UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549
FORM10-Q
(MarkOne)
☒ QUARTERLY REPORT PURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934
ForthequarterlyperiodendedMarch31,2014
or
☐ TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934
Forthetransitionperiodfrom _________ to__________
CommissionFileNumber:333-171891
Apple Green Holding,Inc.
(Exactnameofregistrantasspecifiedinitscharter)
| Nevada | | 27-3436055 |
(Stateorotherjurisdictionofincorporation or
organization) | | (I.R.S. Employer Identification No.) |
30, Jalan PJS 7/19, Bandar Sunway, 46150 Petaling Jaya, Selangor, Malaysia.
(Address ofPrincipalExecutiveOffices)
Tel. +603 5636 1869
Fax +603 5636 1771
(Registrant’stelephonenumber,including areacode)
NotApplicable
(Formername,formeraddressandformerfiscal year,ifchangedsincelastreport)
Indicate bycheckmarkwhetherthe registrant (1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.Yes☐ No ☒
IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyandpostedonitscorporateWebsite,ifany,everyInteractiveDataFilerequired to be submittedand posted pursuantto Rule405 of Regulation S-T(§232.405of this chapter)during thepreceding12 months (orforsuch shorterperiod thattheregistrantwasrequiredtosubmitandpostsuchfiles).Yes☒ No☐
Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,orasmallerreportingcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler”and“smallerreportingcompany”inRule12b-2oftheExchangeAct.
| Largeacceleratedfiler | ☐ | Acceleratedfiler | ☐ |
| Non-acceleratedfiler | ☐ | Smallerreportingcompany | ☒ |
(Donotcheckifsmallerreportingcompany)
Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheExchangeAct)Yes ☒ No ☐
As of October 27, 2014,therewere 10,200,000sharesoftheissuer’s commonstockissued and outstanding.
TABLEOFCONTENTS
| | | Page
No. |
| | PART I–FINANCIALINFORMATION | |
| | | |
| Item1. | FinancialStatements | 3 |
| | Balance Sheetsat March 31,2014(unaudited)andDecember 31,2013 | 3 |
| | StatementofOperations | 4 |
| | StatementofCashFlows | 5 |
| | NotestoFinancial Statements(unaudited) | 6 |
| | | |
| Item2. | Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations. | 10 |
| | | |
| Item3. | Quantitativeand QualitativeDisclosuresAbout Market Risk | 11 |
| | | |
| Item4. | Controlsand Procedures. | 11 |
PART II –OTHERINFORMATION
| Item1. | LegalProceedings. | 13 |
| Item1A. | Risk Factors. | 13 |
| Item2. | UnregisteredSalesofEquitySecuritiesand UseofProceeds. | 13 |
| Item3. | DefaultsUponSeniorSecurities. | 13 |
| Item4. | MineSafetyDisclosures. | 13 |
| Item5. | OtherInformation. | 13 |
| Item6. | Exhibits. | 13 |
CAUTIONARY STATEMENTREGARDINGFORWARD-LOOKING INFORMATION
Certain statementsinthisreportcontainormaycontainforward-lookingstatements.Thesestatements,identifiedbywordssuchas“plan”,“anticipate”, “believe”,“estimate”,“should”,“expect”andsimilarexpressionsincludeourexpectationsandobjectives regardingourfuturefinancialposition,operatingresultsandbusinessstrategy.Thesestatementsaresubjecttoknownandunknownrisks,uncertaintiesandotherfactorswhich may cause actual results, performance or achievementstobe materially different from any future results, performanceor achievementsexpressedorimpliedbysuchforward- lookingstatements.These forward-lookingstatementswere basedonvariousfactorsand were derivedutilizingnumerous assumptions and other factors that could cause our actualresultstodiffermateriallyfrom thosein the forward- looking statements. These factors include, but are notlimited to, ourabilitytosecure suitable financingto continue with our existing business orchange ourbusiness andconclude a merger,acquisitionor combinationwith a business prospect, economic,politicalandmarket conditions andfluctuations,government andindustry regulation,interest raterisk,U.S. and global competition, and other factors. Most ofthesefactors aredifficulttopredict accuratelyandare generallybeyond ourcontrol.Youshouldconsidertheareasofriskdescribedin connectionwithany forward-lookingstatements that may be made herein. Readers are cautioned notto place undue reliance ontheseforward-lookingstatements,which speak only asof the date ofthis report. Readersshouldcarefullyreviewthis reportin its entirety, including but not limitedtoourfinancialstatements and thenotesthereto andtherisks describedin our AnnualReport on Form 10-K for the fiscal year ended December 31, 2012.Weadviseyoutocarefullyreview the reportsand documentswefile fromtimeto time withtheSecurities andExchangeCommission(the“SEC”),particularlyour quarterly reports onForm 10-Q and our current reportsonForm8-K. Exceptforour ongoing obligationstodisclosematerialinformationundertheFederalsecuritieslaws,weundertakenoobligationtorelease publiclyanyrevisionstoanyforward- lookingstatements,toreportevents orto report the occurrenceofunanticipated events.
