UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE EXCHANGE ACT
For the transition period from ___________ to _____________
CHINA LIAONING DINGXU ECOLOGICAL AGRICULTURE DEVELOPMENT, INC.
(Exact name of small business issuer as specified in its charter)
Commission File No. 333-170480
| Nevada | 80-0638212 |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
17800 Castleton St,
City of Industry, CA, 91748
(Address of Principal Executive Offices)
812-933-8888
(Issuer’s telephone number)
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 ☒ *
* The registrant is a voluntary filer of reports required to be filed by certain companies under Section 13 or 15(d) of the Securities Exchange Act of 1934 and has filed all reports that would have been required to have been filed by the registrant during the preceding 12 months had it been subject to such filing requirements during the entirety of such period.
Indicate by check mark whether the registrant has submitted electronically 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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| Emerging growth company | ☐ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of May 6, 2023, there were shares of common stock of the registrant outstanding.
Table of Contents
| PART I – FINANCIAL INFORMATION | |
| Item 1. Financial Statements | 4 |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 11 |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 14 |
| Item 4. Controls and Procedures | 14 |
| PART II – OTHER INFORMATION | |
| Item 1. Legal Proceedings | 15 |
| Item 1A. Risk Factors | 15 |
| Item 2. Unregistered Sales of Securities and Use of Proceeds | 15 |
| Item 3. Defaults Upon Senior Securities | 15 |
| Item 4. Mine Safety Disclosure | 15 |
| Item 5. Other Information | 15 |
| Item 6. Exhibits | 15 |
| SIGNATURES | 16 |
| EXHIBIT 31.1 | |
| EXHIBIT 32.1 |
| 2 |
Forward-Looking Statements
Various statements contained in this report constitute “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are based on current expectations and are indicated by words or phrases such as “believe,” “expect,” “may,” “will,” “should,” “seek,” “plan,” “intend” or “anticipate” or the negative thereof or comparable terminology, or by discussion of strategy. Forward-looking statements represent as of the date of this report our judgment relating to, among other things, future results of operations, growth plans, sales, capital requirements and general industry and business conditions applicable to us. Such forward-looking statements are based largely on our current expectations and are inherently subject to risks and uncertainties. Our actual results could differ materially from those that are anticipated or projected as a result of certain risks and uncertainties, including, but not limited to, a number of factors, such as: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles and the other risks and uncertainties that are set forth in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on future results. Except as otherwise required to be disclosed in periodic reports required to be filed by public companies with the Securities and Exchange Commission (“SEC”) pursuant to the SEC's rules, we have no duty to update these statements, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks and uncertainties, we cannot assure you that the forward-looking information contained in this report will in fact transpire.
As used in this Quarterly Report on Form 10-Q, unless the context requires or is otherwise indicated, the terms “we,” “us,” “our,” the “Registrant,” the “Company,” “our company” and similar expressions include the following entities (as defined below):
(i) China Liaoning Dingxu Ecological Agriculture Development, Inc. (“CLAD”), formerly known as Hazlo! Technologies, Inc., a Nevada corporation;
(ii) China Liaoning DingXu Ecological Agriculture Development Co, Ltd., a BVI company (“DingXu BVI”), a wholly-owned subsidiary of CLAD;
(iii) Panjin Hengrun Biological Technology Development Co., Ltd. 盘锦恒润生物技术开发有限公司, a limited liability company organized under the laws of the People’s Republic of China and a ninety-nine percent owned subsidiary of DingXu BVI (“Panjin Hengrun”);
(iv) Liaoning Dingxu Ecological Agriculture Development Co., Ltd.辽宁鼎旭生态农业发展有限公司, a limited liability company organized under the laws of the People’s Republic of China and an affiliated entity of Panjin Hengrun through contractual arrangements (“Liaoning Dingxu”).
“China” or “PRC” refers to the People’s Republic of China, excluding Hong Kong, Macau and Taiwan.
“RMB” or “Renminbi” refers to the legal currency of China and “$” or “U.S. Dollars” refers to the legal currency of the United States. We make no representation that the RMB or U.S. Dollar amounts referred to in this report could have been or could be converted into U.S. Dollars or RMB, as the case may be, at any particular rate or at all.
“GAAP” unless otherwise indicated refers to accounting principles generally accepted in the United States.
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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
China Liaoning Dingxu Ecological Agriculture Development, Inc.
