UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended December 31, 2009
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period __________ to __________
Commission File Number: 333-147716
Jin Jie Corp
(Exact name of small business issuer as specified in its charter)
NEVADA 98-0550257
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
409 - 4th Floor, Tsui King House, Choi Lung Estate, Kowloon, Hong Kong
(Address of principal executive offices)
(702) 533-3083
(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [X] Yes [ ] 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 (ss.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 [ ] 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
definitions of "large accelerated filer," "accelerated filer," and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: As of February 16, 2010, there were
1,900,000 shares of common stock, par value $0.001 issued and outstanding.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION.............................................. 3
ITEM 1. FINANCIAL STATEMENTS............................................... 3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.......................................... 11
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK......... 18
ITEM 4T. CONTROLS AND PROCEDURES............................................ 18
PART II - OTHER INFORMATION................................................. 19
ITEM 1. LEGAL PROCEEDINGS.................................................. 19
ITEM 1A. RISK FACTORS....................................................... 19
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS........ 19
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.................................... 19
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................ 19
ITEM 5. OTHER INFORMATION.................................................. 19
ITEM 6. EXHIBITS ...........................................................19
SIGNATURES.................................................................. 20
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JIN JIE CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
December 31, September 30,
2009 2009
-------- --------
(unaudited) (audited)
ASSETS
Current Assets
Cash $ 11,354 $ 12,368
Prepaid expenses -- 693
-------- --------
Total Current Assets 11,354 13,061
-------- --------
TOTAL ASSETS $ 11,354 $ 13,061
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $ 7,552 $ 7,105
Due to stockholder 500 500
-------- --------
Total Current Liabilities 8,052 7,605
-------- --------
Total Liabilities 8,052 7,605
-------- --------
Stockholders' Equity
Common stock - 100,000,000 par value $0.001 shares authorized;
1,900,000 common shares issued and outstanding 1,900 1,900
Additional paid in capital 67,100 67,100
Deficit accumulated during the development stage (65,698) (63,544)
-------- --------
Total Stockholders' Equity 3,302 5,456
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 11,354 $ 13,061
======== ========
The accompanying notes are an integral part of these financial statements.
3
JIN JIE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS (unaudited)
Period from
Three Months Three Months July 17, 2007
ended ended (Inception) to
December 31, December 31, December 31,
2009 2008 2009
---------- ---------- ----------
REVENUE $ -- $ -- $ --
---------- ---------- ----------
OPERATING EXPENSES
Accounting and legal 2,076 2,451 35,125
General & Administrative 711 333 2,590
Website development costs -- -- 2,722
Filing fees (633) 1,587 13,761
Consulting Fees -- -- 11,000
Incorporation costs -- -- 500
---------- ---------- ----------
LOSS BEFORE INCOME TAXES (2,154) (4,371) (65,698)
PROVISION FOR INCOME TAXES -- -- --
---------- ---------- ----------
NET LOSS $ (2,154) $ (4,371) $ (65,698)
========== ========== ==========
NET LOSS PER SHARE: BASIC AND DILUTED $ (0.00) $ (0.00)
========== ==========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 1,900,000 1,900,000
========== ==========
The accompanying notes are an integral part of these financial statements.
4
JIN JIE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (unaudited)
Deficit
Accumulated
Common Stock Additional during the
-------------------- Paid in Development
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
Balance, July 17, 2007 (date of inception) -- $ -- $ -- $ -- $ --
Common shares issued, July 17, 2007 1,900,000 1,900 67,100 -- 69,000
Net loss for the period ended
September 30, 2007 -- -- -- (13,722) (13,722)
--------- ------- -------- -------- --------
Balance, September 30, 2007 1,900,000 1,900 67,100 (13,722) 55,278
Net loss for the year ended
September 30, 2008 -- -- -- (32,168) (32,168)
--------- ------- -------- -------- --------
Balance, September 30, 2008 1,900,000 1,900 67,100 (45,890) 23,110
Net loss for the year ended
September 30, 2009 -- -- -- (17,654) (17,654)
--------- ------- -------- -------- --------
Balance, September 30, 2009 1,900,000 1,900 67,100 (63,544) 5,456
Net loss for the period ended
December 31, 2009 -- -- -- (2,154) (2,154)
--------- ------- -------- -------- --------
Balance, December 31, 2009 1,900,000 $ 1,900 $ 67,100 $ 65,698 $ 3,302
========= ======= ======== ======== ========
The accompanying notes are an integral part of these financial statements.
