nanchong City Bureau of Finance due on demand at fixed interest rate of 0.465% per month | $ 654,400 | $ 650,400 | |
b) Loan payable to Nanchong Commercial Bank due on January 24, 2014, which was paid in full in January 2014, and July 1, 2014, at fixed interest rate of 6.6% per annum, guaranteed by a third party | 1,636,000 | 1,626,000 | |
c) Loan payable to Nanchong Bank of Communications due on July 1, 2014, at floating interest rate, guaranteed by third parties, Mr. Pu Fachun, Zhang Xuchu and Feng Ting, Hedi Medicines | 818,000 | 813,000 | |
d) Individual loans from unrelated parties, which are due on demand and bearing interests from 0% to 72% per annum | 3,744,804 | 2,256,400 | |
Total Short Term Loans | $6,853,204 | $5,345,800 |
Note_7_Long_Term_Loans_Schedul
Note 7 - Long Term Loans: Schedule of Long Term Loans (Tables) | 3 Months Ended | ||
Dec. 31, 2013 | |||
Tables/Schedules | ' | ||
Schedule of Long Term Loans | ' | ||
31-Dec-13 | 30-Sep-13 | ||
a) Individual loans from unrelated parties at monthly interest rate of 0%-6% | $2,849,866 | $3,358,411 | |
b) Individual loans from various investors, bearing interest of 12% per annum and due on July 1, 2015, as extended | 100,000 | 100,000 | |
Less: current portion of long term loans | 2,469,542 | 2,438,187 | |
Total Long Term Loans | $480,324 | $1,020,224 |
Note_8_Income_Taxes_Schedule_o
Note 8 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables) | 3 Months Ended | ||||
Dec. 31, 2013 | |||||
Tables/Schedules | ' | ||||
Schedule of Effective Income Tax Rate Reconciliation | ' | ||||
Three Months Ended December 31, | |||||
2013 | 2012 | ||||
US statutory income tax rate | 35% | 35% | |||
Non-taxable item in US | 0% | -28% | |||
Change in valuation allowance – US | -35% | -7% | |||
China income tax statutory rate | 25% | 25% | |||
Change in valuation allowance - China | -25% | -25% | |||
Effective rate | - | - |
Note_8_Income_Taxes_Schedule_o1
Note 8 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables) | 3 Months Ended | ||
Dec. 31, 2013 | |||
Tables/Schedules | ' | ||
Schedule of Deferred Tax Assets and Liabilities | ' | ||
31-Dec-13 | 31-Dec-12 | ||
United States: | |||
Deferred tax asset-beginning | $ 855,293 | $ 658,622 | |
Addition: loss carry-forward | 2,514 | 177,947 | |
Valuation allowance-beginning | -855,293 | -658,622 | |
Addition: valuation allowance | (2,514) | (177,947) | |
Deferred tax asset net | $ - | $ - | |
China: | |||
Deferred tax asset-beginning | $ 2,084,623 | $ 185,246 | |
Addition: loss carry-forward | 309,077 | 26,275 | |
Valuation allowance-beginning | -2,084,623 | -185,246 | |
Addition: valuation allowance | (309,077) | (26,275) | |
Deferred tax asset net | $ - | $ - |
Note_9_Earnings_loss_Per_Share1
Note 9 - Earnings (loss) Per Share: Schedule of Earnings Per Share, Basic and Diluted (Tables) | 3 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Tables/Schedules | ' | ||||||
Schedule of Earnings Per Share, Basic and Diluted | ' | ||||||
Three Months Ended December 31, | |||||||
2013 | 2012 | ||||||
Net loss | ($1,243,586) | $ (445,684) | |||||
Weighted average common shares | |||||||
(denominator for basic loss per share) | 46,917,445 | 39,061,840 | |||||
Effect of dilutive securities: | |||||||
Warrants | - | - | |||||
Weighted average common shares | |||||||
(denominator for diluted loss per share) | 46,917,445 | 39,061,840 | |||||
Basic and diluted loss per share | $ (0.03) | $ (0.01) | |||||
Note_1_Organization_and_Basis_1
Note 1 - Organization and Basis of Presentation (Details) | 3 Months Ended |
Dec. 31, 2013 | |
Details | ' |
Entity Incorporation, State Country Name | 'California |
Entity Incorporation, Date of Incorporation | 6-Sep-96 |
Note_2_Summary_of_Significant_9
Note 2 - Summary of Significant Accounting Policies (Details) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
Details | ' | ' |
Prepaid value-added tax | $113,319 | $123,157 |
Recovered_Sheet1
Note 2 - Summary of Significant Accounting Policies: Foreign Currency Translation (Details) | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
StatementsOfIncomeAndCashFlowMember | StatementsOfIncomeAndCashFlowMember | |||
Foreign Currency Translation | 6.1125 | 6.1501 | 6.1275 | 6.2972 |
Note_3_Going_Concern_Details
Note 3 - Going Concern (Details) (USD $) | 3 Months Ended |
Dec. 31, 2013 | |
Details | ' |
Working capital deficiency | $16,300,000 |
Note_4_Inventory_Schedule_of_I1
Note 4 - Inventory: Schedule of Inventory, Current (Details) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
Details | ' | ' |
Inventory, Raw Materials, Gross | $58,628 | $128,669 |
Packing Supplies | 37,002 | 40,393 |
