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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2012
 
TRANSITION REPORT UNDER  SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 
For the transition period from _____________________ to ______________
 
SEC File No. 333-179082
 
A & C United Agriculture Developing Inc.
(Exact name of registrant as specified in its charter)
 
Nevada
 
100
 
27-5159463
(State or other jurisdiction
of incorporation or organization)
 
(Primary Standard Industrial
Classification Code Number)
 
IRS I.D.
 
Oak Brook Pointe, Suite 500,
700 Commerce Drive, Oak Brook, Illinois
 
60523
 (Address of principal executive offices)
 
(Zip Code)
 
Issuer’s telephone number:  630-288-2500

N/A
(Former name, former address and former three months, if changed since last report)
 
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 o

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 o

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
o
Accelerated filer
o
Non-accelerated filer
o
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 o  No x

As of January 23, 2012 there were 36,299,495 shares issued and outstanding of the registrant’s common stock.
 


 
 

 
 
TABLE OF CONTENTS
 
PART I — FINANCIAL INFORMATION
   
 
 
         
Item 1. 
Financial Statements
    3  
           
Item 2.   
Management’s Discussion and Analysis or Plan of Operation.
   
19
 
           
Item 3.  
Quantitative and Qualitative Disclosure about Market Risk
   
23
 
           
Item 4.  
Controls and Procedures.
   
24
 
           
PART II — OTHER INFORMATION
       
           
Item 1.  
Legal Proceedings.
   
25
 
           
Item 2.  
Unregistered Sales of Equity Securities and Use of Proceeds.
   
25
 
           
Item 3.  
Defaults Upon Senior Securities
   
25
 
           
Item 4.
Mine Safety Disclosures
   
25
 
           
Item 5.  
Other Information
   
25
 
           
Item 6.  
Exhibits.
   
26
 

 
2

 
 
PART I — FINANCIAL INFORMATION
 
Item 1.  Financial Statements 
 
A & C United Agriculture Developing Inc

 (A Development Stage Enterprise)






Unaudited Financial Statements

As of December 31 2012
 
 
3

 

Table of Contents

Balance Sheet
    5  
         
Statement of Loss
    6  
         
Statement of Stockholders Equity
    7  
         
Statement of Cash Flows
    8  
         
Notes to Financial Statements
    9  
         
Exhibit A
    18  
 
 
4

 
 
A & C United Agriculture Developing Inc
(A Development Stage Enterprise)
BALANCE SHEET
 
   
December 31
   
September 30
 
   
2012
   
2012
 
ASSETS
 
(Unaudited)
       
Current assets:
           
Cash and cash equivalents
  $ 399,737     $ 181,879  
Accounts receivable
    80,085       -  
Inventory
    71,600       239,000  
Total Current Assets
  $ 551,422     $ 420,879  
                 
Other current assets:
               
Prepaid expense
  $ 4,106     $ 16,000  
Loan to shareholder
    22,000       -  
Prepaid to Supplier
    117,500       -  
Total Other Current Assets
  $ 143,606     $ 16,000  
                 
TOTAL ASSETS
  $ 695,028     $ 436,879  
                 
LIABILITIES & EQUITY
               
Current liabilities:
               
Account payable
  $ 25,000     $ 551  
Credit card payable
    1,404       1,031  
Total current liabilities
  $ 26,404     $ 1,582  
                 
Other current liabilities:
               
Loan from shareholders
    -       -  
Unearned revenue
    -       80,000  
Total other current liabilities
  $ -     $ 80,000  
                 
Total liabilities
  $ 26,404     $ 81,582  
                 
Stockholders' Equity:
               
Common stock, $0.001 par value;
               
500,000,000 shares authorized;
               
36,299,495 shares issued and outstanding.
  $ 36,300     $ 34,625  
Paid-in capital
    808,650     $ 475,325  
Deficit accumulated during the development stage
    (176,633 )     (154,860 )
Accumulated other comprehensive income (loss)
    307       207  
                 
Total stockholders' equity
  $ 668,624     $ 355,297  
TOTAL LIABILITIES & EQUITY
  $ 695,028     $ 436,879  

 
5

 

A & C United Agriculture Developing Inc
(A Development Stage Enterprise)
STATEMENT OF LOSS
 
   
Three Months Ended
December 31
   
Three Months Ended
December 31
   
Cumulative from
February 7, 2011 (Date of
Inception) Through
December 31,
 
   
2012
   
2011
   
2012
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
                         
Revenues
  $ 387,085     $ -     $ 565,085  
Cost of Goods Sold
  $ 357,611     $ -     $ 523,256  
Gross Profit
  $ 29,474     $ -     $ 41,829  
Operating expenses:
                       
