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: 000-23039

  

JD INTERNATIONAL LIMITED

(Exact Name of Registrant as Specified in Its Charter)

 

Nevada		25-1605848
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

G/F First Asia Tower, 8 FuiYiuKok

Street, Tsuen Wan, NT, Hong Kong

(Address of principal executive offices, Zip Code)

 

852 36978989

(Registrant’s telephone number, including area code)

  

(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 (§ 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 [X] No [  ]

 

The number of shares outstanding of each of the issuer’s classes of common stock, as of February 28, 2014 is as follows:

 

Class of Securities		Shares Outstanding
Common Stock, $0.001 par value		450,800

 

  

  

JD INTERNATIONAL LIMITED

 

Quarterly Report on Form 10-Q

For the Quarter Ended December 31, 2013

  

PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements.		3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.		4
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.		7
Item 4.	Controls and Procedures.		8
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.		8
Item 1A.	Risk Factors.		8
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.		8
Item 3.	Defaults Upon Senior Securities.		8
Item 4.	Mine Safety Disclosures.		8
Item 5.	Other Information.		8
Item 6.	Exhibits.		8
Signatures			9

 

 

PART I

FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS.

 

Index to Financial Statements

 

		Page
Financial Statements
Balance Sheets as of December 31, 2013 (Unaudited) and September 30, 2013 (Audited)		F-1
Statements of Operations and Comprehensive Loss - for the Three Months Ended December 31, 2013 and 2012 and for the period from July 5, 1989 (date of inception) through December 31, 2013 - (Unaudited)		F-2
Statements of Changes in Stockholders’ Deficit - for the Three Months Ended December 31, 2013 and for the period from July 5, 1989 (date of Inception) through December 31, 2013 - (Unaudited)		F-3
Statements of Cash Flows - for the Three Months Ended December 31, 2013 and 2012 for the period from July 5, 1989 (date of inception) through December 31, 2013 - (Unaudited)		F-8
Notes to Financial Statements - (Unaudited)		F-10

 

 

JD INTERNATIONAL LIMITED

(a development stage company)

Balance Sheets

 

		December 31, 2013				September 30, 2013
		(Unaudited)				(Audited)
ASSETS
Current Assets
Cash		$	—			$	—
Total Current Assets			—				—
Total Assets		$	—			$	—
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Liabilities
Current Liabilities
Accrued expenses		$	390			$	—
Note payable to controlling shareholder			126,794				116,306
Accrued interest payable to controlling stockholder			—				—
Total Liabilities			127,184				116,306
Commitments and Contingencies
Stockholders’ Deficit
Preferred stock - $0.001 par value 50,000,000 shares authorized None issued and outstanding			—				—
Common stock - $0.001 par value. 100,000,000 shares authorized. 450,800 shares issued and outstanding			451				451
Additional paid-in capital			48,121,208				48,121,208
Common stock warrants			—				—
Deficit accumulated during the development stage			(48,248,843	)			(48,237,965	)
Total Stockholders’ Deficit			(127,184	)			(116,306	)
Total Liabilities and Stockholders’ Deficit		$	—			$	—

 

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

  

 

JD INTERNATIONAL LIMITED

(a development stage company)

Statements of Operations and Comprehensive Loss

(Unaudited)

 

										Period from
										July 5, 1989
		Three months				Three months				(date of inception)
		ended				ended				through
		December 31, 2013				December 31, 2012				December 31, 2013
Revenues		$	—			$	—			$	—
Operating Expenses
General and administrative expenses			10,878				3,560				17,215,075
Depreciation expense			—				—				91,495
Research and development expense			—				—				10,556,405
Technology and patent rights acquired			—				—				2,650,000
Expense related to warrant extensions			—				—				17,890,676
Amortization of goodwill			—				—				535,057
Total operating expenses			10,878				3,560				48,938,708
Loss from operations			(10,878	)			(3,560	)			(48,938,708	)
Other Income (Expense)
Interest expense			—				(1,289	)			(362,010	)
Other income			—				—				1,043,722
Other expense			—				—				(67,405	)
Equity in loss from unconsolidated subsidiaries			—				—				(575,412	)
Impairment loss			—				—				(690,124	)
Gain from sale of stock			—				—				1,341,094
Total other income (expense)			—				(1,289	)			689,865
Loss before provision for income taxes			(10,878	)			(4,849	)			(48,248,843	)
Provision for income taxes			—				—				—
Net Loss			(10,878	)			(4,849	)			(48,248,843	)
Comprehensive income			—				—				—
Comprehensive Loss		$	(10,878	)		$	(4,849	)		$	(48,248,843	)
Earnings per share of common stock outstanding computed on net loss - basic and fully diluted		$	(0.02	)		$	(0.01	)
Weighted-average number of shares outstanding – basic and fully diluted			450,800				450,800

  

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

 

  

JD INTERNATIONAL LIMITED

(a development stage company)

Statements of Changes in Stockholders’ Deficit

(Unaudited)

 

