UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: December 31, 2013

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to____________

Commission File Number: 333-174874

GENERAL AGRICULTURE CORPORATION

(Exact name of the registrant as specified in its charter)

Delaware		35-2379917
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Room 801, Plaza B, Yonghe Building, No.28 AnDingMen East Street, Dongcheng District,Beijing, China.		Postal Code :100007
(Address of principal executive offices)		(Zip Code)

Phone: +86-10-64097316

Fax: +86-10-64097026

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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 x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.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 x No ¨

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

Large accelerated filer	¨		Accelerated filer		¨
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller Reporting Company		x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ¨ No x

Number of shares of common stock outstanding as of February 14, 2014: 15,918,940

TABLE OF CONTENTS

	Page

PART I – FINANCIAL INFORMATION	3

ITEM 1. FINANCIAL STATEMENTS	3

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	23

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30

ITEM 4. CONTROLS AND PROCEDURES	30

PART II – OTHER INFORMATION	31

ITEM 1. LEGAL PROCEEDINGS	31

ITEM 1A. RISK FACTORS	31

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	31

ITEM 3. DEFAULT UPON SENIOR SECURITIES	31

ITEM 4. MINE SAFETY DISCLOSURES	31

ITEM 5. OTHER INFORMATION	31

ITEM 6. EXHIBITS	31

	2

PART I– FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2013 AND 2012

(UNAUDITED)

		Page

Consolidated Balance Sheets		4
Consolidated Statements of Operations and Comprehensive Income		5
Consolidated Statements of Cash Flows		6
Notes to Consolidated Financial Statements (Unaudited)		7

	3

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Consolidated Balance Sheets

	December 31, 2013		September 30, 2013
	(Unaudited)
ASSETS
Current Assets
Cash and Cash Equivalents	$	642,356	$	2,408,520
Accounts receivable		3,928,348		-
Inventory		3,389,128		4,074,166
Advance payments		1,930,479		24,438
Prepaid lease- current, net		2,965,101		2,372,480
Other current assets		408,296		15,625
Total Current Assets		13,263,708		8,895,229

Property and equipment, net		14,858,816		15,108,031

Other Assets
Intangibles, net		157,663		158,020
Prepaid leases – non current, net		20,906,584		18,000,267
Total Other Assets		21,064,247		18,158,287

TOTAL ASSETS	$	49,186,771	$	42,161,547

LIABILITIES
Current Liabilities
Accounts payable and accrued expenses		405,572		208,325
Short-term bank loans		5,562,400		5,542,000
Due to related parties		963,639		718,261
Customer deposits		3,049,405		-
Other current liabilities		133,673		45,865
Total Current Liabilities		10,114,689		6,514,451

Total Liabilities		10,114,689		6,514,451

STOCKHOLDERS' EQUITY
Common stock
$0.0001 par value, 200,000,000 shares authorized 15,918,940 shares issued and outstanding at December 31, 2013 and September 30, 2013, respectively		1,592		1,592
Additional paid-in capital		4,909,572		4,909,572
Statutory reserves		2,885,384		2,508,735
Retained earnings		28,583,900		25,678,005
Accumulated other comprehensive income		2,691,635		2,549,192
Total stockholders’ equity		39,072,082		35,647,096

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	49,186,771	$	42,161,547

The accompanying notes are an integral part of these consolidated financial statements.

	4

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Consolidated Statements of Operations and Comprehensive Income(Loss)

(Unaudited)

	For the Three Months Ended December 31
	2013		2012

Sales	$	7,126,875	$	7,440,677

Cost of sales		3,273,264		3,400,608

Gross profit		3,853,611		4,040,069

Operating expenses
Selling expenses		59,134		396,403
General and administrative expenses		461,179		212,003
Total operating expenses		520,313		608,406

Income from operations		3,333,298		3,431,663

Other income (expenses):
Government subsidy		-		111,321
Interest income		709		1,092
Interest expense		(61,681)		(52,777)
Other income(expense), net		10,218		11,981
Total other income(expenses)		(50,755)		71,617

Income before provision for income taxes		3,282,543		3,503,280

Provision for income taxes		-		-
Net income		3,282,543		3,503,280

Other comprehensive income
Foreign currency translation adjustment		142,443		60,491
Total comprehensive income	$	3,424,986	$	3,563,771

Basic earning per share	$	0.21	$	0.22
Diluted earning per share	$	0.21	$	0.22

Weighted average number of common stock outstanding
Basic		15,918,940		15,918,940
Diluted		15,918,940		15,918,940

The accompanying notes are an integral part of these consolidated financial statements.

	5

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Consolidated Statements of Cash Flows

(Unaudited)

	For the Three Months Ended December 31,
	2013		2012

Cash flows from operating activities:
Net Income		3,282,543		3,503,280

Adjustments to reconcile net income to net cash used in operating activities:
Long-term advance payments amortized in current period		638,116		391,824
Depreciation and amortization		285,209		274,967
Changes in current assets and current liabilities:
Accounts receivable		(3,918,743)		(3,572,389)
Inventory		718,132		1,453,562
Advance payments		(1,901,291)		(3,356,031)
Prepaid leases		(4,053,692)		-
Other current assets		(391,654)		(2,357)
Accounts payable and accrued expenses		196,407		150,572
Customer deposits		3,041,949		286,254
Other current liabilities		87,427		59,043
Total adjustments		(5,298,140)		(4,314,555)

Net cash used in operating activities		(2,015,597)		(811,275)

Cash flows from investing activities:
Acquisition of property and equipment		-		(18,988)
Addition to construction in progress		-		(44,121)
Net cash used in investing activities		-		(63,109)

Cash flows from financing activities:
Restricted cash		-		278,303
Proceeds from short-term bank loans		5,548,800		1,224,531
Repayment of short-term bank loans		(5,548,800)		-
Due to shareholder		244,913		88,779
Net cash provided by financing activities		244,913		1,591,613

Effect of foreign currency translation		4,520		(607)

Net increase (decrease) in cash and cash equivalents		(1,766,164)		716,622

Cash and cash equivalents – beginning of period		2,408,520		351,045
Cash and cash equivalents – ending of period		642,356		1,067,667

Supplemental disclosure of cash flow information:
Cash paid for interest	$	61,681	$	52,777

Supplemental schedule of non-cash activities
Transfer from construction in progress to fixed assets	$	217,580	$	59,294

The accompanying notes are an integral part of these consolidated financial statements.

	6

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Notes to Consolidated Financial Statements

(Unaudited)

Note 1 – Organization and Nature of Business

Geltology Inc. (“Gelt”) was established under the laws of the State of Delaware on March 24, 2010. On July 12, 2013, Gelt filed with the Secretary of State, Delaware a Certificate of Amendment to change its name to General Agriculture Corporation. The accompanying unaudited consolidated financial statements include the financial statements of General Agriculture Corporation and its subsidiaries (collectively, the “Company”). The Company is primarily engaged in planting, preserving, packaging and marketing premium navel oranges for distribution and sale throughout the People’s Republic of China (“PRC”).

