Attached files
file | filename |
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EX-31 - EXHIBIT 31.2 - OAKRIDGE INTERNATIONAL CORP | ex312-123110oak.htm |
EX-31 - EXHIBIT 31.1 - OAKRIDGE INTERNATIONAL CORP | ex311-123110oak.htm |
EX-32 - EXHIBIT 32.1 - OAKRIDGE INTERNATIONAL CORP | ex321-123110oak.htm |
EX-32 - EXHIBIT 32.2 - OAKRIDGE INTERNATIONAL CORP | ex322-123110oak.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10 - Q
[ ] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended December 31, 2010 |
[ ] | 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: 333-152312
(Exact Name of Registrant as Specified in Its Charter)
Nevada |
------------- |
(State or Other Jurisdiction of Incorporation or Organization) |
(IRS Employer Identification No.) |
Suite 1609, 16/F., Jie Yang Building, 271 Lockhart Road, Wanchai, Hong Kong |
n/a |
(Address of Principal Executive Offices) |
(Zip Code) |
Tel: (206) 309 2235 Fax: (702) 948
5779
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(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 past 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 (@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 "small reporting company" in Rule 12b-2 of the Exchange Act. (check one) |
Large Accelerated Filer [ ] Accelerated Filer [ ] Non-Accelerated Filer [ ] 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[ x ] No[ ]
The number of common equity shares outstanding as of January 28, 2011 was 6,510,000 shares of Common Stock, $0.001 par value. |
INDEX
Page |
||
PART I. FINANCIAL INFORMATION | ||
Item 1. | Financial Statements | |
Consolidated Balance Sheet - December 31, 2010 (Unaudited) | 2 |
|
Consolidated Statements of Operations - Three Months and Six Months ended December 31, 2010 and 2009, and from October 31, 2007 (Inception) to December 31, 2010 (Unaudited) | 3 |
|
Consolidated Statement of Stockholders' Equity - From October 31, 2007 (Inception) to December 31, 2010 (Unaudited) | 4 |
|
Consolidated Statement of Cash Flows - Six Months ended December 31, 2010 and 2009, and from October 31, 2007 (Inception) to December 31, 2010 (Unaudited) | 5 |
|
Notes to Consolidated Financial Statements | 6-17 |
|
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 18-25 |
Item 3. | Quantitative and Qualitative Disclosure About Market Risk | 26 |
Item 4. | Controls and Procedures | 26 |
PART II. OTHER INFORMATION | ||
Item 1 | Legal Proceedings | 28 |
Item 1A | Risk Factors | 28 |
Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 28 |
Item 3 | Defaults Upon Senior Securities | 28 |
Item 4 | (Removed and Reserved) | 28 |
Item 5 | Other Matters | 28 |
Item 6. | Exhibits | 28 |
SIGNATURES | 29 |
1
PART I - FINANCIAL INFORMATION
OAKRIDGE INTERNATIONAL CORPORATION |
(A DEVELOPMENT STAGE COMPANY) |
CONSOLIDATED BALANCE SHEET |
AS AT DECEMBER 31, 2010 |
(UNAUDITED) |
(Stated in US Dollars) |
|
|
|
|||||
(Unaudited) |
(Audited) |
||||||
ASSETS |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
511 |
$ |
563 |
|||
Total assets |
$ |
511 |
$ |
563 |
|||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
Current liabilities: |
|||||||
Accrued expenses |
$ |
9,309 |
$ |
7,409 |
|||
Other payable |
5,625 |
5,625 |
|||||
Amount due to director |
11,809 |
6,809 |
|||||
Total current liabilities |
26,743 |
19,843 |
|||||
Stockholders' equity: |
|||||||
Common stock, $0.001 par value, 75,000,000 shares |
|||||||
Authorized; 6,510,000 shares issued and outstanding |
4 |
6,510 |
6,510 |
||||
Additional paid up capital |
4 |
30,590 |
30,590 |
||||
Deficit accumulated during the development stage |
(63,332) |
(56,380) |
|||||
Total stockholders' deficit |
(26,232) |
(19,280) |
|||||
Total liabilities and stockholders' equity |
$ |
511 |
$ |
563 |
|||
See accompanying notes to the consolidated financial statements
2
OAKRIDGE INTERNATIONAL CORPORATION |
(A DEVELOPMENT STAGE COMPANY) |
CONSOLIDATED STATEMENTS OF OPERATIONS |
FOR THE THREE MONTHS AND SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009, |
AND FOR THE PERIOD FROM OCTOBER 31, 2007 (INCEPTION) TO DECEMBER 31, 2010 |
(UNAUDITED) |
(Stated in US Dollars) |
For the |
For the |
For the Six |
For the Six |
|
|||||||
Net revenues |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
11,295 |
|
Cost of revenue |
- |
- |
- |
- |
10,821 |
||||||
Gross profits |
- |
- |
- |
- |
474 |
||||||
Other general and |
|||||||||||
administrative expenses |
3,450 |
950 |
6,952 |
2,007 |
62,126 |
||||||
Loss from operations |
(3,450) |
(950) |
(6,952) |
(2,007) |
(61,652) |
||||||
Other expenses: |
|||||||||||
Interest |
- |
220 |
- |
440 |
1,680 |
||||||
Net loss |
$ |
(3,450) |
$ |
(1,170) |
$ |
(6,952) |
$ |
(2,447) |
$ |
(63,332) |
|
Weighted average basic and |
|||||||||||
Diluted shares outstanding |
6,510,000 |
5,260,000 |
6,510,000 |
6,394,511 |
5,628,747 |
||||||
Loss per share - basic and diluted* |
$ |
(0.00) |
$ |
(0.00) |
$ |
(0.00) |
$ |
(0.00) |
$ |
(0.00) |
|
*Basic and diluted weighted average number of shares is the same since the Company does not have any dilutive securities
See accompanying notes to the consolidated financial statements
