UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
OF THE SECURITIES EXCHANGE ACT OF 1934
For
The Quarterly Period Ended
or
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission
File Number
(Exact name of registrant issuer as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices, including zip code)
Registrant’s
phone number, including area code +
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading Symbol(s) | Name of each exchange on which registered: | ||
| OTC Market – Pink Sheets |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒ 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 (section 232.405 of this chapter) during the preceding twelve months (or shorter period that the registrant was required to submit and post such files).
YES ☐ ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large
Accelerated Filer ☐ Accelerated Filer ☐
Emerging
growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
☐ No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has fled all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes
☐
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.
| Class | Outstanding at May 15, 2024 | |
| Common Stock, $0.001 par value |
TABLE OF CONTENTS
| 2 |
PART I FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS:
SINO GREEN LAND CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF March 31, 2024, AND JUNE 30, 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
| As of | ||||||||
| March 31, 2024 | June 30, 2023 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Finance lease right-of-use assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity (Deficit) | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expense | $ | $ | ||||||
| Customer advances | ||||||||
| Convertible note payable | ||||||||
| Notes payable, secured – current | ||||||||
| Advances due to the related parties | ||||||||
| Finance lease obligations – current | ||||||||
| Operating lease obligations – current | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Finance lease obligations – non-current | ||||||||
| Notes payable, secured – non-current | ||||||||
| Notes payable, unsecured | ||||||||
| Total liabilities | ||||||||
| Stockholders’ equity (deficit) | ||||||||
| Preferred Stock, $ par value; shares authorized; shares issued and outstanding at March 31, 2024 and June 30, 2023, respectively | ||||||||
| Common Stock, $ par value; shares authorized; shares issued and outstanding at March 31, 2024 and June 30, 2023, respectively | ||||||||
| Additional paid-in-capital | ||||||||
| Accumulated other comprehensive income | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity (deficit) | ( | ) | ||||||
| Total Liabilities and Stockholders’ Equity (Deficit) | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
| 3 |
SINO GREEN LAND CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE THREE AND NINE MONTHS ENDED March 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
Three months ended March 31 | Nine months ended March 31 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gross (loss) profit | ( | ) | ( | ) | ||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense), net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other comprehensive income: | ||||||||||||||||
| Foreign currency translation income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss per share | ||||||||||||||||
| Basic and diluted loss per share | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Basic and diluted weighted average shares outstanding | ||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
| 4 |
SINO GREEN LAND CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE THREE AND NINE MONTHS ENDED March 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
| Three and nine months ended March 31, 2024 | ||||||||||||||||||||||||||||||||
| Number of shares | Amount | Number
of shares | Amount | Additional
Paid-in Capital | Accumulated
Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, September 30, 2023 (Unaudited) | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ||||||||||||||||||||||||||||||
| Balance, December 31, 2023 (Unaudited) | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||
| Three and nine months ended March 31, 2023 | ||||||||||||||||||||||||||||||||
| Number of
shares | Amount | Number
of shares | Amount | Additional
Paid-in Capital | Accumulated
Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||
| Balance, June 30, 2022 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ||||||||||||||||||||||||||||||
| Balance, September 30, 2022 (Unaudited) | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||
| Capital contribution attributable to related party debt extinguishment | - | - | ||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, December 31, 2022 (Unaudited) | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
| Capital contribution attributable to related party debt extinguishment | - | - | ||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance as of March 31, 2023 | $ | $ | $ | ( | ) | |||||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
| 5 |
SINO GREEN LAND CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED March 31, 2024, AND 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
| Nine months ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Depreciation | ||||||||
| Changes in operating assets and liabilities | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventories | ( | ) | ||||||
| Prepaid expenses and other current assets | ||||||||
| Operating lease right of use asset | ||||||||
| Accounts payable and accrued liabilities | ( | ) | ||||||
| Customer advances | ( | ) | ||||||
| Operating lease obligations | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Acquisition of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Advances from related parties, net | ||||||||
| Payments on finance lease obligations | ( | ) | ||||||
| Principal payments of notes payable, secured | ( | ) | ( | ) | ||||
| Proceeds from notes payable, unsecured | ||||||||
| Principal payment of notes payable, unsecured | ( | ) | ||||||
| Proceeds from convertible note payable | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | ||||||||
| Net changes in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents-beginning of the period | ||||||||
| Cash and cash equivalents-end of the period | $ | $ | ||||||
| Supplementary cash flow information: | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Acquisition of factory building No. 5 with note payable, secured | $ | $ | ||||||
| Capital contribution attributable to related party debt extinguishment | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
| 6 |
SINO GREEN LAND CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED March 31, 2024, AND 2023
(Unaudited)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Sino Green Land Corporation (“SGLA”), formerly known as Go Silver Toprich Holding Inc., is a corporation organized under the laws of the State of Nevada on March 6, 2008.