Research and development
  $ -     $ -     $ -  
                         
Selling, general and administrative expenses
  $ 51,247     $ 15,564     $ 218,453  
                         
Depreciation and amortization expenses
  $ -             $ -  
Total Operating Expenses
  $ 51,247     $ 15,564     $ 218,453  
                         
Operating Loss
  $ (21,773 )   $ (15,564 )   $ (176,624 )
                         
Investment income, net
  $ -     $ -     $ -  
Interest Expense, net
  $ -     $ -     $ 8  
Loss before income taxes
  $ (21,773 )   $ (15,564 )   $ (176,632 )
Income (loss) tax expense
  $ -     $ -     $ -  
Net Loss
  $ (21,773 )   $ (15,564 )   $ (176,632 )
                         
Net loss per common share- Basics
  $ (0.00 )   $ (0.00 )   $ (0.01 )
Net loss per common share- Diluted
  $ (0.00 )   $ (0.00 )   $ (0.01 )
                         
Other comprehensive income (loss), net of tax:
                       
Foreign currency translation adjustments
  $ 100     $ -     $ 307  
Other comprehensive income (loss)
  $ 100     $ -     $ 307  
Comprehensive Income (Loss)
  $ (21,673 )   $ (15,564 )   $ (176,325 )

 
6

 

A & C United Agriculture Developing Inc
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS EQUITY
The Period February 7, 2011 ( Date of Inception)
through December 31, 2012
 
                     
Deficit
             
                     
Accumulated
   
Accumulated
       
               
Additional
   
During the
   
Other
   
Total
 
   
Common Stock
   
Paid-in
   
Development
   
Comprehensive
   
Stockholders'
 
   
Shares
   
Amount
   
Capital
   
Stage
   
Income (Loss)
   
Equity
 
                                     
Issuance of common stocks
                                   
to shareholders @0.001 per
                                   
share on February 7, 2011
    30,000,000     $ 30,000     $ -                 $ 30,000  
                                             
Issuance of common stocks
                                           
to shareholders @0.1 per
                                           
share on May 31, 2011
    4,449,495     $ 4,450     $ 440,500                 $ 444,950  
                                             
Adjustment for Exchange
                                           
rate changes
                                $ 207     $ 207  
                                               
Net loss for the year
                                             
ended September 30, 2011
                          $ (37,543 )           $ (37,543 )
Balance, September 30, 2011
    34,449,495     $ 34,450     $ 440,500     $ (37,543 )   $ 207     $ 437,614  
                                                 
Issuance of common stocks
                                               
to Michael Williams @0.2
                                               
per share on July 16, 2012
    150,000     $ 150     $ 29,850                     $ 30,000  
                                                 
Issuance of common stocks
                                               
to Pivo Associates Inc @0.2
                                               
per share on July 20, 2012
    25,000     $ 25     $ 4,975                     $ 5,000  
                                                 
Adjustment for currency rate exchange
                            $ -     $ -  
                                                 
Net loss for the year
                                               
ended September 30, 2012
                          $ (117,317 )           $ (117,317 )
Balance, September 30, 2012
    34,624,495     $ 34,625     $ 475,325     $ (154,860 )   $ 207     $ 355,297  
                                                 
Issuance of common stocks
                                               
to Shareholders @0.2
                                               
per share on December 31, 2012
    1,675,000     $ 1,675     $ 333,325                     $ 335,000  
                                                 
Adjustment for currency rate exchange
                            $ 100     $ 100  
                                                 
Net loss for the period
                                               
ended December 31, 2012
                          $ (21,773 )           $ (21,773 )
Balance, December 31, 2012
    36,299,495     $ 36,300     $ 808,650     $ (176,633 )   $ 307     $ 668,624  

 
7

 

A & C United Agriculture Developing Inc
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
 
   
Three Months Ended
December 31
   
Three Months Ended
December 31
   
Cumulative from
February 7, 2011 (Date of Inception)
Through
December 31,
 
   
2012
   
2011
   
2012
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
Operating Activities:
                 
Net loss
  $ (21,773 )   $ (15,564 )   $ (176,632 )
Adjustments to reconcile net income to net cash provided by operating activities:
                       
