UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Quarterly Period Ended December 31, 2002
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _________ to _________
Commission File Number: 0-25963
AGROCAN CORPORATION
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware N/A
------------------------------ ---------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Suite 706, Dominion Centre, 43-59 Queen's Road East, Hong Kong
------------------------------------------------------
(Address of principal executive offices)
011-852-2519-3933
--------------------------
(Issuer's telephone number)
Not applicable
---------------------------------------------------
(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 Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [_]
As of December 31, 2002, the Company had 3,673,304 shares of common stock issued
and outstanding.
Transitional Small Business Disclosure Format: Yes [_] No [X]
Documents incorporated by reference: None.
AGROCAN CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets (Unaudited) - December 31, 2002 and
September 30, 2002
Consolidated Statements of Operations
(Unaudited) - Three Months Ended December 31, 2002 and 2001
Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended
December 31, 2002 and 2001
Notes to Consolidated Financial Statements (Unaudited) - Three Months
Ended December 31, 2002 and 2001
Item 2. Management's Discussion and Analysis or Plan of Operation
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AGROCAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
DECEMBER 31 AND SEPTEMBER 30, 2002
(UNITED STATES DOLLARS)
DEC 31, 2002 SEP 30, 2002
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 78,514 $ 128,615
Accounts receivable, less allowance for
doubtful accounts of $178,617 for each
period 878,149 934,600
Other receivables and prepayments 132,973 132,399
Interest receivable 5,265 -
Inventories 338,183 284,886
Amount due from related parties, net 422,415 422,415
------------------ ------------------
TOTAL CURRENT ASSETS 1,855,499 1,902,915
ADVANCES RECEIVABLE, NET 168,145 168,145
PROPERTY, PLANT AND EQUIPMENT - NET 663,191 673,209
------------------ ------------------
TOTAL ASSETS $ 2,686,835 $ 2,744,269
================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term loans-unsecured $ 296,411 $ 296,411
Short-term bank loan 120,482 120,482
Accounts payable 72,527 82,624
Other payables and accruals 125,325 139,903
Deposits received 309,818 296,375
Amount due to related parties 305,120 341,196
Income tax payable 80,589 72,263
------------------ ------------------
TOTAL LIABILITIES, ALL CURRENT 1,310,272 1,349,254
------------------ ------------------
MINORITY INTEREST 70,393 74,644
------------------ ------------------
SHAREHOLDERS' EQUITY
Preferred stock, par value US$0.0001
per share, authorized 10,000,000 shares;
none issued
Common stock, par value US$0.0001
per share, authorized 25,000,000 shares;
issued and outstanding 3,673,304 shares
at December 31 and September 30, 2002 367 367
Capital in excess of par value 1,885,251 1,885,251
Retained earnings
Unappropriated (701,006) (686,805)
Appropriated 120,457 120,457
Other comprehensive income 1,101 1,101
------------------ ------------------
TOTAL SHAREHOLDERS' EQUITY 1,306,170 1,320,371
------------------ ------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,686,835 $ 2,744,269
================== ==================
See notes to consolidated financial statements
3
AGROCAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
(UNITED STATES DOLLARS)
2002 2001
NET SALES $ 269,195 $ 127,907
COST OF SALES 184,575 93,562
----------- -----------
GROSS PROFIT 84,620 34,345
ADMINISTRATIVE AND GENERAL EXPENSES 64,638 44,661
SELLING EXPENSES 32,139 7,890
----------- -----------
LOSS FROM OPERATIONS (12,157) (18,206)
OTHER INCOME (EXPENSE)
Interest income 5,418 494
Interest expense (1,814) (3,192)
----------- -----------
LOSS BEFORE INCOME TAXES (8,553) (20,904)
INCOME TAXES 9,899 (584)
----------- -----------
LOSS BEFORE MINORITY INTEREST (18,452) (20,320)
MINORITY INTEREST 4,251 836
----------- -----------
NET LOSS $ (14,201) $ (19,484)
=========== ===========
WEIGHT AVERAGE SHARES OUTSTANDING
Basic and diluted 3,673,304 2,684,970
BASIC AND DILUTED LOSS PER SHARES $ (0.00) $ (0.01)
=========== ===========
See notes to consolidated financial statements
4
AGROCAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
(UNITED STATES DOLLARS)
2002 2001
OPERATING ACTIVITIES