										Common				Additional								During the				Stockholders’
		Common				Stock				Stock				Paid-in								Development				equity
		Shares				Amount				Subscribed				Capital				Warrants				Stage				(Deficit)
July 5, 1989 (date of inception)						$	-			$	-			$	-			$	-			$	-			$	-
July 10,1989 Issuance of stock to BICO in connection with obtaining License and Marketing Agreement			8,000,000				80,000				-				-				-				-				80,000
Aug. 21 through Dec. 31, 1989 (various dates)
First Private Placement			656,000				6,560				-				321,440				-				-				328,000
Sep. 29, 1989 - Issuance of stk in connection with patent rights acquired by BICO			1,040,000				10,400				-				509,600				-				-				520,000
Net loss for the period			-				-				-				-				-				(80,000	)			(80,000	)
Balances at December 31, 1989			9,696,000			$	96,960			$	-			$	831,040			$	-			$	(80,000	)		$	848,000
Jan. 1 to Dec. 31, 1990 (various dates)
First private Placement			1,240,000				12,400				-				607,600				-				-				620,000
May 1, 1990 through Aug. 31, 1990 (various dates)
First Private Placement
Exchange of debt for shares of stock			136,000				1,360				-				66,640				-				-				68,000
Warrants issued - to BICO			-				-				-				-				27,500				-				27,500
Net loss for the year			-				-				-				-				-				(497,628	)			(497,628	)
Balances at December 31, 1990			11,072,000			$	110,720			$	-			$	1,505,280			$	27,500			$	(577,628	)		$	1,065,872
Jan. 1 to Dec. 31, 1991 (various dates)
First Private Placement			768,000				7,680				-				376,320				-				-				384,000
Second Private Placement			3,948,250				39,482				-				3,896,468				-				-				3,935,950
December 31, 1991 - common stock subscribed 62,500 shares at 1			-				-				625				61,875				-				-				62,500
Warrants issued - to BICO			-				-				-				-				19,085				-				19,085
Net loss for the year			-				-				-				-				-				(3,650,203	)			(3,650,203	)
Balances at December 31, 1991			15,788,250			$	157,882			$	625			$	5,839,943			$	46,585			$	(4,227,831	)		$	1,817,204
Jan. 1 to Sep. 30, 1992 (various dates)
Second Private Placement			986,750				9,868				-				976,883				-				-				986,751
Third Private Placement			7,212				72				-				25,170				-				-				25,242
Fourth Private Placement			120,000				1,200				-				418,800				-				-				420,000
Jan. 1992 - Exchange of debt for share of stock			235,000				2,350				-				232,650				-				-				235,000
Jan. 1992 - Common stock subscriptions received			62,500				625				(625	)			-				-				-				-
Net loss for the year			-				-				-				-				-				(2,846,584	)			(2,846,584	)

 

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

 

  

JD INTERNATIONAL LIMITED

(a development stage company)

Statements of Changes in Stockholders’ Deficit – Continued

(Unaudited)

 

										Common				Additional								During the				Stockholders’
		Common				Stock				Stock				Paid-in								Development				equity
		Shares				Amount				Subscribed				Capital				Warrants				Stage				(Deficit)
Balances at September 30, 1992			17,199,712			$	171,997			$	-			$	7,493,446			$	46,585			$	(7,074,415	)		$	637,613
Sep. 30, 1992 to Oct. 31,1992(various dates)
Fourth Private Placement			180,000				1,800				-				628,200				-				-				630,000
June 1993 thru July 1993 warrants exercised			25,000				250				-				28,520				(3,770	)			-				25,000
Net loss for the year			-				-				-				-				-				(3,763,101	)			(3,763,101	)
Balances at September 30, 1993			17,404,712			$	174,047			$	-			$	8,150,166			$	42,815			$	(10,837,516	)		$	(2,470,488	)
Oct. 1, 1993 to Sep. 30, 1994(various dates)
Registered Stock			230,961				2,309				-				783,936				-				-				786,245
Consulting service in exchange for stock			7,200				72				-				25,128				-				-				25,200
Treasury Stock purchase			(10,000	)			(100	)			-				(4,900	)			-				(30,000	)			(35,000	)
Treasury Stock sale			10,000				100				-				34,900				-				-				35,000
Nov. 1993 thru Aug. 1994 warrants exercised			105,000				1,050				-				38,950				(2,500	)			-				37,500
June 1994 Private Placement subject to Reg. S			91,667				917				-				287,834				-				-				288,751
Net loss for the year			-				-				-				-				-				(5,145,081	)			(5,145,081	)
Balances at September 30, 1994			17,839,540			$	178,395			$	-			$	9,316,014			$	40,315			$	(16,012,597	)		$	(6,477,873	)
Consulting service in exchange for stock			17,500				175				-				61,075				-				-				61,250
May 1995 Exchange of debt for shrs of stk			3,000,000				30,000				-				10,470,000				-				-				10,500,000
Oct. 1994 thru Sep. 1995 warrants exercised			29,512				295				-				9,771				-				-				10,066
Warrant extensions			-				-				-				-				4,625,000				-				4,625,000
Oct. 1, 1994 to Sep. 30, 1995(various dates)
Registered Stock			437,768				4,378				-				1,497,114				-				-				1,501,492
July 12, 1995 unregistered stock to BICO			1,200,000				12,000				-				4,188,000				-				-				4,200,000
Net loss for the year			-				-				-				-				-				(10,336,514	)			(10,336,514	)

 

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

 

 

JD INTERNATIONAL LIMITED

(a development stage company)

Statements of Changes in Stockholders’ Deficit – Continued

(Unaudited)

 

										Common				Additional								During the				Stockholders’
		Common				Stock				Stock				Paid-in								Development				equity
		Shares				Amount				Subscribed				Capital				Warrants				Stage				(Deficit)
Balances at September 30, 1995			22,524,320			$	225,243			$	-			$	25,541,974			$	4,665,315			$	(26,349,111	)		$	4,083,421
Consulting service in exchange for stock:Reg.			10,000				100				-				34,900				-				-				35,000
Consulting service in exchange for stock:Unreg.			5,000				50				-				17,450				-				-				17,500
Oct. 1995 thru Sep. 1996 warrants exercised			56,000				560				-				27,440				-				-				28,000
Warrant extensions			-				-				-				-				7,640,468				-				7,640,468
Oct. 1, 1995 to Sep. 30, 1996(various dates)
Registered Stock			410,731				4,108				-				1,361,047				-				-				1,365,155
Net loss for the year			-				-				-				-				-				(9,018,258	)			(9,018,258	)
Balances at September 30, 1996			23,006,051			$	230,061			$	-			$	26,982,811			$	12,305,783			$	(35,367,369	)		$	4,151,286
Warrant extensions			-				-				-				-				5,593,875				-				5,593,875
Oct. 1, 1996 to Sep. 30, 1997(various dates)
Registered Stock			(27,000	)			(270	)			-				(94,230	)			-				-				(94,500	)
Net loss for the year			-				-				-				-				-				(6,564,837	)			(6,564,837	)
Balances at September 30, 1997			22,979,051			$	229,791			$	-			$	26,888,581			$	17,899,658			$	(41,932,206	)		$	3,085,824
Warrant extensions			-				-				-				-				25,000				-				25,000
Warrants expired			-				-				-				2,400,000				(2,400,000	)			-				-
Oct. 1, 1997 to Sep. 30, 1998(various dates)
Registered Stock			1,000				10				-				3,490				-				-				3,500
Net loss for the year			-				-				-				-				-				(2,914,329	)			(2,914,329	)
Balances at September 30, 1998			22,980,051			$	229,801			$	-			$	29,292,071			$	15,524,658			$	(44,846,535	)		$	199,995
Warrants issued for services			-				-				-				-				228,538				-				228,538
Warrant extensions			-				-				-				-				6,333				-				6,333
Warrants expired			-				-				-				377,625				(377,625	)			-				-
Net loss for the year			-				-				-				-				-				(487,756	)			(487,756	)
Balances at September 30, 1999			22,980,051			$	229,801			$	-			$	29,669,696			$	15,381,904			$	(45,334,291	)		$	(52,890	)
Warrant extensions			-				-				-				-				230,178				-				230,178
Warrant expired			-				-				-				291,250				(291,250	)			-				-
Net loss for the year			-				-				-				-				-				(695,438	)			(695,438	)
Balances at September 30, 2000			22,980,051			$	229,801			$	-			$	29,960,946			$	15,320,832			$	(46,029,729	)		$	(518,150	)
Warrants issued for services			-				-				-				-				55,199				-				55,199
Net loss for the year			-				-				-				-				-				(1,755,563	)			(1,755,563	)