Non-cash portion of share based legal fee expense
    -       -       69,450  
Accounts Receivable
    (80,085 )     -       (80,085 )
Inventory
    167,400       -       (71,600 )
Prepaid expense
    11,894       169       (4,106 )
Credit card payable
    373       -       1,404  
Prepaid to supplier
    (117,500 )     -       (117,500 )
Unearned Income
    (80,000 )     -       -  
Account payable
    24,449       -       25,000  
Net cash provided by operating activities
  $ (95,242 )   $ (15,395 )   $ (354,069 )
                         
Investing Activities:
                       
Net cash provided by investing activities
  $ -     $ -     $ -  
                         
Financing Activities:
                       
Loan from shareholders
    -       344       -  
Loan to shareholder
    (22,000 )     -       (22,000 )
Proceeds from issuance of common stock
    335,000       5,000       775,499  
Net cash provided by financing activities
  $ 313,000     $ 5,344     $ 753,499  
                         
Effect of  Exchange Rate on Cash
  $ 100     $ -     $ 307  
Net increase (decrease) in cash and cash equivalents
  $ 217,858     $ (10,051 )   $ 399,737  
Cash and cash equivalents at beginning of the period
  $ 181,879     $ 435,437     $ -  
Cash and cash equivalents at end of the period
  $ 399,737     $ 425,386     $ 399,737  

 
8

 
 
A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS


NOTE A- BUSINESS DESCRIPTION

A & C United Agriculture Developing Inc., or the “Company,” is a Nevada corporation formed on February 7, 2011.  Our principal executive office is located at Oak Brook Pointe, Suite 500, 700 Commerce Drive, Oak Brook IL 60523.  Tel: 630-288-2500.

A & C United Agriculture Developing Inc., a vertically integrated "seed to table" agriculture company is engaged in standardized vegetable seed-selecting, planting, growing, harvesting, cool chain transportation, processing and final product selling.

Andy Liu and Charlie Huang, our two founders, driven by the sense of mission and duty to provide safe, high-quality and affordable vegetable products in China for her current and future generations, formed the company in state of Nevada, USA at 2011.

The Company, in addition to its existing seeds export from U.S to China, will continue leveraging the resources obtained via strategic alliances in the future on both sides of the Pacific Ocean, and applying America’s advanced agriculture technologies and quality control/ management practices to build and enhance the entire vegetable production chain in China that will also be utilizing large-scale, mechanization and standardization. As a food-safety oriented company, around the production chain, it will be building systems that support the two-way traceability and recall capability for its products to comply with and exceed local and global food safety requirements from field to supermarket, year round.

Development Stage Company
 
The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards (SFAS) ASC 915, “Development Stage Entities”. The Company has devoted substantially all of its efforts to establishing a new business and for which either of the following conditions exists: planned principal operations have not commenced; or the planned principal operations have commenced, and rising of capital and attempting to raise sales.
 
NOTE B – SIGNIFICANT ACCOUNTING POLICIES

Basis of accounting

The financial statements reflect the assets, revenues and expenditures of the Company on the accrued basis of accounting. The Company’s fiscal year end is the last day of September 30.

 
9

 
 
A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS


NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect certain amounts reported in the financial statements and disclosures.  Accordingly, actual results could differ from those estimates.

Concentration of credit risk

The Company maintains its cash in bank accounts which, at times, may exceed the federally insured limits.  The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash.

Cash and Cash Equivalents

The Company considers all highly-liquid investments with an original maturity of three months or less when purchased to be cash equivalents.  As of December 31, 2012, the company had cash and cash equivalents of $399,737.

Property, Plant, and Equipment Depreciation

Property, plant, and equipment are stated at cost.  Depreciation is being provided principally by straight line methods over the estimated useful lives of the assets.  As of December 31, 2012, there were no fixed assets in the Company’s balance sheets.

Stock-Based Compensation

The Company accounts for stock issued for services using the fair value method.  In accordance with FASB ASC 718, Stock-Based Compensation, the measurement date of shares issued for services is the date at which the counterparty’s performance is complete.

On June 30, 2011, 344,495 shares was issued to Michael Williams @ $0.1 per share for legal service value $34,450.

On July 16, 2012, 150,000 shares were issued to Michael Williams for legal services of $30,000 at $0.20 per share.

On June 20, 2012, 25,000 shares were issued to Pivo Associates for services of $5,000 at $0.20 per share.

 
10

 
 
A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS


NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Basics and Diluted Net Loss per Common Share

The Company computes per share amounts in accordance with Statement of Financial Accounting Standards (SFAS) ASC 260, Earnings per Share (EPS).  ASC 260 requires presentation of basis and diluted EPS.  Basic EPS is computed by dividing the income (loss) available to Common Shareholders by the weighted-average number of common shares outstanding for the period.  Diluted EPS is based on the weighted-average number of shares of common stock and common stock equivalents outstanding during the periods.