3
OAKRIDGE INTERNATIONAL CORPORATION |
(A DEVELOPMENT STAGE COMPANY) |
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY |
FOR THE PERIOD FROM OCTOBER 31, 2007 (INCEPTION) TO DECEMBER 31, 2010 |
(UNAUDITED) |
(Stated in US Dollars) |
|
||||||||||||
accumulated |
||||||||||||
Additional |
during the |
Total |
||||||||||
Common stock |
paid-in |
development |
stockholders' |
|||||||||
Shares |
Amount |
capital |
stage |
deficit |
||||||||
Balance at October 31, 2007 | - |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
|||
(inception) | ||||||||||||
Issuance of founder shares for | ||||||||||||
cash at $0.001 per share - | ||||||||||||
November 30, 2007 | 4,500,000 |
4,500 |
- |
- |
4,500 |
|||||||
Sale of shares for cash at $0.01 | ||||||||||||
per share - March, 2008 | 760,000 |
760 |
6,840 |
- |
7,600 |
|||||||
Net loss | - |
- |
- |
(6,142) |
(6,142) |
|||||||
Balance at June 30, 2008 | 5,260,000 |
5,260 |
6,840 |
(6,142) |
5,958 |
|||||||
Net loss | - |
- |
- |
(38,689) |
(38,689) |
|||||||
Balance at June 30, 2009 | 5,260,000 |
5,260 |
6,840 |
(44,831) |
(32,731) |
|||||||
Issuance of shares for services at | ||||||||||||
$0.02 per share - July 17, 2009 | 1,250,000 |
1,250 |
23,750 |
- |
25,000 |
|||||||
Net loss | - |
- |
- |
(11,549) |
(11,549) |
|||||||
Balance at June 30, 2010 | 6,510,000 |
6,510 |
30,590 |
(56,380) |
(19,280) |
|||||||
Net loss | - |
- |
- |
(6,952) |
(6,952) |
|||||||
Balance at December 31, 2010 | 6,510,000 |
$ |
6,510 |
$ |
30,590 |
$ |
(63,332) |
$ |
(26,232) |
|||
See accompanying notes to the consolidated financial statements
4
OAKRIDGE INTERNATIONAL CORPORATION |
(A DEVELOPMENT STAGE COMPANY) |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009 |
AND FROM OCTOBER 31, 2007 (INCEPTION) TO DECEMBER 31, 2010 |
(UNAUDITED) |
(Stated in US Dollars) |
|
||||||
For the Six |
For the Six |
from October 31, 2007 |
||||
Months Ended |
Months Ended |
(Inception) to |
||||
December 31, 2010 |
December 31, 2009 |
December 31, 2010 |
||||
Cash Flows from Operating Activities: | $ |
(6,952) |
$ |
(2,447) |
$ |
(63,332) |
Net Loss | ||||||
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||||||
Common Stock Issuance for Services | - |
25,000 |
25,000 |
|||
Changes in Assets and Liabilities: | ||||||
Increase / (Decrease) in Accrued Expenses | 1,900 |
(1,600) |
9,309 |
|||
(Decrease) / Increase in Other Payable | - |
(1,272) |
5,625 |
|||
Increase / (Decrease) in Amount due to director | 5,000 |
(24,560) |
11,809 |
|||
Decrease in Account Receivable | - |
4,885 |
- |
|||
Net Cash (Used in) / Provided by Operating Activities | (52) |
6 |
(11,589) |
|||
Cash Flows from Investing Activities: | - |
- |
- |
|||
Cash Flows from Financing Activities: | ||||||
Proceeds from Sale of Common Stock | - |
- |
12,100 |
|||
Net Cash Provided by Financing Activities | - |
- |
12,100 |
|||
(Decrease) / Increase in Cash | (52) |
6 |
511 |
|||
Cash - Beginning of Period | 563 |
667 |
- |
|||
Cash - End of Period | $ |
511 |
$ |
673 |
$ |
511 |
Supplemental Disclosures of Cash Flow Information: | ||||||
Interest Paid | $ |
- |
$ |
440 |
$ |
1,680 |
Income Taxes Paid | $ |
- |
$ |
- |
$ |
- |
See accompanying notes to the consolidated financial statements
5
OAKRIDGE INTERNATIONAL CORPORATION |
(A DEVELOPMENT STAGE COMPANY) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009 |
(UNAUDITED) |
(Stated in US Dollars) |
|
|
|
|
|
|
|
|
|
6
OAKRIDGE INTERNATIONAL CORPORATION |
(A DEVELOPMENT STAGE COMPANY) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009 |
(UNAUDITED) |
(Stated in US Dollars) |
|
|
|
|
|
|
|
|
|
Place of | Attributable |
||||
Name of Company | Incorporation | Interest | |||
Waytop Asia Pacific Limited | Hong Kong | 100% | |||
7
OAKRIDGE INTERNATIONAL CORPORATION |
(A DEVELOPMENT STAGE COMPANY) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009 |
(UNAUDITED) |
(Stated in US Dollars) |
|
|
|
|
|
|
|
|
8
OAKRIDGE INTERNATIONAL CORPORATION |
(A DEVELOPMENT STAGE COMPANY) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009 |
(UNAUDITED) |
(Stated in US Dollars) |
|
|
|
|
|
|
9
OAKRIDGE INTERNATIONAL CORPORATION |
(A DEVELOPMENT STAGE COMPANY) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009 |
(UNAUDITED) |
(Stated in US Dollars) |
|
|
|
|
|
|
|
|
|
|
10
OAKRIDGE INTERNATIONAL CORPORATION |
(A DEVELOPMENT STAGE COMPANY) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009 |
(UNAUDITED) |
(Stated in US Dollars) |
|
|
|
|
|
|
11
OAKRIDGE INTERNATIONAL CORPORATION |
(A DEVELOPMENT STAGE COMPANY) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009 |
(UNAUDITED) |
(Stated in US Dollars) |
|
|
|
|
|
|
12
OAKRIDGE INTERNATIONAL CORPORATION |
(A DEVELOPMENT STAGE COMPANY) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009 |
(UNAUDITED) |
(Stated in US Dollars) |
|
|
|