On July 11, 2012, Gelt completed a reverse acquisition of General Red Holding, Inc. (“GRH”), which was established under the laws of the State of Delaware on January 18, 2011. To accomplish the Share Exchange Agreement, Gelt issued to GRH an aggregate of125,112,803 shares of the common stock of Gelt, at par value of $0.0001 per share. Gelt was delivered with zero assets and zero liabilities at time of closing. Immediately prior to the Share Exchange, Gelt had6,750,000 shares of Common Stock issued and outstanding. Simultaneously with the transaction, the two principal shareholders of Gelt surrendered for cancellation an aggregate of4,513,252 shares of Common Stock beneficially owned by them. The transaction was regarded as a reverse merger whereby GRH was considered to be the accounting acquirer. Although the Company is a legal parent company, the share exchange was treated as a recapitalization of GRH. Thus, GRH is the continuing entity for financial reporting purposes. The financial statements have been prepared as if GRH had always been the reporting company and then on the share exchange date, had reorganized its capital stock.

On September 30, 2011, GRH entered into a Share Transfer and Issuance Agreement (the “Agreement”) with Han Glory International Investment Limited (“Han Glory International”), a company incorporated on April 28, 2011 under the laws of British Virgin Islands and Hua Mei Investments Limited (“Hua Mei”), a company incorporated on April 26, 2011 under the laws of the British Virgin Islands. Under the Agreement, GRH issued74,814,862 shares to Hua Mei, the sole stockholder of Han Glory International, in exchange for all shares and beneficial interest of Han Glory International. This transaction is treated as a reverse merger, and therefore, after the share exchange, Han Glory International became the wholly owned subsidiary of GRH.

On May 18, 2011, Han Glory International purchased all shares of Greater China International Investment Limited (“Greater China International”), a company incorporated on December 4, 2009 under the laws of Hong Kong, from Zhihao Zhang, the sole stockholder of Greater China International, for $1,290 (HK$10,000). As a result, Greater China International became the wholly owned subsidiary of Han Glory International.

On January 13, 2010, Greater China International formed Nanchang Hanxin Agriculture Technology Co., Ltd, a wholly foreign-owned enterprise (“WFOE”) in the city of Nanchang, Jiangxi Province, the People’s Republic of China (“PRC”).

On February 5, 2010, WFOE purchased all shares of Xingguo General Fruit Industry Development Co., Ltd (“General Fruit”) from Jiangjun Hong Group Co., Ltd., Xingping Hou and Jiefeng Ren for $293,400. As a result, WFOE acquired100% interest in General Fruit. This transaction was a capital transaction in substance. That is, the transaction was a reverse recapitalization, equivalent to the issuance of stock by General Fruit for the net monetary assets of WFOE accompanied by a recapitalization.

General Fruit was formed in Xingguo County, Jiangxi Province, under the corporate laws of PRC on March 5, 2003. The primary business of General Fruits is to grow and sell navel oranges. On July 14, 2008, after a series of equity transfer agreements, General Fruits acquired90% interest in Xingguo General Red Navel Orange Preservation Company, Ltd. (“General Preservation”). On July 25, 2010,General Fruits purchased the remaining 10% interest in General Preservation from Xingping Hou, the minority stockholder, for $295,000 (RMB2,000,000) and owns 100% of General Preservation thereafter.

	7

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Notes to Consolidated Financial Statements

(Unaudited)

Note 1 – Organization and Nature of Business

General Preservation, a citrus fruits company primarily engaged in preserving, packaging and marketing premium navel oranges, was formed as a limited liability company in Xingguo County, Jiangxi Province under PRC laws on November 22, 2005. General Preservation provides wholesale, retail, and institutional customers in China and several other countries with premium navel orange fruits under the trademark of “General Red”.

On September 26, 2011, GRH purchased all shares of Sheng Da Holding Limited (“Sheng Da BVI”), a company incorporated on May 18, 2011 under the laws of the British Virgin Islands, from General Red Company, Ltd (“General Red BVI”), a limited liability company incorporated on August 28, 2008 under the laws of British Virgin Islands, for $23,000. As a result, Sheng Da BVI became the wholly owned subsidiary of GRH. On September 29, 2011, Sheng Da BVI entered into a series of new agreements to terminate the old agreements with General Preservation, which were originally signed between General Red BVI and General Preservation on November 17, 2008, amended on June 10, 2011, and transferred to Sheng Da BVI by General Red BVI on June 30, 2011. The old agreements included a Consultation Agreement, an Operating Agreement, a Share Pledge Agreement, a Proxy Agreement and an Option Agreement. Upon the entry of these new agreements, General Preservation is no longer the Variable Interest Entity of Sheng Da BVI.

On June 28, 2013, at the Annual Meeting of stockholders, the stockholders of the Company approved an amendment to the Company’s Certificate of Incorporation. On June 28, 2013, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to the Charter (the “Charter Amendment”). Pursuant to the Charter Amendment, the Company’s Charter was amended, effective as of July 12, 2013, to affect a reverse stock split of the Company’s shares of common stock. On July 12, 2013, the Company affected the1 for 8 reverse split of the Company’s issued and outstanding common stock, decreasing the number of outstanding shares from127,349,551 to15,918,940. These statements have been retroactively adjusted to reflect this reverse split.

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 unaudited consolidated financial statements include the accounts of General Agriculture Corporation 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 September 30, 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. Due to the interim disclosures generally do not repeat those in the annual statements, such financial information should be read in conjunction with the audited consolidated financial statements in the Companys Annual Report for the year ended September 30, 2013.

	8

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Notes to Consolidated Financial Statements

(Unaudited)

Note 2 – Summary of Significant Accounting Policies(Continued)

Change in Fiscal Year

On September 28, 2012, the Company’s board of directors approved a change in fiscal year-end from December 31 to September 30. The fiscal year-end change became effective September 30, 2012.

Seasonal Nature of Operations

The Company’s operations are seasonal based on the maturity stage of its products. Sales are concentrated during the months from October through December and from January through March, corresponding to the Company’s product maturity cycle which begins in the month of October when the products mature and are ready for sale.

Foreign Currency Translation and Transactions

The accompanying unaudited consolidated financial statements are presented in U.S. dollars (“USD”). Great China International’s functional currency is Hong Kong Dollar (“HKD”) and Nanchang Hanxin Agriculture Technology Co., Ltd, General Fruit and General Preservation’s functional currency is Chinese Yuan Renminbi (“RMB”). The unaudited consolidated financial statements are translated into USD in accordance with the Codification ASC 830,Foreign Currency Matters. All assets and liabilities were translated at the current exchange rate, at respective balance sheets dates, stockholders’ equity is translated at the historical rates and income statement items are translated at the average exchange rate for the reporting periods. The resulting translation adjustments are reported as other comprehensive income and accumulated other comprehensive income in stockholders’ equity in Accordance with the Codification ASC 220, Comprehensive Income.

Transaction gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. There were no material transaction gains or losses in the periods presented.

Cash flow from the Company’s operations included in the statement of cash flows is calculated based upon the functional currency using the average translation rate. As a result, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with arithmetical changes in the corresponding balances on the consolidated balance sheets. No presentation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation.

The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company since it has not engaged in any significant transactions that are subject to the restrictions.