The Company only issued one type of shares, i.e., common shares only.  There are no other types securities were issued.  Accordingly, the diluted and basics net loss per common share are the same.

Prepaid Expense

The Company prepaid $3,000 legal service fee to Michael Williams and $1,106 other operating expense as of December 31, 2012.

Prepaid to Supplier

The Company prepaid $117,500 to a US supplier for seeds purchases as of December 31, 2012. And the purchase order and products were shipped and received on January 2013.

Inventory

The inventory was valued at cost of purchase from US suppliers. As of December 31 2012, the Company have inventory of vegetable seeds of $71,600.

Revenue Recognition

In accordance with the FASB Accounting Standards Codification (ASC) 605-15-25 “Revenue Recognition for Sales of Product”, the Company recognizes revenue when it is realized or realizable and earned.  The revenue from the product sales transaction shall be recognized at time of sale if the following conditions are met:

·  
The seller’s price to the buyer is substantially fixed or determinable at the date of sale.
·  
The buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product.

 
11

 
 
A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

 
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition (Continued)

·  
The buyer’s obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product.
·  
The buyer acquiring the product for resale has economic substance apart from that provided by the seller.
·  
The seller does not have significant obligations for future performance to directly bring about resale of the product by the buyer.
·  
The amount of future returns can be reasonably estimated.

Revenues include sales of seeds in Asia, Europe, and North America.
 
The Company had total revenue of $387,085 for the three months period of October 1, 2012 to December 31, 2012.
 
Cost of Goods Sold
 
The Companys purchase cost is primarily from supplier, U.S seed companies. Based upon managements experience in the industry, we believe vegetable seeds supply in United State for the varieties we intend to sell is plenty. We believe that with advanced technology and mature global seed accessibility, U.S seed companies can provide the varieties Chinese end users are looking for. We are focused on finding the right variety. We first will collect specifications from Chinese end users, and then we will match them with the variety here. We ask samples or sometimes we purchase small amount of seed. We will then try them in various locations in China at different planting season. The challenge we have is that not all the varieties we may initially select will prove to work in China. The trial cycle can be over a year in some cases.
 
We do not anticipate offering any material right of return on our product although we may reimburse buyers on a case-by-case basis if seed which passed our trials does not perform well for a particular grower through no fault of the grower.
 
The Company had $239,000 inventory as of September 30, 2012.
 
From the period of October 1, 2012 to December 31, 2012, the Company purchase $189,100 vegetable seeds from US suppliers, and a cost amount of $356,500 have been sold to China; and the less of $71,600 was stored as inventory as of December 31, 2012.
 
 
12

 
 
A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS


NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cost of Goods Sold (Continued)
 
For the fiscal quarter ended December 31, 2012, the Company had $143 certificate fee and $968 freight cost.
 
As a result, a total of $357,611 cost of good sold was recorded for the period of October 1, 2012 to December 31, 2012.
 
Operating Expense

Operation expense consists of selling, general and administrative expenses.

For the three months ended December 31, 2012 and 2011, there was a total of $51,247 and $15,564 operating expenses respectively.

For the cumulative period from February 7, 2011 (Date of Inception) to December 31, 2012, there was a total of $218,453 operating expenses.

The Details were showed in Exhibit A.

Comprehensive Income

The company’s comprehensive income is comprised of net income, unrealized gains and losses on marketable securities classified foreign currency translation adjustments, and unrealized gains and losses on derivative financial instruments related to foreign currency hedging.

Operating Leases
  
The Company entered into a lease for its corporate offices in under terms of non-cancelable operating leases. The lease term is from February 24, 2011 through February 29, 2013 and requires a $169 monthly lease payment, and this office is located at 700 Commerce Drive, STE 500, Oak Brook IL 60523, USA.

 
13

 
 
A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS


NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements

The following pronouncements have become effective during the period covered by these financial statements or will become effective after the end of the period covered by these financial statements:

Pronouncement
 
Issued
 
Title
ASC 605
 
October 2009
 
Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements – a consensus of the FASB Emerging Issues Task Force
ASC 860
 
December 2009
 
Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets
ASC 505
 
January 2010
 
Accounting for Distributions to Shareholders with Components of Stock and Cash – a consensus of the FASB Emerging Issues Task Force
ASC 810
 
January 2010
 
Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary – a Scope Clarification
ASC 718
 
January 2010
 
Compensation – Stock Compensation (Topic 718): Escrowed Share Arrangements and the Presumption of Compensation
ASC 820
 
January 2010
 
Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements
ASC 810
 
February 2010
 
Consolidation (Topic 810): Amendments for Certain Investment Funds
ASC 815
 
March 2010
 
Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives
ASC-310 Receivables
 
July 2010
 
For public entities, the disclosure as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The disclosures about activity that occurs during a reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. For nonpublic entities, the disclosures are effective for annual reporting period ending on or after December 15, 2011.
 