Fair value guidance in ASC 820 was initially effective for fiscal years beginning after November 15, 2007 and for interim periods within those fiscal years for financial assets and liabilities. The effective date of ASC 820 for all non-recurring fair value measurements of nonfinancial assets and nonfinancial liabilities was fiscal years beginning after November 15, 2008. Guidance related to fair value measurements in an inactive market was effective in October 2008 and guidance related to orderly transactions under current market conditions was effective for interim and annual reporting periods ending after June 15, 2009. The Company applied the provisions of ASC 820 to its financial assets and liabilities upon adoption at January 1, 2008 and adopted the remaining provisions relating to certain nonfinancial assets and liabilities on January 1, 2009. The difference between the carrying amounts and fair values of those financial instruments held upon initial adoption, on January 1, 2008, was recognized as a cumulative effect adjustment to the opening balance of retained earnings and was not material to the Company's financial position or results of operations. The Company implemented the guidance related to orderly transactions under current market conditions as of April 1, 2009, which also was not material to the Company's financial position or results of operations. |
13
OAKRIDGE INTERNATIONAL CORPORATION |
(A DEVELOPMENT STAGE COMPANY) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009 |
(UNAUDITED) |
(Stated in US Dollars) |
|
|
|
|
|
|
|
|
14
OAKRIDGE INTERNATIONAL CORPORATION |
(A DEVELOPMENT STAGE COMPANY) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009 |
(UNAUDITED) |
(Stated in US Dollars) |
|
|
|
|
|
15
OAKRIDGE INTERNATIONAL CORPORATION |
(A DEVELOPMENT STAGE COMPANY) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009 |
(UNAUDITED) |
(Stated in US Dollars) |
|
|
|
a. |
The power, through voting rights or similar rights, to direct the activities of a legal entity that most significantly impact the entity's economic performance [FIN 46(R), paragraph 1, sequence 55.2.1] |
b. |
The obligation to absorb the expected losses of the legal entity [FIN 46(R), paragraph 1, sequence 55.2.2] |
c. |
The right to receive the expected residual returns of the legal entity. [FIN 46(R), paragraph 1, sequence 55.2.3] |
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16
OAKRIDGE INTERNATIONAL CORPORATION |
(A DEVELOPMENT STAGE COMPANY) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009 |
(UNAUDITED) |
(Stated in US Dollars) |
|
|
|
|
|
|
|||
$ |
|||
United States federal income tax rate | 15% |
||
Valuation allowance-US federal income tax | (15%) |
||
Provision for income tax | - |
||
Hong Kong statutory rate | 16.5% |
||
Valuation allowance - Hong Kong Rate | (16.5%) |
||
Provision for income tax | - |
||
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17
|
Forward-Looking Statements |
|
|
Critical Accounting Policy and Estimates |
|
18
Operation Overview |
Business of the Issuer |
Oakridge International Corporation is an environmental services company engaging in the business of trading and recovering raw materials from electronic printed circuit boards and other electronic products and components. Our plan is to own recycling facilities in China, Hong Kong and then in the USA. The Company's operations and services include the trading and acquisition of electronic components, recyclable materials such as scrap Printed Circuit Boards ("PCBs") from PCB factories, electronic products from recycling centers, and other electronic sources. After we have processed the PCBs or scrap through our recycling facilities, then we sell the raw materials recovered to customers in the USA and China. We believe the major customers for the recovered raw materials are manufacturers that can utilize the raw materials in the creation of new products. We believe the recycling process and the use of the recycled raw materials is both environmentally correct, for corporations and individuals worldwide, and is an essential responsibility to ensure that electronic products are properly recycled. |
We are a development stage company that has generated modest revenues of $11,295 from operations since our incorporation from October 31, 2007 to December 31, 2010. We have incurred losses since our inception. |
For the six months ended December 31, 2010, we did not earn any revenue, but we focused on trading of raw materials from PCB factories and electronic components, and developing a business model for the recycling technology and performing due diligence regarding potential sources for acquiring recyclable materials. A summary of the significant events for the period is described below. |
Resignation of Director and Senior Officer |
On February 15, 2010, the Company received a Separation Agreement and Release of Claims ("Separation Agreement") from and signed by Mr. Michael Burney ("Mr. Burney"), our then President and Chief Executive Officer ("CEO") in respect of his resignation as President, CEO and member of the board of directors of the Company (the "Director"). |