OTHERPERTINENTINFORMATION
When usedinthisreport,theterms,“we,”the“Company,”“our,”and“us”refersto Apple Green Holding, Inc.,aNevada corporation.
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Apple Green Holding, Inc.
(A Development Stage Company)
Balance Sheets
| | | March 31 | | | December | |
| | | 2014 | | | 31, | |
| | | Unaudited | | | 2013 | |
| | | $ | | | $ | |
| ASSETS | | | | | | |
| | | | | | | |
| CURRENT ASSETS | | | | | | |
| Cash and cash equivalents | | $ | - | | | $ | - | |
| Total current assets | | | - | | | | - | |
| | | | | | | | | |
| TOTAL ASSETS | | $ | - | | | $ | - | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | | | | | | | | |
| | | | | | | | | |
| CURRENT LIABILITIES | | | | | | | | |
| Accounts payable & accrued liabilities | | $ | 41,692 | | | $ | 29,610 | |
| Due to related party | | | 9,275 | | | | 9,275 | |
| | | | | | | | | |
| Total liabilities | | $ | 50,967 | | | $ | 38,885 | |
| | | | | | | | | |
| STOCKHOLDERS’ DEFICIENCY | | | | | | | | |
| Capital Stock(Note 5) | | | | | | | | |
| Authorized: | | | | | | | | |
| 200,000,000 preferred shares, $0.0001 par value, 500,000,000 common shares, $0.0001 par value. | | | | | | | | |
| Issued and outstanding shares: | | | | | | | | |
| 0 preferred shares, | | | | | | | | |
| 10,200,000 common shares at March 31, 2014 and December 31, 2013. | | $ | 1,020 | | | $ | 1,020 | |
| Additional paid-in capital | | | 19,980 | | | | 19,980 | |
| Accumulated deficit | | | (71,967 | ) | | | (59,885 | ) |
| Total Stockholders’ Deficiency | | | (50,967 | ) | | | (38,885 | ) |
| | | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | | $ | - | | | $ | - | |
The accompanying notes are an integral part of these financial statements.
Apple Green Holding, Inc.
(A Development Stage Company)
Statement of Operations
| | | Three Months | | | Three Months | | | For the Period from Inception November 15, | |
| | | Ended | | | Ended | | | 2010 to | |
| | | March 31, | | | March 31, | | | March 31, | |
| | | 2014 | | | 2013 | | | 2014 | |
| | | | | | | | | | |
| REVENUES | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | |
| EXPENSES | | | | | | | | | | | | |
| General & Administrative | | $ | - | | | $ | 1,499 | | | $ | 16,561 | |
| Professional Fees | | $ | 12,082 | | | $ | 3,500 | | | $ | 55,406 | |
| | | | (12,082 | ) | | | (4,999 | ) | | | (71,967 | ) |
| | | | | | | | | | | | | |
| Loss Before Income Taxes | | $ | (12,082 | ) | | $ | (4,999 | ) | | $ | (71,967 | ) |
| Provision for Income Taxes | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | |
| Net Loss | | $ | (12,082 | ) | | $ | (4,999 | ) | | $ | (71,967 | ) |
| | | | | | | | | | | | | |
| PER SHARE DATA: | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Basic and diluted loss per common share | | $ | (0.00 | ) | | $ | (0.00 | ) | | $ | (0.01 | ) |
| | | | | | | | | | | | | |
| Basic and diluted weighted average common shares outstanding | | | 10,200,000 | | | | 10,200,000 | | | | 10,011,972 | |
The accompanying notes are an integral part of these financial statements.
Apple Green Holding, Inc.
(A Development Stage Company)
Statement ofCashFlows
| | | Three Months | | | Three Months | | | For the Period from
Inception November 15, | |
| | | Ended | | | Ended | | | 2010 to | |
| | | March 31, | | | March 31, | | | March 31, | |
| | | 2014 | | | 2013 | | | 2014 | |
| | | | | | | | | | |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | | |
| | | | | | | | | | |
| Net Loss | | $ | (12,082 | ) | | $ | (4,999 | ) | | $ | (71,967 | ) |
| Changes in Operating Assets and Liabilities: | | | | | | | | | | | | |
| (Increase) or decrease in accounts payable and accrued liabilities | | | 12,082 | | | | 420 | | | | 41,692 | |
| Net cash used in operating activities | | | - | | | | (4,579 | ) | | | (30,275 | ) |
| | | | | | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Increase in note payable | | | - | | | | 6,000 | | | | - | |
| Common stock issued for cash | | | - | | | | - | | | | 21,000 | |
| Due to Related Party | | | - | | | | | | | | 9,275 | |
| Net cash provided by financing activities | | | - | | | | 6,000 | | | | 30,275 | |
| | | | | | | | | | | | | |
INCREASE (DECREASE)INCASHANDCASH EQUIVALENTS | | | - | | | | 1,421 | | | | - | |
| | | | | | | | | | | | | |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | | | - | | | | 16 | | | | - | |
| | | | | | | | | | | | | |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | | $ | - | | | $ | 1,588 | | | $ | - | |
| | | | | | | | | | | | | |
SupplementalCashFlowDisclosures: | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Cash paid for: | | | | | | | | | | | | |
| Interest expense | | $ | - | | | $ | - | | | $ | - | |
| Income taxes | | $ | - | | | $ | - | | | $ | - | |
The accompanyingnotesareanintegralpartofthese financialstatements.