	9

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Notes to Consolidated Financial Statements

(Unaudited)

Note 2 – Summary of Significant Accounting Policies(Continued)

The exchange rates used to translate amounts in RMB into USD for the purposes of preparing the consolidated financial statements were as follows:

	December 31,	September 30,
	2013	2013
Period end RMB:USD exchange rate	0.1636	0.1630
Average RMB:USD exchange rate	0.1632	0.1605
Period end HKD:USD exchange rate	0.1290	0.1290
Average HKD:USD exchange rate	0.1290	0.1289

Use of Estimates

The preparation of unaudited consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods presented. Actual results could differ from these estimates. Significant items subject to such estimates and assumptions include the recoverability of the carrying amounts of recorded assets and liabilities, estimated useful life of property and equipment, inventory obsolesce and the allowance for doubtful accounts.

Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company’s financial statements.

If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits and short-term cash investments that are highly liquid in nature and have original maturities of three months or less.

	10

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Notes to Consolidated Financial Statements

(Unaudited)

Note 2 – Summary of Significant Accounting Policies(Continued)

Accounts Receivable

Accounts receivable are recorded net of allowance for doubtful accounts. The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. Periodically, management assesses customer credit history and relationships as well as performs accounts receivable aging analysis. Based on the results, management determines whether certain balances are deemed uncollectible at the end of each period. Using its past collection experience, the Company reserves0.3% of accounts receivable balances outstanding between six months and twelve months,3% of accounts receivable outstanding for more than one year but less than two years, and100% of accounts receivable balances outstanding for more than two years. As of December 31, 2013 and September 30, 2013, no allowance was deemed necessary as all receivables were aged less than six months.

Inventories

Inventory is stated at the lower of cost or market. Cost is determined using the weighted-average cost method. Provisions are made for excess, slow moving and obsolete inventory as well as inventory whose carrying value is in excess of net realizable values, if any. Management continually evaluates the recoverability based on assumptions about customer demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory reserves or write-downs may be required that could negatively impact our gross margin and operating results. As of December 31, 2013 and September 30, 2013, no provisions were deemed necessary as no obsolete and slow-moving inventories were observed.

Property and Equipment

Property and equipment are stated at cost. Depreciation is calculated based on the straight-line method over the estimated useful lives of the assets as follows:

		Estimated Useful Life
Electronic equipment		5 years
Vehicles		10 years
Machinery and equipment		5 to 15 years
Buildings and improvements		5 to 20 years
Navel orange orchards		11 to 30 years

Construction in progress primarily represents the construction costs of buildings, machinery, equipment and agricultural improvements made to orchards. Costs incurred are capitalized and transferred to property and equipment upon completion, at which time depreciation commences.

Navel orange orchards consist of orchards the Company planted and acquired from local farmers. The planting cost includes cost related to land leveling, saplings, fertilizer, labor and facility on orchard lands. The planting cost was recorded as the property cost. In 2008 and 2011, the Company directly acquired certain navel orange trees from local farmers and recorded the purchase cost as property cost.

	11

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Notes to Consolidated Financial Statements

(Unaudited)

Note 2 – Summary of Significant Accounting Policies(Continued)

Cost of repairs and maintenance is expensed as incurred. Gain or loss on disposal of property and equipment, if any, is recognized in the statements of operations and comprehensive income.

Impairment of Long-Lived Assets

Long-lived assets, including property, plant and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. As of December 31 2013 and September 30, 2013, there was no impairment of long-lived assets.

Intangible Assets

Intangible assets are amortized using the straight-line method over their estimated period of benefit. Evaluation of the recoverability of intangible assets is made to take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. All of our intangible assets are subject to amortization. No impairments of intangible assets have been identified during any of the periods presented. Land use rights with a finite useful life are amortized on a straight-line basis over its estimated useful life of50 years.

Revenue Recognition

The Company derives its revenue primarily from sale of navel oranges. Revenue is recognized in accordance with the provisions of ASC Topic 605, which provides that revenue is recognized when products are shipped, title and risk of loss is passed to the customers and collection is reasonably assured. Payments received before the above criteria are satisfied are recorded as advances from customers.

Income Tax

The Company has adopted the provisions of ASC subtopic 740-10 (“ASC 740-10”), Income taxes: Overall (Pre-Codification: FIN 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement 109). ASC 740-10 clarifies the accounting for income taxes by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. It also provides guidance on derecognizing, measurement classification, interest and penalties, accounting in interim periods, disclosure and transition.

The Company applies the provisions of ASC 740-10,Accounting For Uncertainty In Income Taxes, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in its combined financial statements. ASC 740-10 prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. ASC 740-10 also provides guidance related to, among other things, classification, accounting for interest and penalties associated with tax positions, and disclosure requirements.

	12

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Notes to Consolidated Financial Statements

(Unaudited)

Note 2 – Summary of Significant Accounting Policies(Continued)

All of the Company’s income is generated in the PRC, accordingly, its income tax provision is calculated based on the applicable tax rates and existing legislation, interpretation and practices in respect thereof.

Comprehensive Income

Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. For the Company, comprehensive income for the periods presented includes net income and foreign currency translation adjustments.

The accumulated other comprehensive income balances at December 31, 2013 and September 30, 2013 were approximately $2,691,635 and $2,549,192, respectively, and are comprised entirely of foreign currency translation adjustments. Comprehensive income for the three months ended December 31, 2013 and 2012 was as follows.

	Three Months Ended December 31,
	2013		2012
Comprehensive income
Net income	$	3,282,543	$	3,503,280
Foreign currency translation adjustement		142,443		60,491
Comprehensive income	$	3,424,986	$	3,563,771

Advertising Expense

The Company expenses all advertising expenses as incurred. Advertising expenses included in selling expenses were $1,860 and $17,194 for the three months ended December 31, 2013 and 2012, respectively.

Shipping and Handling

All shipping and handling costs are expensed as incurred and included in selling expenses. Total shipping and handling expenses were $20,846 and $364,728 for the three months ended December 31, 2013 and 2012, respectively.

	13

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Notes to Consolidated Financial Statements

(Unaudited)

Note 2 – Summary of Significant Accounting Policies(Continued)

Statutory Reserves

Pursuant to the applicable laws in the PRC, the Company makes appropriations to two non-distributable reserve funds, the statutory surplus reserve and the statutory public welfare reserve. The appropriations are based on after-tax net earnings as determined in accordance with the PRC generally accepted accounting principles, after offsetting any prior years’ losses. Appropriation to the statutory surplus reserve is based on an amount at least equal to10% of after-tax net earnings until the reserve is equal to50% of the entity's registered capital. Appropriation to the statutory public welfare fund is based on5% to10% of after-tax net earnings and is not mandatory. The statutory public welfare reserve is established for the purpose of providing employee facilities and other collective benefits to the employees and is non-distributable, other than in liquidation.

The Company does not make appropriations to the discretionary surplus reserve fund. As of December 31, 2013 and September 30, 2013, the Company had appropriated $2,885,384 and $2,508,735 of statutory surplus reserve funds, respectively.

Value-added-tax

The Company is subject to a value added tax (“VAT”) of13% for selling navel oranges that were bought from other farmersand 17% for processing navel oranges from General Fruits. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). Under the commercial practice of the PRC, the Company pays VAT based on tax invoices issued. The tax invoices may be issued subsequent to the date on which revenue is recognized, and there may be a considerable delay between the date on which the revenue is recognized and the date on which the tax invoice is issued. In the event that the PRC tax authorities dispute the date on which revenue is recognized for tax purposes, the PRC tax office has the right to assess a penalty based on the amount of the taxes which are determined to be late or deficient, and will be expensed in the period if and when a determination is made by the tax authorities that a penalty is due. The Company reports revenues net of PRC’s value added tax for all the periods presented in the consolidated statements of operations.