Balance Sheet
September 30, 2022 | December 31, 2021 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Total Checking/Savings | $ | 46,305 | $ | 46,305 | ||||
| Total Other Current Assets | – | – | ||||||
| Total Current Assets | 46,305 | 46,305 | ||||||
| Total Fixed Assets | – | – | ||||||
| Other Assets | – | – | ||||||
| TOTAL ASSETS | $ | 46,305 | $ | 46,305 | ||||
| LIABILITIES & EQUITY | ||||||||
| Liabilities | ||||||||
| Current Liabilities | ||||||||
| Other Current Liabilities | ||||||||
| Accrued Expense | $ | 2,100 | $ | 1,800 | ||||
| Due to related Parties | 81,058 | 81,058 | ||||||
| Payroll Liabilities | – | – | ||||||
| Total Other Current Liabilities | 83,158 | 82,858 | ||||||
| Total Current Liabilities | 83,158 | 82,858 | ||||||
| Total Long Term Liabilities | – | – | ||||||
| Total Liabilities | 83,158 | 82,858 | ||||||
| Equity | ||||||||
| Accumulated Other Income | (9,609,011 | ) | (9,609,011 | ) | ||||
| Additional Paid In Capital | 21,351,738 | 21,351,738 | ||||||
| Common Stock $.001 | 14,845 | 14,845 | ||||||
| Non-Controlling Interest | 69,945 | 69,945 | ||||||
| Retained Earnings | (11,864,069 | ) | (11,844,542 | ) | ||||
| Net Income | (300 | ) | (19,527 | ) | ||||
| Total Equity | (36,852 | ) | (36,552 | ) | ||||
| TOTAL LIABILITIES & EQUITY | $ | 46,305 | $ | 46,305 | ||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 4 |
China Liaoning Dingxu Ecological Agriculture Development, Inc.
Profit & Loss
Three Months ending | Three Months ending | Nine Months ending | Nine Months ending | |||||||||||||
| Jul - Sept 22 | Jul - Sept 21 | Jan - Sept 22 | Jan - Sept 21 | |||||||||||||
| Ordinary Income/Expense | ||||||||||||||||
| Total Income | $ | – | $ | – | $ | – | $ | – | ||||||||
| Total COGS | – | – | – | – | ||||||||||||
| Gross Profit | – | – | – | – | ||||||||||||
| Expense | ||||||||||||||||
| Bank Charges/Fees | – | 78 | – | 158 | ||||||||||||
| Computer and Internet | – | – | – | – | ||||||||||||
| Depreciation Expense | – | – | – | – | ||||||||||||
| Dues & Subscriptions | – | 2500 | – | 2500 | ||||||||||||
| General/Admin Expense | – | – | – | – | ||||||||||||
| Interest Expense | – | – | – | – | ||||||||||||
| Office Supplies | – | – | – | – | ||||||||||||
| Payroll Expenses | – | – | – | – | ||||||||||||
| Total Professional Fees | – | 16,237 | 300 | 16,837 | ||||||||||||
| Rent Expense | – | – | – | – | ||||||||||||
| Total Expense | – | 18,815 | 300 | 19,495 | ||||||||||||
| Net Ordinary Income | – | (18,815 | ) | (300 | ) | (19,495 | ) | |||||||||
| Other Income/Expense | ||||||||||||||||
| Total Other Income | – | – | – | – | ||||||||||||
| Other Expense | – | – | – | – | ||||||||||||
| Net Other Income | – | – | – | – | ||||||||||||
| Net Income | $ | – | $ | (18,815 | ) | $ | (300 | ) | $ | (19,495 | ) | |||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 5 |
China Liaoning Dingxu Ecological Agriculture Development, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE and NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(Currency expressed in United States Dollars (“US$”), except for number of shares)
Three and Nine months ended September 30, 2022 (Unaudited)