Apple Green Holding, Inc.
(A DevelopmentStageCompany)
Notes toInterimFinancialStatements
March31,2014
NOTE 1.GENERALORGANIZATIONANDBUSINESS
Apple Green Holding, Inc. (the “Company”), formerly known as Blue Sun Media Inc.,is a development stage company, incorporated in the State of Nevada on November 15, 2010.
On January 10, 2014, the Company entered into a Share Exchange Agreement with Apple Green International Limited, a Seychelles company (AGIL”) and its sole shareholder, Apple Green Venture Sdn. Bhd., a Malaysia company (“AGIL Stockholder”), pursuant to which the Company acquired from AGIL Stockholder all of the outstanding shares of AGIL in exchange for the issuance of 389,800,000 shares of its Common Stock (the “Reverse Merger”). AGIL, through its affiliated entities located and operating in the Malaysia, is engaged in producing and providing organic fertilizer and develop a solid waste management.
On September 12, 2014, the Company, AGIL, and AGIL Shareholder entered into a Mutual Rescission Agreement and General Release as of January 31, 2014 (the “Rescission Agreement”), according to which the Company, AGIL, and AGIL Shareholder rescind and terminate the Share Exchange Agreement and related documents (the “Rescission”). According to the Rescission Agreement, 389,800,000 shares of Common Stock owned by AGIL Shareholder shall be cancelled so that the AGIL Shareholder shall have no ownership interest in the Company’s Shares or any equity interests of the Company as of such date. All AGIL shares owned or controlled by the Company which are issued and outstanding immediately prior to January 31, 2014 shall be returned to the AGIL Shareholder pursuant to this Rescission Agreement and the Company shall have no ownership interest in AGIL of such date. As a result of the Rescission, the Company became a shell company. AGIL is not and has never been a subsidiary of the Company and the parties are returned to their respective positions immediately prior to the Share Exchange Agreement and Reverse Merger as if the transaction has never occurred.
Since the Rescission, the Company became a shell company and plans to pursue acquisitions of other business the Board of Directors may approve from time to time. The Company will seek potential acquisitions and plans to conduct due diligence investigations on available candidates. However, there can be no assurance that the Company will successfully make an acquisition or that such acquisition will be successful for the Company and its shareholders. Possible acquisition candidates will be examined based on competitive position as compared to other companies of similar size and experience within the industry segment as well as within the industry as a whole; the cost of participation by the Company; and the accessibility of required management expertise, personnel, raw materials services, professional assistance, and other items. The Company is unable to predict when it may participate in a business opportunity. It anticipates, however, that the analysis of specific proposals and the selection of a business opportunity may take several months or more.
Pending negotiation and consummation of an acquisition, the Company anticipates that it will have, aside from carrying on its search for an acquisition candidate, no business activities, and, thus, will have no source of revenue. Should the Company incur any significant liabilities prior to a combination with a private company, it may not be able to satisfy such liabilities as are incurred. If the Company's management pursues one or more combination opportunities beyond the preliminary negotiations stage and those negotiations are subsequently terminated, it is foreseeable that such efforts will exhaust the Company's ability to continue to seek such combination opportunities before any successful combination can be consummated. In that event, the Company's common stock will become worthless and holders of the Company's common stock will receive a nominal distribution, if any, upon the Company's liquidation and dissolution.
NOTE 2.SUMMARYOFSIGNIFICANTACCOUNTINGPRACTICES
BasisofPresentation
The accompanyingfinancialstatementshavebeenpreparedinaccordancewithUnitedStatesgenerallyacceptedaccountingprinciples(USGAAP)forinterimfinancialinformationandinaccordancewithprofessionalstandardspromulgatedbythePublicCompanyAccountingOversightBoard(PCAOB).Theyreflectalladjustmentswhichare, intheopinionofmanagement,necessary forafairpresentationofthefinancialposition and operatingresultsfor the three months ended March 31, 2014,respectivelyalong with the period November 15, 2010 (date ofinception) to March 31, 2014.