Operating leases

Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company are accounted for as operating leases. Payments made under operating leases are charged to the consolidated statements of operations on a straight-line basis over the shorter of the lease term or estimated useful life.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are cash and accounts receivable arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions. The Company controls credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is limited.

	14

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Notes to Consolidated Financial Statements

(Unaudited)

Note 2 – Summary of Significant Accounting Policies(Continued)

As of December 31, 2013 and September 30, 2013, the Company’s cash was with banks in the PRC and Hong Kong, where there is currently no rule or regulation mandated on obligatory insurance of bank accounts.

For the three months ended December 31, 2013, no customer accounted for more than10% of the Company’s sales. For the three months ended December 31, 2012, two customers accounted for approximately21% of the Company’s total sales.

For the three months ended December 31, 2013, two vendors account for79% the Company’s total purchases, respectively. For the three months ended December 31, 2012, three vendors accounted for approximately73% of the Company’s raw materials,

Economic and Political Risks

The Company’s operations are conducted primarily in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.

The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

Fair Value

The Company has categorized its assets and liabilities at fair value based upon the fair value hierarchy specified by FASB ASC 820.

The levels of fair value hierarchy are as follows:

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access.

ii.

Level 2 inputs utilize other-than-quoted prices that are observable, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

iii.

Level 3 inputs are unobservable and are typically based on our own assumptions, including situations where there is little, if any, market activity.

The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. As of December 31, 2013 and September 30, 2013, the carrying amounts of financial assets and liabilities, such as cash, accounts receivable, accounts payable, and other payables, approximate their fair values because of the short maturity of these instruments and market rates of interest available to the Company.

	15

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Notes to Consolidated Financial Statements

(Unaudited)

Note 2 – Summary of Significant Accounting Policies(Continued)

Earnings Per share

The Company reports earnings per share in accordance with the provisions of FASB ASC 260.10, "Earnings Per Share”. FASB ASC 260.10 requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock using the treasury method. As of December 31, 2013 and September 30, 2013, there are no potentially dilutive securities outstanding.

Recent accounting pronouncements

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does 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.

In January 2013, the FASB issued ASU 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarified that the scope of ASU 2011-11, Disclosures about Offsetting Assets and Liabilities, would apply to derivatives including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with Section 210-20-45 or Section 815-10-45 or are subject to a master netting arrangement or similar agreement. This ASU is effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. Retrospective presentation for all comparative periods presented is required. The adoption of ASU 2013-01 is not expected to have material impact on the Company’s consolidated financial statements.

In February 2013, the Financial Accounting Standards Board issued ASU 2013-02, Comprehensive Income: Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in financial statements. However, it requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. ASU 2013-02 is effective prospectively for reporting periods beginning after December 15, 2012 for public entities. Early adoption is permitted. The Company does not expect that the adoption of ASU 2013-02 will have a material impact on its consolidated financial statements.

Note 3 – Inventory

Inventories as of December 31, 2013 and September 30, 2013 by major categories are summarized as follows:

	December 31, 2013		September 30, 2013

Raw material	$	200,574	$	84,171

Work in process		1,616,503		3,989,995

Finished goods		1,572,051		-

	$	3,389,128	$	4,074,166

Work in process consists of the capitalization of depreciation, amortization of prepaid lease of navel orange orchards, rental, salary, fertilizer, utility, and labor spent in cultivating and producing navel oranges. Work in process is posted to finished goods after the navel oranges are harvested. The harvest season of navel oranges usually starts in October.

Note 4 – ADVANCE PAYMENTS

The Company usually makes an advance payment to the vendors where the Company bought certain navel oranges from. Advance payments as of December 31, 2013 and September 30, 2013 consist of the following:

	December 31, 2013		September 30, 2013
Advances to suppliers	$	1,907,672	$	-
Others		22,807		24,438
		1,930,479	$	24,438

	16

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Notes to Consolidated Financial Statements

(Unaudited)

Note 5 – Property and Equipment

Property and equipment as of December 31, 2013 and September 30, 2013 consist of the following:

	December 31, 2013		September 30, 2013
Electronic equipment	$	118,103	$	117,670
Vehiciles		326,764		325,566
Machinery and equipment		2,072,124		2,064,525
Buildings and improvements		7,784,165		7,755,617
Navel organce orchards		10,880,236		10,623,019
Subtotal		21,181,393		20,886,397
Less: Accumulated Depreciation		6,391,411		6,084,046
		14,789,981		14,802,351
Add:Construction progress		68,835		305,680
Total	$	14,858,816	$	15,108,031

Note 6 – Intangible Assets

Intangible assets as of December 31, 2013 and September 30, 2013 consist of the following:

	December 31, 2013		September 30, 2013
Land use rights	$	187,694	$	185,614
Less: Acculmulated amortization		30,031		27,594
Total	$	157,663	$	158,020

Amortization expense was $936 and $912 for the three months ended December 31, 2013 and 2012, respectively.

Note 7 – Prepaid Leases

Prepaid leases as of December 31, 2013 and September 30, 2013 consist of the following:

	December 31, 2013		September 30, 2013
Current	$	2,965,101	$	2,372,480
Non current		20,906,584		18,000,267
Total	$	23,871,686	$	20,372,747

On April 1, 2011, General Fruit entered into lease contracts with a group of individual orchard owners, pursuant to which General Fruit was authorized to operate the orchards for10 years starting January 1, 2011. The lease terms are effective from January 1, 2011 throughDecember 31, 2020. The aggregate lease amount is approximately RMB98,553,600 ($16,123,369) and pursuant to the contract terms, as of September 30, 2012, the Company paid off the entire lease amount using cash generated from operations.

	17

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 7 – PREPAID LEASES(Continued)

On December 30, 2012, January 1, 2013 and June 1, 2013, General Fruit entered into lease contracts with another group of individual orchard owners, pursuant to which General Fruit was authorized to operate the orchards for10 years starting January 1, 2013. The lease terms are effective from January 1, 2013 throughDecember 31, 2022. The aggregate lease amount is approximately RMB57,847,300 ($9,463,818) and pursuant to the contract terms, as of June 30, 2013, the Company paid off the entire lease amount using cash generated from operations.

OnDecember 31, 2013, General Fruit entered into a lease contract with an orchard company, pursuant to which General Fruit was authorized to operate the orchard for10 years starting January 1, 2014. The lease terms are effective from January 1, 2014 through December 31, 2023. The aggregate lease amount is approximately RMB24,840,000 ($4,063,824) and pursuant to the contract terms, as of December 31, 2013, the Company paid off the entire lease amount using cash generated from operations.

These leases are accounted for as operating leases in accordance with FASB ASC 840-20 and the aggregate lease amounts will be expensed each year on a straight-line basis over the lease terms. Lease expenses were approximately $638,116 and $391,824 for the three months ended December 31, 2013 and 2012, respectively.