Sunshine Green Land Corp., (“SGL”) a Labuan corporation, was formed on December 8, 2021. On June 30, 2023, SGL consummated a share exchange agreement with the shareholders of Tian Li Eco Holdings Sdn. Bhd (“Tian Li”), a Malaysian corporation, in which all the shares of Tian Li were exchanged for shares of SGL, and Tian Li became a wholly-owned subsidiary of SGL.
On October 1, 2023, SGLA completed a merger with SGL. After the merger, SGLA, SGL, and Tian Li, are collectively referred to as the “Company.”
Upon completion of the merger, SGLA acquired SGL in exchange for shares of common stock of SGLA and shares of preferred stock of SGLA. Immediately after completion of the share exchange, the Company has a total of shares of common stock outstanding and shares of preferred stock outstanding.
Prior
to the merger, Luo Xiong and spouse Wo Kuk Ching and their immediate family members controlled
As SGLA and SGL were under common control at the time of the share exchange, the transaction is accounted for as a combination of entities under common control in a manner similar to the pooling-of-interests method of accounting. In pooling-of-interests accounting, the financial statements of the previously separate companies for periods before the combination are recast on a combined basis for all prior periods that the entities are under common control. The accompanying combined financial statements for all periods presented are referred to as the “consolidated” financial statements. Accordingly, the Company’s consolidated financial statements as of March 31, 2024 and June 30, 2023, and for the three-month and nine-months ended March 31, 2024 and 2023, include SGLA’s, SGL’s, and Tian Li’s historical assets, liabilities, and results of operations, including the issuance of shares of common stock of SGLA and shares of preferred stock of SGLA on October 1, 2023, as if the combination and issuance of shares occurred at the beginning of the earliest period presented.
The Company conducts its business through its subsidiary Tian Li, which operates in Malaysia as an environmental technology company and recycler of plastic waste bottles and plastic packaging materials.
Going concern
The
accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement
of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, for the nine months
ended March 31, 2024, the Company incurred a net loss of $
| 7 |
The ability of the Company to continue as a going concern is dependent on raising capital to fund its initial business plan and ultimately to attain profitable operations. Management believes additional cash required to meet the Company’s obligations as they become due will be provided by way of advances from related parties. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
Basis of presentation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The unaudited condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. The unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s Transition Report Form 10-KT for the six month transition period ended June 30, 2023, and, in the opinion of management, reflect all adjustments, which consist of normal recurring adjustments, considered necessary for a fair presentation of the periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the full fiscal year ending June 30, 2024. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and accompanying notes, included in the Company’s Transition Report on Form 10-KT, filed with the SEC. The condensed consolidated balance sheet as of March 31, 2024, was derived from the audited financial statements as of that date, but does not include all disclosures, including notes, required by GAAP.
Use of estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include estimates for the valuation of inventory and accruals of potential liabilities.
Revenue recognition
The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) or agreement(s) with a customer, (2) identifying the Company’s performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied.