Under the Separation Agreement, Mr. Burney resigned as President, CEO and Director of the Company effective on February 14, 2010. Furthermore the Separation Agreement included two clauses: a Release of Claims and a Mutual Non-Disparagement clause, both of which the Board could not agree and accept for reasons including not complying with the Board's request, prior to and after his resignation, for his work reports and contact details (the "Reports") of his activities as the top officer of the Company for the past 5 months prior to his resignation. Mr. Burney has not produced any reports or information to the Board of Directors prior to or after his departure. Until Mr. Burney submits all the outstanding Reports and information with a satisfactory explanation, the Company reserves the right to claim for any damages or opportunity cost that may have been incurred by Mr. Burney's representation during his employment as CEO and President of the Company. |
19
Recycle Process and Technology |
We continue our plan to own and operate PCB recycling facilities in Asia and the USA. We plan to use a PCB recycling process where we recycle scrap and EOL PCBs in an efficient and environmentally friendly process. This type of technology involves special crushing of PCBs, followed by separation of the metallic and non-metallic materials with a proprietary separation process. The technique has advantages over other methods proposed for recycling PCBs since it does not involve any secondary pollutants that are harmful to the environment. At present, we are looking for potential manufacturers of the crushing technology for evaluation and discussion. We are still evaluating the technologies and are also in the process of studying the market in China to accommodate our initial operations in line with the anticipated resources available to us. During the period under review, we are still investigating recycle technologies and other related environment recycling methods, however at the date of this report the progress has been limited due to lack of resources. |
Trading of PCB Materials and Electronic Components |
Our business involves net-working with electronic factories and we can have the opportunity to trade in PCB materials and electronic components so as to develop closer relationship with the factories. This is a very competitive industry and the margins are under downward adjusting pressure. However, such net-working with electronic factories provides us a strategic link into the factories that we will potentially provide a future source for electronic waste to feed on our recycling operation. |
Summary of Our Plans |
To implement our business plan, apart from additional financing, we will need to negotiate and secure contracts with acceptable terms for: |
* |
Trading in electronic components |
|
* |
Sourcing of electronic PCBs from recycling centers and scrap PCBs from PCB factories |
|
* |
Locating customers for the raw materials recovered from this recycling technology |
|
* |
Searching facilities for processing these materials |
|
Products and Services |
We plan to acquire and process electronics products and components, with specialization in printed circuit boards. The normal process for recycling PCBs starts from disassembly and component recycling. Certainly, any hazardous components need to be removed and isolated prior to being processed. Utilizing advanced proprietary technological process, the PCBs are then shredded and granulated by machine, separating metals from the fibers that constitute the majority of the PCBs. The process generates two raw materials: fiber residue and metal concentrate. |
We believe the fiber residue can be used in several industries to enhance products. We believe it can be used in the composite industry as filler in resins to make products such as furniture, wall sidings and "plastic" lumber, and that these composite products can be given appearance of wood, marble or granite. We also believe that the fiber residue can be used as an additive in waterproofing materials, asphalt and concrete. |
The metal concentrate is primarily copper, although there may also be smaller quantities of other precious metals, such as gold, palladium and silver, depending upon the mix of PCBs input into the process. The different metals in the metal concentrate can then be recovered by a variety of separation processes. We currently plan to sell this metal concentrate to smelters until other separation techniques can be developed. In general, we need to ensure that the cost of processing the PCBs is less than the resale value of the raw materials recovered in the recycling process. |
20
Sales, Marketing and Distribution |
Our intended recycling technology for processing printed circuit boards produces no emissions into the environment, and the output of the process is raw materials that can be utilized in the creation of new products. This is distinctly different from current methods of processing PCBs that include chemical and burning techniques that produce harmful emissions and byproducts that need additional disposal. In order to make the benefits of our process known, our marketing efforts will be a vital part of our operation. We will market to recycling centers and PCB factories for product supply, and to smelters and product manufacturers for the output materials of our process. We plan to allocate a considerable portion of our operating budget to this marketing effort that may include hiring industry experts and consultants, and marketing personnel, advertising in trade magazines and publications. |