5
JIN JIE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (unaudited)
Period from
Three Months Three Months July 17, 2007
ended ended (Inception) to
December 31, December 31, December 31,
2009 2008 2009
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (2,154) $ (4,371) $(65,698)
Adjustments to reconcile net (loss) to net
cash (used in) operating activities:
(Increase) Decrease in prepaid expenses 693 1,409 --
Increase (Decrease) in accrued liabilities 447 (2,100) 7,552
Increase in due to stockholder -- -- 500
-------- -------- --------
Net cash used in operating activities (1,014) (5,062) (57,646)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock -- -- 69,000
-------- -------- --------
Net cash provided by financing activities -- -- 69,000
-------- -------- --------
Change in cash during the period (1,014) (5,062) 11,354
Cash, beginning of the period 12,368 23,478 --
-------- -------- --------
Cash, end of the period $ 11,354 $ 18,416 $ 11,354
======== ======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes $ -- $ -- $ --
======== ======== ========
Cash paid for interest $ -- $ -- $ --
======== ======== ========
The accompanying notes are an integral part of these financial statements.
6
JIN JIE CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2009
NOTE 1 - NATURE OF OPERATIONS
Jin Jie Corp. ("the Company"), incorporated in the state of Nevada on July 17,
2007, and is in the business of developing and promoting its proprietary
automotive Internet Sites. The company has limited operations and is considered
to be in the development stage.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
MANAGEMENT CERTIFICATION
The financial statements herein are certified by the officers of the Company to
present fairly, in all material respects, the financial position, results of
operations and cash flows for the periods presented in conformity with
accounting principles generally accepted in the United States of America,
consistently applied.
FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and cash equivalents,
prepaid expenses, accounts payable, and amounts due to stockholder. The amount
due to stockholder is non interest-bearing. It is management's opinion that the
Company is not exposed to significant interest, currency or credit risks arising
from its other financial instruments and that their fair values approximate
their carrying values except where separately disclosed.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles of the United States 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 year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.
LOSS PER SHARE
Basic loss per share is calculated using the weighted average number of common
shares outstanding and the treasury stock method is used to calculate diluted
earnings per share. For the years presented, this calculation proved to be
anti-dilutive.
DIVIDENDS
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the period shown.
7
JIN JIE CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2009
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
The Company provides for income taxes uisng an asset and liability approach.
Deferred tax assets are reduced by a valuation allowance if, based on the weight
of available evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized. No provision for income taxes is
included in the statement due to its immaterial amount, net of the allowance
account, based on the likelihood of the Company to utilize the loss
carry-forward.
NET INCOME (LOSS) PER COMMON SHARE
Net income (loss) per common share is computed based on the weighted average
number of common shares outstanding and common stock equivalents, if not
anti-dilutive. The Company has not issued any potentially dilutive common
shares.
NOTE 3 - DUE TO STOCKHOLDER
The amount owing to stockholder is unsecured, non-interest bearing and has no
specific terms of repayment.
NOTE 4 - COMMON STOCK
Common Shares - Authorized: The Company has 50,000,000 common shares authorized
at a par value of $0.001 per share.
Common Shares - Issued and Outstanding: During the year ended September 30,
2007, the Company issued 1,900,000 common shares for total proceeds of $69,000.
As of December 31, 2009, the Company has no warrants or options outstanding.
NOTE 5 - INCOME TAXES
The Company provides for income taxes using an asset and liability approach.
Deferred tax assets and liabilities are recorded based on the differences
between the financial statement and tax bases of assets and liabilities and the
tax rates in effect currently.
Deferred tax assets are reduced by a valuation allowance if, based on the weight
of available evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized. In the Company's opinion, it is
uncertain whether they will generate sufficient taxable income in the future to
fully utilize the net deferred tax asset. Accordingly, a valuation allowance
equal to the deferred tax asset has been recorded. The total deferred tax asset
is $14,453, which is calculated by multiplying a 22% estimated tax rate by the
cumulative net operating losses of $65,698.