The Company generates revenue primarily from the sales of plastic recycle products directly to customers. The Company recognizes revenue at a point in time when the control of the products has been transferred to customers. The transfer of control is considered complete when products have been picked up by our customers or delivered to our customers. The Company recognizes revenues net of sales discount and relevant charges, and accounts for packaging, shipping and handling fees as a fulfilment cost.
| Three
months ended March 31, | Nine
months ended March 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Sale of plastic recycle products | $ | $ | $ | $ | ||||||||||||
| 8 |
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, demand deposits placed with banks or other financial institutions and have original maturities of less than three months. The Company’s primary bank deposits are located in Malaysia.
| March 31, 2024 | June 30, 2023 | |||||||
| Cash, cash equivalents, and restricted cash | ||||||||
| Denominated in United States Dollars | $ | $ | ||||||
| Denominated in Chinese Renminbi | ||||||||
| Denominated in Malaysian Ringgit | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
Accounts Receivable
Accounts receivables are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts, as needed. The Company uses the allowance method to account for uncollectible trade receivable balances. Under the allowance method, if needed, an estimate of uncollectible customer balances is made based upon specific account balances that are considered uncollectible. Factors used to establish an allowance include the credit quality and payment history of the customer. The Company did not deem it necessary to provide an allowance for doubtful accounts as of March 31, 2024 and June 30, 2023.
Inventories
Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (“FIFO”) basis. The Company records adjustments to its inventory based on an estimated forecast of the inventory demand, taking into consideration, among others, inventory turnover, inventory quantities on hand, unfilled customer order quantities, forecasted demand, current prices, competitive pricing, and trends and performance of similar products. If the estimated net realizable value is determined to be less than the recorded cost of the inventory, the difference is recognized as a loss in the period in which it occurs. Once inventory has been written down, it creates a new cost basis for inventory that may not be subsequently written up.
Property and equipment
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:
| Categories | Expected useful life | |
| Factory building | ||
| Factory equipment | ||
| Office equipment | ||
| Leasehold improvement | ||
| Motor vehicles |
| 9 |
Management assesses the carrying value of property and equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If there is indication of impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. For the three and nine months ended March 31, 2024 and 2023, the Company determined there were no indicators of impairment of its property and equipment.
Leases
The Company accounts for its leases in accordance with the guidance of ASC 842, Leases. The Company determines whether a contract is, or contains, a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid lease payments.
Income taxes
The Company accounts for income taxes using the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized before the Company is able to realize their benefits, or that future deductibility is uncertain.
Tax benefits from an uncertain tax position are recognized only if it more likely than not that the tax position will be sustained on examination by the taxing authorities based on technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has greater than 50 percent likelihood of being realized upon ultimate resolution. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Foreign currency translation
The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In addition, the Company’s operating subsidiary maintains its books and records in their respective local currency, which consists of the Malaysian Ringgit (“MYR”).
In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$ using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of a foreign subsidiary are recorded as a separate component of accumulated other comprehensive loss within equity.
Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:
| As
of March 31, 2024 | As
of June 30, 2023 | |||||||
| Spot USD: MYR exchange rate | $ | $ | ||||||
| Average USD: MYR exchange rate | $ | $ | ||||||
| 10 |
The MYR is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the MYR amounts could have been, or could be, converted into US Dollars at the rates used in translation.
The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed like basic net loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive. As of March 31, 2024, the Company had convertible notes payable that were convertible into shares of common stock. For the periods ended March 31, 2024 and 2023, the calculations of basic and diluted loss per share are the same because these potential dilutive securities would have had an anti-dilutive effect.
Fair value measurements
The Company follows the guidance of ASC 820-10, “Fair Value Measurements and Disclosures”, with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
Level 1 : Observable inputs such as quoted prices in active markets;
Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions
The Company believes the carrying amounts reported in the balance sheets for accrued expenses and due to related party, approximate their fair values because of the short-term nature of these financial instruments.