AccountingBasis
The CompanyiscurrentlyadevelopmentstageenterprisereportingundertheprovisionsofAccountingStandardsCodification(“ASC”)915,Development Stage Entity.Thesefinancial statements arepreparedonthe accrualbasisofaccountinginconformitywith accountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.
Going Concern
Thesefinancialstatementshavebeenpreparedonagoingconcernbasis.TheCompanyhasincurredlossessince inceptionresultinginanaccumulateddeficitof$71,967atMarch31,2014andfurtherlosses areanticipatedinthedevelopmentofitsbusinessraisingsubstantialdoubtabouttheCompany’sabilitytocontinue as agoingconcern.Itsabilitytocontinueasagoingconcernisdependentupontheabilityofthe Companyto generateprofitable operationsinthe futureand/ortoobtainthe necessaryfinancingto meetitsobligations and repayitsliabilities arising from normal businessoperations when they come due.
Management hasplansto seekadditionalcapitalthroughaprivateplacementofitscommonstockorfurtherdirectorloansasneeded.Thesefinancial statementsdonotincludeanyadjustmentsrelating totherecoverabilityandclassification ofrecordedassets,ortheamountsofand classificationofliabilities thatmightbe necessaryintheeventtheCompanycannotcontinue.
Cash andCashEquivalents
Cash andcashequivalentsarereportedinthebalancesheetatcost,whichapproximatesfairvalue.Forthepurposeofthe financialstatementscash equivalentsincludeallhighlyliquidinvestments withmaturityof threemonthsor less.
Apple Green Holding,Inc.
(A DevelopmentStageCompany)
Notes toInterimFinancialStatements
March 31,2014
FairValueofFinancialInstruments
The fair value of cash and cash equivalents and accounts payable approximates the carrying amount of these financial instruments due to their short maturity.
Earnings (Loss)perShare
The CompanyadoptedASC260,EarningsperShare. Basicearnings(loss)persharearecalculatedby dividingtheCompany’snetincomeavailable tocommonshareholdersbytheweightedaveragenumberofcommonsharesoutstandingduringthe year. Thedilutedearnings(loss)pershareare calculatedbydividingthe Company’snetincome(loss)available tocommonshareholdersbythedilutedweightedaverage numberof shares outstanding for the period. Thedilutedweightedaverage number of sharesoutstandingisthebasicweighted numberofsharesadjusted as of thefirstof theyear for anypotentially dilutive debt or equity. Thereare nodiluted shares outstanding.
Dividends
The company has not adopted any policy regarding payment if dividends. No dividends have been paid during the period shown.
IncomeTaxes
The CompanyadoptedASC740,IncomeTaxes,atitsinception.UnderASC740,deferredtax assetsandliabilitiesarerecognizedforthefuturetaxconsequencesattributabletodifferencesbetweenthefinancialstatementcarryingamountsofexisting assetsandliabilitiesandtheirrespectivetaxbases.Deferredtaxassets, including taxloss andcreditcarry forwards,andliabilitiesaremeasured using enacted tax ratesexpected to applyto taxableincomein the yearsin which those temporary differences areexpected to be recovered orsettled. Theeffect on deferredtaxassetsandliabilities ofachangeintaxratesis recognizedinincomeintheperiodthatincludes theenactmentdate.Deferred incometaxexpenserepresentsthe changeduring the periodinthedeferredtaxassets and deferredtaxliabilities. The components of the deferredtaxassets andliabilities areindividuallyclassified as currentand non-current basedontheircharacteristics. Deferredtax assets are reducedby avaluationallowance when,in the opinion of management,itis morelikely than not that some portion orall of the deferredtax assets will not be realized. No deferredtaxassets orliabilities were recognized as ofMarch31, 2014.
Advertising
The Companywillexpenseadvertising costasincurred.Theadvertisingsinceinceptionhasbeenzero.
Use ofEstimates
The preparationoffinancialstatements inconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmericarequiresmanagementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilitiesanddisclosureofcontingentassetsand liabilitiesatthedateofthefinancialstatementsandthereportedamountsofrevenueandexpensesduringthereportingperiod.Actualresultscould differfrom those estimates.
Revenue andCostRecognition
The Companyhas nocurrentsourceofrevenue; thereforethe Companyhasnotyet adoptedanypolicy regardingtherecognitionofrevenueorcost.
RelatedParties
Related parties,which canbeacorporation,individual,investor oranotherentityareconsideredtoberelatedifthepartyhas theability,directly orindirectly, tocontroltheotherpartyor exercisesignificant influenceovertheCompany inmakingfinancialandoperatingdecisions.Companies arealsoconsidered toberelatediftheyare subjecttocommoncontrol orcommonsignificantinfluence.TheCompanyhastheserelationships.