Net loss $(14,201) $(19,484)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 17,181 17,325
Minority interest in net loss (4,251) (836)
Decrease in accounts receivable 56,451 47,592
Decrease (increase) in other receivables, deposit
and prepayments (574) 11,218
Increase in interest receivable (5,265) -
Increase in inventories (53,297) (95,567)
Decrease in amounts due from related parties - 15,670
(Decrease) increase in accounts payable (10,097) 45,380
(Decrease) increase in tax payable 8,326 (19,369)
Decrease in other payables and accruals (14,578) (51,908)
Increase in deposits received 13,443 108,919
(Decrease) increase in amounts due to related parties (36,076) 24,598
--------- ---------
Net cash provided by (used in) operating activities (42,938) 83,538
--------- ---------
INVESTING ACTIVITIES
Additions to property, plant and equipment (7,163) (35,768)
--------- ---------
Net cash used in investing activites (7,163) (35,768)
--------- ---------
FINANCING ACTIVITIES
Repayment of short term loan - unsecured - (19,880)
Repayment of short term bank loan - (36,144)
--------- ---------
Net cash used in financing activities - (56,024)
--------- ---------
Net decrease in cash and cash equivalents (50,101) (8,254)
Cash and cash equivalents at beginning of year 128,615 71,309
--------- ---------
Cash and cash equivalents at end of year $ 78,514 $ 63,055
========= =========
Cash paid during the three months for income taxes $ 1,573 $ 18,785
Cash paid during the three months for interest $ 148 $ -
See notes to consolidated financial statements
5
AGROCAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
(UNAUDITED)
(EXPRESSED IN UNITED STATES DOLLARS)
1. THE INTERIM FINANCIAL STATEMENTS
The interim financial statements have been prepared by AgroCan Corporation
and in the opinion of management, reflect all material adjustments which
are necessary to a fair statement of results for the interim periods
presented, including normal recurring adjustments. Certain information and
footnote disclosures made in the most recent annual financial statements
included in our Form 10-KSB for the year ended September 30, 2002, have
been condensed or omitted for the interim statements. It is our opinion
that, when the interim statements are read in conjunction with the
September 30, 2002 financial statements, the disclosures are adequate to
make the information presented not misleading. The results of operations
for the three months ended December 31, 2002 and 2001 are not necessarily
indicative of the operating results for the full fiscal year, as the
Company's business fluctuates in accordance with planting seasons resulting
in increased revenues in the second and third quarters.
The preparation of financial statements in conformity with generally
accepted accounting principles 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 amount of revenues and expenses during the
reporting periods. Management makes these estimates using the best
information available at the time the estimates are made; however, actual
results could differ materially from those results.
The Company reported a 110% increase in sales during the three months ended
December 31, 2002 compared to the three months ended December 31, 2001. The
Company believes that it has adequate funds to support operations for the
current fiscal year ending September 30, 2003.
To address its on-going and long-term cash needs, the Company plans to
initiate discussions with investment banks and financial institutions and
attempt to raise funds to support current and future operations. This
includes attempting to raise additional working capital through the sale of
additional capital stock or through additional bank or third party
borrowings. The Company cannot provide any assurance that it will be able
to raise any such funds.
2. INVENTORIES
Inventories at December 31, 2002 and September 30, 2002 are comprised of
the following:
6
DECEMBER 31, 2002 SEPTEMBER 30, 2002
USD USD
RAW MATERIALS $ 182,861 $ 110,030
FINISHED GOODS 155,322 $ 174,856
----------------- --------------------
$ 338,183 $ 284,886
================= ===================
3. SHORT-TERM LOANS
Short-term loans-unsecured represent amounts borrowed from third parties.
Loans in the amount of $296,411 are unsecured, non-interest bearing and
payable on demand.
As of December 31, 2002, the Company has a bank loan of $120,482. The bank
loan bears interest at 6.04% per annum and is due April 4, 2003. The loan
is guaranteed by a customer of the Company.