8
JIN JIE CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2009
NOTE 6 - RELATED PARTY TRANSACTIONS
As of December 31, 2009, there is a balance owing to a stockholder of the
Company in the amount of $500.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities that become available. They may face a conflict in selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.
NOTE 7 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in the notes to the
financial statements, the Company has no established source of revenue. This
raises substantial doubt about the Company's ability to continue as a going
concern. Without realization of additional capital, it would be unlikely for the
Company to continue as a going concern. The financial statements do not include
any adjustments that might result from this uncertainty.
The Company's activities to date have been supported by equity financing. It has
sustained losses in all previous reporting periods with an inception to date
loss of $65,698 as of December 31, 2009. Management continues to seek funding
from its shareholders and other qualified investors to pursue its business plan.
In the alternative, the Company may be amenable to a sale, merger or other
acquisition in the event such transaction is deemed by management to be in the
best interests of the shareholders.
NOTE 8 - SUBSEQUENT EVENTS
Effective January 13, 2010 Jin Jie Corp. (the "Company") and certain of its
shareholders entered into an agreement with Green Biofuels Holdings Ltd., an
Israeli company ("GBH"), and all of its shareholders (collectively the "GBH
Shareholders") pursuant to which we agreed to purchase all of GBH's interest in
the GBH Carbon Credit Project and all related knowhow, trademarks, patents and
agreements.
As consideration for the sale and transfer of the GBH Carbon Credit Project
Assets to our company, the Company agreed to assume and carry out all GBH's
responsibilities under certain agreements for carbon reduction. Upon closing of
the transaction, if completed, our company will be in the business of assisting
companies to obtain carbon credits under the Clean Development Mechanism of the
Kyoto Protocol of 1997.
9
JIN JIE CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2009
In addition to the assumption of certain contracts by the Company, the agreement
is subject to a number of closing conditions including the following:
(a) The Company effecting a forward share split of 35:1 of its authorized
and issued and outstanding shares of common stock;
(b) The Company changing its name from "Jin Jie Corp." to "Blue Sphere
Corporation";
(c) Cally Kai Lai Lai and Wei Xiang Zeng jointly selling 5,584,000
(post-split) shares of the Company's outstanding common stock at a price of
$0.001 per share to each of the three shareholders of GBH;
(d) The Company entering into employment agreements with each of the GBH
Shareholders on terms satisfactory to the Company and the shareholders pursuant
to which the shareholders will expend no less than 75% of their time on the
business of the Company;
(e) Cally Kai Lai Lai and Wei Xiang Zeng jointly selling an aggregate of
1,675,000 (post-split) shares of the Company to certain nominees of GBH at a
price of $0.001 per share;
(f) The Company having no liabilities other than legal fees accrued for the
purpose of the transaction in the maximum of $40,000;
(g) each of the GBH Shareholders agreeing not to compete with the business
of the Company for a period of one year following termination of their
employment agreement with the Company
(h) The Company agreeing to appoint two nominees of GBH to the board of
directors;
(i) The Company complete a financing prior to or upon closing of up to
$500,000 comprising of units at $0.50 per unit with each unit consisting of one
shares and one share purchase warrant exercisable at a price of $0.75 for a
period of five years from the closing date; and
(j) Satisfactory completion of due diligence by both parties.
Closing of the transaction is intended to take place on or before February 10,
2010. As of February 10, 2010, the Company has not closed the proposed
transaction. There is no assurance that the transaction will be completed as
planned or at all.
Company has analyzed its operations subsequent to December 31, 2009 through the
date these financial statements were submitted to the Securities and Exchange
Commission, and has determined that it does not have any other material
subsequent events to disclose in these financial statements.
NOTE 9 - RECENT ACCOUNTING PRONOUNCEMENTS
The adoption of new accounting pronouncements is not expected to have a material
effect on the Company's current financial position, results or operations, or
cash flows.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD LOOKING STATEMENTS
This quarterly report contains forward-looking statements. Forward-looking
statements are projections in respect of future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology such as "may", "should", "expects", "plans", "anticipates",
"believes", "estimates", "predicts", "potential" or "continue" or the negative
of these terms or other comparable terminology. These statements are only
predictions and involve known and unknown risks, uncertainties and other
factors, including the risks in the section entitled "Risks and Uncertainties"
and the risks set out below, any of which may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. These
risks include:
* risks related to the potential of delays in customer orders or the
failure to retain customers;
* the uncertainty of profitability based upon our history of losses;
* risks related to failure to obtain adequate financing on a timely
basis and on acceptable terms for our planned exploration and
development projects;
* risks related to competition;
* risks related to tax attributes; and
* other risks and uncertainties related to our business strategy.