Property
The Companydoesnotownanyrealestateor other properties. The Company’s office is located No. 30 Jalan PJS 7/19 Bandar Sunway, 46150, Petaling Jaya, Selangor Darul Ehsan, Malaysia. The business office is rent premises of its subsidiary (SSM), no charge to the Company.
RecentlyIssuedAccounting Pronouncements
Recent pronouncementsissuedbytheFinancialAccountingStandardsBoard(“FASB”) orotherauthoritative standardsgroupswithfutureeffectivedatesareeithernotapplicableorarenotexpectedtobesignificanttothefinancialstatementsoftheCompany.
Apple Green Holding,Inc.
(A DevelopmentStageCompany)
Notes toInterimFinancialStatements
March 31,2014
NOTE 3.INCOMETAXES
The Companyprovidesfor incometaxesunderASCTopic740whichrequirestheuseofanassetandliabilityapproachinaccountingforincometaxes.Deferredtaxassetsandliabilitiesarerecordedbasedonthedifferencesbetweenthefinancialstatementandtaxbasesofassetsandliabilitiesandthetaxratesineffect currently.
ASC Topic740 requiresthereductionofdeferred taxassetsbyavaluationallowanceif,basedontheweightofavailableevidence,itismorelikelythannotthatsomeorallofthedeferredtaxassetswillnotberealized.IntheCompany’sopinion,itisuncertainwhethertheywillgeneratesufficienttaxableincomein the futuretofullyutilizethenetdeferred taxasset.
The Companyutilizestheassetandliabilitymethodforfinancialreportingofincometaxes.Deferredtaxassetsandliabilitiesaredeterminedbasedontemporarydifferencesbetweenfinancialreportingandthetax basisofassetsand liabilities,andaremeasuredbyapplyingenactedratesandlawstotaxable yearsinwhichsuchdifferencesareexpectedtoberecoveredorsettled.Anychangesintaxratesorlawsare recognized in the period when such changesare enacted.
AsofMarch31,2014, theCompanyhas $28,067ingross deferredtaxassetsresultingfromnet operating losscarry-forwards.Avaluationallowancehasbeenrecordedtofullyoffsetthesedeferredtaxassetsbecause theCompany’smanagementbelievesfuturerealization oftherelatedincometaxbenefitsisuncertain.Accordingly,the netprovisionforincometaxesiszerofortheperiodNovember15,2010(inception)to March 31, 2014. As of March 31, 2014, the Company has federal net operatinglosscarry forwards of approximately $71,967availabletooffset futuretaxableincomethrough2030. Thedifferencebetween thetaxprovisionat thestatutoryfederal incometaxrateon March 31, 2014and thetaxprovisionattributabletolossbefore income taxesis as follows:
| | | For the period November 15,
2010 (Date of Inception) through
March 31, 2014 | |
| Statutory federal income taxes | | | 34.0% | |
| State taxes, net of federal benefits | | | 5.0% | |
| Valuation allowance | | | (39.0)% | |
| Incometaxrate | | | - | |
The Companyhasfiledincometaxreturnssincethedateofinception.
Apple Green Holding,Inc.
(A DevelopmentStageCompany)
Notes toInterimFinancialStatements
March 31,2014
NOTE4.STOCKHOLDERS’EQUITY
On March 19, 2014, the Company increase the total authorized shares from 520,000,000 shares to 700,000,000 shares, consisting of 500,000,000 shares of common stock, par value $0.0001 per share, and 200,000,000 shares of preferred stock, par value $0.0001 per share.
PreferredStock
As ofMarch31,2014,theCompanyhas200,000,000 Preferred shares at $0.0001 par value authorized,howevernoneareissuednor outstanding.
Common Stock
On December 7, 2010, the Company issued 9,000,000 of its $0.0001 par value common stock at $0.001 per share for $9,000 cash to the founder of the Company.
On May 18, 2011, the Company issued 1,200,000 shares common stock at $0.01 per share yielding net proceeds of $12,000 pursuant to the Registration Statement on Form S-1, initially filed on January 27, 2011 and declared effective on April 28, 2011.
On January 10, 2014, the Company issued 389,800,000 shares of common stock to Apple Green Venture Sdn. Bhd. In consideration of the all of the equity interests of AGIL.
On September 12, 2014, the Company, AGI, and Shareholder entered into a Rescission Agreement, according to which 389,800,000 shares of Common Stock owned by AGIL Shareholder shall be cancelled so that the Shareholder shall have no ownership interest in the Company’s Shares or any equity interests of the Company as of such date. All AGIL shares owned or controlled by the Company which are issued and outstanding immediately prior to January 31, 2014 shall be delivered to the AGIL Shareholder pursuant to this Rescission Agreement and the Company shall have no ownership interest in AGIL as of January 31, 2014.