Management does not anticipate that the adoption of these standards will have a material impact on the financial statements.
 
 
14

 
 
A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS


NOTE C – RELATED PARTY TRANSACTIONS

Common Shares Issued to Executive and Non-Executive Officers and Directors

As of December, 2012, total 30,235,000 shares were issued to officers and directors as follows:

Name
 
Title
 
Share QTY
   
Amount
 
Purchase Date
 
% of Common Share
 
Jun Huang
 
President
    15,000,000     $ 15,000  
2/7/2011
    41.32 %
Yidan Liu
 
Secretary, CFO
    15,000,000     $ 15,000  
2/7/2011
    41.32 %
Ross Rispens
 
Diretor
    75,000     $ 10,000  
5/31/2011
    0.21 %
Xinyu Wang
 
Diretor
    10,000     $ 1,000  
5/31/2011
    0.03 %
Manying Chen
 
Diretor
    50,000     $ 5,000  
5/31/2011
    0.14 %
Minhang Wei
 
Diretor
    100,000     $ 10,000  
5/31/2011
    0.28 %
Total
        30,235,000     $ 56,000         83.29 %

*Based upon total outstanding shares 36,299,495 as of December 31, 2012.
 
Loans to Officers

As of December 31, 2012, the Company advanced $22,000 to the officer, Yidan Liu, for operating, and marketing activity.  The outstanding balance is due on demand and no agreement was signed.
 
NOTE D – SHAREHOLDERS’ EQUITY

Under the Company’s Articles of Incorporation of the Company, the Company is authorized to issue 500,000,000 shares of common stock with a par value of $0.001.

On February 7, 2011, the Company was incorporated in the State of Nevada.

On February 7, 2011, two founders of the Company, Jun Huang and Yidan Liu purchased 30,000,000 shares at $0.001 per share.  The proceeds of $30,000 were received.
 
On May 31, 2011, additional 4,105,000 shares were issued to 113 shareholders at price of $0.1 per share or $410,500 common stock.

 
15

 
 
A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS


NOTE D – SHAREHOLDERS’ EQUITY (Continued)

On June 30, 2011, 344,495 shares was issued to Michael Williams @ $0.1 per share for legal service value $34,450.

On July 16, 2012, 150,000 shares was issued to Michael Williams @ $0.2 per share for legal service value $30,000.

On July 20, 2012, 25,000 shares were issued to Pivo Associate Inc @ $0.2 per share for consulting service value $5,000.

On December 2012, additional 1,175,000 shares were issued to 12 shareholders and  at price of $0.2 per share or $235,000 common stock.

On December 2012, 500,000 shares were issued to 7 new shareholders at price of $0.2 per share or $100,000 common stock.

Therefore, as of December 31, 2012, there was total of 36,299,495 shares issued and outstanding.
 
Stock Subscription Receivable - Shareholders

At June 30, 2011, the Company had receivable from its 113 shareholders aggregating $405,500 for the purchase of their Company common stock.

As of September 30, 2011, the Company still had $5,000 stock subscription receivable from one shareholder, Ming Zhang.

 In December 2011, the Company received the $5,000 from the shareholder, Ming Zhang.

All stock receivables were subsequently paid in full in December 2011.

Therefore, as of December 31, 2012, the Company had no outstanding balance for stock subscription receivable.
 
NOTE E – SUBSEQUENT EVENT

The Company prepaid $117,500 to US supplier on December 2012 for seeds purchases. And the purchase order and products were shipped and received on January 2013.

 
16

 
 
A & C UNITED AGRICULTURE DEVELOPING INC

NOTES TO FINANCIAL STATEMENTS

 
NOTE F – GOING CONCERN

The Company is currently in the development stage and their activities consist solely of corporate formation, raising capital, and attempting to sell products to generate and increase sales revenues.

There is no guarantee that the Company will be able to raise enough capital or generate revenues to sustain its operations and carry out its business plan.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The financial statements do not include any adjustments relating to the carrying amounts of recorded assets or the carrying amounts and classification of recorded liabilities that may be required should the Company be unable to continue as a going concern.

