WEB NEWS Comments & Business Outlook
Xiangtian (USA) Air Power Co., Ltd.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Stated in US Dollars)
(Unaudited)
For the
For the
For the
For the
Three
Three
Nine
Nine
Months
Months
Months
Months
Ended
Ended
Ended
Ended
April 30,
April 30,
April 30,
April 30,
2016
2015
2016
2015
Revenue
8,940,206
1,130,405
9,009,326
1,130,405
Cost of sales
$
7,957,023
$
938,674
$
8,020,566
$
938,674
Gross profit
$
983,183
$
191,731
$
988,760
$
191,731
Operating expenses:
Selling expenses
6,668
5,731
16,015
16,391
General and administrative expenses
401,734
187,067
1,027,521
918,378
Loss from operations
408,402
192,798
1,043,536
934,769
Other (expense) income
Interest expense
136
(44,178
)
136
(126,879
)
Non-operating income (loss)
(767
)
-
135,296
(90
)
Exchange gain (loss)
8
491
(17,910
)
(12
)
Total other (expense) income, net
(623
)
(43,687
)
117,522
(126,981
)
Net income (loss) before taxes
$
574,158
(44,754
)
$
62,746
(870,019
)
Income tax benefit (expense)
(295,439
)
20,548
(222,361
)
179,120
Net income (loss)
$
278,719
(24,206
)
$
(159,615
)
(690,899
)
Foreign currency translation adjustment
151,172
68,662
(420,880
)
24,568
Comprehensive income (loss)
429,891
44,456
(580,495
)
(666,331
)
Earnings (loss) per common share – basic and diluted
$
0.00
$
0.00
$
(0.00
)
$
(0.00
)
Weighted average number of common shares outstanding - basic and diluted
591,042,000
531,042,000
591,042,000
531,042,000
CFO Trail
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Resignation of Chief Executive Officer and Acting Chief Financial Officer and Appointment of General Counsel
On April 15, 2016, Zhiqi Zhang notified the Company’s Board of Directors that he would resign as the Company’s Chief Executive Officer and Acting Chief Financial Officer, effective April 30, 2016. The Board of Directors accepted his resignation and appointed him to serve as the Company’s General Counsel effective upon his resignation.
Mr. Zhang will receive $9,663 as annual compensation in connection with this appointment. No material plan, contract, or arrangement was entered into or materially amended in connection with Mr. Zhang’s appointment as the General Counsel, and there was no grant or award to Mr. Zhang or modification under any such plan, contract, or arrangement in connection with his appointment.
Appointment of Chief Executive Officer and Acting Chief Financial Officer
On April 15, 2016, the Company’s Board of Directors approved the appointment of Zhou Deng Hua as the Chief Executive Officer and Acting Chief Financial Officer effective April 30, 2016. Mr. Zhou currently serves as Vice General Manager and as a Director. Mr. Zhou will continue as a director of the Company.
Mr. Zhou will receive $40,000 per year as compensation for his services in connection with this appointment. No material plan, contract, or arrangement was entered into or materially amended in connection with Mr. Zhou’s appointment as the Chief Executive Officer and Acting Chief Financial Officer, and there was no grant or award to Mr. Zhou or modification thereto under any such plan, contract, or arrangement in connection with his appointment.
Comments & Business Outlook
Xiangtian (USA) Air Power Co., Ltd. Consolidated Statement of Operations and Comprehensive Loss (Stated in US Dollars) (Unaudited)
For the
For the
For the
For the
Three
Three
Six
Six
Months
Months
Months
Months
Ended
Ended
Ended
Ended
January 31,
January 31,
January 31,
January 31,
2016
2015
2016
2015
Revenue
2,510
-
69,120
-
Cost of sales
$
1,528
$
-
$
63,543
$
-
Gross profit
$
982
$
-
$
5,577
$
-
Operating expenses:
Selling expenses
4,837
5,325
9,347
10,660
General and administrative expenses
266,645
391,595
625,787
731,311
Loss from operations
271,482
396,920
635,134
741,971
Other (expense) income
Interest expense
-
(44,926
)
-
(82,791
)
Non-operating income
4,273
-
136,063
-
Exchange gain (loss)
10
106
(17,918
)
(503
)
Total other (expense) income, net
4,283
(44,820
)
118,145
(83,294
)
Net loss before taxes
$
(266,217
)
(441,740
)
$
(511,412
)
(825,265
)
Income tax benefit
40,226
79,465
73,078
158,573
Net loss after taxes
$
(225,991
)
(362,275
)
$
(438,334
)
(666,692
)
Foreign currency translation adjustment
(408,549
)
(208,249
)
(572,052
)
(44,094
)
Comprehensive loss
(634,540
)
(570,524
)
(1,010,386
)
(710,786
)
Net loss per common share – basic and diluted
$
(0.00
)
$
(0.00
)
$
(0.00
)
$
(0.00
)
Weighted average number of common shares
591,042,000
598,042,000
591,042,000
598,042,000
Deal Flow
XIANGTIAN (USA) AIR POWER CO., LTD.