Inventory, Work in Process, Gross | 109,890 | 60,032 |
Inventory, Finished Goods, Gross | 113,797 | 204,717 |
Inventory, net of reserve | $319,317 | $433,811 |
Note_5_Related_Party_Transacti2
Note 5 - Related Party Transactions: Schedule of Related Party Transactions (Details) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
Due to related parties-current portion | $7,427,244 | $5,500,997 |
Due to related parties | 0 | 1,415,868 |
Chunfei Real Estate | ' | ' |
Due to related parties-current portion | 1,132,096 | 856,163 |
Sichuan Chunfei Daily Chemical | ' | ' |
Due to related parties-current portion | 484,924 | 364,723 |
Sichuan Shubei Feed Co Ltd | ' | ' |
Due to related parties-current portion | 63,313 | 16,260 |
Sichuan Lanmate Technology | ' | ' |
Due to related parties-current portion | 2,951,848 | 2,614,811 |
Jian Zhou | ' | ' |
Due to related parties-current portion | 32,720 | ' |
Pu Fachun | ' | ' |
Due to related parties-current portion | 2,762,343 | 1,649,040 |
Due to related parties | ' | $1,415,868 |
Note_5_Related_Party_Transacti3
Note 5 - Related Party Transactions (Details) (USD $) | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Details | ' | ' |
Imputed interest expense for non interest bearing related party loans | $81,671 | $29,490 |
Note_6_Short_Term_Loans_Schedu1
Note 6 - Short Term Loans: Schedule of Debt (Details) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
Short term loans | $6,853,204 | $5,345,800 |
Nanchong City Bureau | ' | ' |
Short term loans | 654,400 | 650,400 |
Bank Of Nanchong | ' | ' |
Short term loans | 1,636,000 | 1,626,000 |
Nanchong Bank of Communications | ' | ' |
Short term loans | 818,000 | 813,000 |
Individual Loan Unrelated Party | ' | ' |
Short term loans | $3,744,804 | $2,256,400 |
Note_7_Long_Term_Loans_Schedul1
Note 7 - Long Term Loans: Schedule of Long Term Loans (Details) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
Long term loans | $480,324 | $1,020,224 |
Long term loans-current portion | 2,469,542 | 2,438,187 |
Individual Loan Unrelated Party | ' | ' |
Long term loans | 2,849,866 | 3,358,411 |
Individual Loan Various Unrelated Investors | ' | ' |
Long term loans | $100,000 | $100,000 |
Note_7_Long_Term_Loans_Details
Note 7 - Long Term Loans (Details) (USD $) | Dec. 20, 2013 |
Details | ' |
Long Term Bank Loan Agreement with Jialing Rural Credit Cooperative Union | $4,744,400 |
Note_8_Income_Taxes_Schedule_o2
Note 8 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
UnitedStates | ' | ' |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 35.00% |
Non-taxable item | 0.00% | -28.00% |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | -35.00% | -7.00% |
China | ' | ' |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | 25.00% |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | -25.00% | -25.00% |
Note_8_Income_Taxes_Details
Note 8 - Income Taxes (Details) (USD $) | Dec. 31, 2013 |
UnitedStates | ' |
Unrecognized Tax Benefits Resulting in Net Operating Loss Carryforward | $2,500,000 |
China | ' |
Unrecognized Tax Benefits Resulting in Net Operating Loss Carryforward | $11,500,000 |
Note_8_Income_Taxes_Schedule_o3
Note 8 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) (USD $) | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
UnitedStates | ' | ' |
Deferred Tax Assets, Net, Current | $855,293 | $658,622 |
Deferred Tax Assets, Operating Loss Carryforwards | 2,514 | 177,947 |
Deferred Tax Assets, Valuation Allowance, Current | -855,293 | -658,622 |
Valuation Allowance, Deferred Tax Asset, Change in Amount | -2,514 | -177,947 |
China | ' | ' |
Deferred Tax Assets, Net, Current | 2,084,623 | 185,246 |
Deferred Tax Assets, Operating Loss Carryforwards | 309,077 | 26,275 |
Deferred Tax Assets, Valuation Allowance, Current | -2,084,623 | -185,246 |
Valuation Allowance, Deferred Tax Asset, Change in Amount | ($309,077) | ($26,275) |
Note_9_Earnings_loss_Per_Share2
Note 9 - Earnings (loss) Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) (USD $) | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Details | ' | ' |
Net Loss | ($1,243,586) | ($445,684) |
Weighted average number of common shares - Basic | 46,917,445 | 39,061,840 |
Weighted average number of common shares - Diluted | 46,917,445 | 39,061,840 |
Loss per common share - Basic and diluted | ($0.03) | ($0.01) |
Note_10_Risk_Factors_Details
Note 10 - Risk Factors (Details) | 3 Months Ended |
Dec. 31, 2013 | |
Details | ' |
Concentration Risk, Customer | 'three customers accounted for 67.7%, 12.8% and 11.3% of total sales |
Concentration Risk, Supplier | 'two vendors accounted for 43.7% and 19.9% of total purchases |