As of December 31, 2012 the cash and cash equivalent balance was $399,737 and there is cumulative loss of $176,325 for the cumulative period from February 7, 2011 (Date of Inception) to December 31, 2012.

The Company’s lack of operating history and financial resources raise substantial doubt about its ability to continue as a going concern.  The financial statements do not include adjustments that might result from the outcome of this uncertainty and if the Company is unable to generate significant revenue or secure financing, then the Company may be required to cease or curtail its operations.

 
17

 
 
Exhibit A

   
Three Months Ended
December 31
   
Three Months Ended
December 31
   
Cumulative from
February 7, 2011 (Date of
Inception) Through
December 31,
 
   
2012
   
2011
   
2012
 
Expense
                 
Bank Service Charges
    60       51       562  
Business Licenses and Permits
    -       -       4,684  
Meals and Entertainment
    197       -       471  
Membership fee
    -       -       505  
Insurance Expense
    72       -       72  
Office Supplies
    -       -       334  
Postage and Delivery
    81       -       232  
Printing and Reproduction
    -       -       136  
Auto and Truck Expenses
    -       -       84  
Travel Expense
    2,954       -       13,904  
Professional Fees
    -       -          
Accounting
    25,000       -       50,000  
Consulting Fees
    7,607       -       30,107  
Legal Fee
    13,000       15,000       106,450  
Transfer Agent fees
    200       -       590  
SEC & EDGAR Filling Fee
    1,562       -       6,135  
Professional Fees
    47,369       15,000       193,281  
Software
    -       -       320  
Rent Expense
    514       513       3,870  
Total Expense
    51,247       15,564       218,453  
 
 
18

 
 
Item 2.   Management’s Discussion and Analysis or Plan of Operation.
 
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-Q.

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking.  Forward-looking statements are, by their very nature, uncertain and risky.  These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.
 
Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them.  Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements.  You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

Overview

A & C United Agriculture Developing Inc., or the “Company,” is a Nevada corporation formed on February 7, 2011.  Our principal executive office is located at Oak Brook Pointe, Suite 500, 700 Commerce Drive, Oak Brook IL 60523.  Tel: 630-288-2500.

A & C United Agriculture Developing Inc., a vertically integrated "seed to table" agriculture company is engaged in standardized vegetable seed-selecting, planting, growing, harvesting, cool chain transportation, processing and final product selling.

Andy Liu and Charlie Huang, our two founders, driven by the sense of mission and duty to provide safe, high-quality and affordable vegetable products in China for her current and future generations, formed the company in state of Nevada, USA at 2011.

The Company, in addition to its existing seeds export from U.S to China, will continue leveraging the resources obtained via strategic alliances in the future on both sides of the Pacific Ocean, and applying America’s advanced agriculture technologies and quality control/management practices to build and enhance the entire vegetable production chain in China that will also be utilizing large-scale, mechanization and standardization. As a food-safety oriented company, around the production chain, it will be building systems that support the two-way traceability and recall capability for its products to comply with and exceed local and global food safety requirements from field to supermarket, year round.

While the Company is focusing on providing safe, fresh quality products that are easy to use, appetizing and nutritious, it commits not to compromise quality or harm the environment and ecosystems.

Current and Future Planned Operational Activities
 
In the fiscal quarter ended December 31, 2012, we have made $387,000 seed sales that conclude the total revenue of $565,000 for the period of February 7, 2011 to December 31 2012.

We have also purchased $117,500 worth of seeds on January 2013 and increased our inventory to $189,100 as our inventory for future sales.

 
19

 
 
We attended the opening ceremony in Fugou, Henan province, China. We play an important role in the project and we are still working with our local partner to materialize the plan.

We have completed intensive market research and strategic production partner meetings within the major cities of Beijing, Shanghai, Guangzhou and Shenzhen. We also had advanced discussions with companies located in China and ASEAN (Association of Southeast Asian Nations), in order to integrate more business entities and generate significantly more revenue on seeds and vegetables selling.

Due to the Beijing subsidiary registration process has taken longer period of time and a lot more efforts than anticipated, we are actively searching for alternatives including registering subsidiary in other geographical locations where regulations are believed more flexible and efficient.

In 2013, the management team intends to keep focusing on seed sales and also continue to develop the vegetable production chain (seed to table). We will continue leverage the network of contacts that company already built.

Currently the company’s cash flow is sufficient and we belive our sales are strong.
 