Lease expense attributable to future periods is as follows:

Twelve months ended December 31:

2014	$	2,957,851

2015		2,957,851

2016		2,957,851

2017		2,957,851

2018		2,957,851

Thereafter		9,082,428

	$	23,871,686

	18

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Notes to Consolidated Financial Statements

(Unaudited)

Note 8 – Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses as of December 31, 2013 and September 30, 2013 consist of the following:

	December 31, 2013		September 30, 2013
Accounts payable	$	288,805	$	109,608
Accrued expenses		116,767		98,717
	$	405,572	$	208,325

The carrying value of accounts payable and accrued expenses approximates their fair value due to the short-term nature of these obligations.

Note 9 – CUSTOMER DEPOSITS

Based on the sales contract, the Company’s sales distributors are required to make security deposits. As of December 31, 2013 and September 30, 2013, the Company had customer deposits of $3,409,405 and $0, respectively.

Note 10 – Short-Term Bank Loans

On November 30, 2012 and December 21, 2012, the Company obtained a loan of $5,542,000(RMB34,000,000) from Agricultural Development Bank of China, the principal of which would be repaid on November 19, 2013. The interest was calculated using an annual fixed interest rate of6.00% and paid monthly. The loan was secured by the Company’s real property, inventory and equipment and guaranteed by Xingping Hou, CEO of the Company and Youhua Yu, wift of Xingping Hou. The principal was paid off in October and November 2013.

On November 28 and December 4, 2013, the Company entered into two short-term bank loan agreements with Agricultural Development Bank of China for $2,617,600(RMB16,000,000) and $2,944,800 (RMB18,000,000). Pursuant to the Loan Agreements, the principle will be repaid on September 27, 2014 and October 3, 2014. The interest was calculated using an annual fixed interest rate of6.00% and will be paid monthly. The loan was secured by the Company’s real property, navel orange orchards and equipments, and guaranteed by Xingping Hou, CEO of the Company. The loan was also guaranteed by Ganzhou Guoruitai Guarantee Co., Ltd., an unrelated party, with maximum exposure limit of $1,963,200 (RMB12,000,000). On November 20 and December 4, 2013, Xingping Hou, CEO of the Company and Jiangjunhong Industrial Group Co., Ltd., a Chinese Corporation owned by Xingping Hou, jointly entered into cross-guarantee agreements with Ganzhou Guoruitai Guarantee Co, Ltd. Pursuant to the cross-guarantee agreements, the Company paid $49,080 (RMB300,000) to the guarantor as guarantee fee for the above bank loans. The term of these guarantees are for two years. On the date of loan expiration, should the Company failed to make their debt payment, Jiangjunhong Industrial Group Co., Ltd. and Xingping Hou will be obligated to perform under the cross guarantees by primarily making the required payments, including late fees and penalties. In addition, on December 3, 2013, the Company paid Ganzhou Guoruitai Guarantee Co, Ltd $392,640 (RMB2,400,000) as security deposit for the guarantee. The purpose of such bank loans are for the working capital.

	19

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Notes to Consolidated Financial Statements

(Unaudited)

Note 11 – Due to Related Party

As of December 31, 2013 and September 30, 2013, the Company had outstanding debts from a related party, Hua Mei Investments Limited (“Hua Mei”), of $963,639 and $718,261, respectively. These debts are non-interest bearing and payable on demand. The proceeds of these debts were utilized as working capital.

Note 12 – Income Taxes

General Agriculture Corporation and General Red Holding Inc. (collectively referred to as the “US entities”) are each subject to US tax and files US federal income tax returns. The US entities are Delaware corporations and conduct all of their businesses through their Chinese subsidiaries. No provision for US federal income tax were made for the three months ended December 31, 2013 and 2012 as the US entities incurred losses.

Han Glory International is not subject to tax on income or capital gains under the laws of British Virgin Islands. Greater China International did not earn any income that was derived in Hong Kong for the three months ended December 31, 2013 and 2012, and therefore was not subject to Hong Kong Profit tax.

Under the Corporate Income Tax Law of the PRC, the corporate income tax rate is25%. However, as an agricultural company engaged in cultivation, General Fruit has been approved for tax exemption since its formation. General Preservation was also approved for such exemption from income tax for the years 2013 and 2012. As a result, for the three months ended December 31, 2013 and 2012, there was no income tax provision for the Company.

The US shell company has net operating loss amounted to $257,995 and $36,154 during the three months ended December 31, 2013 and 2012, respectively. Net operating loss carried forward, If not utilized, will expire in20 years after its generation. Management believes that it is more likely than not that the benefit from the NOL carryforwards will not be realized. In recognition of this risk, we have provided an offsetting valuation allowance of the deferred tax assets, relating to these NOL carryforwards. Management will review this valuation allowance periodically and make adjustments as warranted.

The following table reconciles the U.S. statutory rates to the Company’s effective tax rate as:

	Three Months Ended December 31,
	2013		2012

U.S. Statutory rate	34	%	34	%
Foreign income not recognized in the U.S.	(34)		(34)
PRC statutory income tax rate	25		25
Tax exemption	(25)		(25)
Effective income tax rate	-		-

	20

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Notes to Consolidated Financial Statements

(Unaudited)

Note 13 – StockHOLDERs’ EQUITY

On July 11, 2012, the Company entered into a Share Exchange Agreement with General Red Holding, Inc., another Delaware company (“GRH”) and acquired all of the outstanding capital stock of GRH. In connection with the Share Exchange Agreement, the Company issued to GRH an aggregate of125,112,803 shares of the common stock of the Company, at par value of $0.0001 per share. Immediately prior to the Share Exchange, the Company had6,750,000 shares of Common Stock issued and outstanding. In connection with the transaction, the two principal shareholders of the Company surrendered for cancellation an aggregate of4,513,252 shares of Common Stock beneficially owned by them.

During the years ended September 30, 2012, Hua Mei and the Company entered into an agreement to convert a debt in the amount of $307,720, owed to Greater China International to equity. Pursuant to the agreement, the additional paid in capital of the Company increased to $4,909,572 after the conversion.

On July 12, 2013, the Company affected the 1 for 8 reverse split of the Company’s issued and outstanding common stock, decreasing the number of outstanding shares from127,349,551 to15,918,940. These statements have been retroactively adjusted to reflect this reverse split.

Note 14 – Statutory Reserve

For the three months ended December 31, 2013, statutory reserve activity was as follows:

Balance – September 30, 2012	$	1,653,723

Addition to statutory reserve		855,012

Balance – September 30, 2013		2,508,735

Addition to statutory reserve		376,649

Balance – December 31, 2013	$	2,885,384

Note 15 – Earnings Per Share

The Company reports earnings per share in accordance with the provisions of the FASB’s related accounting standard. This standard requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution, but includes vested restricted stocks and is computed by dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock.

	21

GENERAL AGRICULTURE CORPORATION AND SUBSIDIARIES

(FORMERLY GELTOLOGY INC.)

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 15 – EARNINGS PER SHARE(Continued)

The following is a reconciliation of the basic and diluted earnings per share computation:

	Three Months Ended December 31,
	2013		2012

Net income	$	3,282,543	$	3,503,280

Weighted average common shares		15,918,940		15,918,940
(denominator for basic earnings per share)

Effect of diluted securities:		-		-

Weighted average common shares		15,918,940		15,918,940
(denominator for diluted earnings per share)

Basic earnings per share	$	0.21	$	0.22
Diluted earnings per share	$	0.21	$	0.22

Note 16 – Subsequent Event

The Company has evaluated subsequent events for purposes of recognition or disclosure through the date these financial statements were issued.There has been no reportable subsequent event.