155,358,865 Shares of Common Stock
We are not selling any shares of common stock in this offering and therefore will not receive any proceeds from the sale of common stock hereunder. Our common stock is currently quoted on the over-the-counter OTCQB Market under the symbol “GOAS”. The last reported sales price per share of our common stock as reported by the OTCQB on December 7, 2015 was $2.00.
No underwriter or person has been engaged to facilitate the sale of shares of common stock in this offering. None of the proceeds from the sale of stock by the selling stockholders will be placed in escrow, trust or any similar account.
We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read the entire prospectus and any amendments or supplements carefully before you make your investment decision.
Comments & Business Outlook
Xiangtian (USA) Air Power Co., Ltd. Consolidated Statement of Operations and Comprehensive Loss (Stated in US Dollars) (Unaudited)
For the
For the
Three
Three
Months
Months
Ended
Ended
October 31,
October 31,
2015
2014
Revenue
66,610
-
Cost of sales
$
62,015
$
-
Gross profit
$
4,595
$
-
Operating expenses:
Selling expenses
4,510
5,335
General and administrative expenses
359,142
339,716
Loss from operations
363,652
345,051
Other (expense) income
Interest expense
-
(37,865
)
Non-operating income
131,790
Exchange loss
(17,928
)
(609
)
Total other (expense) income, net
113,862
(38,474
)
Net loss before taxes
$
(245,195
)
(383,525
)
Income tax benefit
32,852
79,107
Net loss after taxes
$
(212,343
)
(304,418
)
Foreign currency translation adjustment
(163,503
)
164,155
Comprehensive loss
(375,846
)
(140,263
)
Net loss per common share – basic and diluted
$
(0.00
)
$
(0.00
)
Weighted average number of common shares outstanding - basic and diluted
591,042,000
598,042,000
Management Discussion and Analysis
Revenue
We have recognized $66,610 and $0 revenue for the three months ended October 31, 2015 and 2014. The revenue referred to selling air compression related machines in this period.
Deal Flow
Title of each class of securities to be registered
Amount to be registered
Proposed
Proposed
Amount of
Total Common Stock, par value $.001 per share
155,358,865
$
1.18
$
183,323,459.52
$
21,302.19
(2)
Comments & Business Outlook
Xiangtian (USA) Air Power Co., Ltd. Consolidated Statement of Operations and Comprehensive Income (Loss) (Stated in US Dollars)
For the
For the
Year Ended
Year Ended
July 31,
July 31,
2015
2014
(Restated)
Revenue
20,772,028
-
Cost of sales
$
17,781,011
$
-
Gross profit
$
2,991,017
$
-
Operating expenses:
Selling expenses
21,912
5,479
General and administrative expenses
1,216,041
745,127
Total operating expenses
1,237,953
750,606
Income (loss) from operations
1,753,064
(750,606
)
Other (expense) income
Interest expense
(178,661
)
(44,909
)
Other expense
(90
)
-
Exchange gain
(13
)
389
Total other expense, net
(178,764
)
(44,520
)
Net income (loss) before taxes
$
1,574,300
$
(795,126
)
Income tax benefit (expense)
(916,840
)
113,932
Net income (loss) after taxes
$
657,460
$
(681,194
)
Foreign currency translation adjustment
7,492
7,552
Comprehensive income (loss)
664,952
(673,642
)
Net earning (loss) per common share – basic and diluted
$
0.00
$
(0.00
)
Weighted average number of common shares outstanding - basic and diluted
597,907,753
284,206,285
Management Discussion and Analysis
Revenue
We have recognized $20,772,028 and $0 revenue for the year ended July 31, 2015 and 2014. The project in Weihai was completed in February 2015, project in Binzhou was completed in June 2015 and project in Dezhou was completed in July 2015. Hence, we recognized the related revenue and cost of the projects completed during the current period according to our revenue recognition policy by completed contract method.