Segment Information
Under ASC 280, Segment Reporting, operating segments are defined as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and in assessing performance. The Company’s operation segment consists of one component, and the Company’s Chief Executive Officer, who is also the CODM, makes decisions and manages the Company’s operations as a single operating segment.
Recent accounting pronouncements
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. This new standard is effective for the Company in the fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and will be applied as a cumulative-effect adjustment to retained earnings. The Company adopted ASU 2016-03 as of July 1, 2023, with no impact on our condensed consolidated financial statements or the related disclosures.
Other recent accounting pronouncements and guidance issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.
2. PREPAYMENTS AND OTHER CURRENT ASSETS
Prepayments and other current assets consisted of the following as of March 31, 2024 and June 30, 2023:
| March 31, 2024 | June 30, 2023 | |||||||
| Prepaid expenses | $ | $ | ||||||
| Deposit on factory acquisition (No. 5 factory building, see Note 4) | ||||||||
| Rental and other deposits | ||||||||
| Prepaid rent | ||||||||
| $ | $ | |||||||
| 11 |
3. INVENTORIES
Inventories primarily consisted of the following PET (polyethylene terephthalate) materials at March 31, 2024 and June 30, 2023:
| March 31, 2024 | June 30, 2023 | |||||||
| PET flakes | $ | $ | ||||||
| PET pellets | ||||||||
| PET strap belt | ||||||||
| Other PET materials | ||||||||
| $ | $ | |||||||
The
Company’s inventory balances have been adjusted to net realizable value resulting in a write off of approximately $
4. PROPERTY AND EQUIPMENT, NET
Property and equipment consisted of the following at March 31, 2024 and June 30, 2023:
| March 31, 2024 | June 30, 2023 | |||||||
| Factory buildings | $ | $ | ||||||
| Factory equipment | ||||||||
| Office equipment | ||||||||
| Leasehold improvement | ||||||||
| Motor vehicle | ||||||||
| Total cost | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Net book value | $ | $ | ||||||
Depreciation
and amortization expense was $
At
March 31, 2024, the factory buildings related to costs of No. 3 factory building (purchased in March 2023) and No. 5 factory
building. In September, 2023, the Company signed an agreement with its landlord to acquire No. 5 factory building for approximately
$
5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accrued liabilities consisted of the following as of March 31, 2024 and June 30, 2023:
| March 31, 2024 | June 30, 2023 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Other payables | ||||||||
| $ | $ | |||||||
The balance of accrued liabilities include accrued payroll and accrued utilities.
| 12 |
The balance of other payables includes a balance payable to the seller of factory building No. 5.
6. CONVERTIBLE NOTE PAYABLE
Convertible note consisted of the following as of March 31, 2024 and June 30, 2023:
| March 31, 2024 | June 30, 2023 | |||||||
| Convertible note | $ | $ | ||||||
On
January 9, 2023, the Company issued a convertible note payable to a third party for $
7. NOTES PAYABLE, SECURED
In
October 2022, the Company obtained a credit facility with OCBC Bank in Malaysia to provide a loan in the principal amount of
MYR
In June 2023, the credit agreement
with OCBC Bank was amended to provide a second loan to the Company in the principal amount of MYR
The
total interest expenses were $
Future Minimum principal payments under the bank loans payable, secured are as follow:
| 2024 | $ | |||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 onward | ||||
| Total | ||||
| Current portion | ( | ) | ||
| Long term | $ |
8. NOTES PAYABLE, UNSECURED
In January and February 2024, the Company issued
two notes payable to investors for aggregate proceeds of $
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9. RELATED PARTY TRANSACTIONS
As of March 31, 2024 and June 30, 2023, the amount due from (due to) related parties consisted of:
March 31, 2024 | June 30, 2023 | |||||||
| Due from Invent Fortune Sdn. Bhd. (4) | $ | $ | ||||||
| Payable to Luo Xiong and Wo Kuk Ching (1) | ( | ) | ( | ) | ||||
| Payable to Empower International Trading (2) | ( | ) | ( | ) | ||||
| Payable to TLC Global International Trading (3) | ( | ) | ( | ) | ||||
| Total due to related parties, net | $ | ( | ) | $ | ( | ) | ||
The amounts due from and payable to related parties are unsecured, non-interest bearing, and payable on demand. The Company has the right to offset amounts with related parties controlled by the same common control group.