 

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

 

  

JD INTERNATIONAL LIMITED

(a development stage company)

Statements of Changes in Stockholders’ Deficit – Continued

(Unaudited)

 

										Common				Additional								During the				Stockholders’
		Common				Stock				Stock				Paid-in								Development				equity
		Shares				Amount				Subscribed				Capital				Warrants				Stage				(Deficit)
Balances at September 30, 2001			22,980,051			$	229,801			$	-			$	29,960,946			$	15,376,031			$	(47,785,292	)		$	(2,218,514	)
Warrant expired			-				-				-				57,407				(57,407	)			-				-
Net loss for the year			-				-				-				-				-				(461,103	)			(461,103	)
Balances at September 30, 2002			22,980,051			$	229,801			$	-			$	30,018,353			$	15,318,624			$	(48,246,395	)		$	(2,679,617	)
Warrant expired			-				-				-				3,309,422				(3,309,422	)			-				-
Net Income for the year			-				-				-				-				-				719,681				719,681
Balances at September 30, 2003			22,980,051			$	229,801			$	-			$	33,327,775			$	12,009,202			$	(47,526,714	)		$	(1,959,936	)
Warrant expired			-				-				-				8,181,724				(8,181,724	)							-
Net loss for the year			-				-				-				-				-				-				-
Balances at September 30, 2004			22,980,051			$	229,801			$	-			$	41,509,499			$	3,827,478			$	(47,526,714	)		$	(1,959,936	)
Warrants issued for services			-				-				-				-				1,600				-				1,600
Warrant expired			-				-				-				3,103,396				(3,103,396	)			-				-
Net loss for the year			-				-				-				-				-				(206,580	)			(206,580	)
Balances at September 30, 2005			22,980,051			$	229,801			$	-			$	44,612,895			$	725,682			$	(47,733,294	)		$	(2,164,916	)
September 13, 2006 sale of 1,000 Units consisting of 11,100 shares of restricted, unregistered common stock and 500 common stock warrants each			11,100,000				111,000				-				9,000				5,000				-				125,000
September 18, 2006 Warrant cancellation			-				-				-				725,682				(725,682	)			-				-
September 25, 2006 purchase and retirement of treasury stock			(11,975,000	)			(119,750	)			-				119,749				-				-				(1	)
Capital contributed to support operations			-				-				-				11,677				-				-				11,677
Related party cancellation of debt			-				-				-				2,402,630				-				-				2,402,630
Net loss for the year			-				-				-				-				-				(369,413	)			(369,413	)
Balances at September 30, 2006			22,105,051			$	221,051			$	-			$	47,881,633			$	5,000			$	(48,102,707	)		$	4,977
Effect of redomicile to Nevada			-				(198,946	)			-				168,946				-				30,000				-
Net loss for the year			-				-				-				-				-				(39,272	)			(39,272	)

 

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

 

 

JD INTERNATIONAL LIMITED

(a development stage company)

Statements of Changes in Stockholders’ Deficit – Continued

(Unaudited)

  

										Common				Additional								During the				Stockholders’
		Common				Stock				Stock				Paid-in								Development				equity
		Shares				Amount				Subscribed				Capital				Warrants				Stage				(Deficit)
Balances at September 30, 2007			22,105,051			$	22,105			$	-			$	48,050,579			$	5,000			$	(48,111,979	)		$	(34,295	)
Cumulative effect of Fiscal 2008 reverse and forward stock splits			(22,053,051	)			(22,053	)			-				22,053				-				-				-
Issuance of common stock for cash upon exercise of warrants			398,800				399				-				43,469				(3,988	)			-				39,880
Net loss for the year			-				-				-				-				-				(45,150	)			(45,150	)
Balances at September 30, 2008			450,800			$	451							$	48,116,101			$	1,012			$	(48,157,129	)		$	(39,565	)
Net loss for the year			-				-				-				-				-				(15,141	)			(15,141	)
Balances at September 30, 2009			450,800			$	451			$	-			$	48,116,101			$	1,012			$	(48,172,270	)		$	(54,706	)
Net loss for the year			-				-				-				-				-				(13,557	)			(13,557	)
Balances at September 30, 2010			450,800			$	451			$	-			$	48,116,101			$	1,012			$	(48,185,827	)		$	(68,263	)
Net loss for the year			-				-				-				-				-				(15,947	)			(15,947	)
Balances at September 30, 2011			450,800			$	451			$	-			$	48,116,101			$	1,012			$	(48,201,774	)		$	(84,210	)
Expiration of warrants			-				-				-				1,012				(1,012	)			-				-
Net loss for the year			-				-				-				-				-				(18,243	)			(18,243	)
Balances at September 30, 2012			450,800			$	451			$	-			$	48,117,113			$	-			$	(48,220,017	)		$	(102,453	)
Capital contribution			-				-				-				4,095				-				-				4,095
Net loss for the year			-				-				-				-				-				(17,948	)			(17,948	)
Balances at September 30, 2013			450,800			$	451			$	-			$	48,121,208			$	-			$	(48,237,965	)		$	(116,306	)
Net loss for the three months ended December 31, 2013			-				-				-				-				-				(10,878	)			(10,878	)
Balances at December 31, 2013 - (unaudited)			450,800			$	451			$	-			$	48,121,208			$	-			$	(48,248,843	)		$	(127,184	)