Auditor trail
Item 4.01: Changes In Registrant’s Certifying Accountant
On September 14, 2015, Jimmy P. Lee, CPA, P.C. was dismissed as the independent registered public accounting firm for Xiangtian (USA) Air Power Co., Ltd. (the “Company”). The Company’s Board of Directors made the decision and adopted resolutions on September 14, 2015 to retain Yichien Yeh, CPA to assume the role of the Company’s new independent registered public accounting firm effective September 14, 2015.
The report of Jimmy P. Lee, CPA regarding the Company’s financial statements for the fiscal year ended July 31, 2014 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that the audit report of Jimmy P. Lee, CPA on the Company’s financial statements for fiscal year ended July 31, 2014 contained an explanatory paragraph which noted that there was substantial doubt about the Company’s ability to continue as a going concern.
During the fiscal year ended July 31, 2014, and during the period from August 1, 2014 to September 14, 2015, the date of dismissal, (i) there were no disagreements with Jimmy P. Lee, CPA on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Jimmy P. Lee, CPA would have caused it to make reference to such disagreement in its reports; and (ii) there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.
The Company has provided Jimmy P. Lee, CPA with a copy of the foregoing disclosures and requested that Jimmy P. Lee, CPA furnish the Company with a letter addressed to the SEC stating whether or not it agrees with the above statements. A copy of such letter is filed as Exhibit 16.1 to this Current Report on Form 8-K.
Deal Flow
Title of each class of securities to be registered
Amount to be registered
Proposed
Proposed
Amount of
Total Common Stock, par value $.001 per share
155,358,864
$
1.18
$
183,323,459.52
$
21,302.19
Investor Alert
Item 4.02: Non-Reliance on Previously Issued Financial Statements
The conclusion relates to correcting the accounting treatment regarding the omission of subscription receivables in the consolidated financial statements in the aggregate amount of $310,000, and the necessity of revision for the footnotes of acquisitions made with related parties whose identity and stock ownership had been previously disclosed and the consolidation of a variable interest entity to reflect a more accurate disclosure.
As a result of this determination, the Company will restate its financial statements for the foregoing dates and periods, which restatements will be reflected in the restated consolidated financial statements to be contained in an amended Form 10-K for the fiscal year ended July 31, 2014 and in amended Form 10-Q’s for the fiscal quarters ended October 31, 2013, January 31, 2014, April 30, 2014, October 31, 2014, January 31, 2015 and April 30, 2015.
Comments & Business Outlook
Xiangtian (USA) Air Power Co., Ltd.
Condensed Consolidated Statement of Operations and Comprehensive Loss
(Stated in US Dollars)
(Unaudited)
For the
For the
For the
For the
Revenue
1,133,522
-
1,133,522
-
Cost of sales
$
938,674
$
-
$
938,674
$
-
Sales Tax
3,117
3,117
Gross profit
$
191,731
$
-
$
191,731
$
-
Operating expenses:
Selling expenses
5,731
-
16,391
-
General and administrative expenses
187,067
153,049
918,378
366,244
Loss from operations
192,798
153,049
934,769
366,244
Net gain (loss) from operations
(1,067
)
(153,049
)
(743,038
)
(366,244
)
Other (expense) income:
Interest (expense) income
(44,178
)
(200
)
(126,879
)
383
Other expenses
-
-
(90
)
-
Foreign exchange gain (loss)
491
-
(12
)
-
Total other (expense) income, net
(43,687
)
(200
)
(126,981
)
383
Net loss before taxes
$
(44,754
)
(153,249
)
$
(870,019
)
(365,861
)
Income tax benefit
20,548
27,857
179,120
38,261
Net loss
$
(24,206
)
(125,392
)
$
(690,899
)
(327,600
)
Foreign currency translation adjustment
68,662
(72,225
)
24,568
(59,981
)
Comprehensive gain (loss)
44,456
(197,617
)
(666,331
)
(387,581
)
Net loss per common share – basic and diluted
$
(0.00
)
$
(0.00
)
$
(0.00
)
$
(0.00
)
Weighted average number of common shares outstanding - basic and diluted
531,042,000
258,000,000
531,042,000
207,633,700
Management Discussion and Analysis
Revenue
Investor Alert
EXPLANATORY NOTE
10Q/A
In response to the comments of the staff of the Division of Corporation Finance of the Securities and Exchange Commission set forth in a letter, dated March 12, 2015, we are filing this Amendment No. 1 on Form 10-Q/A to amend the following item of our Quarterly Report on Form 10-Q for the quarter ended October 31, 2014 as originally filed with the Securities and Exchange Commission on December 18, 2014 (the “Original Form 10-Q”): Item 4. Controls and Procedures in Part I. We have also updated the signature page, the certifications of our Chief Executive Officer and Principal Financial Officer in Exhibits 31.1, 31.2, 32.1 and 32.2.