| Number of Common Shares | Par Value of Common Stock | Additional Paid in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Non-Controlling Interest | Total Shareholder’s Equity | ||||||||||||||||||||||
| BALANCE AT December 31, 2021 | 14,845,619 | $ | 14,845 | $ | 21,351,738 | $ | (11,844,542 | ) | (9,609,011 | ) | $ | 69,945 | $ | (36,552 | ) | |||||||||||||
| Net Loss - 3.31.22 | – | – | – | – | – | – | – | |||||||||||||||||||||
| Other Comprehensive Income/(Loss) | – | – | – | (300 | ) | – | – | (300 | ) | |||||||||||||||||||
| Shares of Non-Controlling | – | – | – | – | – | – | – | |||||||||||||||||||||
| BALANCE AT March 31, 2022 | 14,845,619 | $ | 14,845 | $ | 21,351,738 | $ | (11,864,369 | ) | (9,609,011 | ) | $ | 69,945 | $ | (36,852 | ) | |||||||||||||
| Net Loss - 6.30.22 | – | – | – | – | – | – | – | |||||||||||||||||||||
| Other Comprehensive Income/(Loss) | – | – | – | – | – | – | – | |||||||||||||||||||||
| Shares of Non-Controlling | – | – | – | – | – | – | – | |||||||||||||||||||||
| BALANCE AT June 30, 2022 | 14,845,619 | $ | 14,845 | $ | 21,351,738 | $ | (11,864,369 | ) | $ | (9,609,011 | ) | $ | 69,945 | $ | (36,852 | ) | ||||||||||||
| Net Loss - 9.30.22 | – | – | – | – | – | – | – | |||||||||||||||||||||
| Other Comprehensive Income/(Loss) | – | – | – | – | – | – | – | |||||||||||||||||||||
| Shares of Non-Controlling | – | – | – | – | – | – | – | |||||||||||||||||||||
| BALANCE AT September 30, 2022 | 14,845,619 | $ | 14,845 | $ | 21,351,738 | $ | (11,864,369 | ) | $ | (9,609,011 | ) | $ | 69,945 | $ | (36,852 | ) | ||||||||||||
Three and Nine months ended September 30, 2021 (Unaudited)
| Number of Common Shares | Par Value of Common Stock | Additional Paid in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Non-Controlling Interest | Total Shareholder’s Equity | ||||||||||||||||||||||
| BALANCE AT December 31, 2020 | 14,845,619 | $ | 14,845 | $ | 21,351,738 | $ | (11,844,542 | ) | $ | (9,609,011 | ) | $ | 69,945 | $ | (17,025 | ) | ||||||||||||
| Net Loss - 3.31.21 | – | – | – | – | – | – | – | |||||||||||||||||||||
| Other Comprehensive Income/(Loss) | – | – | – | (316 | ) | – | – | (316 | ) | |||||||||||||||||||
| Shares of Non-Controlling | – | – | – | – | – | $ | – | – | ||||||||||||||||||||
| BALANCE AT March 31, 2021 | 14,845,619 | $ | 14,845 | $ | 21,351,738 | $ | (11,844,858 | ) | $ | (9,609,011 | $ | 69,945 | $ | (17,341 | ) | |||||||||||||
Net Loss - 3.31.21 | – | – | – | – | – | – | – | |||||||||||||||||||||
| Other Comprehensive Income/(Loss) | – | – | – | (364 | ) | – | – | (364 | ) | |||||||||||||||||||
| Shares of Non-Controlling | – | – | – | – | – | – | – | |||||||||||||||||||||
| BALANCE AT June 30, 2021 | 14,845,619 | $ | 14,845 | $ | 21,351,738 | $ | (11,845,222 | ) | $ | (9,609,011 | ) | $ | 69,945 | $ | (17,705 | ) | ||||||||||||
| Net Loss - 9.30.21 | – | – | – | – | – | – | – | |||||||||||||||||||||
| Other Comprehensive Income/(Loss) | – | – | – | (18,815 | ) | – | – | (18,815 | ) | |||||||||||||||||||
| Shares of Non-Controlling | – | – | – | – | – | – | – | |||||||||||||||||||||
| BALANCE AT September 30, 2021 | 14,845,619 | $ | 14,845 | $ | 21,351,738 | $ | (11,864,069 | ) | $ | (9,609,011 | ) | $ | 69,945 | $ | (36,520 | ) | ||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 6 |
China Liaoning Dingxu Ecological Agriculture Development, Inc.