  

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

 

 

JD INTERNATIONAL LIMITED

(a development stage company)

Statements of Cash Flows

(unaudited)

  

										Period from
										July 5, 1989
		Three months				Three months				(date of inception)
		ended				ended				through
		December 31, 2013				December 31, 2012				December 31, 2013
Cash Flows from Operating Activities
Net loss for the period		$	(10,878	)		$	(4,849	)		$	(48,248,843	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization			—				—				626,552
Gain on sale of stock purchased for investment			—				—				(1,341,094	)
Warrants issued for services			—				—				515,515
Expense related to warrant extensions			—				—				17,890,676
Common stock issued for services			—				—				138,950
Common stock issued for License and Marketing agreement			—				—				80,000
Impairment loss			—				—				704,491
Inventory deposit - BICO			—				—				(1,000,000	)
Equity in loss of unconsolidated subsidiaries			—				—				575,412
Accrued interest contributed to equity			—				—				324,879
Changes in operating assets and liabilities:
Increase in Accrued expenses			390				—				390
Increase in Accrued interest payable			—				1,289				21,429
Net cash used in operating activities			(10,488	)			(3,560	)			(29,711,643	)
Cash Flows from Investing Activities
Purchase of property and equipment			—				—				(303,746	)
Proceeds from sale of property and equipment			—				—				175,000
Net cash paid for common stock purchased for investment			—				—				(459,500	)
Net activity on notes receivable from related parties			—				—				(138,538	)
Net cash used in investing activities			—				—				(726,784	)
Cash Flows from Financing Activities
Cash received from notes payable to
Former majority shareholder and others			—				4,000				491,077
Current majority shareholder			10,488				—				10,488
Convertible notes			—				—				95,000
Cash paid on notes payable			—				—				(42,500	)
Cash received from sale of common stock			—				—				11,096,834
Cash received on Regulation S sale of common stock			—				—				288,751
Cash received on sale of common stock to BICO			—				—				4,200,000
Cash received on warrant exercises			—				—				157,946
Net activity on cash advanced to/received from BICO			—				—				14,160,060
Cash paid to acquire treasury stock			—				—				(35,001	)
Cash contributed as capital to support operations			—				—				15,772
Net cash provided by financing activities			10,488				4,000				30,438,427

 

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

 

 

JD INTERNATIONAL LIMITED

(a development stage company)

Statements of Cash Flows - Continued

(Unaudited)

 

										Period from
										July 5, 1989
		Three months				Three months				(date of inception)
		ended				ended				through
		December 31, 2013				December 31, 2012				December 31, 2013
Increase (Decrease) in Cash			—				440				—
Cash at beginning of period			—				2,000				—
Cash at end of period		$	—			$	2,440			$	—
Supplemental Disclosure of Interest and Income Taxes Paid
Interest paid for the year		$	—			$	—			$	11,725
Income taxes paid for the year		$	—			$	—			$	—
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Issuance of 371,000 shares of common stock to satisfy $303,000 note payable		$	—			$	—			$	303,000
Issuance of 3,000,000 shares of common stock to BICO in payment of intercompany debt		$	—			$	—			$	10,500,000

 

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

 

 

JD INTERNATIONAL LIMITED

(a development stage company)

Notes to Financial Statements

December 31, 2013

(Unaudited)

 

Note 1 - Organization and Description of Business

 

JD International Limited (Company) was incorporated on July 5, 1989 as Diasense, Inc. in accordance with the Laws of the Commonwealth of Pennsylvania.

 

On January 22, 2007, the Company filed Articles of Merger and Plan of Merger with the Commonwealth of Pennsylvania and the State of Nevada to change the Company’s domicile from Pennsylvania to Nevada by means of a merger with and into a Nevada corporation formed on November 3, 2006 solely for the purpose of effecting the reincorporation. The Articles of Incorporation and Bylaws of the Nevada corporation are the Articles of Incorporation and Bylaws of the surviving corporation. Such Articles of Incorporation maintained the Company’s corporate name of Diasense, Inc. and modified the Company’s capital structure to allow for the issuance of up to 100,000,000 shares of $0.001 par value common stock and up to 50,000,000 shares of $0.001 par value preferred stock. Although the merger documents were filed in both Pennsylvania and Nevada on January 22, 2007, the Commonwealth of Pennsylvania required completion of certain documents in order to issue a tax clearance certificate to complete the merger. The required tax clearance was not issued until March 22, 2007 which formally completed the domicile relocation to Nevada. The effect of this action is reflected in the accompanying financial statements as of the first day of the first period presented.

 

On March 19, 2008, the Company changed its corporate name to Truewest Corporation.

 

On August 29, 2006, the Company entered into a Voluntary Surrender Agreement whereby all of the Company’s assets, which had previously been pledged as collateral to secure loan agreements by and between the Company and Company’s lender, who was also the Company’s majority shareholder, under which the Company was then in default, were repossessed. Through the date of the Voluntary Surrender Agreement, the Company’s business efforts were focused on developing a noninvasive glucose sensor (Sensor). The Sensor was proposed to use electromagnetic technology to measure the concentration of glucose in human tissue without requiring the user to take a blood sample.

 

On August 29, 2013, Glenn A. Little (“Little”), who owned in the aggregate, 384,875 shares (the “Shares”) of common stock, par value $0.001 per share of the Company, entered into a Securities Purchase Agreement (“SPA”) with JD International Development Limited, a Hong Kong corporation (“JDID”) pursuant to which JDID purchased the Shares and repaid Mr. Little the balance of the note payable and related accrued interest as of June 30, 2013 for total of $365,000. The transaction contemplated in the SPA closed on September 11, 2013. The Shares represent approximately 85% of all of the issued and outstanding Common Stock of the Registrant.