| (1) | ||
| (2) | ||
| (3) | ||
| (4) |
10. LEASES
During
the nine months ended March 31, 2024, the Company entered into two finance leases for motor vehicles. The aggregate monthly lease
payments are $
As of March 31, 2024 | As of June 30, 2023 | |||||||
| Right-of-use assets-operating lease | $ | $ | ||||||
| Right-of-use assets-finance leases | ||||||||
| Total right-of-use assets | $ | $ | ||||||
| Operating lease liabilities – current | $ | $ | ||||||
| Operating lease liabilities – non-current | ||||||||
| Finance lease liabilities – current | ||||||||
| Finance lease liabilities – non-current | ||||||||
| Total lease liabilities | $ | $ | ||||||
The components of lease expense and supplemental cash flow information related to leases for the nine months ended March 31, 2024 and 2023 are as follows:
| Other information for the nine months ended | March 31, 2024 | March 31, 2023 | ||||||
| Cash paid for amounts included in the measurement of lease obligations | ||||||||
| Cash payments for operating lease | $ | $ | ||||||
| Cash payments for finance lease | ||||||||
| Weighted average remaining lease term (in years) | ||||||||
| Operating leases | - | |||||||
| Finance leases | ||||||||
| Weighted average discount rate | ||||||||
| Operating leases | % | % | ||||||
| Finance leases | % | |||||||
The undiscounted future minimum payments under the Company’s operating and finance lease liabilities and reconciliation to the operating and finance lease liabilities recognized on the consolidated balance sheet as of March 31, 2024 are as follows:
| Operating lease | Finance lease | |||||||
| Year ending | ||||||||
| 2024 | $ | $ | ||||||
| 2025 | ||||||||
| 2026 | ||||||||
| Thereafter | ||||||||
| Total lease payment | ||||||||
| Less: Imputed interest | ( | ) | ||||||
| Total lease obligations | $ | |||||||
| Current | ( | ) | ||||||
| Long term | $ | $ | ||||||
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following information should be read in conjunction with (i) the financial statements of Sino Green Land Corporation, a Nevada corporation, and the notes thereto appearing elsewhere in this Form 10-Q together with (ii) the more detailed business information and the June 30, 2023 audited financial statements and related notes included in the Company’s most recent Annual Report on Form 10-KT for the nine months ended June 30, 2023 filed with the SEC on September 28, 2023. Statements in this section and elsewhere in this Form 10-Q that are not statements of historical or current fact constitute “forward-looking” statements.
Overview
Sino Green Land Corporation (the “Company” or “we” or “our”) was incorporated under the laws of the State of Nevada on March 6, 2008, under the name of Henry County Plywood Corporation, as successor by merger to a Virginia corporation incorporated in May 1948 under the same name. On March 17, 2009, we changed our name from “Henry County Plywood Corporation” to “Sino Green Land Corporation”. On January 7, 2020, we renamed from “Sino Green Land Corporation” to “Go Silver Toprich, Inc.”. On August 31, 2020, we changed the name from “Go Silver Toprich, Inc.” back to “Sino Green Land Corporation”.
Results of Operations
Revenues and Cost of Revenues
Net revenues were $488,820 for the three months ended March 31, 2024, reflecting an increase of $423,638, or 649.93%, from $65,182 for the three months ended March 31, 2023..The increase in net revenues was mainly due to an increase in sales of plastic recycle products from the third parties.