This list is not an exhaustive list of the factors that may affect any of our
forward-looking statements. These and other factors should be considered
carefully and readers should not place undue reliance on our forward-looking
statements.
Forward looking statements are made based on management's beliefs, estimates and
opinions on the date the statements are made and we undertake no obligation to
update forward-looking statements if these beliefs, estimates and opinions or
other circumstances should change. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements. Except as
required by applicable law, including the securities laws of the United States,
we do not intend to update any of the forward-looking statements to conform
these statements to actual results.
Our financial statements are stated in United States dollars (US$) and are
prepared in accordance with United States Generally Accepted Accounting
Principles.
In this quarterly report, unless otherwise specified, all dollar amounts are
expressed in United States dollars.
As used in this quarterly report, the terms "we", "us", "our", the "Company" and
"Jin Jie" mean Jin Jie Corp. and its subsidiaries, unless the context clearly
requires otherwise.
OUR CURRENT BUSINESS
Prior to our most recently completed fiscal quarter we were in the business of
developing and promoting our automotive Internet Sites, RodesTrading.com and
RodesTrading.cn. During the quarter ended December 31, 2009 management of the
Company determined to change our business focus to that of generating revenue
from emission reduction through sales of carbon credits, sales of material and
byproducts for energy generation, government and other subsidies relating to
emission reduction. In connection with the change in our business focus, on
January 13, 2010 we entered into an agreement with Green Biofuels Holdings Ltd.
("GBH") pursuant to which we agreed to purchase all of GBH's interest in the GBH
Carbon Credit Project. There is no assurance that the transaction will be
completed as planned or at all.
11
There can be no assurance that our planned activities will be successful or that
we will ultimately attain profitability. Our long term viability depends on our
ability to grow our new business to fund the continuation of business
operations. We intend to use our common stock as payment for services of various
consultants in order to help advance our business plan.
AGREEMENT WITH GREEN BIOFUELS HOLDINGS LTD.
Effective January 13, 2010 Jin Jie Corp. (the "Company") and certain of its
shareholders entered into an agreement with Green Biofuels Holdings Ltd., an
Israeli company ("GBH"), and all of its shareholders (collectively the "GBH
Shareholders") pursuant to which we agreed to purchase all of GBH's interest in
the GBH Carbon Credit Project and all related knowhow, trademarks, patents and
agreements.
As consideration for the sale and transfer of the GBH Carbon Credit Project
Assets to our company, the Company agreed to assume and carry out all GBH's
responsibilities under certain agreements for carbon reduction. Upon closing of
the transaction, if completed, our company will be in the business of assisting
companies to obtain carbon credits under the Clean Development Mechanism of the
Kyoto Protocol of 1997.
In addition to the assumption of certain contracts by the Company, the agreement
is subject to a number of closing conditions including the following:
(a) The Company effecting a forward share split of 35:1 of its authorized
and issued and outstanding shares of common stock;
(b) The Company changing its name from "Jin Jie Corp." to "Blue Sphere
Corporation";
(c) Cally Kai Lai Lai and Wei Xiang Zeng jointly selling 5,584,000
(post-split) shares of the Company's outstanding common stock at a price of
$0.001 per share to each of the three shareholders of GBH;
(d) The Company entering into employment agreements with each of the GBH
Shareholders on terms satisfactory to the Company and the shareholders pursuant
to which the shareholders will expend no less than 75% of their time on the
business of the Company;
(e) Cally Kai Lai Lai and Wei Xiang Zeng jointly selling an aggregate of
1,675,000 (post-split) shares of the Company to certain nominees of GBH at a
price of $0.001 per share;
(f) The Company having no liabilities other than legal fees accrued for the
purpose of the transaction in the maximum of $40,000;
(g) each of the GBH Shareholders agreeing not to compete with the business
of the Company for a period of one year following termination of their
employment agreement with the Company
(h) The Company agreeing to appoint two nominees of GBH to the board of
directors;
(i) The Company complete a financing prior to or upon closing of up to
$500,000 comprising of units at $0.50 per unit with each unit consisting of one
shares and one share purchase warrant exercisable at a price of $0.75 for a
period of five years from the closing date; and
(j) Satisfactory completion of due diligence by both parties.