Market |
As the world becomes more digitalized through the increasing utilization of electronics devices, there is an accelerating amount of obsolete electronic devices including personal computers, printers, fax machines, cell phones and other electrical and electronic equipment that has reached their useful End Of Life each year. In the United States, the Environmental Protection Agency ("EPA") has estimated that in 2007 there were 2.2 Million Tons of EOL products, of which only 18.4% were recycled, the remainder primarily going to landfills. |
Printed circuit boards are typically made of layers of thin copper foil circuitry and insulating layers of an epoxy resin. Board contacts and components add traces of other precious metals. While the value of these metals is recognized, the typical extraction methods of burning or chemical processing releases toxic emissions and has created extremely polluted cities like Guiyu, China. The pending acquisition of Total Union and its proprietary process is mechanical, and releases no emissions. |
Competition |
Around the world, obsolete electronic equipment is typically discarded with domestic refuse, deposited in landfills, or incinerated without any pre-treatment. Depending upon the design and construction of these PCBs, the PCBs and their components primarily contain insulating resin and copper, and may also contain trace amounts of other precious metals. Currently, the small percentage of PCBs that are recycled for the recovery of these metals has involved hydrometallurgical, thermal and other processes that create secondary pollution that is harmful to the environment. While the typical extraction methods of burning and chemical processing do deliver these commodity metals, it is done at the expense of the environment. The mechanical process yields two raw materials, a resin powder and a metal concentrate with no emissions or impact to the environment. The resin powder is utilized as an additive in products such as outdoor decking, furniture, and waterproofing materials. The metal concentrate, primarily copper, is used to create new electrical and electronic products such as wire, printed circuit boards, and other electrical components. The markets for our products and services are competitive, and we face competition from a number of sources. Many of our competitors have substantially greater resources than us. Those resources may include greater name recognition; larger product lines; complementary lines of business; and greater financial, marketing, information systems, and other resources. We can give no assurance that competitive pressures will not materially and adversely affect the Company's business, financial condition, and results of operations. |
21
Twelve Months Operating Plan |
Over the next twelve months, our operating plan will be focused on three main areas: financing, identifying technology partners, and operating recycling facilities in China, Hong Kong and the USA. Each of the three areas will be developed on its own path depending on the progress made and the amount of capital available. |
Financing |
Our financial plans involve getting sufficient funding to continue trading in electronic components and materials, scrap PCBs and working capital for identifying other technology process that we have found. These two initiatives are independent, and require separate strategy. The trading of the electronic components and materials, and scrap PCBs requires funding of about US$500,000 to buy PCB scrap materials and selling to our customers. The working capital funding is expected to be US$250,000. We will seek to raise development, operation and expansion funds for the next twelve months by equity offering for at least US$750,000 to support these plans. We expect that we shall be able to attract investors when our shares are displayed and quoted, or listed and saleable on a recognized exchange services, such as the Over-the-counter Bulletin Board quotation services or major stock exchange markets. In addition, management is seeking strategic investors and partners to execute the operational plan as set out in this section. |
Technology Process |
As digital technology evolves, computer and digital equipment and devices are being retired at an accelerating rate. Around the world, obsolete electronic equipment is typically discarded with domestic refuse, deposited in landfills, incinerated or exported to developing countries. When discarded as trash, this avalanche of old electronic equipment is not only a waste of valuable resources, but also can release hazardous emissions into the environment if handled improperly. |
We plan to contact PCB and electronics manufacturers, scrap dealers, recycling centers, federal, state and local governments and environmental groups in Asia and USA from our offices in Hong Kong, regarding the environmentally friendly PCB Recycling Technology. Our purpose is to market our recycling business as follows: |