	22

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion of the financial condition and results of operation of General Agriculture Corp.(formerly Geltology Inc.) for the three months ended December 31, 2013 and 2012 should be read in conjunction with the selected consolidated financial data, the unaudited consolidated financial statements and the notes to those statements that are included elsewhere in this report on Form 10-Q (the “ Report”). In addition to historical information, the following discussion contains certain forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements relate to our future plans, objectives, expectations and intentions. These statements may be identified by the use of words such as “may”, “will”, “could”, “expect”, “anticipate”, “intend”, “believe”, “estimate”, “plan”, “predict”, and similar terms or terminology, or the negative of such terms or other comparable terminology. Although we believe the expectations expressed in these forward-looking statements are based on reasonable assumptions within the bound of our knowledge of our business, our actual results could differ materially from those discussed in these statements. Factors that could contribute to such differences include, but are not limited to, those discussed in the “Risk Factors” section. We undertake no obligation to update publicly any forward-looking statements for any reason even if new information becomes available or other events occur in the future.

Our financial statements are prepared in U.S. Dollars and in accordance with accounting principles generally accepted in the United States. See “Critical Accounting Policies and Estimates - Foreign Currency Translation and Transactions” below for information concerning the exchange rates at which Renminbi and Hong Kong Dollar were translated into U.S. Dollars at various pertinent dates and for pertinent periods.

COMPANY OVERVIEW

Geltology Inc. (“GELT”) was incorporated under the laws of the State of Delaware on March 24, 2010. On July 12, 2013, GELT filed with the Secretary of State Delaware a Certificate of Amendment to change its name to General Agriculture Corporation. GELT, through its direct operating subsidiaries General Fruit and General Preservation, is primarily engaged in planting, preserving, packaging and marketing premium navel oranges for distribution and sale throughout the People’s Republic of China (“PRC”).

On July 11, 2012, GELT completed a reverse acquisition of General Red Holding, Inc. (“GRH”), which was established under the laws of the State of Delaware on January 18, 2011, entered into a share exchange agreement (the “Exchange Agreement”) with GRH and acquired all of the outstanding capital stock of GRH. Pursuant to the Exchange Agreement, GELT issued to GRH an aggregate of 125,112,803 shares of the common stock of GELT, at par value of $0.0001 per share (“Common Stock”) (such transaction is hereinafter referred to as the “Share Exchange”). GELT was delivered with zero assets and zero liabilities at time of closing.

Immediately prior to the Share Exchange, GELT had 6,750,000 shares of Common Stock issued and outstanding. Simultaneously with the transaction, the two principal shareholders of GELT surrendered for cancellation an aggregate of 4,513,252 shares of Common Stock beneficially owned by them. The transaction was regarded as a reverse merger whereby GRH was considered to be the accounting acquirer. Although the Company is the legal parent company, the share exchange was treated as a recapitalization of GRH. Thus, GRH is the continuing entity for financial reporting purposes. The financial statements have been prepared as if GRH had always been the reporting company and then on the share exchange date, had reorganized its capital stock.

Upon completion of the Share Exchange, the shareholders of GELT owned approximately 98.24% of the fully diluted outstanding shares of the Company prior to the issuance of the shares to the investors. Accordingly, GRH became the wholly owned subsidiary of GELT.

On September 30, 2011, GRH entered into an Agreement and Plan of Reorganization with Han Glory International Investment Limited (“Han Glory International”), a company incorporated on April 28, 2011 under the laws of British Virgin Islands and Hua Mei Investments Limited (“Hua Mei”), a company incorporated on April 26, 2011 under the laws of the British Virgin Islands. Under the agreement, GRH issued 74,814,862 shares to Hua Mei, the sole stockholder of Han Glory International, in exchange for all shares and beneficial interest of Han Glory International. This transaction is treated as a reverse merger, and therefore, after the share exchange, Han Glory International became the wholly owned subsidiary of GRH.

	23

On January 13, 2010, Greater China International formed Nanchang Hanxin Agriculture Technology Co., Ltd (“WFOE”) in the city of Nanchang, Jiangxi Province, the PRC.

On February 5, 2010, WFOE purchased all shares of Xingguo General Fruit Industry Development Co., Ltd (“General Fruit”) from Jiangjun Hong Group Co., Ltd., Xingping Hou and Jiefeng Ren for $293,400. As a result, WFOE acquired 100% interest in General Fruit. This transaction was a capital transaction in substance. That is, the transaction was a reverse recapitalization, equivalent to the issuance of stock by General Fruit for the net monetary assets of WFOE accompanied by a recapitalization.

General Fruit was formed in Xingguo County, Jiangxi Province, under the corporate laws of the PRC. On March 5, 2003. The primary business of General Fruit is to grow and sell navel oranges. On July 14, 2008, after a series of equity transfer agreements, General Fruit acquired 90% interest in Xingguo General Red Navel Orange Preservation Company, Ltd. (“General Preservation”). On July 25, 2010, General Fruit purchased the remaining 10% interest in General Preservation from Xingping Hou, the minority stockholder, for $295,000 (RMB 2,000,000) and owns 100% of General Preservation thereafter.

On June 28, 2013, at the Annual Meeting of stockholders the stockholders of the Company approved an amendment to the Company’s Certificate of Incorporation. On June 28, 2013, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to the Charter (the “Charter Amendment”). Pursuant to the Charter Amendment, the Company’s Charter was amended, effective as of July 12, 2013, to affect a reverse stock split of the Company’s shares of common stock. On July 12, 2013, the Company affected the 1 for 8 reverse split of the Company’s issued and outstanding common stock, decreasing the number of outstanding shares from 127,349,551 to 15,918,940. These statements in this 10-Q have been retroactively adjusted to reflect this reverse split.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We continually evaluate our estimates, including those related to bad debts, inventories, recovery of long-lived assets, income taxes, and the valuation of equity transactions. We base our estimates on historical experience and on various other assumptions that we believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the financial statements.

	24

While our significant accounting policies are fully described in Note 2 to our unaudited consolidated financial statements for the three months ended December 31, 2013, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management’s discussion and analysis.

Seasonal nature of operations

Accounts receivable

Accounts receivable are recorded net of allowance for doubtful accounts. The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. Periodically, management assesses customer credit history and relationships as well as performs accounts receivable aging analysis. Based on the results, management determines whether certain balances are deemed uncollectible at the end of each period. Using its past collection experience, the Company reserves 0.3% of accounts receivable balances outstanding between six months and twelve months, 3% of accounts receivable outstanding for more than one year but less than two years, and 100% of accounts receivable balances outstanding for more than two years.

Inventories

Property and equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using straight-line method over the estimated useful lives of the assets. The estimated useful lives of the assets are as follows:

	Estimated Useful Life
Electronic equipment	5 years
Vehicles	10 years
Machinery and equipment	5-15 years
Buildings and improvements	5-20 years
Navel orange orchards	11-30 years

Revenue recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured. The Company recognizes revenues from the sale of navel oranges upon shipment and transfer of title.