Closing of the transaction is intended to take place on or before February 10,
2010. As of February 10, 2010, the Company has not closed the proposed
transaction. There is no assurance that the transaction will be completed as
planned or at all.
12
RESULTS OF OPERATIONS
THREE MONTH SUMMARY
The major components of our expenses for the quarter are outlined in the table
below:
Three Months Three Months
ended ended Percentage
December 31, December 31, Increase /
2009 2008 (Decrease)
-------- -------- ----------
REVENUE $ -- $ -- --
-------- -------- -------
OPERATING EXPENSES
Accounting and legal 2,076 2,451 (15.30)%
General & Administrative 711 333 113.51%
Website development costs -- -- --
Filing fees (633) 1,587 (139.89)%
Consulting Fees -- -- --
Incorporation costs -- -- --
-------- -------- -------
LOSS BEFORE INCOME TAXES $ (2,154) $ (4,371) (50.72)%
REVENUE
We have not earned any revenues since our inception on July 17, 2007. We are
still in the development stage and do not anticipate earning any revenues until
we can establish an alliance with targeted companies to market or distribute the
results of our research projects.
Three Months Ended December 31, 2009 and 2008
LIQUIDITY AND CAPITAL RESOURCES
WORKING CAPITAL
Three Months
Ended Year Ended Percentage
December 31, September 30, Increase/
2009 2009 (Decrease)
-------- ------- ----------
Current Assets $ 11,354 13,061 (13.07%)
Current Liabilities 8,052 7,605 5.88%
Working Capital $ 3,302 5,456 (39.5%)
As of December 31, 2009, we had $11,354 in cash, a decrease of $1,014 from the
year ended September 30, 2009. As of December 31, 2009, we had a working capital
of $3,302, a decrease of $2,154 from the year ended September 30, 2009.
CASH FLOWS
Three Months Three Months
ended ended Percentage
December 31, December 31, Increase/
2009 2008 (Decrease)
-------- -------- ----------
Net cash used in operating activities $ (1,014) (5,062) (79.97%)
-------- -------- ------
Net cash provided by financing activities $ -- -- --
-------- -------- ------
13
CASH FLOW USED IN OPERATING ACTIVITIES
Our cash used in operating activities for the three months ended December 31,
2009 compared to our cash used in operating activities for the three months
ended December 31, 2008 decreased by 79.97% largely due to the fact that our
business has been inactive during the period.
CASH FLOW PROVIDED BY FINANCING ACTIVITIES
No cash was used in or provided by investing activities for either the three
months ended December 31, 2009 or 2008.
CASH PROVIDED BY INVESTING ACTIVITIES
No cash was used in or provided by investing activities for either the three
months ended December 31, 2009 or 2008.
GOING CONCERN
Our registered independent auditors included an explanatory paragraph in their
report on the accompanying financial statements regarding concerns about our
ability to continue as a going concern. Our financial statements contain
additional note disclosures describing the circumstances that lead to this
disclosure by our registered independent auditors.
Due to this doubt about our ability to continue as a going concern, management
is open to new business opportunities which may prove more profitable to the
shareholders of Jin Jie Corp. Historically, we have been able to raise a limited
amount of capital through private placements of our equity stock, but we are
uncertain about our continued ability to raise funds privately. Further, we
believe that our company may have difficulties raising capital until we locate a
prospective business opportunity through which we can pursue our plan of
operation. If we are unable to secure adequate capital to continue our
acquisition efforts, our business may fail and our stockholders may lose some or
all of their investment.
Should our original business plan fail, we anticipate that the selection of a
business opportunity in which to participate will be complex and without
certainty of success. Management believes that there are numerous firms in
various industries seeking the perceived benefits of being a publicly registered
corporation. Business opportunities may be available in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex. We can provide no assurance that we will be
able to locate compatible business opportunities.