We will start marketing the company gradually and in order to increase our seed sales, we need to raise ideally 500 thousand or more dollars to increase our inventory amount and further diversify number of crops we carry.
 
During the next 12 months, we anticipate engaging in the following operational activities, although we may vary our plans depending upon operational conditions:
  
Milestone Table
 
Event
 
Actions
 
Time
 
Total estimated cost
 
               
Evaluate a few business opportunities and enter into letter of intent
 
Conduct meetings with the business owners and discuss model of partnership
 
By Mar 31st, 2013
  $ 5,000  
Further evaluate selected business entities and engage company's legal and financial resources
 
Layout detailed roadmap and conduct legal process and auditing whereas necessary
 
By June 30th, 2013
  $ 25,000  
Raise $500,000 or more by offering company stocks to increase seed inventory in order to increase sales
 
Marketing, conduct meetings and roadshows
 
By Apr 15th, 2013 
  $ 100,000  
 
As described in “Liquidity and Capital Resources,” below, we currently have sufficient cash resources to fund all of these anticipated obligations.
 
 
20

 
 
Results of Operations

For the fiscal quarter ended December 31, 2012 vs. 2011
 
Revenue
 
There was $387,085 and $0.00 revenue generated for the fiscal quarter ended December 31, 2012 and 2011.
 
Cost of Revenue
 
There was $357,611 and $0.00 cost of goods sold incurred for the fiscal quarter ended December 31, 2012 and 2011 respectively.
 
Expense
 
Our expenses consist of selling, general and administrative expenses as follows:

For the fiscal quarter ended December 31, 2012 and 2011, there was a total of $51,247 and $15,564 operating expenses respectively. $47,369 out of the total $51,247 was professional service fee due to company listing and filling.  We are expecting the professional service fee to go down to about $75,000 annually.
 
 
21

 
 
For the cumulative period from February 7, 2011 (Date of Inception) to December 31, 2012, there was a total of $218,453 operating expenses.
 
   
Three Months Ended
December 31
2012
   
Three Months Ended
December 31
2011
   
Cumulative from
February 7, 2011 (Date of
Inception) Through
December 31,
2012
 
Expense
                 
Bank Service Charges
    60       51       562  
Business Licenses and Permits
    -       -       4,684  
Meals and Entertainment
    197       -       471  
Membership fee
    -       -       505  
Insurance Expense
    72       -       72  
Office Supplies
    -       -       334  
Postage and Delivery
    81       -       232  
Printing and Reproduction
    -       -       136  
Auto and Truck Expenses
    -       -       84  
Travel Expense
    2,954       -       13,904  
Professional Fees
    -       -          
Accounting
    25,000       -       50,000  
Consulting Fees
    7,607       -       30,107  
Legal Fee
    13,000       15,000       106,450  
Transfer Agent fees
    200       -       590  
SEC & EDGAR Filling Fee
    1,562       -       6,135  
Professional Fees
    47,369       15,000       193,281  
Software
    -       -       320  
Rent Expense
    514       513       3,870  
Total Expense
    51,247       15,564       218,453  

 
22

 
 
Income & Operation Taxes
 
We are subject to income taxes in the U.S.
 
We paid no income taxes in USA for the fiscal quarter ended December 31, 2012 due to the net operation loss in the USA.
 
Net Loss
 
We incurred net losses of $21,773 and $15,564 for the fiscal quarter ended December 31, 2012 and 2011, and net losses of $176,632 for period from February 7 to December 31, 2012.

Liquidity and Capital Resources
 
   
At
December 31
   
At
December 31
 
   
2012
   
2011
 
             
Current Ratio*
    26.32       127.51  
Cash
  $ 399,737     $ 425,386  
Working Capital***
  $ 668,624     $ 422,050  
Total Assets
  $ 695,028     $ 425,386  
Total Liabilities
  $ 26,404     $ 3,336  
                 
Total Equity
  $ 693,624     $ 422,050  
                 
Total Debt/Equity**
    0.04       0.01  
_________
*Current Ratio = Current Assets /Current Liabilities.
** Total Debt / Equity = Total Liabilities / Total Shareholders Equity.
*** Working Capital = Current Assets - Current Liabilities.
 
The Company had cash and cash equivalents of $399,737 and $425,386 at fiscal quarter ended December 31, 2012 and 2011 and the working capital of $668,624 and $422,050 with liabilities of $26,404 and $3,336.
 