Cash Flows
| Nine Months ending | Nine Months ending | |||||||
| Jan - Sept 2022 | Jan - Sept 2021 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net Income | $ | (300 | ) | $ | (19,495 | ) | ||
| Adjustments to reconcile Net Income to net cash provided by operations: | ||||||||
| Inventory | – | – | ||||||
| Other Current Assets | – | – | ||||||
| Accounts Payable | – | 15,557 | ||||||
| Accrued Expense | 300 | 600 | ||||||
| Due to related Parties | – | – | ||||||
| Payroll Liabilities | – | – | ||||||
| Net cash provided by Operating Activities | – | (3,338 | ) | |||||
| INVESTING ACTIVITIES | ||||||||
| Land Right Use | – | – | ||||||
| Prepaid Lease | – | – | ||||||
| Property Plant & Equipment | – | – | ||||||
| Net cash provided by Investing Activities | – | – | ||||||
| FINANCING ACTIVITIES | ||||||||
| Long Term Payable | – | – | ||||||
| Accumulated Other Income | – | – | ||||||
| Additional Paid In Capital | – | – | ||||||
| Capital Stock | – | – | ||||||
| Common Stock $.001 | – | – | ||||||
| Dividends Paid | – | – | ||||||
| Non-Controlling Interest | – | – | ||||||
| Opening Balance Equity | – | – | ||||||
| Retained Earnings | – | – | ||||||
| Net cash provided by Financing Activities | – | – | ||||||
| Net cash increase for period | – | (3,338 | ) | |||||
| Cash at beginning of period | 46,305 | 4,675 | ||||||
| Cash at end of period | $ | 46,305 | $ | 1,337 | ||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 7 |
China Liaoning Dingxu Ecological Agriculture Development, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021 (UNAUDITED)
(Currency expressed in United States Dollars (“US$”), except for number of shares)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.
In the opinion of management, the balance sheet as of September 30, 2022 which has been derived from unaudited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended September 30, 2022 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2021 or for any future period.
These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Form 10-K for the year ended December 31, 2021.
2. DESCRIPTION OF BUSINESS AND ORGANIZATION
(i) China Liaoning Dingxu Ecological Agriculture Development, Inc. (“CLAD”), formerly known as Hazlo! Technologies, Inc., a Nevada corporation;
(ii) China Liaoning DingXu Ecological Agriculture Development Co, Ltd., a BVI company (“DingXu BVI”), a wholly-owned subsidiary of CLAD;
(iii) Panjin Hengrun Biological Technology Development Co., Ltd. 盘锦恒润生物技术开发有限公司, a limited liability company organized under the laws of the People’s Republic of China and a ninety-nine percent owned subsidiary of DingXu BVI (“Panjin Hengrun”);
(iv) Liaoning Dingxu Ecological Agriculture Development Co., Ltd.辽宁鼎旭生态农业发展有限公司, a limited liability company organized under the laws of the People’s Republic of China and an affiliated entity of Panjin Hengrun through contractual arrangements (“Liaoning Dingxu”).
“China” or “PRC” refers to the People’s Republic of China, excluding Hong Kong, Macau and Taiwan.
“RMB” or “Renminbi” refers to the legal currency of China and “$” or “U.S. Dollars” refers to the legal currency of the United States. We make no representation that the RMB or U.S. Dollar amounts referred to in this report could have been or could be converted into U.S. Dollars or RMB, as the case may be, at any particular rate or at all.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
| 8 |
The accompanying financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions and balances were eliminated in consolidation. As of September 30, 2022, there was no subsidiary held by the Company.
Use of estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheet, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.
Going Concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the nine months ended September 30, 2022, the Company incurred a loss before income tax of $300 and used cash in operations of $0. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2021 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. Despite the amount of funds that we have raised, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
Cash and cash equivalents
Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
Fair value of financial instruments
The carrying value of the Company’s financial instruments: cash and cash equivalents, prepayments, amount due to a director and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.
The Company follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
| · | Level 1 : Observable inputs such as quoted prices in active markets; | |
| · | Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | |
| · | Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions information regarding the impact of the adoption of ASC 842 on the Company’s financial statements. |
| 9 |
Recent accounting pronouncements
In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We adopted the new standard effective January 1, 2018, and the standard did not have a material impact on our financial statements.
In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. We adopted the new standard effective January 1, 2018 on a prospective basis. The new standard did not have a material impact on our consolidated financial statements.
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
4. PREPAID EXPENSES AND OTHER RECEIVABLES
None.
5. ACCRUED LIABILITIES
The accrued liabilities as of September 30, 2022 included the transfer agent’s fee of $2,100, while the accrued liabilities as of December 31, 2021 included the transfer agents of $1,800.
6. AMOUNT DUE TO RELATED PARTY
As of September 30, 2022, and December 31, 2021, our directors has loaned to the Company $81,058 and $81,058 as working capital, respectively. This loan is unsecured, non-interest bearing and due on demand.
7. STOCKHOLDERS’ EQUITY
As of September 30, 2022, and December 31, 2021, there were and shares of common stock issued and outstanding respectively.
There were stock options, warrants or other potentially dilutive securities outstanding as of September 30, 2022.