 

In connection with the change in control, Mr. Little, the Company’s former President, Chief Financial Officer and sole director, resigned his officers positions with the Company and Cheung Wai Yin was appointed as President and a director of the Company by the sole director, Glenn A. Little. Mr. Little’s resignation as a director of the Company became effective on or about September 26, 2013.

 

On November 26, 2013, the Company field its Certificate of Amendment (the “Certificate of Amendment”) effecting name change of the Company to JD International Limited.

 

The Company’s current principal business activity is to seek a suitable reverse acquisition candidate through acquisition, merger or other suitable business combination method. The Company has never fully or successfully implemented any business plan(s) and, accordingly, is considered to be in the development stage.

 

 

JD INTERNATIONAL LIMITED

(a development stage company)

Notes to Financial Statements - Continued

December 31, 2013

(Unaudited)

 

Note 2 - Preparation of Financial Statements

 

The Company follows the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and has a year-end of September 30.

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 period. Actual results could differ from those estimates.

 

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

 

During interim periods, the Company follows the accounting policies set forth in its annual audited financial statements filed with the U. S. Securities and Exchange Commission on its Annual Report on Form 10-K containing the Company’s financial statements for the year ended September 30, 2013. The information presented within these interim financial statements may not include all disclosures required by generally accepted accounting principles and the users of financial information provided for interim periods should refer to the annual financial information and footnotes when reviewing the interim financial results presented herein.

 

In the opinion of management, the accompanying interim financial statements, prepared in accordance with the U. S. Securities and Exchange Commission’s instructions for Form 10-Q, are unaudited and contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations and cash flows of the Company for the respective interim periods presented. The current period results of operations are not necessarily indicative of results which ultimately will be reported for the full fiscal year ending September 30, 2014.

 

Note 3 - Going Concern Uncertainty

 

On August 29, 2006, the Company entered into a Voluntary Surrender Agreement (Voluntary Surrender Agreement) with Dominion Assets, LLC (Dominion) whereby all of the Company’s assets, which had previously been pledged as collateral to secure loan agreements under which the Company was then in default, were repossessed. Dominion was, at that time, the majority shareholder of the Company.

 

The Company’s current principal business activity is to seek a suitable reverse acquisition candidate through acquisition, merger or other suitable business combination method. The Company’s continued existence is dependent upon its ability to generate sufficient cash flows from operations to support its daily operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis.

 

The Company anticipates future sales of equity securities to facilitate either the consummation of a business combination transaction or to raise working capital to support and preserve the integrity of the corporate entity. However, there is no assurance that the Company will be able to obtain additional funding through the sales of additional equity securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company.

 

 

JD INTERNATIONAL LIMITED

(a development stage company)

Notes to Financial Statements - Continued

December 31, 2013

(Unaudited)

 

If no additional operating capital is received during the next twelve months, the Company will be forced to rely on existing cash in the bank and upon additional funds loaned by management and/or significant stockholders to preserve the integrity of the corporate entity at this time. In the event, the Company is unable to acquire advances from management and/or significant stockholders, the Company’s ongoing operations would be negatively impacted. It is the intent of management and significant stockholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, no formal commitments or arrangements to advance or loan funds to the Company or repay any such advances or loans exist. There is no legal obligation for either management or significant stockholders to provide additional future funding. While the Company is of the opinion that good faith estimates of the Company’s ability to secure additional capital in the future to reach our goals have been made, there is no guarantee that the Company will receive sufficient funding to sustain operations or implement any future business plan steps.

 

Note 4 - Summary of Significant Accounting Policies

 

1.

Cash and cash equivalents

 

For Statement of Cash Flows purposes, the Company considers all cash on hand and in banks, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.

 

2.

Income Taxes

 

The Company files income tax returns in the United States of America and may file, as applicable and appropriate, various state(s). With few exceptions, the Company is no longer subject to U.S. federal, state and local, as applicable, income tax examinations by regulatory taxing authorities for years ending prior to September 30, 2009. The Company does not anticipate any examinations of returns filed after October 1, 2009.

 

The Company uses the asset and liability method of accounting for income taxes. At September 30, 2013 and 2012, respectively, the deferred tax asset and deferred tax liability accounts, as recorded when material to the financial statements, are entirely the result of temporary differences. Temporary differences generally represent differences in the recognition of assets and liabilities for tax and financial reporting purposes, primarily accumulated depreciation and amortization, allowance for doubtful accounts and vacation accruals.

 

The Company has adopted the provisions required by the Income Taxes topic of the FASB Accounting Standards Codification. The Codification Topic requires the recognition of potential liabilities as a result of management’s acceptance of potentially uncertain positions for income tax treatment on a “more-likely-than-not” probability of an assessment upon examination by a respective taxing authority. As a result of the implementation of Codification’s Income Tax Topic, the Company did not incur any liability for unrecognized tax benefits.

 

3.

Earnings (loss) per share

 

Basic earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the respective period presented in our accompanying financial statements.

 

Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants).

 

 

JD INTERNATIONAL LIMITED

(a development stage company)

Notes to Financial Statements - Continued

December 31, 2013

(Unaudited)

 

Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculation date.

 

At December 31, 2013 and 2012, and subsequent thereto, the Company’s outstanding warrants are considered to be common stock equivalents; however, the issued and outstanding warrants are considered anti-dilutive due to the Company’s net operating loss position.

 

4.

Pending and/or New Accounting Pronouncements

 

The Company is of the opinion that any pending accounting pronouncements, either in the adoption phase or not yet required to be adopted, will not have a significant impact on the Company’s financial position or results of operations.

 

Note 5 - Fair Value of Financial Instruments

 

The carrying amount of cash, accounts receivable, accounts payable and notes payable, as applicable, approximates fair value due to the short term nature of these items and/or the current interest rates payable in relation to current market conditions.

 

Interest rate risk is the risk that the Company’s earnings are subject to fluctuations in interest rates on either investments or on debt and is fully dependent upon the volatility of these rates. The Company does not use derivative instruments to moderate its exposure to interest rate risk, if any.