No other sections were affected, but for the convenience of the reader, this report on Form 10-Q/A restates in its entirety, as amended, our Original Form 10-Q. This report on Form 10-Q/A is presented as of the filing date of the Original Form 10-Q and does not reflect events occurring after that date, or modify or update disclosures in any way other than as required to reflect the restatement described below.
Investor Alert
EXPLANATORY NOTE
20F/A
In response to the comments of the staff of the Division of Corporation Finance of the Securities and Exchange Commission set forth in a letter, dated March 12, 2015, we are filing this Amendment No. 1 on Form 10-K/A to make the following revisions to our Annual Report on Form 10-K for the fiscal year ended July 31, 2014 as originally filed with the Securities and Exchange Commission on November 20, 2014 (the “Original Form 10-K”): (i) deleting the reference to the statutory safe harbors under Part I, Special Note Regarding Forward-Looking Statements; (ii) providing additional information regarding renewal provisions of certain variable interest agreements under Item 1 – Business – Acquisition of Sanhe, (iii) deleting the projected cash receipts from two projects under Liquidity and Capital Resources under Part I, Item 7. Management’s Discussion and Analysis; (iv) updating the business experience of Mr. Zhang Zhiqi, our Chief Executive Officer, under Part III, Item 10. Directors and Executive Officers of the Registrant, and Corporate Governance, (iv) adding disclosure regarding compensation under Part III, Item 11- Executive Compensation and iv) updating the description of the services provided by Bezalel International LLC (USA) and disclosing other related party transactions under paragraph 1 and Part III, Item 13. Interested Person Transactions. Underlying agreements for the transactions disclosed under Part III, Item 13. Interested Person Transactions are attached as exhibits 10.17, 10.18, 10.19, 10.20, 10.21. The agreements that were previously attached as exhibits 10.14 and 10.16 are re-filed to correct a translating error. We have also updated the signature page, the certifications of our Chief Executive Officer and Principal Financial Officer in Exhibits 31.1, 31.2, 32.1 and 32.2.
No other sections were affected, but for the convenience of the reader, this report on Form 10-K/A restates in its entirety, as amended, our Original Form 10-K. This report on Form 10-K/A is presented as of the filing date of the Original Form 10-K and does not reflect events occurring after that date, or modify or update disclosures in any way other than as required to reflect the restatement described below.
CFO Trail
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Principal Financial Officer
Mr. Zhang will receive no compensation in connection with this appointment. No material plan, contract, or arrangement was entered into or materially amended in connection with Mr. Zhang’s appointment as the Acting Chief Financial Officer, and there was no grant or award to Mr. Zhang or modification thereto under any such plan, contract, or arrangement in connection with his appointment.
CFO Trail
ITEM 5.02 DEPARTURE OF PRINCIPAL OFFICER.
Comments & Business Outlook
Xiangtian (USA) Air Power Co., Ltd.
Consolidated Statement of Operations and Comprehensive Loss
(Stated in US Dollars)
(Unaudited)
For the
For the
For the
For the
Revenue
-
-
-
-
Cost of sales
$
-
$
-
$
-
$
-
Gross profit
$
-
$
-
$
-
$
-
Operating expenses:
Selling expenses
5,325
-
10,660
-
General and administrative expenses
391,595
96,814
731,311
213,196
Loss from operations
396,920
96,814
741,971
213,196
Other (expense) income
Interest expense
(44,926
)
583
(82,791
)
583
Exchange loss
106
-
(503
)
-
Total other (expense) income, net
(44,820
)
583
(83,294
)
583
Net loss before taxes
$
(441,740
)
(96,231
)
$
(825,265
)
(212,613
)
Income tax benefit
79,465
10,404
158,573
10,404
Net loss after taxes
$
(362,275
)
(85,827
)
$
(666,692
)
(202,209
)
Foreign currency translation adjustment
(208,249
)
(9,012
)
(44,094
)
12,244
Comprehensive loss
(570,524
)
(94,839
)
(710,786
)
(189,965
)
Net loss per common share – basic and diluted
$
(0.00
)
$
(0.00
)
$
(0.00
)
$
(0.00
)
Weighted average number of common shares outstanding - basic and diluted
531,042,000
258,000,000
531,042,000
184,630,435
Management Discussion and Analysis
We have not incurred any revenue for the six months ended January 31, 2015 and 2014, as we have just started our business, and no construction projects were completed as of January 31, 2015. Hence, no revenue was recognized per our revenue recognition policy, completed contract method. The related costs incurred on the ongoing projects were classified as construction in progress under inventory.