Operations - Hong Kong |
We plan to provide operating capital and trading and sourcing of electronic components and electronic scrap to the Hong Kong and overseas manufacturers and scrap dealers. We will either sell these scrap PCBs and/or electronic components, or recycle the PCB scraps through our own recycle plant. |
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Operations - United States |
We plan to contact PCB manufacturers, scrap dealers and recycling centers in the United States about acquiring and handling their PCB disposal in an environmentally correct and beneficial manner. We believe current PCB disposal methods include incineration, landfill and smelting, and these methods typically create secondary pollution and/or environmental problems. We plan to introduce a new recycling process originated from China which has no adverse environmental effect, no secondary emissions, and yielding raw materials for the use in new products. |
We plan to work with federal, state and local governments to promote our PCB recycling technology and its ability to protect the environment. We may also approach a socially conscious and progressive city like San Francisco to promote our method of environmentally friendly recycling of PCBs as a showcase for other facilities in the United States. |
Research and Development |
Since incorporation, the Company has not embarked on any research and development program and has not incurred or is expecting to incur any such costs. |
Costs and Effects of Compliance with Environmental Laws |
We currently do not expect there will be any additional costs and effects of compliance with environmental laws in our current plan of operation, as we will ensure that the contracting parties are all approved by the local government authorities. In the future if we operate our own PCB recycling facility, we will evaluate the costs and benefits effects of compliance with environmental laws which may be substantial. We will work closely with all government environmental agencies to comply with all the local environmental laws and regulations. |
Employees |
As of January 15, 2011, we had 2 staff in the Company. Subject to financing, in the next 12 months, we plan to hire consultants in Hong Kong, China and the U.S.A. to undertake and implement the operational plans. |
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Results of Operations |
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The Company has realized no revenue, no cost of revenue and no gross profit for the three month period ended December 31, 2009. For the period from October 31, 2007 (date of inception) to December 31, 2010, the Company realized revenue of $11,295, incurred a cost of revenue of $10,821 and achieved a gross profit of $474. |
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For the three month period ended December 31, 2009, we had no gross profit and our total operating expenses were $950, all of which were selling, general and administrative expenses. We also had $220 in interest expense. Our net loss to our shareholders for the three month period ended December 31, 2009 was $1,170. For the period from October 31, 2007 (date of inception) to December 31, 2010, the accumulated gross profit was $474, the total operating expenses were $62,126 which were all selling, general and administrative expenses, and we had $1,680 in interest expense, resulting in an accumulated net loss to our shareholders of $63,332. |
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Liquidity and Capital Resources |
We do not have sufficient resources to accomplish our business plans. As of December 31, 2010, we had $511 in cash. |
We will have to raise funds to pay for our expenses and accomplish our business plans. We may have to borrow money from shareholders or issue debt or equity or enter into a strategic arrangement with a third party. There can be no assurance that additional capital will be available to us. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans or lines of credit. Our inability to raise funds for our operations will have a severe negative impact on our ability to remain a viable company. |
Going Concern Consideration |
The Company is a development stage company and has commenced operations. The Company had realized no revenue and incurred a net loss of $3,450 for the three months ended December 31, 2010 and an accumulated net loss of $63,332 for the period from October 31, 2007 (inception) to December 31, 2010. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company's ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered in emerging markets and the competitive environment in which the Company operates. The Company is pursuing financing for its operations. In addition the Company has commenced operations to earn revenues. Failure to secure such financing, to raise additional equity capital and to earn revenue may result in the Company depleting its available funds and not being able to pay its obligations. These consolidated financial statements do not include any adjustment to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. |