Impairment of Long-Lived Assets

	25

Intangible Assets

Foreign Currency Translation and Transactions

The accompanying unaudited consolidated financial statements are presented in U.S. dollars (“USD”). Great China International’s functional currency is Hong Kong Dollar (“HKD”) and Nanchang Hanxin Agriculture Technology Co., Ltd, General Fruit and General Preservation’s functional currency is Chinese Yuan Renminbi (“RMB”). The unaudited consolidated financial statements are translated into USD in accordance with the Codification ASC 830,Foreign Currency Matters. All assets and liabilities were translated at the current exchange rate, at respective balance sheet dates, stockholders’ equity is translated at the historical rates and income statement items are translated at the average exchange rate for the reporting periods. The resulting translation adjustments are reported as other comprehensive income and accumulated other comprehensive income in stockholders’ equity in Accordance with the Codification ASC 220, Comprehensive Income.

The exchange rates used to translate amounts in RMB into USD for the purposes of preparing the consolidated financial statements were as follows:

	December 31,	September 30,
	2013	2013
Period end RMB:USD exchange rate	0.1636	0.1630
Average RMB:USD exchange rate	0.1632	0.1605
Period end HKD:USD exchange rate	0.1290	0.1290
Average HKD:USD exchange rate	0.1290	0.1289

Results of Operations for the three months Ended December 31, 2013 Compared to the three months Ended December 31, 2012

Revenues

For the three months ended December 31, 2013, we had net revenues of $7,126,875, as compared to those of $7,440,677 for the three months ended December 31, 2012, a decrease of approximately $313,802 or 4.2%. The decrease in net revenues was primarily attributable to an decrease in the unit price of our products since the Company does not bear the shipping in domestic sale during this fiscal year 2014.

Our sales volume decreased by approximately 0.7% for the three months ended December 31, 2013, while the average unit sales price decreased by approximately 5.2%, as shown below:

	26

Three months ended	Sales Volume (in KG)		Sale Price Per KG (in US$)		Total Sales Revenue
December 31, 2013	9,712,155	*	0.73	*	7,092,049	*
December 31, 2012	9,698,941		0.77		7,440,677
Variance	13,214		0.04		348,628
% Variance	0.1	%	5.2	%	4.7	%

*Tangerine, a new product this fiscal year, was not included in the calculation due to comparison.

During the three months ended December 31, 2013, the Company sold 56,450 KG Tangerine, $0.617 per KG.

Cost of sale.

Cost of sales decreased by $127,344, or 3.74%, from $3,400,608 for the three months ended December 31, 2012 to $3,273,264 for the three months ended December 31, 2013. The decrease was primarily attributable to (1)an increase in the product output of 2.5 kg orange per tree due to better maintenance and cultivation in the past two years; (2) an extra tax levied on navel oranges sold overseas, which increased the cost of sale in fiscal 2012. The cost of navel oranges cultivated from our orchard is lower than that outsourced. (3) a decrease in process fee(waxing and ripening fruit) since the Company postponed the pickup season during the fiscal year 2014.

Gross profit and gross margin

Our gross profit was $3.853,611 for the three months ended December 31, 2013 as compared to $4.040.069 for the three months ended December 31, 2012, representing a gross margin of 54.1% and 54.3%, respectively. The decrease in our gross profit margin for the three months ended December 31, 2013 was mainly attributable to the reasons discussed above. The higher gross margin was primarily due to (1) the synergy between the complete chain of the production process from planting, preserving to packaging; (2) lower amortization of the land use right due to low acquisition cost.

Selling expenses

Selling expenses were $59,134 and $396,403 for the three months ended December 31, 2013 and 2012, respectively, decreased by $337,269 or 85.08%, mainly due to reduction in advertising and other expenses.

Selling expenses consisted of the following:

	Three Months Ended December 31,				Increase/decrease
	2013		2012		$		%
Shipping and handling	20,846		364,728		(343,882)		-94.3	%
Compensations and related benefits	10,991		13,545		(2,554)		-18.9	%
Advertising and promotion	1,860		17,194		(15,334)		-89.2	%
Others	25,437		936		24,501		2617.6	%
Total	59,134		396,403		(337,269)		-85.1	%
Selling expenses as % of revenue	0.8	%	5.3	%	-4.5	%	-84.9	%

Shipping and handling expenses decreased by $343,882 or 94.3%, since the Company does not bear the shipping in domestic sale during the fiscal year 2014.

Compensation and related benefits decreased by $2,554, or 18.9%, in the three months ended December 31, 2013 compared to the three months ended December 31, 2012, due to the implementation of automated planting starting in October 2012.

Advertising and promotion expense decreased by $15,334 or 89.2%, as a result of the down-sizing of our marketing campaign in the three months ended December 31, 2013.

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Other expense mainly includes customer entertainment, vehicle maintenance, travelling expense and miscellaneous office expenses. During the three months ended December 31, 2013, vehicle maintenance and travelling expense increase significantly to $3,857 and $19,047 from $63 and $3,857 during the three months ended December 31, 2012.

General and administrative expenses

General and administrative expenses amounted to $461,179 for the three months ended December 31, 2013, as compared to $212,003 for the same period in 2012, an increase of $249,176 or 117.5%. General and administrative expenses consisted of the following:

	Three Months Ended
	December 31,				Increase/decrease
	2013		2012		$		%
Compensation and related benefits	91,035		64,794		26,241		40.5	%
Depreciation	24,274		24,543		(269)		-1.1	%
Professional service	239,139		51,241		187,898		366.7	%
Office expenses	5,884		6,205		(321)		-5.2	%
Tax	11,909		21,267		(9,358)		-44	%
Other	88,939		43,953		44,986		-102.3	%
Total	461,179		212,003		249,176		-4.8	%

G&A expense as of revenues	6.5	%	2.9	%	3.6	%	124.1	%

Compensation and related benefits increased by $26,241 or 40.5%, mainly because we hired directors and chief finance officer during 2013.

Professional service fees increased by 187,898 due to more audit and legal fees incurred during 2013.

Other general and administrative expenses mainly include utilities, repairs, telecommunication, insurance and certain low-value miscellaneous items and $48,960(RMB300,000) of guarantee fee that the Company paid to the guarantor as guarantee fee for the loans borrowed from Agricultural Development Bank of China during November and December 2013. Their amounts varied period over period due to different circumstances.

Income from operations

For the three months ended December 31, 2013, income from operations was $3,333,298, as compared to $3,431,663 for the three months ended December 31, 2012, an decrease of $98,365 or 2.87%, mainly due to decrease in the unit price of our products and decrease in our cost of sales during three months ended December 2013 compared the same period in 2012.

Other income (expenses)

For the three months ended December 31, 2013, other expense amounted to 50,755 as compared to other income of $71,671 for the same period in 2012. For the three months ended December 31, 2013 and 2012, other income (expense) mainly included: (i) interest expense, which decreased by $8,904 or 16.87% period over period due to a decrease in the average balance and the interest rate of our bank loans, the interest rate decreased to 6% from 6.56%, and (ii) certain government subsidies, In the three months ended December 31, 2012, we received government subsidies of approximately $111,321; In the three months ended December 31, 2013, we did not receive any government subsidies.