For the six months ended January 31, 2015, we have incurred total operating expenses in the amount of $741,971, which mainly comprises selling expenses of $10,660, professional fees totaling $268,647, and general and administrative expenses totaling $462,664. For the six months ended January 31, 2014, we incurred total operating expenses in the amount of $213,196 which mainly comprises professional fees totaling $98,900, and general and administrative expenses totaling $114,296. The increase in operating expenses from 2014 to 2015 is due to increased amounts of professional fees and administrative expenses related to public reporting and the acquisition of Sanhe.
For the three months ended January 31, 2015, we incurred total operating expenses in the amount of $396,920 which mainly comprised selling expenses of $5,325, professional fees totaling $153,849 and general and administrative expenses totaling $237,746. For the three months ended January 31, 2014, we incurred total operating expenses in the amount of $96,814, which mainly comprised of professional fees totaling $29,784, and general and administrative expenses totaling $67,030. The increase in operating expenses from 2014 to 2015 is due to increased amounts of professional fees and administrative expenses related to public reporting and the acquisition of Sanhe.
We incurred total operating expenses in the amount of $1,669,496 from inception on September 2, 2008 through January 31, 2015. These operating expenses were comprised of selling expenses of $16,139, professional fees totaling $672,384 and general and administrative expenses totaling $980,973.
We have not incurred any expenses for research and development from inception through January 31, 2015. As a result of operating losses, there has been no provision for the payment of income taxes from the date of inception. The Company has a certain deferred tax asset that is available to offset against future taxable income.
Comments & Business Outlook
Xiangtian (USA) Air Power Co., Ltd.
Consolidated Statement of Operations and Comprehensive Loss
(Stated in US Dollars)
(Unaudited)
For the
For the
Revenue
-
-
Cost of sales
$
-
$
-
Gross profit
$
-
$
-
Operating expenses:
Selling expenses
5,335
-
General and administrative expenses
339,716
116,382
Loss from operations
345,051
116,382
Other (expense) income
Interest expense
(37,865
)
-
Exchange loss
(609
)
-
Total other expense, net
(38,474
)
-
Net loss before taxes
$
(383,525
)
(116,382
)
Income tax benefit
79,107
-
Net loss after taxes
$
(304,418
)
(116,382
)
Foreign currency translation adjustment
164,155
21,256
Comprehensive loss
(140,263
)
(95,126
)
Net loss per common share – basic and diluted
$
(0.00
)
$
(0.00
)
Weighted average number of common shares outstanding - basic and diluted
531,042,000
111,260,870
Management Discussion and Analysis
We have not incurred any revenue for the three months ended October 31, 2014 and 2013, as we have just started our business, and no construction projects were completed as of October 31, 2014. Hence, no revenue was recognized per our revenue recognition policy, completed contract method. The related costs incurred on the ongoing projects were classified as construction in progress under inventory.
For the three months ended October 31, 2014, we have incurred total operating expenses in the amount of $345,051, which mainly comprises selling expenses of $5,335, professional fees totaling $114,798, and general and administrative expenses totaling $224,918. For the three months ended October 31, 2013, we incurred total operating expenses in the amount of $116,382 which mainly comprises professional fees totaling $69,116, and general and administrative expenses totaling $47,266. The increase in operating expenses from 2013 to 2014 is due to increased amounts of professional fees and administrative expenses related to public reporting and the acquisition of Sanhe.
We incurred total operating expenses in the amount of $1,213,797 from inception on September 2, 2008 through October 31, 2014. These operating expenses were comprised of selling expenses of $10,814, professional fees totaling $518,535 and general and administrative expenses totaling $743,227.
We have not incurred any expenses for research and development from inception through October 31, 2014. As a result of operating losses, there has been no provision for the payment of income taxes from the date of inception. The Company has a certain deferred tax asset that is available to offset against future taxable income.