As ofMarch31,2014,thereare500,000,000CommonSharesat$0.0001parvalueauthorizedwith10,200,000issuedandoutstanding.
NOTE5.RELATEDPARTYTRANSACTIONS
Due to Related Party — As of March 31, 2014, the Company had borrowed from Vincent Loy Ghee Yaw,its Chairman of the Board of Directors the sum of $9,275 which not bears any interest and is due on demand. The Company used the proceeds of the loans from Vincent Loy Ghee Yaw.
Partiesareconsideredtoberelatedifonepartyhastheability,directlyorindirectly,tocontroltheotherpartyorexercisesignificantinfluenceoverthe otherpartyinmakingfinancialandoperationaldecisions.Partiesarealsoconsideredtobe relatediftheyaresubject tocommoncontrolorcommonsignificantinfluence.Theduefrom/torelatedpartiesrepresentedtheadvancesfromortotheCompany’sdirectors.Such advances are non-interest bearing and due upon demand.
NOTE6.GOINGCONCERN
As ofMarch31,2014,theaccompanyingfinancialstatementshavebeenpresentedonthebasisthatitisagoingconcerninthedevelopmentstage,whichcontemplatestherealizationofassetsandthesatisfactionof liabilitiesinthenormalcourseofbusiness.
For theperiodNovember15,2010(dateofinception)throughMarch31,2014theCompanyhashadanetlossof$71,967consistingofSEC auditandreviewfees,Nevadastatetaxes,andincorporationfeesfortheCompanytoinitiateitsSECreportingrequirements.
As ofMarch31,2014,theCompany has notyetemerged from thedevelopmentstage.In viewofthese matters, recoverability ofany assetamountsshownintheaccompanyingauditedfinancialstatementsisdependentupontheCompany’sabilityto beginoperationsandtoachievealevelofprofitability.Since inception,theCompanyhasfinanceditsactivitiesprincipallyfromthesaleofequitysecurities.TheCompanyintendsonfinancing its future developmentactivities anditsworking capital needs largely from loans and thesale of public equity securitieswithsomeadditional funding fromothertraditionalfinancing sources,includingterm notes, until suchtime that funds provided by operations aresufficient tofund workingcapitalrequirements.
NOTE7.CONCENTRATIONOFRISKS
Cash Balances
The Companymaintainsits cashininstitutionsinsuredbytheFederalDepositInsuranceCorporation(FDIC).AllotherdepositaccountsatFDIC-insured institutionswere insureduptoatleast$250,000perdepositor.TheCompanyhadnodepositsinexcessofinsuredamountsas ofMarch31,2014.
NOTE8.SUBSEQUENTEVENTS
In accordancewithASC855,SubsequentEvents,theCompanyhas evaluatedsubsequenteventsthroughthe dateofissuance ofthe unauditedinterim financialstatements.Duringthisperiod,theCompanydidnothaveanymaterialrecognizablesubsequentevents.
ITEM 2.MANAGEMENTDISCUSSIONANDANALYSISOFFINANCIALCONDITIONANDRESULTSOFOPERATION
The following discussion should be read in conjunction with Apple Green Holding, Inc.’s (“Apple Green,” the “Company,” “we,” “our,” “us,”) Condensed Consolidated Financial Statements and the related Notes contained elsewhere in this quarterly report onForm 10-Q. All statements in the following discussion that are not reports of historical information or descriptions of current accounting policy are forward-looking statements. Please consider our forward-looking statements in light of the factors that may affect operating results set forth herein.
Overview
Apple Green Holding, Inc. (the “Company” or “Apple Green”), formerly known as Blue Sun Media Inc., was incorporated in the State of Nevada on November 15, 2010.
Rescission of Reverse Merger
On January 10, 2014, the Company entered into a Share Exchange Agreement with Apple Green International Limited, a Seychelles company (AGIL”) and its sole shareholder Apple Green Venture Sdn. Bhd, a Malaysia company (“AGIL Stockholder”), according to which the Company acquired from AGIL Stockholder all of the outstanding shares of AGIL in exchange for the issuance of 389,800,000 shares of its Common Stock (the “Reverse Merger”). AGIL, through its affiliated entities located and operating in the Malaysia, is engaged in producing and providing organic fertilizer and develop a solid waste management.
On September 12, 2014, the Company, AGIL, and AGIL Shareholder entered into a Mutual Rescission Agreement and General Release as of January 31, 2014 (the “Rescission Agreement”), according to which the Company, AGIL, and AGIL Shareholder rescind and terminate the Share Exchange Agreement and related documents (the “Rescission”). According to the Rescission Agreement, 389,800,000 shares of Common Stock owned by AGIL Shareholder shall be cancelled so that the AGIL Shareholder shall have no ownership interest in the Company’s Shares or any equity interests of the Company as of such date. All AGIL shares owned or controlled by the Company which are issued and outstanding immediately prior to January 31, 2014 shall be returned to the AGIL Shareholder pursuant to this Rescission Agreement and the Company shall have no ownership interest in AGIL. As a result of the Rescission, the Company became a shell company. AGIL is not and has never been a subsidiary of the Company and the parties are returned to their respective positions immediately prior to the Share Exchange Agreement and Reverse Merger as if the transaction has never occurred.