 

Financial risk is the risk that the Company’s earnings are subject to fluctuations in interest rates or foreign exchange rates and are fully dependent upon the volatility of these rates. The company does not use derivative instruments to moderate its exposure to financial risk, if any.

 

Note 6 - Note Payable to controlling shareholder

 

On September 29, 2006, the Company and it’s controlling shareholder, sole officer and director, Glenn A. Little, acknowledged that outside funds are necessary to support the corporate entity and comply with the periodic reporting requirements of the Securities Exchange Act of 1934, as amended. To this end, Mr. Little agreed to lend the Company up to $50,000 with a maturity period not to exceed two (2) years from the initial funding date at an interest rate of 6.0% per annum.

 

On August 29, 2013, Glenn A. Little (“Little”) entered into a Securities Purchase Agreement (“SPA”) with JD International Development Limited, a Hong Kong corporation (“JDID”) pursuant to which JDID purchased the Shares and repaid Mr. Little the balance of the note payable and related accrued interest as of June 30, 2013 for total of $365,000. The transaction contemplated in the SPA closed on September 11, 2013.

 

As of September 30, 2013 and 2012, respectively, balance due to Mr. Little is $0 and $84,400 under this agreement and as of September 30 and December 31, 2013, the total balance due including note payable and accrued interest to JD International Development Limited is $116,306 and $126,794, respectively. The new note payable to JD International Development Limited is unsecured, interest free and is repayable upon demand.

 

 

JD INTERNATIONAL LIMITED

(a development stage company)

Notes to Financial Statements - Continued

December 31, 2013

(Unaudited)

 

The following table is a summary of the notes payable to the Company’s controlling shareholder as of December 31 and September 30, 2013, respectively:

 

		December 31, 2013				September 30, 2013
						(audited)
Note payable to JD International Development Limited		$	126,794			$	116,306

 

Note 7 - Income Taxes

 

The components of income tax (benefit) expense for each of the three months ended December 31, 2013 and 2012 and for the period from July 5, 1989 (date of inception) through December 31, 2013 – (unaudited), are as follows:

 

Period from

July 5, 1989

(date of inception)

Three months ended

Three months ended

through

December 31, 2013

December 31, 2012

December 31, 2013

Federal:

Current

$

—

$

—

$

—

Deferred

—

—

—

—

—

—

State:

Current

—

—

—

Deferred

—

—

—

—

—

—

Total

$

—

$

—

$

—

 

As of September 30, 2013, as a result of the September 2013 change in control transaction, the Company has a net operating loss carryforward of approximately $10,878 to offset future taxable income. The amount and availability of any net operating loss carryforwards will be subject to the limitations set forth in the Internal Revenue Code. Such factors as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of any net operating loss carryforward(s).

 

 

JD INTERNATIONAL LIMITED

(a development stage company)

Notes to Financial Statements - Continued

December 31, 2013

(Unaudited)

 

The Company’s income tax expense (benefit) for the three months ended December 31, 2013 and 2012 and for the period from July 5, 1989 (date of inception) through December 31, 2013, respectively, differed from the statutory federal rate of 34 percent as follows:

 

										Period from
										July 5, 1989
										(date of inception)
		Three months ended				Three months ended				through
		December 31, 2013				December 31, 2012				December 31, 2013
Statutory rate applied to income before income taxes		$	(3,700	)		$	—			$	(3,700	)
Increase (decrease) in income taxes resulting from:
State income taxes			—				—				—
Other, including nondeductible change in control transaction expenses and application of net operating loss carryforward			3,700				—				3,700
Income tax expense		$	—			$	—			$	—

 

Temporary differences, consisting primarily of statutory deferrals of expenses for organizational costs, statutory differences in the depreciable/amortizable lives for property and equipment and patents and the recognition of expense charges related to the issuance of warrants, between the financial statement carrying amounts and tax bases of assets and liabilities give rise to deferred tax assets and/or liabilities. As of December 31, 2013 and September 30, 2013, respectively, after taking the September 2013 change in control into consideration:

 

		December 31, 2013				September 30, 2013
						(audited)
Deferred tax assets
Net operating loss carryforwards		$	3,700			$	—
Less valuation allowance			(3,700	)			—
Net Deferred Tax Asset		$	—			$	—

 

During each of the three months ended December 31, 2013 and 2012, the valuation allowance for the deferred tax asset increased by approximately $10,900 and $-, respectively.

 

Note 8 - Equity

 

The Company is authorized to issue 50,000,000 shares of preferred stock with a par value of $0.001. The preferred stock has voting rights equal to common stock. No preferred stock had been issued as of the balance sheet dates. In January 2014, 1,860,000 shares of preferred stock was issued as part of a private placement.

 

The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.001. Each share has one vote. At December 31, 2013 and September 30, 2013, the Company has 450,800 shares issued and outstanding.

 

 

JD INTERNATIONAL LIMITED

(a development stage company)

Notes to Financial Statements - Continued

December 31, 2013

(Unaudited)

 

Note 9 - Stock Warrants

 

On September 18, 2006, the Company entered into a unit purchase agreement (Unit Purchase Agreement) to sell 1,000 Units to Glenn A. Little (Little) for $125,000 cash. Each Unit consisted of 11,100 shares of common stock and 500 common stock purchase warrants or an aggregate of 11,100,000 shares of common stock and 500,000 common stock purchase warrants. There were no commissions or underwriting discounts paid in conjunction with this transaction and the Company believes that the shares and warrants were exempt from registration under Section 4(2) of the Securities Act of 1933 as amended.

 

On May 1, 2008, a total of 398,800 warrants, including 367,075 warrants held by Glenn A. Little, were exercised at a price of $0.10 per share which resulted in the issuance of 398,800 shares of restricted, unregistered common stock for a gross proceeds of $39,880. There were no commissions or underwriting discounts paid in conjunction with this transaction and the Company believes that the shares issued upon the exercise of the corresponding warrants were exempt from registration under Section 4(2) of the Securities Act of 1933, as amended.

 

The common stock purchase warrants were eligible for exercise from their issuance on September 18, 2006 through September 18, 2011 at an exercise price of $0.10 per share. The Company assigned a value of $5,000 to these warrants at their issue date.