Income tax expense

For the three months ended December 31, 2013, income tax amounted to $0. We began enjoying an income tax exemption for year 2013 and 2012 for processing agricultural commodities. General Fruit has been approved for tax exemption since its formation.

Net income

As a result of the factors described above, our net income for the three months ended December 31, 2013 was $3,282,543. For the three months ended December 31, 2012, we had net income of $3.503,280.

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Foreign currency translation gain

The functional currency of our subsidiaries operating in the PRC is the Chinese Yuan or Renminbi (“RMB”). The financial statements of our subsidiaries are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for the period) for revenues, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements of operations. As a result of these translations, which are a non-cash adjustment, we reported a foreign currency translation gain of $142,443 for the three months ended December 31, 2013 as compared to $60,491 for the same period in 2012. This non-cash gain had the effect of increasing our reported comprehensive income.

Comprehensive income

For the three months ended December 31, 2013 and 2012, comprehensive income of $3.424.986 and $3.563, 771 were derived from the sum of our net income of $3,282,543 and 3.503,280 plus foreign currency translation gain of $142,443 and $60,491, respectively.

LIQUIDITY AND CAPITAL RESOURCES

We have historically funded our operation primarily through paid-in capital, sales of goods, loan from stockholders and short term loans from financial institutions in China. The Company currently generates its cash flow through operations, which it believes will be sufficient to sustain current level operations for at least the next twelve months.

As of December 31, 2013, our balance of cash and cash equivalents was $642,356. As of September 30, 2013, our balance of cash and cash equivalents was $2,408,520, an decrease of 1,766,164 or 73.3%, mainly due to net cash used in operating activities.

The following summarizes the key components of the Company’s cash flows for the three months ended December 31, 2013 and 2012:

	Three Months Ended
	December 31,		Increase/decrease
	2013	2012	$	%
Net cash used in operating activities	(2,015,597)	(811,275)	(1,204,322)	148.5	%
Net cash used in investing activities	-	(63,109)	63,109	-
Net cash provided by financing activities	244,913	1,591,613	(1,346,700)	-84.6	%
Effect of foreign currency translation	4,520	(607)	5,127	844.6	%
Net increase(decrease) in cash and cash equivalents	(1,766,164)	716,622	(2,482,786)	-346.5	%

In summary, our cash flows were:

Net cash used in operating activities decreased in the three months ended December 31, 2013 by $1,204,322 to $2,015,597, from net cash used in operating activities of $811,275 for the three months ended December 31, 2012. These changes were mainly brought about by the following changes: a change in net income of $220,737, a change in cash used in prepaid leases of $4,053,692, a change in cash provided by customer deposits of $2,755,695, and a change in cash tied in inventory of $735,430.

Net cash used in investing activity decreased by $63,109, from $63,109 to $0, in the three months ended December 31, 2013 compared to the same period ended in 2012, which is mainly due to less cash expenditures on property and equipment.

Net cash provided by financing activities decreased by $1,346,700 to $244,913 in the three months ended December 31, 2013 compared to $1,591,613 provided by financing activities at the same period ended in 2012. This was due to the repayment of short-term bank loans of $5,548,000.

Working capital decreased by $473,705 to $3,149,019 as of December 31, 2013 from working capital of $3,622,724 as of December 31, 2012. In order to stay cost competitive in the long-run, we leased 69,000 additional orange trees in first quarter of fiscal year 2014. Based on the lease rate of approximately $58.75(RMB360) per tree, the total spending was $4,053,888 (RMB24,840,000).

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As we are listed by the lending bank as a good credit customer, we believe that our short-term bank loans will be renewed at their maturity dates. On November 30 and December 21, 2012, as a replacement of an existing short-term bank loan that matured in November 16, 2012, the Company obtained a new bank loan of approximately $5,542,000 (RMB34, 0000, 000) from Agricultural Development Bank of China, which was paid off during October and November 2013.

On November 28 and December 4, 2013, the Company entered into two short-term bank loan agreements with Agricultural Development Bank of China for $2,617,600(RMB16,000,000) and $2,944,800 (RMB18,000,000). Pursuant to the Loan Agreements, the principle will be repaid on September 27, 2014 and October 3, 2014. The interest was calculated using an annual fixed interest rate of 6.00% and will be paid monthly. The loan was secured by the Company’s real property, navel orange orchards and equipments, and guaranteed by Xingping Hou, CEO of the Company. The loan was also guaranteed by Ganzhou Guoruitai Guarantee Co., Ltd., an unrelated party, with maximum exposure limit of $1,963,200 (RMB12,000,000). On November 20 and December 4, 2013, Xingping Hou, CEO of the Company and Jiangjunhong Industrial Group Co., Ltd., a Chinese Corporation owned by Xingping Hou, jointly entered into cross-guarantee agreements with Ganzhou Guoruitai Guarantee Co, Ltd. Pursuant to the cross-guarantee agreements, the Company paid $49,080 (RMB300,000) to the guarantor as guarantee fee for the above bank loans. The term of these guarantees are for two years. On the date of loan expiration, should the Company failed to make their debt payment, Jiangjunhong Industrial Group Co., Ltd. and Xingping Hou will be obligated to perform under the cross guarantees by primarily making the required payments, including late fees and penalties. In addition, on December 3, 2013, the Company paid Ganzhou Guoruitai Guarantee Co, Ltd $392,640 (RMB2,400,000) as security deposit for the guarantee. The purpose of such bank loans are for the working capital.

Although we will continue to invest in our business, with expected positive operating cash flow fueled by our profit, we believe our operating cash is sufficient to sustain current level operations for at least the next twelve months.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial assets.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to respond to 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 Exchange Act is recorded, processed, summarized and reported within the time periods 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 company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer to allow timely decisions regarding required disclosure. Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness, as of the end of the period covered by this report, of our disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a-15(e). Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of such date, the Company’s disclosure controls and procedures were effective.

Changes in internal control over financial reporting

During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II– OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

As a smaller reporting company, we are not required to respond to this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None in the Quarterly Period ended June 30, 2013.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit No.		Description
Exhibit
No.		Description
31.1		Certification of the Chief Executive Officer (Principal Executive Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of the Chief Financial Officer (Principal Financial and Accounting Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS-XBRL Instance Document

101.SCH-XBRL Taxonomy Extension Schema Document

101.CAL-XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF-XBRL Taxonomy Extension Definition Linkbase Document

101.LAB-XBRL Taxonomy Extension Label Linkbase Document

101.PRE-XBRL Taxonomy Extension Presentation Linkbase Document

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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.

	GENERAL AGRICULTURE CORPORATION

Date: February 12, 2014	By:	/s/ Xingping Hou
	Name:	Xingping Hou
	Title:	Chief Executive Officer
		(Principal Executive Officer)

Date: February 12, 2014	By:	/s/ Amy Xue
	Name:	Amy Xue
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

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Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	H.S. sophomore Bad

AMAYA Global (GELT) 10-Q2014 Q1 Quarterly report

Content analysis

Table of Contents

Consolidated Statements of Operations and Comprehensive Income(Loss)

Consolidated Statements of Cash Flows

(Unaudited)

Basis of Presentation and Consolidation

Change in Fiscal Year

Seasonal Nature of Operations

Foreign Currency Translation and Transactions