Comments & Business Outlook
Consolidated Statement of Operations and Comprehensive Loss
(Stated in US Dollars)
For the
For the
Revenue
-
-
Cost of sales
$
-
$
-
Gross profit
$
-
$
-
Operating expenses:
Selling expenses
5,479
-
General and administrative expenses
745,127
87,589
Loss from operations
(750,606
)
(87,589
)
Other (expense) income
Interest expense
(44,909
)
-
Exchange gain
389
-
Total other expense, net
(44,520
)
-
Net loss before taxes
$
(795,126
)
$
(87,589
)
Income tax benefit
113,932
-
Net loss after taxes
$
(681,194
)
$
(87,589
)
Foreign currency translation adjustment
7,552
472
Comprehensive loss
(673,642
)
(87,117
)
Net loss per common share – basic and diluted
$
(0.00
)
$
(0.01
)
Weighted average number of common shares outstanding - basic and diluted
263,079,329
8,000,000
Management Discussion and Analysis
Acquisition of Sanhe
On July 25, 2014, Sanhe and Luck Sky Shen Zhen and Sanhe’s shareholders entered into a series of agreements known as variable interest agreements (the “VIE Agreements”) pursuant to which Sanhe became LuckSky Shen Zhen’s contractually controlled affiliate. The VIE Agreements include the Framework Agreement on Business Cooperation, the Exclusive Management Consulting and Training and Technical Services Agreement, the Exclusive Option Agreement, the Equity Pledge Agreement, the Know-How Sub-License Agreement and the Power-of-Attorney. The purpose and effect of the VIE Agreements is to provide LuckSky Shen Zhen (our indirect wholly-owned subsidiary) with all of the management and control of Sanhe and all of its net income. While LuckSky Shen Zhen does not actually own at present any of the equity and shares in Sanhe, the purpose and effect of the VIE Agreements is to instill in Luck Sky Shen Zhen total management and voting control of Sanhe for all material purposes. The use of VIE agreements is a common structure used to acquire PRC corporations, particularly in certain industries in which foreign investment is restricted or forbidden by the PRC government.
Reverse Merger Activity
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
CFO Trail
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 29, 2014, Mr. Zhou Deng Rong submitted a letter to the Board of Directors (the “Board”) of the Company resigning from the positions of Chief Executive Officer and Director, effective on such date. Mr. Zhou also resigned as General Manager and Director of Sanhe City Lucksky Electrical Engineering Co., Ltd. (“Sanhe”), a company commercially controlled by the Company through a series of variable interest agreements.
Mr. Zhou resigned due to uncertainty about a Chinese government investigation into an offering of securities to Chinese investors by an entity not affiliated with the Company, but which securities were later exchanged for common stock of the Company in September 2013. On July 20, 2014, Mr. Zhou received a verbal summons from the Public Security Bureau for investigation assistance purposes and Mr. Zhou has been responding to questions by the authorities. To date, the Company has received no notice of any government investigation or proceeding with respect to this offering or any other matter and is not aware of any warrant or charges against Mr. Zhou. In addition, no claims have been filed against the Company or any of its affiliates by any shareholder.
Appointment of the Chairman of the Board, Chief Executive Officer, Chief Operating Officer and Acting Chief Financial Officer
Effective as of July 29, 2014, the Board appointed Mr. Zhiqi Zhang as the Company’s Chief Executive Officer, Roy Thomas Phillips as the Company’s Chief Operating Officer and Acting Chief Financial Officer and Zhou Jian, who has served as a Director since June 2012, as the Chairman of the Board of Directors. The Board has not determined the compensatory arrangement of Messrs. Zhang, Phillips or Zhou for their services. There is no material plan, contract or arrangement that has been entered into in connection with their appointments.
Investor Alert
Item 4.02: Non-Reliance on Previously Issued Financial Statements
The board of directors of the Company, based on the recommendation of the consultants and in consultation with management and the Company’s independent registered public accounting firm Jimmy P. Lee, CPA, P.C., concluded that, because of errors identified in the Company’s previously issued financial statements for the fiscal year ended July 31, 2013 and the first three quarter of fiscal 2014, the Company would restate its previously issued financial statements of these periods. The Company will be filing an amendment to its Annual Report on Form 10-K for the fiscal year ended July 31, 2013 and amendments to its Quarterly Report on Form 10-Q for the first three fiscal quarters in the fiscal year ended July 31, 2014 to reflect the restatement of our consolidated financial statements as of and for these three fiscal quarters, which reflects the correction of the same type of error with respect to such period.