 

On September 18, 2011, the Company’s Sole Officer and Director extended the exercise period of the warrants for an additional year through September 18, 2012. No warrants were exercised and the 101,200 warrants outstanding on September 18, 2012 expired. As at December 31 and September 30, 2013, there is no outstanding balance of stock warrants.

  

 

JD INTERNATIONAL LIMITED

(a development stage company)

Notes to Financial Statements - Continued

December 31, 2013

(Unaudited)

 

Note 10 - Subsequent Events

 

On January 12, 2014, the Company completed the private placement of an aggregate of 1,592,000 shares of Series A Preferred Stock to certain foreign investors for an aggregate purchase price of $1,248,000. This placement was a part of the placement completed on January 4, 2014, of 268,000 shares of Series A Preferred Stock to certain foreign investors for an aggregate purchase price of $200,000.

 

Management has evaluated all activity of the Company through the issue date of the financial statements and concluded that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes to financial statements.

 

 

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

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

(1) Caution Regarding Forward-Looking Information

 

Certain statements contained in this quarterly filing, including, without limitation, statements containing the words “believes”, “anticipates”, “expects” and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

 

Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; 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; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.

 

Given these uncertainties, readers of this Form 10-Q and investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

 

(2) Background

 

The Company was initially incorporated as Diasense, Inc. on July 5, 1989 in accordance with the Laws of the Commonwealth of Pennsylvania.

 

On January 22, 2007, the Company filed Articles of Merger and Plan of Merger with the Commonwealth of Pennsylvania and the State of Nevada to change the Company’s domicile from Pennsylvania to Nevada by means of a merger with and into a Nevada corporation formed on November 3, 2006 solely for the purpose of effecting the reincorporation. The Articles of Incorporation and Bylaws of the Nevada corporation are the Articles of Incorporation and Bylaws of the surviving corporation. Such Articles of Incorporation maintained the Company’s corporate name of Diasense, Inc. and modified the Company’s capital structure to allow for the issuance of up to 100,000,000 shares of $0.001 par value common stock and up to 50,000,000 shares of $0.001 par value preferred stock. Although the merger documents were filed in both Pennsylvania and Nevada on January 22, 2007, the Commonwealth of Pennsylvania required completion of certain documents in order to issue a tax clearance certificate to complete the merger. The required tax clearance was not issued until March 22, 2007 which formally completed the domicile relocation to Nevada. The effect of this action is reflected in the accompanying financial statements as of the first day of the first period presented.

 

On August 29, 2006, the Company entered into a Voluntary Surrender Agreement with Dominion whereby all of the Company’s assets, which had previously been pledged as collateral to secure loan agreements were repossessed. Through the date of the Voluntary Surrender Agreement, the Company’s business efforts were focused on developing a noninvasive glucose sensor (Sensor). The Sensor was proposed to use electromagnetic technology to measure the concentration of glucose in human tissue without requiring the user to take a blood sample.

 

The Company has never fully or successfully implemented any business plan(s) and, accordingly, is considered to be in the development stage.

 

On March 19, 2008, the Company changed its corporate name to Truewest Corporation.

 

 

On November 26, 2013, the Company changed its corporate name to JD International Limited.

 

The Company’s current business plan is to locate and combine with an existing, privately-held company which is profitable or, in management’s view, has growth potential, irrespective of the industry in which it is engaged. A combination may be structured as a merger, consolidation, exchange of the Company’s common stock for stock or assets or any other form which will result in the combined enterprise’s becoming a publicly-held corporation.

 

(3) Results of Operations

 

We are still a development stage company with limited revenues. During the first quarter 2013, the company did not record any revenues.

 

General and administrative expenses for the three month periods ended December 31, 2013 and 2012, were $10,878 and $3,560, respectively. They directly related maintaining the corporate entity and maintaining compliance with the Securities Exchange Act of 1934, as amended. The Company incurs minor quarterly fluctuations in the expenditure levels based, primarily, in fluctuations in professional fees related to the Company’s periodic filings.

 

Earnings per share for the respective three month periods ended December 31, 2013 and 2012, were approximately $(0.02) and $(0.01), respectively, based on the weighted-average shares issued and outstanding at the end of each respective period.

 

The Company does not expect to generate any meaningful revenue or incur operating expenses for purposes other than fulfilling the obligations of a reporting company under the Securities Exchange Act of 1934 unless and until such time that the Company’s operating subsidiary begins meaningful operations.

 

(4) Plan of Business

 

General

 

The Company intends to locate and combine with an existing, privately-held company which is profitable or, in management’s view, has growth potential, irrespective of the industry in which it is engaged. However, the Company does not intend to combine with a private company which may be deemed to be an investment company subject to the Investment Company Act of 1940. A combination may be structured as a merger, consolidation, exchange of the Company’s common stock for stock or assets or any other form which will result in the combined enterprise’s becoming a publicly-held corporation.

 

Pending negotiation and consummation of a combination, the Company anticipates that it will have, aside from carrying on its search for a combination partner, no business activities, and, thus, will have no source of revenue. Should the Company incur any significant liabilities prior to a combination with a private company, it may not be able to satisfy such liabilities as are incurred.

 

If the Company’s management pursues one or more combination opportunities beyond the preliminary negotiations stage and those negotiations are subsequently terminated, it is foreseeable that such efforts will exhaust the Company’s ability to continue to seek such combination opportunities before any successful combination can be consummated. In that event, the Company’s common stock will become worthless and holders of the Company’s common stock will receive a nominal distribution, if any, upon the Company’s liquidation and dissolution.