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Item 3. Quantitative and Qualitative Disclosures about Market Risk. |
Quantitative and Qualitative Disclosures about Market Risk: |
A smaller reporting company is not required to provide the information required by this Item. |
Off-Balance Sheet Arrangements: |
The Company has no off-balance sheet obligations or guarantees and has not historically used special purpose entities for any transactions. |
Item 4. Controls and Procedures. |
Based upon that evaluation, our Management has concluded that, as of September 30, 2010, our disclosure controls and procedures were not effective in timely alerting management to the material information relating to us (or our consolidated subsidiaries) required to be included in our periodic filings with the SEC. |
Internal Control over Financial Reporting |
(a) Management's Annual Report on Internal Control Over Financial Reporting |
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. |
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the registrant's annual or interim financial statements will not be prevented or detected on a timely basis. |
Our management, with the participation of its CEO and President, assessed the effectiveness of our internal control over financial reporting as of December 31, 2010. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of The Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on that assessment under such criteria, management concluded that our internal controls over financial reporting were not effective as of September 30, 2010 due to control deficiencies that constituted material weaknesses. A material weakness is a control deficiency, or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. |
In the course of making our assessment of the effectiveness of internal controls over financial reporting, we identified one material weakness in our internal control over financial reporting. This material weakness consisted of inadequate staffing within the accounting operations of our Company. The small number of employees who are responsible for accounting functions (more specifically, one) prevents us from segregating duties within our internal control system. The inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews. |
We are in the process of developing and implementing remediation plans to address our material weaknesses. |
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Management has identified specific remedial actions to address the material weaknesses described above: |
* | Improve the effectiveness of the accounting group by continuing to augment our existing resources with additional consultants or employees to improve segregation procedures and to assist in the analysis and recording of complex accounting transactions and preparation of tax disclosures. We plan to mitigate the segregation of duties issues by hiring additional personnel in the accounting department once we have achieved positive cash flow from operations, and/or have raised significant additional working capital. |
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* | Improve segregation procedures by strengthening cross approval of various functions including cash disbursements and quarterly internal audit procedures where appropriate. |
Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. |
Changes in Controls and Procedures |
There were no significant changes made in our internal controls over financial reporting during the period ended December 31, 2010 that have materially affected or are reasonably likely to materially affect these controls. Thus, no corrective actions with regard to significant deficiencies or material weaknesses were necessary. |
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PART II. OTHER INFORMATION |
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Description |
3.1 |
Articles of Incorporation (1) |
3.2 |
Bylaws (1) |
31.1 |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Attached Hereto) |
31.2 |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Attached Hereto) |
32.1 |
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350. (Attached Hereto) |
32.2 |
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350. (Attached Hereto) |
1 |
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SIGNATURES
In accordance with to requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. |
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By: |
/s/ Xiong Xu |
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Name: |
Xiong Xu |
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Title: |
President, Director and |
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Chief Executive Officer |
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By: | /s/ Sau Shan Ku | |
Name: |
Sau Shan Ku |
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Title: |
Treasurer, Secretary, Director |
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Chief Financial Officer |
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