8. SUBSEQUENT EVENTS
None.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Management’s Discussion and Analysis
This section of the Form 10-Q includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
As used in this Quarterly Report on Form 10-Q, unless the context requires or is otherwise indicated, the terms “we,” “us,” “our,” the “Registrant,” the “Company,” “our company” and similar expressions include the following entities (as defined below):
(i) China Liaoning Dingxu Ecological Agriculture Development, Inc. (“CLAD”), formerly known as Hazlo! Technologies, Inc., a Nevada corporation;
(ii) China Liaoning DingXu Ecological Agriculture Development Co, Ltd., a BVI company (“DingXu BVI”), a wholly-owned subsidiary of CLAD;
(iii) Panjin Hengrun Biological Technology Development Co., Ltd. 盘锦恒润生物技术开发有限公司, a limited liability company organized under the laws of the People’s Republic of China and a ninety-nine percent owned subsidiary of DingXu BVI (“Panjin Hengrun”);
(iv) Liaoning Dingxu Ecological Agriculture Development Co., Ltd.辽宁鼎旭生态农业发展有限公司, a limited liability company organized under the laws of the People’s Republic of China and an affiliated entity of Panjin Hengrun through contractual arrangements (“Liaoning Dingxu”).
“China” or “PRC” refers to the People’s Republic of China, excluding Hong Kong, Macau and Taiwan.
“RMB” or “Renminbi” refers to the legal currency of China and “$” or “U.S. Dollars” refers to the legal currency of the United States. We make no representation that the RMB or U.S. Dollar amounts referred to in this report could have been or could be converted into U.S. Dollars or RMB, as the case may be, at any particular rate or at all.
The Company engages in the business of growing, producing, marketing and selling fresh mushrooms, dried mushrooms, and mushroom seeds through its affiliated VIE, LiaoNing DingXu. Currently the Company has no operations.
History
We were incorporated under the name “Hazlo! Technologies, Inc.” on August 19, 2010 in the State of Nevada. Our initial business plan was to modify and translate software and web applications originally written in English into Spanish and to focus on the needs of the Arizona business community to better serve the Spanish-speaking population. We did not generate any revenue from said IT services and data translation services.
On December 12, 2011, we entered a Share Exchange Agreement with DingXu BVI’s sole shareholder (Chin Yung Kong) under which we issue 3,000,000 shares of common stock to Chin Yung Kong to acquire 100% of the issued and outstanding shares of DingXu BVI (the “Share Exchange”). Upon closing of the Share Exchange, DingXu BVI became the wholly owned subsidiary of CLAD.
China Liaoning DingXu Ecological Agriculture Development Co, Ltd., a BVI company (the “DingXu BVI”) was incorporated under the laws of British Virgin Islands on April 15, 2011. Chin Yung Kong was the sole shareholder and director of DingXu BVI.
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On July 5, 2011, DingXu BVI formed Panjin Hengrun Biological Technology Development Co., Ltd. 盘锦恒润生物技术开发有限公司, a limited liability company organized under the laws of the PRC (“Panjin Hengrun”). DingXu BVI owns 99% of the total ownership of Panjing Hengrun.
On November 28, 2011, Panjin Hengrun entered into a set of contractual arrangements with Liaoning Dingxu Ecological Agriculture Development Co., Ltd.辽宁鼎旭生态农业发展有限公司, a limited liability company organized under the laws of the PRC and an affiliated entity of Panjin Hengrun through contractual arrangements (“Liaoning Dingxu”). The contractual arrangements are comprised of a series of agreements, including a Consulting Service Agreement and an Operating Agreement, through which Panjin Hengrun has the right to advise, consult, manage and operate Liaoning Dingxu to collect and own all of Liaoning Dingxu’s net profits and net losses. Additionally, under a Proxy Agreement, the shareholders of Liaoning Dingxu have vested their voting control over Liaoning Dingxu to Panjin Hengrun. In order to further reinforce Panjin Hengrun’s rights to control and operate Liaoning Dingxu, Liaoning Dingxu and its shareholders have granted Panjin Hengrun, under an Option Agreement, the exclusive right and option to acquire all of their equity interests in Liaoning Dingxu, or, alternatively, all of the assets of Liaoning Dingxu. Further, the shareholders of Liaoning Dingxu agreed to pledge all of their rights, titles and interests in Liaoning Dingxu under an Equity Pledge Agreement.
Upon entry of these contractual arrangements, Liaoning Dingxu became the Variable Interest Entity (“VIE”) of Panjin Hengrun pursuant to ASC-810-10-05 and Panjin Hengrun was able to carry out business operations through Liaoning Dingxu.