FUTURE FINANCINGS
We do not have any significant available credit, bank financing or other
external sources of liquidity. Due to historical operating losses and other
issues as described in our going concern footnote included in its interim
financial statements as at and for the period ended December 31, 2009, our
operations have not been a source of liquidity and we had satisfied our cash
requirements through shareholder loans and private placements. In order to
obtain necessary capital, we may need to sell additional shares of our common
stock or borrow funds from private lenders. There is no assurance that we will
be able to secure additional financing or that it can be secured at rates
acceptable to us. In addition, should we be required to either issue stock for
services or to secure equity funding, due to the lack of liquidity in the market
for our stock such financing would result in significant dilution to our
existing shareholders.
Jin Jie's short term plan is to continue to ask its officers to defer payment of
salaries, utilize its common stock where possible to pay for services and to
seek further shareholder loans. In the longer term, the Company is actively
seeking additional merger, acquisition or venture relationships with operating
enterprises in the business of emission reduction in order to generate long-term
growth opportunities for the Company, permit the Company to meet its financial
obligations and to provide increased value to the Company's shareholders. We
14
have obtained our required cash resources principally through loans from
shareholders and our executive officers. There can be no assurance that our
planned activities will be successful or that we will ultimately attain
profitability. Our long term viability depends on our ability to grow our new
business to fund the continuation of business operations. We intend to use our
common stock as payment for services of various consultants in order to help
advance our business plan.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to stockholders.
CRITICAL ACCOUNTING POLICIES
The following discussion and analysis of financial condition and results of
operations are based upon the Company's financial statements, which have been
prepared in conformity with accounting principles generally accepted in the
United States of America. The Company's significant accounting policies are more
fully described in Note 2 of the Notes to Financial Statements included with
this report. Certain accounting estimates are particularly important to the
understanding of the Company's financial position and results of operations and
require the application of significant judgment by the Company's management or
can be materially affected by changes from period to period in economic factors
or conditions that are outside the control of management. The Company's
management uses their judgment to determine the appropriate assumptions to be
used in the determination of certain estimates. Those estimates are based on
historical operations, future business plans and projected financial results.
The following d iscusses the Company's critical accounting policies and
estimates.
MANAGEMENT CERTIFICATION
The financial statements herein are certified by our officers to present fairly,
in all material respects, the financial position, results of operations and cash
flows for the periods presented in conformity with accounting principles
generally accepted in the United States of America, consistently applied.
FINANCIAL INSTRUMENTS
Our financial instruments consist of cash and cash equivalents, prepaid
expenses, accounts payable, and amounts due to stockholder. The amount due to
stockholder is non interest-bearing. It is management's opinion that we are not
exposed to significant interest, currency or credit risks arising from its other
financial instruments and that their fair values approximate their carrying
values except where separately disclosed.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles of the United States 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 year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.
LOSS PER SHARE
Basic loss per share is calculated using the weighted average number of common
shares outstanding and the treasury stock method is used to calculate diluted
earnings per share. For the years presented, this calculation proved to be
anti-dilutive.
DIVIDENDS
We have not adopted any policy regarding payment of dividends. No dividends have
been paid during the period shown.
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INCOME TAXES
We provide for income taxes using an asset and liability approach. Deferred tax
assets are reduced by a valuation allowance if, based on the weight of available
evidence, it is more likely than not that some or all of the deferred tax assets
will not be realized. No provision for income taxes is included in the statement
due to its immaterial amount, net of the allowance account, based on the
likelihood of us utilizing the loss carry-forward.
NET INCOME (LOSS) PER COMMON SHARE
Net income (loss) per common share is computed based on the weighted average
number of common shares outstanding and common stock equivalents, if not
anti-dilutive. We have not issued any potentially dilutive common shares.
RISKS AND UNCERTAINTIES
BECAUSE OUR AUDITOR HAS ISSUED A GOING CONCERN OPINION REGARDING OUR COMPANY,
THERE IS AN INCREASED RISK ASSOCIATED WITH AN INVESTMENT IN OUR COMPANY.
We have earned limited revenue since our inception, which makes it difficult to
evaluate whether we will operate profitably. Operating expenses for the period
from July 17, 2007 (date of inception) to December 31, 2009, totalled $65,698.