Since the Rescission, the Company became a shell company and plans to pursue acquisitions of other business the Board of Directors may approve from time to time. The Company will seek potential acquisitions and plans to conduct due diligence investigations on available candidates. However, there can be no assurance that the Company will successfully make an acquisition or that such acquisition will be successful for the Company and its shareholders. Possible acquisition candidates will be examined based on competitive position as compared to other companies of similar size and experience within the industry segment as well as within the industry as a whole; the cost of participation by the Company; and the accessibility of required management expertise, personnel, raw materials services, professional assistance, and other items. The Company is unable to predict when it may participate in a business opportunity. It anticipates, however, that the analysis of specific proposals and the selection of a business opportunity may take several months or more.
Pending negotiation and consummation of an acquisition, the Company anticipates that it will have, aside from carrying on its search for an acquisition candidate, no business activities, and, thus, will have no source of revenue. Should the Company incur any significant liabilities prior to a combination with a private company, it may not be able to satisfy such liabilities as are incurred. If the Company's management pursues one or more combination opportunities beyond the preliminary negotiations stage and those negotiations are subsequently terminated, it is foreseeable that such efforts will exhaust the Company's ability to continue to seek such combination opportunities before any successful combination can be consummated. In that event, the Company's common stock will become worthless and holders of the Company's common stock will receive a nominal distribution, if any, upon the Company's liquidation and dissolution.
ResultsofOperations
The followingdiscussionshouldbereadinconjunctionwiththecondensedfinancialstatementsandsegmentdataandinconjunctionwiththeCompany’s Form 10Q for the period ended March 31, 2014. Results of interim periods may not be indicative of results for the full year.
The CompanydidnotgenerateanyrevenueduringthethreemonthsendedMarch31,2014.
Total expenses for the three (3) months ending March 31, 2014 were $12,082 resulting in an operating loss as compared to total expenses of $4,999 for the period ended March 31, 2013. The increase in expenses was due primarily to an increase professional fee in the quarter ended March 31, 2014. Basic net loss per share amounting to $0.00 for the three (3) months ending March 31, 2014. General and Administrative expenses fees for the three (3) months ending March 31, 2014 is arise from professional fees of $12,082 for accounting and legal services.
Liquidity andCapitalResources
Net cash provided by operating activities for the quarter ended March 31, 2014 was nil compared to net cash used in operating activities for the quarter ended March 31, 2013 of $4,579.
Off-Balance SheetArrangements
We donothaveanyoff-balancesheetarrangements.
ITEM 3.QUANTITATIVEANDQUALITATIVEDISCLOSURESABOUTMARKETRISK.
Notapplicabletoasmallerreportingcompany.
ITEM 4.CONTROLSANDPROCEDURES
Management’s ReportOnInternalControlOverFinancialReporting
Our managementisresponsibleforestablishingandmaintainingadequateinternalcontroloverfinancialreporting.Internalcontroloverfinancialreportingis definedinRule13a-15(f)or15d-15(f)promulgatedundertheSecurities Exchange Actof1934asaprocess designedby,orunderthesupervision of,thecompany’sprincipalexecutiveandprincipalfinancialofficersandeffectedbythecompany’sboardofdirectors,managementandotherpersonnel,toprovidereasonableassuranceregarding thereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesin accordance withaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmericaandincludesthose policies and proceduresthat:
| | ● | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; |
| | ● | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and |
| | | |
| | ● | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. |
Because ofitsinherentlimitations,internalcontroloverfinancialreportingmaynotpreventordetectmisstatements. Projectionsofany evaluationofeffectiveness tofutureperiodsaresubjecttothe riskthatcontrolsmaybecomeinadequatebecauseofchangesinconditions,orthat thedegree ofcompliancewith the policiesorproceduresmaydeteriorate.Allinternal control systems,nomatterhowwelldesigned,have inherentlimitations. Therefore, even those systemsdeterminedtobe effective can provideonlyreasonable assurancewith respecttofinancialstatementpreparation and presentation.Becauseoftheinherentlimitationsof internalcontrol,there isariskthatmaterialmisstatements may notbe prevented ordetected on atimelybasisby internal control over financial reporting. However,these inherentlimitationsare knownfeaturesofthefinancialreportingprocess.Therefore,it ispossibletodesignintotheprocesssafeguardstoreduce,thoughnoteliminate,this risk.