 

 

Combination Suitability Standards

 

In its pursuit for a combination partner, the Company’s management intends to consider only combination candidates which are profitable or, in management’s view, have growth potential. The Company’s management does not intend to pursue any combination proposal beyond the preliminary negotiation stage with any combination candidate which does not furnish the Company with audited financial statements for at least its most recent fiscal year and unaudited financial statements for interim periods subsequent to the date of such audited financial statements, or is in a position to provide such financial statements in a timely manner. The Company will, if necessary funds are available, engage attorneys and/or accountants in its efforts to investigate a combination candidate and to consummate a business combination. The Company may require payment of fees by such combination candidate to fund the investigation of such candidate. In the event such a combination candidate is engaged in a high technology business, the Company may also obtain reports from independent organizations of recognized standing covering the technology being developed and/or used by the candidate. The Company’s limited financial resources may make the acquisition of such reports difficult or even impossible to obtain and, thus, there can be no assurance that the Company will have sufficient funds to obtain such reports when considering combination proposals or candidates. To the extent the Company is unable to obtain the advice or reports from experts, the risks of any combined enterprise’s being unsuccessful will be enhanced. Furthermore, to the knowledge of the Company’s officers and directors, neither the candidate nor any of its directors, executive officers, principal stockholders or general partners:

 

(1) will have been convicted of securities fraud, mail fraud, tax fraud, embezzlement, bribery, or a similar criminal offense involving misappropriation or theft of funds, or be the subject of a pending investigation or indictment involving any of those offenses;

 

(2) will have been subject to a temporary or permanent injunction or restraining order arising from unlawful transactions in securities, whether as issuer, underwriter, broker, dealer, or investment advisor, may be the subject of any pending investigation or a defendant in a pending lawsuit arising from or based upon allegations of unlawful transactions in securities; or

 

(3) will have been a defendant in a civil action which resulted in a final judgement against it or him awarding damages or rescission based upon unlawful practices or sales of securities.

 

The Company’s officers and directors will make these determinations by asking pertinent questions of the management of prospective combination candidates. Such persons will also ask pertinent questions of others who may be involved in the combination proceedings. However, the officers and directors of the Company will not generally take other steps to verify independently information obtained in this manner which is favorable. Unless something comes to their attention which puts them on notice of a possible disqualification which is being concealed from them, such persons will rely on information received from the management of the prospective combination candidate and from others who may be involved in the combination proceedings.

 

(5) Liquidity and Capital Resources

 

At December 31, 2013, the Company had a working capital deficit of approximately $130,000.

 

It is the belief of management and significant stockholders that, should the need arise, they will provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, there is no legal obligation for either management or significant stockholders to provide additional future funding. Further, the Company is at the mercy of future economic trends and business operations for the Company’s majority stockholder to have the resources available to support the Company. Should this pledge fail to provide financing, the Company has not identified any alternative sources. Consequently, there is substantial doubt about the Company’s ability to continue as a going concern.

 

The Company’s need for working capital may change dramatically as a result of any business acquisition or combination transaction. There can be no assurance that the Company will identify any such business, product, technology or company suitable for acquisition in the future. Further, there can be no assurance that the Company would be successful in consummating any acquisition on favorable terms or that it will be able to profitably manage the business, product, technology or company it acquires.

 

The Company has no current plans, proposals, arrangements or understandings with respect to the sale or issuance of additional securities prior to the location of a merger or acquisition candidate. Accordingly, there can be no assurance that sufficient funds will be available to the Company to allow it to cover the expenses related to such activities.

 

Regardless of whether the Company’s cash assets prove to be inadequate to meet the Company’s operational needs, the Company might seek to compensate providers of services by issuances of stock in lieu of cash.

 

 

(6) Critical Accounting Policies

 

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

 

Our significant accounting policies are summarized in Note D of our financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

 

(7) Effect of Climate Change Legislation

 

The Company currently has no known or identified exposure to any current or proposed climate change legislation which could negatively impact the Company’s operations or require capital expenditures to become compliant. Additionally, any currently proposed or to-be-proposed-in-the-future legislation concerning climate change activities, business operations related thereto or a publicly perceived risk associated with climate change could, potentially, negatively impact the Company’s efforts to identify an appropriate target company which may wish to enter into a business combination transaction with the Company.

 

(8) Other Contractual Obligations

 

As of December 31, 2013, we do not have any contractual obligations.

 

(9) Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

(10) Recently Issued Accounting Pronouncements

 

We review new accounting standards as issued. Although some of these accounting standards issued or effective after the end of our previous fiscal year may be applicable to us, we have not identified any standards that we believe merit further discussion. We believe that none of the new standards will have a significant impact on our financial position, operations or cash flows.

 

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

 

In future periods, the Company may become subject to certain market risks, including changes in interest rates and currency exchange rates. At the present time, the Company has no identified exposure and does not undertake any specific actions to limit exposures, if any.

  

 

Item 4 - Controls and Procedures

 

Disclosure Controls and Procedures. Our management, under the supervision and with the participation of our Chief Executive and Financial Officer (Certifying Officer), has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15 promulgated under the Exchange Act as of the end of the period covered by this Quarterly Report. Disclosure controls and procedures are controls and procedures 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 Commission’s rules and forms and include controls and procedures designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our Certifying Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon that evaluation, our Certifying Officer concluded that as of such date, our disclosure controls and procedures were not effective to ensure that the information required to be disclosed by us in our reports is recorded, processed, summarized and reported within the time periods specified by the SEC due to a weakness in our controls more fully disclosed in our Annual Report on Form 10-K. However, our Certifying Officer believes that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the respective periods presented.

 

Changes in Internal Control over Financial Reporting. There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting which internal controls will remain deficient until such time as the Company completes a merger transaction or acquisition of an operating business at which time management will be able to implement effective controls and procedures.

 

PART II

OTHER INFORMATION

 

Item 1 - Legal Proceedings

 

None

 

Item 1A - Risk Factors

 

We are a smaller reporting company as defined by Reg. 240.12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

Item 2 - Sales of Unregistered Equity Securities and Use of Proceeds

 

None

 

Item 3 - Defaults upon Senior Securities

 

None

 

Item 4 - Mine Safety Disclosures

 

N/A

 

Item 5 - Other Information

 

None

 

ITEM 6. EXHIBITS.

 

The following exhibits are filed as part of this report or incorporated by reference:

 

Exhibit No.		Description
31.1*		Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification 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

 

*		Filed herewith.
**		In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 in this Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed”.

 

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: March 3, 2014	JD INTERNATIONAL LIMITED
	By:	/s/ Cheung Wai Yin Sheng Chen
		Cheung Wai Yin
		Chief Executive Officer
		(Principal Executive Officer)