As of December 31, 2012, we have $399,737 in cash. As shown in the Milestone Table above, we need a minimum of approximately $130,000in funds to finance our business in the next 12 months. This amount does not include all our costs which we will incur irrespective of our business development activities, including bank service fees and those costs associated with SEC requirements associated with staying public, estimated to be approximately $75,000 annually. Accordingly, we estimate our total need for funds for operations in the next 12 months is $205,000. Accordingly, as we anticipate an average monthly burn rate of no more than $17,083during the next 12 months, we believe we have sufficient cash available to fund all of our operational and SEC filing needs during the next 12 months.
 
Item 3.  Quantitative and Qualitative Disclosure about Market Risk
 
Not applicable.
 
 
23

 
 
Item 4.  Controls and Procedures.
 
Evaluation of Disclosure Controls and Procedures

The Company has established disclosure controls and procedures to ensure that information required to be disclosed in this quarterly report on Form 10-Q was properly recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.  The Company’s controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers to allow timely decisions regarding required disclosure.

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) at December 31, 2012 based on the evaluation of these controls and procedures required by paragraph (b) of Rule 13a-15 or Rule 15d-15 under the Exchange Act.  This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer/ Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer/Chief Financial Officer concluded that, at December 31, 2012, our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company's internal control over financial reporting that occurred during the Company's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
 
 
24

 
 
PART II — OTHER INFORMATION
 
Item 1.  Legal Proceedings.
 
None.
 
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

We sold the following unregistered securities in the quarter ended December 31, 2012:

   
# of shareholders
   
Shares Sold
   
Amount Reveived
   
Price
 
U.S.
    3       425,000     $ 85,000.00     $ 0.20  
Non-U.S.
    16       1,250,000     $ 250,000.00     $ 0.20  
Total
    19       1,675,000     $ 335,000.00     $ 0.20  

We relied upon Section 4(2) of the Securities Act of 1933, as amended for the above issuances to US citizens or residents. We relied upon Regulation S of the Securities Act of 1933, as amended for the above issuances to non US citizens or residents.
 
We relied upon Section 4(2) of the Securities Act of 1933, as amended for the above issuances to US citizens or residents.

We believed that Section 4(2) of the Securities Act of 1933 was available because:

·  
None of these issuances involved underwriters, underwriting discounts or commissions.
·  
Restrictive legends were and will be placed on all certificates issued as described above.
·  
The distribution did not involve general solicitation or advertising.
·  
The distributions were made only to investors who were sophisticated enough to evaluate the risks of the investment.

We relied upon Regulation S of the Securities Act of 1933, as amended for the above issuances to non US citizens or residents.

We believed that Regulation S was available because:

·  
None of these issuances involved underwriters, underwriting discounts or commissions;
·  
We placed Regulation S required restrictive legends on all certificates issued;
·  
No offers or sales of stock under the Regulation S offering were made to persons in the United States;
·  
No direct selling efforts of the Regulation S offering were made in the United States.

In connection with the above transactions, although some of the investors may have also been accredited, we provided the following to all investors:

·  
Access to all our books and records.
·  
Access to all material contracts and documents relating to our operations.
·  
The opportunity to obtain any additional information, to the extent we possessed such information, necessary to verify the accuracy of the information to which the investors were given access.

Prospective investors were invited to review at our offices at any reasonable hour, after reasonable advance notice, any materials available to us concerning our business. Prospective Investors were also invited to visit our offices.
 
Item 3.  Defaults Upon Senior Securities.

None.
 
Item 4. Mine Safety Disclosure.

Not applicable.

Item 5.  Other Information.
 
Not applicable.
 
 
25

 
 
Item 6.  Exhibits.
 
(a)  
Exhibits.
 
Exhibit No.
 
Document Description
     
31.1
 
CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
     
32.1 *
 
CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002
 
Exhibit 101 
 
Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.**
     
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**
____________
*  This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
 
26

 
 
SIGNATURES
 
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

A & C United Agriculture Developing Inc., a Nevada corporation

Title  
 
Name  
 
Date
 
   Signature
             
Principal Executive Officer  
 
Yidan (Andy) Liu  
 
January 23, 2013
 
/s/ Yidan (Andy) Liu

In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
 
 
SIGNATURE
 
NAME
 
TITLE
 
DATE
             
/s/ Yidan (Andy) Liu
 
Yidan (Andy) Liu
 
Principal Executive Officer, Principal Financial
 
January 23, 2013
       
Officer and Principal Accounting Officer
   
 
 
27

 
 
EXHIBIT INDEX

Exhibit No.
 
Document Description
     
31.1
 
CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
     
32.1 *
 
CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002
 
Exhibit 101
 
Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.**
     
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**
____________
* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
 
 
 
28