The error was discovered by the Company’s consultants during the course of the preparation of the Annual Report for the fiscal year ended July 31, 2014 that one of the Company’s wholly owned subsidiary, Luck Sky Holdings Limited (“Luck Sky Holdings”), a corporation organized under the laws of the British Virgin Islands on June 26, 2013, was not consolidated into the Company’s consolidated financial statements. There have been no operations in this subsidiary and nominal assets since its incorporation, which led to certain inadvertent omissions by the Company during its consolidation process and financial statement preparation. The Company estimates the effect of the restatement is to increase the amount of the net loss for the fiscal year ended July 31, 2013 by approximately $1,837, and to cause an additional net loss for the three months ended October 31, 2013, January 31, 2014 and April 30, 2014 of approximately $204, $0 and $1,263, respectively. Since the Company is a shell company, the omission of information regarding LuckSky Holdings was deemed to be material. Consequently, the Company determined to correct the accounting treatment by consolidating Luck Sky Holdings in accordance with ASC 810 Consolidation.
Auditor trail
Item 4.01: Changes In Registrant’s Certifying Accountant
Auditor trail
On June 12, 2014, Kenne Ruan, CPA, P.C. (“KR”) resigned as our registered independent public accountant, effective June 12, 2014. The decision to accept the resignation of Kenne Ruan, CPA, P.C. has been approved by our board of directors. During the period between the Company's engagement of KR on June 8, 2013, through the fiscal year ended July 31, 2013, and any subsequent interim period before such resignation, there were no disagreements with KR on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of KR would have caused it to make reference to such disagreement in its reports, and there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K. The audit report of KR on the Company’s financial statements for fiscal year ended July 31, 2013 contained an explanatory paragraph which noted that there was substantial doubt about the Company’s ability to continue as a going concern because the Company had suffered recurring losses from operations and had a net capital deficiency. The financial statements did not include any adjustments that might result from the outcome of this uncertainty. We provided KR with a copy of this disclosure before its filing with the Securities and Exchange Commission ("SEC"). We requested that KR provide us with a letter addressed to the SEC stating whether or not it agrees with the above statements. A copy of the letter provided by KR is filed as Exhibit 16.1 to this Current Report on Form 8-K.
Acquisitions
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On May 30, 2014 we entered into a common stock purchase agreement with Zhou Jian, the sole shareholder of Luck Sky (Hong Kong) Aerodynamic Electricity Limited (“Luck Sky HK”), a Hong Kong company (the “Stock Purchase Agreement”). Pursuant to the Stock Purchase Agreement and effective May 30, 2014, we purchased from Zhou Jian 10,000 shares of common stock of Luck Sky HK, representing 100% of the issued and outstanding shares of common stock of Luck Sky HK, and we paid Zhou Jian a purchase price in the amount of HKD $ 10,000.00 (approximately USD$1,289.98) in cash (the “Acquisition”).
Luck Sky HK owns a direct, wholly-owned subsidiary, Luck Sky (Shen Zhen) Aerodynamic Electricity Limited (the “WOFE”), a corporation registered under the laws of the People’s Republic of China. Luck Sky HK and the WOFE had no operating business, no liabilities and nominal assets as of the date of the Acquisition. As a result of the Acquisition, Luck Sky HK became our wholly-owned subsidiary. The WOFE became our indirect subsidiary through Luck Sky HK.
Comments & Business Outlook
For the Three Months
For the Nine
Period From September 2,
Months Ended
Months Ended
2008 (inception) to
April 30,
April 30,
April 30,
2014
2013
2014
2013
2014
Revenue:
$
0
0
$
0
0
$
0
General and administrative
$
37,068
14,522
$
202,464
63,149
$
362,679
Loss from continuing operations
(37,068
)
(14,522
)
(202,464
)
(63,149
)
(362,679
)
Loss from discontinued operations
0
0
0
0
(4,099
)
Net loss
$
(37,068
)
(14,522
)
(202,464
)
(63,149
)
$
(366,778
)
Net loss per common share - basic and diluted
Continuing operations
$
0
0
$
0
$
0
Discontinued operations
0
0
0
0
Total
$
0
0
$
0
$
0
Weighted average number of common shares outstanding - basic and diluted
258,916,865
8,000,000
202,444,444
8,000,000
.1
8,000,000
Management Discussion and Analysis
Results of Operations
Revenue
Since inception on September 2, 2008 and for the nine months ended April 30, 2014 we have not earned any revenues. We are currently seeking business combination opportunities with companies in the air power industry or sources of capital to allow us to develop such technologies and manufacturing opportunities ourselves. We do not expect to realize any revenues until our business plan is implemented.