Liaoning Dingxu was formed as a limited liability company organized under the laws of the PRC on August 6, 2009. It mainly engages in the business of growing mushrooms and marketing, producing and selling mushrooms and related agricultural products.
Since the completion of the Share Exchange, our business operations have been carried out through Panjin Hengrun and its affiliated operating entity Liaoning Dingxu. On December 12, 2011, we ceased the business of development stage IT services and data translation services and started to engage in the business of growing mushrooms and marketing, producing and selling mushrooms and related agricultural products through Liaoning Dingxu.
The Company was engaged in the business of growing, producing, marketing and selling fresh mushrooms, dried mushrooms, and mushroom seeds through its affiliated VIE, LiaoNing DingXu. Currently the Company has no operations.
As at September 30, 2022, the Company was not engaged in continued business. Although management is currently attempting to implement its business plan and is seeking additional sources of financing, there is no assurance the activity will be successful. Accordingly, the Company must rely on its president to perform essential functions without compensation until a business operation can be commenced. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of this uncertainty.
Capital Resources and Liquidity
Our auditors have issued a “going concern” opinion, meaning that there is substantial doubt if we can continue as an on-going business unless we obtain additional capital. No substantial revenues from our planned business model are anticipated until we have raised sufficient monies to implement our business model. The Company will need to seek capital from other resources such as private placements in the Company’s common stock or debt financing, which may not even be available to the Company. However, if such financing were available, because we are a development stage company with no or limited operations to date, it would likely have to pay additional costs associated with such financing and in the case of high-risk loans be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such financing. If the company cannot raise additional proceeds via such financing, it would be required to cease business operations.
As of September 30, 2022, we had $46,305.53 in cash as compared to $1,337.53 as at December 30, 2021. As of the date of this Form 10-Q, the current funds available to the Company will not be sufficient to fund the expenses related to the implementation of our business and continue maintaining a reporting status.
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Results of Operations
At September 30, 2022, the Company was not engaged in continued business. There is minimal historical operational information about us on which to base an evaluation of our performance. Due to a lack of funding, we have not implemented our business operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, and possible delays in our planned product development.
We had $NIL in revenue for the three-month period ended September 30, 2022. Total expenses in the three-month period ended September 30, 2022 were $0 as compared to total expenses for the three month period ended September 30, 2021 of $18,815 resulting in a net loss for the three month period ended September 30, 2022 of $0 as compared to a net loss of $18,815 for the three month period ended September 30, 2021.
We had $NIL in revenue for the nine-month period ended September 30, 2022. Total expenses in the nine-month period ended September 30, 2022 were $300 as compared to total expenses for the nine-month period ended September 30, 2021 of $19,495 resulting in a net loss for the nine-month period ended September 30, 2022 of $0 as compared to a net loss of $19,495 for the nine month period ended September 30, 2021. The net loss for the nine-month period ended September 30, 2022 is a result of Professional fees of $300 comprised accounting expense, as compared to the net loss for the nine-month period ended September 30, 2020 of $19,945 is a result of Bank Fees of $158, dues and subscriptions of $2,500 and Professional fees of $15,557 comprised of accounting expense.
Off-balance sheet arrangements
The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on the company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement, or other contractual arrangement to which an entity unconsolidated with the company is a party, under which the company has (i) any obligation arising under a guaranteed contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.
In connection with this quarterly report, as required by Rule 15d-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of the design and operation of our company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our company's management, including our company's principal executive officer and principal financial officer. Based upon that evaluation, our company's principal executive officer and principal financial officer concluded that subject to the inherent limitations noted in this Part II, Item 9A(T) as of September 30, 2022, our disclosure controls and procedures were not effective due to the existence of material weaknesses in our internal controls over financial reporting.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f)) during the quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
Currently we are not involved in any pending litigation or legal proceeding.
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 Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosure.
None.
Item 5. Other Information.
None.
Item 6. Exhibits.
| * | Included in Exhibit 31.1 |
| ** | Included in Exhibit 32.1 |
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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.
May 15, 2023
| China Liaoning Dingxu Ecological Agriculture Development, Inc. | ||
| By: | /s/ Huijun (David) He | |
| Huijun (David) He | ||
| President, Chief Executive Officer | ||
| (Principal Executive Officer) and Director | ||
| By: | /s/ Huijun (David) He |
| Huijun (David) He | |
| Principal Accounting Officer |
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