We have incurred cumulative net losses of $65,698 since inception to December
31, 2009. We have not attained profitable operations and are dependent upon
obtaining financing or generating revenue from operations to continue operations
for the next 12 months should we determine to pursue a strategy of growth.
As of December 31, 2009, we had cash in the amount of $11,354. Our future is
dependent upon our ability to obtain financing or upon future profitable
operations. We reserve the right to seek additional funds through private
placements of our common stock and/or through debt financing. Our ability to
raise additional financing is unknown. We do not have any formal commitments or
arrangements for the advancement or loan of funds. For these reasons, our
auditors stated in their report that they have substantial doubt we will be able
to continue as a going concern. As a result, there is an increased risk that you
could lose the entire amount of your investment in our company.
BECAUSE WE HAVE A LIMITED OPERATING HISTORY, IT IS DIFFICULT TO EVALUATE AN
INVESTMENT IN OUR STOCK.
An evaluation of our business will be difficult for investors because we have a
limited operating history. We are in the development stage of our business and
have not yet generated revenues from our business operations. To date, revenues
are not substantial enough to maintain us without additional capital injection
if we determine to pursue a growth strategy before significant revenues are
generated.
We face a number of risks encountered by early-stage companies, including our
need to develop infrastructure to support growth and expansion; our need to
obtain long-term sources of financing; our need to establish our marketing,
sales and support organizations; and our need to manage expanding operations.
Our business strategy may not be successful, and we may not successfully address
these risks. If we are unable to sustain profitable operations, investors may
lose their entire investment in us.
BECAUSE OUR MANAGEMENT HAS ONLY AGREED TO PROVIDE THEIR SERVICES ON A PART-TIME
BASIS, THEY MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO
OUR BUSINESS OPERATIONS, CAUSING OUR BUSINESS TO FAIL.
Cally Ka Lai Lai, our president and CEO, devotes 10 to 15 hours per week to our
business affairs. We do not have an employment agreement with Cally Ka Lai Lai,
nor do we maintain key life insurance for her. Currently, we do not have any
full or part-time employees. If the demands of our business require the full
business time of our management, it is possible that they may not be able to
devote sufficient time to the management of our business, as and when needed. If
our management is unable to devote a sufficient amount of time to manage our
operations, our business will fail.
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BECAUSE OUR PRESIDENT, CALLY KA LAI LAI, AND OUR DIRECTOR, WEI XIANG ZENG OWN
52.6% OF OUR OUTSTANDING COMMON STOCK, INVESTORS MAY FIND THAT CORPORATE
DECISIONS INFLUENCED BY CALLY KA LAI LAI AND WEI XIANG ZENG ARE INCONSISTENT
WITH THE BEST INTERESTS OF OTHER STOCKHOLDERS.
Cally Ka Lai Lai is our president, chief executive officer and a director. She
owns approximately 26.3% of the outstanding shares of our common stock. Wei
Xiang Zeng is a director. He owns approximately 26.3% of the outstanding shares
of our common stock. Accordingly, they will have an overwhelming influence in
determining the outcome of all corporate transactions or other matters,
including mergers, consolidations and the sale of all or substantially all of
our assets, and also the power to prevent or cause a change in control. Our
president, Cally Ka Lai Lai owns 500,000 shares of our common stock, which
equates to 26.3% of our outstanding common stock. Our director, Wei Xiang Zeng,
owns 500,000 shares of our common stock, which equates to 26.3% of our
outstanding common stock. The offer or sale of a large number of shares at any
price may cause the market price to fall. Sales of substantial amounts of common
stock or the perception that such transactions could occur may materially and
adversely affect prevailing markets prices for our common stock.
NEW LEGISLATION, INCLUDING THE SARBANES OXLEY ACT OF 2002, MAY MAKE IT MORE
DIFFICULT FOR US TO RETAIN OR ATTRACT OFFICERS AND DIRECTORS.