Net revenues were $1,394,346 for the nine months ended March 31, 2024, reflecting an increase of $946,731, or 211.51%, from $447,615 for the nine months ended March 31, 2023. The increase in net revenues was mainly due to an increase in sales of plastic recycle products from the third parties.
Cost of revenues was $619,229 for the three months ended March 31, 2024, reflecting an increase of $568,771, or 1,127.22%, from $50,458 for the three months ended March 31, 2023. The increase in cost of revenue was due to the unit cost is higher in line with our revenue increase.
Cost of revenues was $1,839,634 for the nine months ended March 31, 2024, reflecting an increase of $1,404,228, or 322.51%, from $435,406 for the nine months ended March 31, 2023. The increase in cost of revenue was due to the unit cost is higher in line with our revenue increase.
Gross Loss
Gross loss was $130,409 for the three months ended March 31, 2024 and gross profit was $14,724, for the three months ended March 31, 2023, reflecting a decrease of $145,133 or 985.69%. The decrease in gross loss was mainly due to the increase in the net revenues.
Gross loss was $445,288 for the nine months ended March 31, 2024 and gross profit was $12,209 for the nine months ended March 31, 2023, reflecting an decrease of $457,497, or 3,747.21%. primarily due to the unit cost is higher.
General and Administrative Expenses
General and administrative expenses were $132,377 for the three months ended March 31, 2024, reflecting an decrease of $112,789, or 46.01%, from $245,166 for the three months ended March 31, 2023. The general and administrative expenses was relatively flat when compared to the prior year period
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General and administrative expenses were $447,444 for the nine months ended March 31, 2024, reflecting an decrease of $48,315, or 9.75%, from $495,759 for the nine months ended March 31, 2023. The general and administrative expenses was relatively flat when compared to the prior year period
Net Loss
Net loss totaled $285,101 for the three months ended March 31, 2024, an decrease of $48,468 of 20.48%, as compared to the net loss of $236,633 for the three months ended March 31, 2023. The increase was primarily due to the increase of cost of revenue and operating expense.
Net loss totaled $943,686 for the nine months ended March 31, 2024, an decrease of $454,179, of 92.78%, as compared to the net loss of $489,507 for the nine months ended March 31, 2023. The decrease was primarily due to the increase of cost of revenue and operating expense.
Liquidity and Capital Resources
Going concern.
For the six months ended March 31, 2024, Sino Green Land Corporation incurred a net loss of $943,686 and used cash in operating activities of $557,193. These factors raise substantial doubt about the Sino Green Land Corporation’s ability to continue as a going concern within one year after the date the financial statements are issued. In addition, Sino Green Land Corporation’s independent registered public accounting firm, in their report on Sino Green Land Corporation’s June 30, 2023, audited financial statements, raised substantial doubt about the Sino Green Land Corporation’s ability to continue as a going concern. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
Working Capital
| March 31, 2024 | June 30, 2023 | Change | ||||||||||
| Total current assets | $ | 434,183 | $ | 480,602 | $ | (46,419 | ) | |||||
| Total current liabilities | (3,094,127 | ) | (1,743,848 | ) | (1,350,279 | ) | ||||||
| Working capital deficit | $ | (2,659,944 | ) | $ | (2,180,342 | ) | $ | (1,396,698 | ) | |||
As of March 31, 2024, We had total current assets of $434,183 consisting of cash on hand of $94,310, accounts receivables of $75,020, inventory of $173,866, and prepaid expenses and other current assets of $90,987, compared to total current assets of $480,602 as of June 30, 2023. The decrease was mainly due to the decrease in cash, inventory and prepaid expenses. We had current liabilities of $3,094,127 consisting of accounts payable and accrued expenses of $265,041, customer advances of $34,339, convertible note payable of $750,000, current portion of notes payable-secured of $66,259, advances due to related parties of $1,959,952 and financing lease obligation of $18,536, compared to total current liabilities of $1,743,848 as of June 30, 2023.
