UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended June 30, 2015

 OR

☐    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: 000-55180

 

(Exact name of registrant as specified in its charter)

 

 7F., No.247, Minsheng 1st Rd.

Xinxing Dist., Kaohsiung City 800

Taiwan Republic of China

(Address of principal executive offices)

    

 +886 7222 3733

(Registrant's telephone number, including area code)

Copies to:

Asher S. Levitsky P.C.

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas; Suite 1100

Phone (212) 370-1300

Fax: (646) 895-7182

E-mail: alevitsky@egsllp.com

 

 

 

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

As of September 25, 2015, there are a total of 60,300,001 shares of common stock issued and outstanding.

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Note 1 - Organization and Basis of Presentation

 

Jishanye, Inc. ("Jishanye" or the "Company") is a Delaware corporation incorporated on April 12, 2012 under the name Yambear Bio-tech, Inc."  The Company's corporate name was changed to Jishanye, Inc. on October 25, 2013.  The Company has one subsidiary, Jishanye (Taiwan), Inc. ("Jishanye Taiwan"), a Taiwanese limited liability company, which is wholly owned by the Company.  . Jishanye Taiwan was established on August 17, 2012.  The Company's operations are conducted through Jishanye Taiwan.

The Company, through its subsidiary, was engaged in selling enzymes products to public consumers in Taiwan through June 2014.  Since June 2014, the Company switched its business focus from selling enzyme products to devoting its effort to engage in the funeral management services, initially in Taiwan.  The funeral management services business in Taiwan is different from the funeral business in the United States, and involves offering a range of services to grieving families, which include providing a place for mourners to visit, maintaining the body during the mourning period in a manner consistent with both religious and cultural practices and health and safety regulations, and providing burial and, more frequently, cremation, which, because of the scarcity of land in Taiwan, is preferred to burial.  In addition, funeral management services including providing the necessary setting and personnel to meet the grieving family's religious and cultural preferences.

Note 2 - Summary of Significant Accounting Policies

 

 

The accompanying interim unaudited consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the "SEC") with respect to Form 10-Q and Form 10-K. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The interim unaudited consolidated financial statements furnished reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary to present fairly the financial position as of June 30, 2015 and the results of operations and cash flows for the periods ended June 30, 2015 and 2014. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three and six months ended June 30, 2015 are not necessarily indicative of the results to be expected for any subsequent periods or for the entire year ending December 31, 2015. These interim unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2014.

 

The accompanying consolidated financial statements include the accounts of Jishanye and its wholly-owned subsidiary, Jishanye Taiwan. All significant intercompany transactions and balances were eliminated in consolidation.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Specific estimates include the collectability of accounts receivable and the valuation of inventory and deferred income tax.

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The Company's management reviewed all material events from June 30, 2015 through the issuance date of these financial statements for disclosure consideration.

Note 3 – Short-term debt – related party

The Company's short-term debt from related parties consisted of the following:

 

The loans from the chief executive officer include loans from a company owned by the chief executive officer

These notes are interest free, have no maturity date and are payable on demand.

Note 4 – Stockholders' Equity

On June 9, 2015, the Company sold a total of 47,800,000 shares of common stock for a total consideration of $999,020, or $0.0209 per share.  The Company's chief executive officer and a company controlled by chief executive officer, purchased 40,560,000 of these shares. As a result of the stock purchase, the chief executive's beneficial ownership in the Company's common stock increased from approximately 10% to approximately 67%.

Note 5 - Related Party Transactions

 

Pursuant to an employment agreement between the Company and its former chief executive and financial officer, dated September 1, 2012, Mr. Lin earned a salary of NTD32,000 (approximately $1,100) per month and subsequently increased to NTD35,000 (approximately $1,133).  The agreement provides that either party may terminate the agreement with at least 30 days prior notice. This agreement was terminated during the third quarter of 2015.

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

 

Overview

 

We were engaged in selling enzymes products to public consumers in Taiwan through June 2014.  Since June 2014, we switched our focus from selling enzyme products to engaging business in the funeral management services, initially in Taiwan.  The funeral management services business in Taiwan is different from the funeral business in the United States, and involves offering a range of services to grieving families, which include providing a place for mourners to visit, maintaining the body during the mourning period in a manner consistent with both religious and cultural practices and health and safety regulations, and providing burial or, more frequently, cremation, which, because of the scarcity of land in Taiwan, is preferred to burial.  In addition, funeral management services includes providing the necessary setting and personnel to meet the grieving family's religious and cultural preferences.  Since June 2014, we have generated minimal revenues in the funeral management services business and we have been engaged in marketing and related activities. We are optimistic about our ability to generate revenue from this business during the second half of 2015, although we can give no assurance that we can or will generate any significant revenue from this business.  The Company's chief executive officer has experience in the funeral services business in Taiwan and owns a company which is engaged in the funeral management services business.

Results of Operations

 

Three and six months ended June 30, 2015 and 2014 

 

We did not generate any revenues during the three or six months ended June 30, 2015.  Our revenues for the three and six months ended 2014 were primarily from our funeral management services business. The decrease reflects the lack of our efforts to generate revenue from the enzyme product business and our failure to generate more revenues from the funeral management services business.

Our gross profit for the three and six months ended June 30, 2014 was $17,129.  The gross profit reflects the insignificant cost of funeral management services business.

For the three months ended June 30, 2015 and 2014, we had general and administrative expenses of $18,388 and $11,422, respectively.  For the six months ended June 30, 2015 and 2014, we had general and administrative expenses of $57,125 and $25,523, respectively.  The increases reflect increases in salary and rental expenses incurred as a result of our efforts relating to the funeral services business and increased professional fees related to SEC filings.

 

For the three months ended June 30, 2015 we had a net loss was $18,372, or $0.00 per share (basic and diluted) and for the three months ended June 30, 2014, we had net income of $5,814, or $0.00 per share (basic and diluted).  For the six months ended June 30, 3015 and 2014, had losses of $57,109, or $0.00 per share (basic and diluted) and $9,843, or $0.00 per share (basic and diluted).

Liquidity and Capital Resources

At June 30, 2015, we had working capital of $683,280, as compared with negative working capital of $258,716 at December 31, 2014.  The increase in working capital resulted from a loan of approximately $42,000 from our chief executive officer and the proceeds of a private placement of $999,020 in June 2015.  The principal investor in the private placement was our chief executive officer and a company controlled by the chief executive officer.

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Product revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Service revenue is recognized when persuasive evidence of an arrangement exists, service has provided, the fee is fixed or determinable, and collectability is probable. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as advances from customers.   Sales represent the invoiced value of products, net of value-added tax ("VAT").

Recent Accounting Pronouncements

 

The Company does not expect adoption of the new accounting pronouncements will have a material effect on the Company's financial statements.

 

Off-Balance Sheet Arrangements

 

None.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

 

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES.

 

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, our management, with the participation of Chun-Hao Chang, our principal executive officer, and Mei-Chun Lin, our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2015. Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating and implementing possible controls and procedures.

 

Management conducted its evaluation of disclosure controls and procedures under the supervision of our chief executive officer and our chief financial officer. Based on that evaluation, Mr. Chang and Ms. Lin concluded that our disclosure controls and procedures were not effective as of June 30, 2015.

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