The Sarbanes-Oxley Act of 2002 was enacted in response to public concerns
regarding corporate accountability in connection with recent accounting
scandals. The stated goals of the Sarbanes-Oxley Act are to increase corporate
responsibility, to provide for enhanced penalties for accounting and auditing
improprieties at publicly traded companies, and to protect investors by
improving the accuracy and reliability of corporate disclosures pursuant to the
securities laws. The Sarbanes-Oxley Act generally applies to all companies that
file or are required to file periodic reports with the SEC, under the Securities
Exchange Act of 1934. As a public company, we are required to comply with the
Sarbanes-Oxley Act. The enactment of the Sarbanes-Oxley Act of 2002 has resulted
in a series of rules and regulations by the SEC that increase responsibilities
and liabilities of directors and executive officers. The perceived increased
personal risk associated with these recent changes may deter qualified
individuals from accepting these roles. As a result, it may be more difficult
for us to attract and retain qualified persons to serve on our board of
directors or as executive officers. We continue to evaluate and monitor
developments with respect to these rules, and we cannot predict or estimate the
amount of additional costs we may incur or the timing of such costs.
OUR COMMON STOCK IS ILLIQUID AND SHAREHOLDERS MAY BE UNABLE TO SELL THEIR
SHARES.
There is currently a limited market for our common stock and we can provide no
assurance to investors that a market will develop. If a market for our common
stock does not develop, our shareholders may not be able to re-sell the shares
of our common stock that they have purchased and they may lose all of their
investment. Public announcements regarding our company, changes in government
regulations, conditions in our market segment or changes in earnings estimates
by analysts may cause the price of our common shares to fluctuate substantially.
PENNY STOCK RULES WILL LIMIT THE ABILITY OF OUR STOCKHOLDERS TO SELL THEIR
STOCK.
The Securities and Exchange Commission has adopted regulations which generally
define "penny stock" to be any equity security that has a market price (as
defined) less than $5.00 per share or an exercise price of less than $5.00 per
share, subject to certain exceptions. Our securities are covered by the penny
stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
"accredited investors". The term "accredited investor" refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission which provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer also must
17
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, OR FINRA, HAS ADOPTED SALES
PRACTICE REQUIREMENTS WHICH MAY ALSO LIMIT A SHAREHOLDER'S ABILITY TO BUY AND
SELL OUR STOCK.
In addition to the "penny stock" rules described above, FINRA has adopted rules
that require that in recommending an investment to a customer, a broker-dealer
must have reasonable grounds for believing that the investment is suitable for
that customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer's financial status, tax status, investment
objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. FINRA requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common stock, which may limit your ability to buy and sell our stock and have an
adverse effect on the market for its shares.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 4T. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures at December 31, 2009, which is the end of the period
covered by this report. This evaluation was carried out by our principal
executive officer and principal financial officer. Based on this evaluation, our
principal executive officer and principal financial officer has concluded that
the design and operation of our disclosure controls and procedures are effective
as at the end of the period covered by this report.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed by our company in
the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
SEC's rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by our company in the reports that we file or submit under the
Exchange Act is accumulated and communicated to our management, including our
principal executive officer and principal financial officer, as appropriate, to
allow timely decisions regarding required disclosure.
INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting during
the three months ended December 31, 2009 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 1A. RISK FACTORS
Not Applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
No. Description
--- -----------
3.1 Articles of Incorporation (attached as an exhibit to our registration
statement on Form SB-2 filed with the SEC on November 29, 2007)
3.2 Bylaws (attached as an exhibit to our registration statement on Form
SB-2 filed with the SEC on November 29, 2007)
10.1 Carbon Credit Project Contract Acquisition Agreement with Green
Biofuels Holdings Ltd. and its shareholders dated January 13, 2010
(attached as an exhibit to our current report on Form 8-K filed with
the SEC on January 19, 2010)
31.1 Rule 13a-14(a)/15d-14(a) Certifications (ii) Rule 13a-14/15d-14
Certification Chief Executive Officer
31.2 Rule 13a-14(a)/15d-14(a) Certifications (ii) Rule 13a-14/15d-14
Certification Chief Financial Officer
32.1 Section 1350 Certification Chief Executive Officer
32.2 Section 1350 Certification Chief Financial Officer
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
JIN JIE CORP.
By /s/ Cally Ka Lai Lai
------------------------------------------------------------
Cally Ka Lai Lai
Chief Executive Officer and Director
(Principal Executive Officer)
Date: February 16, 2010
By /s/ Wei Xiang Zeng
------------------------------------------------------------
Wei Xiang Zeng
Chief Financial Officer and Director
(Principal Accounting Officer and Principal Financial Officer)
Date: February 16, 2010
20