Contract Awards
WASHINGTON , Jan. 7, 2014 /PRNewswire / -- Xianning Auspicious Day Air Energy Power Company Limited, a Xianning City, Hubei Company, and Sanhe City Luck Sky Electrical Engineering Co., Ltd. (a subsidiary of Xiangtian USA Air Power Company, a Delaware Corporation OTCQB Ticker (GOAS)) based in Yanjiao, Hebei , signed a Sales Agreement for Xiangtian's "natural energy power generation system." This agreement will provide for the installation of Xiangtian's power generation equipment in the currently being built power generation facility in Hubei Provence.
This power station is scheduled to be a 35 MW power plant, and is scheduled to be online in early June 2014. All of the power generation equipment utilized in this station will be from Xiangtian. As this first green power plant goes on line and demonstrates reliable and sustained electrical production, additional opportunities to supple power generation equipment throughout china will be available. Xianning Auspicious Day Air Energy Power Company Limited is investing approximately 350 Million Chinese Yuan ($58,333 USD) for purchasing this equipment.
Luck Sky Group Natural Energy Power System is a new energy production invention. This system provides energy by utilizing solar energy, wind energy, geothermal energy, tidal energy, water hammer potential energy and all the available natural energy as a raw power. This raw power is then converted into DC power, processed through an ultra -wideband, high-performance power inverter, which is registered in Luck Sky Group's independent intellectual property rights list, and outputs stable power in line with national standards. Part of the output electric power is for the power needs of the operation facility, and remaining part will be supplied to the power grid. Any additional electricity will be stored as 20Mpa compressed air. When natural energy is intermittent or during times of equipment maintenance, compressed air is released to drive compressed air engines linked with a generator which produces electric power.
Natural energy power system's core technology is "compressed air energy storage power generation." The design of this system is novel and reasonable. Considering the energy structure, it will provide a reliable alternative to the power supply system that mainly based on the fossil fuels.
This natural energy power generation system has been developed through independent research and development by Luck Sky Group, with independent intellectual property rights. Luck Sky Group has filed and received almost 100 patents. Related products are: ultra-wideband voltage power inverter, new structures aerodynamic engine, low-speed aerodynamic generators, new structures isothermal air compressor, natural energy power systems, and the aerodynamic automobile motors, etc.
Contract Awards
WASHINGTON , Oct. 15, 2013 /PRNewswire / -- Xiangtian (USA ) Air Power Company, a Delaware Corporation OTCQB Ticker (GOAS), has signed a letter of intent with Shifang City Zhen Lin Fertilizer Co., Ltd. This letter of intent allows Shifang City Zhen Lin Fertilizer Co., Ltd. the ability to purchase air power generation equipment from Sanhe City Luck Sky Electrical Engineering Limited Company (a subsidiary of Xiangtian (USA ) Air Power Company.)
The Letter of intent provides for sales of equipment totaling 40 million RMB (Approximately $6.5 Million USD) and will allow for additional sales of equipment at a future date if needed. It is anticipated that this transaction will be completed within 6 months after receiving the proper approvals from the regulators in China .
Luck Sky Group Natural Energy Power System is an new energy Production invention. This system provides energy by utilizing solar energy, wind energy, geothermal energy, tidal energy, water hammer potential energy and all the available natural energy as a raw power. This raw power is then converted into DC power, processed through an ultra -wideband, high-performance power inverter, which is registered in Luck Sky Group independent intellectual property rights list, and outputs stable power in line with national standards. Part of the output electric power is for the power needs of the operation facility, and remaining part will be supplied to the power grid. Any additional electricity will be stored as 20Mpa compressed air. When natural energy is intermittent or during times of equipment maintenance, releasing the compressed air to drive compressed air engines linked with a generator which produces electric power, provide customers an advanced power generation and supply equipment.
Natural energy power system's core technology is "compressed air energy storage power generation." The design of this system is novel and reasonable. Considering the energy structure, it will provide a reliable alternative to the power supply system that mainly based on the fossil fuels.
This natural energy power generation system has been developed through independent research and development by Luck Sky Group, with independent intellectual property rights. Luck Sky Group has filed and received almost 100 patents. Related products are: ultra-wideband voltage power inverter, new structures aerodynamic engine, low-speed aerodynamic generators, new structures isothermal air compressor, natural energy power systems, and the aerodynamic automobile motors, etc.
Comments & Business Outlook
WASHINGTON Sept. 30, 2013 /PRNewswire/ -- Xiangtian (USA Hong Kong
The merger of Xiangtian (USA Hong Kong Full release