The Company’s net loss was $285,101 and $236,633 for the three months ended March 31, 2024 and 2023, respectively.
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Cash Flows
Nine months Ended March 31, | ||||||||||||
| 2024 | 2023 | Change | ||||||||||
| Cash flows provided by (used in) operating activities | $ | (558,016 | ) | $ | (644,641 | ) | $ | 86,625 | ||||
| Cash flows provided by (used in) investing activities | (902,921 | ) | (596,173 | ) | (306,748 | ) | ||||||
| Cash flows provided by (used in) financing activities | 1,390,861 | 1,577,124 | (186,263 | ) | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | 39,252 | 18,377 | 20,875 | |||||||||
| Net changes in cash and cash equivalents | $ | (30,824 | ) | $ | 354,687 | $ | (385,511 | ) | ||||
Cash Flow from Operating Activities
Cash flow used in operating activities for the nine months ended March 31, 2024 was $558,016 as compared to the amount of $644,641 used in operating activities for the nine months ended March 31, 2023, reflecting a decrement of $86,625. The decrease in net cash provided by operating activities was mainly due to the fact that the increase from the accrued assets and other payables and prepayment impact on cash flows.
Cash Flow from Investing Activities
Cash flow used in investing activities was $902,921 and $596,173 for the nine months ended March 31, 2024 and 2023, respectively. The increase in net cash flow used in investing activities was mainly due to the acquisition of PPE.
Cash Flow from Financing Activities
Cash flow provided by financing activities was $1,390,861 for the nine months ended March 31, 2024 and $1,577,124 for the nine months ended March 31, 2023, respectively. The decrease in net cash provided by financing activities was mainly due to the decrease in loan proceeds.
Critical Accounting Policies and Estimates
Use of Estimates
In preparing these financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets, and expenses during the periods reported. Actual results may differ from these estimates.
Off-Balance Sheet Arrangements
As of March 31, 2024, we have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 3.
ITEM 4. CONTROLS AND PROCEDURES.
DISCLOSURE CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures:
We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2024. This evaluation was carried out by Wo Kuk Ching (“Ms. Wo”), our Chief Executive Officer and Wong Ching Wing (“Elise”), our Chief Financial Officer, who also serve as our principal executive officer and principal financial and accounting officer, respectively. Based upon that evaluation, Ms. Wo and Elise concluded that, as of March 31, 2024, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.
The material weaknesses identified include (i) the Company did not maintain a functioning independent audit committee and did not maintain an independent board; (ii) the Company had inadequate segregation of duties; and (iii) the Company had an insufficient number of personnel with an appropriate level of U.S. GAAP knowledge and experience and ongoing training in the application of U.S. GAAP and SEC disclosure requirements commensurate with the Company’s financial reporting requirements.
Changes in Internal Control over Financial Reporting:
There were no changes in our internal control over financial reporting during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
We are not currently involved in any legal proceedings, and we are not aware of any pending or potential legal actions.
Item 1A. Risk Factors.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information.
None
ITEM 6. Exhibits
| Exhibit No. | Description | |
| 31.1 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer* | |
| 31.2 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal financial and accounting officer* | |
| 32.1 | Section 1350 Certification of principal executive officer * | |
| 32.2 | Section 1350 Certification of principal financial and accounting officer * | |
| 101.INS | Inline XBRL Instance Document* | |
| 101.SCH | Inline XBRL Schema Document* | |
| 101.CAL | Inline XBRL Calculation Linkbase Document* | |
| 101.DEF | Inline XBRL Definition Linkbase Document* | |
| 101.LAB | Inline XBRL Label Linkbase Document* | |
| 101.PRE | Inline XBRL Presentation Linkbase Document* | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
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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.
| SINO GREEN LAND CORPORATION | ||
| (Name of Registrant) | ||
| Date: May 20, 2024 | ||
| By: | /s/ Teresa Wo Kuk Ching | |
| Title: | Chief Executive Officer | |
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