AsofMarch31,2014managementassessedtheeffectivenessofourinternalcontroloverfinancialreportingbasedonthecriteriaforeffectiveinternalcontroloverfinancialreportingestablishedinInternalControl--IntegratedFramework issuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(“COSO”)andSECguidanceonconductingsuchassessments.Basedonthat evaluation,they concludedthat,during theperiod coveredbythis report, such internal controls and procedures were noteffective to detect the inappropriate applicationofUS GAAP rulesasmore fullydescribedbelow.Thiswasduetodeficienciesthat existedinthe designoroperationof ourinternalcontrolsoverfinancialreportingthatadverselyaffectedourinternalcontrolsandthatmaybeconsideredtobematerialweaknesses.
The mattersinvolvinginternalcontrolsandproceduresthatourmanagementconsideredtobematerialweaknessesunderthestandardsofthePublicCompanyAccountingOversightBoardwere:(1)lackofafunctioningauditcommitteeduetoalackofamajority ofindependentmembersand alack of a majority of outsidedirectors on our boardofdirectors,resulting inineffectiveoversightintheestablishmentand monitoring of required internal controls and procedures;(2) inadequatesegregation ofduties consistentwith control objectives;and (3)ineffectivecontrolsover periodendfinancialdisclosureandreportingprocesses.Theaforementionedmaterialweaknesses wereidentifiedby ourChiefExecutiveOfficerin connection with the reviewofourfinancialstatements as of March 31, 2014.
Managementbelieves thatthematerialweaknessessetforthin items(2)and(3)abovedidnothaveaneffecton ourfinancialresults.However,managementbelievesthatthelackofafunctioningauditcommitteeandthelackofamajorityofoutsidedirectorsonourboardofdirectorsresultsinineffectiveoversightintheestablishmentandmonitoringofrequiredinternalcontrolsandprocedures, whichcouldresultina materialmisstatementin ourfinancial statementsin future periods.
Management’sRemediationInitiatives
In anefforttoremediatetheidentifiedmaterial weaknessesandotherdeficienciesandenhanceourinternal controls,wehaveinitiated,or plantoinitiate,thefollowingseriesofmeasures:
Wewillcreateapositiontosegregatedutiesconsistentwithcontrolobjectivesandwillincreaseourpersonnelresourcesandtechnicalaccountingexpertisewithintheaccountingfunctionwhenfundsareavailabletous.And,weplanto appointoneormoreoutsidedirectorstoourboardofdirectors whoshallbeappointedto anauditcommittee resultinginafullyfunctioningauditcommitteewhowillundertakethe oversightin theestablishmentandmonitoring of requiredinternal controls and procedures such asreviewing and approvingestimatesand assumptions made by management when funds are availableto us.
Management believesthattheappointmentofoneormoreoutsidedirectors,whoshallbeappointedtoafullyfunctioningauditcommittee,willremedythelackofafunctioningauditcommitteeandalack ofamajorityofoutsidedirectorsonourBoard.
Changesininternalcontrolsoverfinancialreporting
Therewasnochangeinourinternalcontrolsoverfinancial reportingthatoccurredduringtheperiodcoveredbythisreport,whichhasmaterially affected,orisreasonablylikelyto materiallyaffect,ourinternalcontrolsoverfinancialreporting.
PARTII-OTHERINFORMATION
ITEM 1.LEGALPROCEEDINGS.
None.
ITEM 1A.RISKFACTORS.
Notapplicabletoasmallerreportingcompany.
ITEM 2.UNREGISTEREDSALESOFEQUITYSECURITIESANDUSEOFPROCEEDS.
None.
ITEM 3.DEFAULTSUPONSENIORSECURITIES.
None.
ITEM 4.MINESAFETYDISCLOSURES
Notapplicable.
ITEM 5.OTHERINFORMATION.
None.
ITEM 6.EXHIBITS.
| 31.1 | | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer |
| | | |
| 31.2 | | Rule13(a)-14(a)/15(d)-14(a)Certificationofprincipalfinancialandaccountingofficer |
| | | |
| 32.1 | | Section1350Certificationofprincipalexecutiveofficerandprincipalfinancialandaccountingofficer |
| | | |
| 101* | | InteractiveDataFilesofFinancialStatements andNotes. |
* In accordancewithRegulationS-T,theInteractiveData FilesinExhibit101totheQuarterlyReportonForm10-Qshallbedeemed“furnished”andnot“filed”.
SIGNATURES
Pursuanttotherequirements oftheSecuritiesExchangeActof1934,theregistranthasdulycausedthisreportto besigned on itsbehalfby theundersigned thereuntodulyauthorized.
| | Apple Green Holding, Inc. |
| | | |
| | BY: | /s/ Vincent Loy Ghee Yaw |
| | Name: | VincentLoyGheeYaw |
| | Title: | ChiefExecutiveOfficer,Director |
| | | |
| | Dated: | October 27, 2014 |
-14-