4. INCOME TAXES
During the three months ended December 31, 2002, the company recorded an
income tax of $9,899. The company is subject to income taxes on an entity
basis on income arising in or derived from the tax jurisdiction in which
each entity is domiciled. Our British Virgin Islands subsidiary is not
liable for income taxes. Our PRC subsidiaries comprise two wholly owned
foreign enterprises and a 70% held Sino-Foreign Equity Joint Venture. PRC
Companies are generally subject to income taxes at an effective rate of 33%
(30% Chinese national income tax plus 3% Chinese state income tax). Two of
our PRC subsidiaries, Fenglin and Linmao, are manufacturing companies
operating in special zones, and they are entitled to a reduced national
income taxes rate of 24%. All the subsidiaries are exempt from state income
tax. Further, pursuant to the approval of the relevant PRC tax authorities,
all the subsidiaries have been granted a "tax holidays", whereby the
subsidiaries are fully exempted from PRC income taxes for two years
starting from the year profits are first made, followed by a 50% exemption
for the next three years. In 1999, the two-year, 100% exemption expired for
Fenglin and Linmao, subjecting them to income tax at a rate of 12%.
Effective January 1, 2001, the two-year, 100% exemption expired for Jiali
and it became subject to income tax at a rate of 15%. Losses incurred by
PRC companies may be carried forward for five years. Deferred tax assets
and liabilities are not considered material at December 31, 2002 and 2001.
5. EARNINGS PER SHARE
Basic earnings per share is based on the weighted average shares of common
stock outstanding. Diluted earnings per share assumes the conversion,
exercise or issuance of all potential common stock instruments such as
options, warrants and convertible securities, unless the effect is to
reduce loss per share or increase earnings per share.
6. SUBSEQUENT EVENT
On January 3, 2003, pursuant to the Fiscal 2001 Equity Compensation Plan,
the Board of Directors approved the issuance of 545,454 shares with an
aggregate value of $60,000 for the payment of directors' fees.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Cautionary Statement Pursuant to Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995:
This Quarterly Report on Form 10-QSB for the quarterly period ended December 31,
2002 contains "forward-looking" statements within the meaning of the Federal
securities laws. These forward-looking statements include, among others,
statements concerning our expectations regarding sales trends, gross and net
operating margin trends, political and economic matters, the availability of
equity capital to fund our capital requirements, and other statements of
expectations, beliefs, future plans and strategies, anticipated events or
trends, and similar expressions concerning matters that are not historical
facts. The forward-looking statements in this Quarterly Report on Form 10-QSB
for the quarterly period ended December 31, 2002 are subject to risks and
uncertainties that could cause actual results to differ materially from those
results expressed in or implied by the statements contained herein.
Overview:
AgroCan Corporation was incorporated on December 8, 1997 in the State of
Delaware. Effective December 31, 1997, we issued 1,598,646 shares of common
stock, which represented all of the capital stock outstanding at the completion
of this transaction, to the shareholders of AgroCan (China) Inc., a corporation
incorporated in the British Virgin Islands, in exchange for all of the capital
stock of AgroCan (China) Inc.
Prior to the above transaction, we had no material operations. The AgroCan China
transaction was accounted for as a recapitalization of AgroCan (China) Inc., as
the shareholders of AgroCan (China) Inc. acquired all of the capital stock of
the company in a reverse acquisition. Accordingly, the assets and liabilities of
AgroCan (China) Inc. were recorded at historical cost, and the shares of common
stock issued by the company were reflected in the consolidated financial
statements giving retroactive effect as if we had been the parent company from
inception.
We, through AgroCan (China) Inc., currently own 100% interest in two
wholly-owned subsidiaries, Guangxi Linmao Fertilizer Company Limited ("Guangxi
Linmao") and Jiangxi Jiali Chemical Industry Company Limited ("Jiangxi Jiali").
We, through AgroCan (China) Inc., also own a 70% interest in Jiangxi Fenglin
Chemical Industry Company Limited, a Sino-Foreign Equity Joint Venture ("Jiangxi
Fenglin"). All of the aforementioned entities are located in the People's
Republic of China ("China" or the "PRC").
We account for our interest in Jiangxi Fenglin similar to a majority-owned
subsidiary because of our 70% interest, our contractual ability to appoint four
out of six directors to the Board of Directors, which is the highest authority
for the joint venture, and our right to appoint the Chairman of the Board. Due
to the rights asserted by the PRC partner under customary joint venture
8
agreements, joint venture interests in the PRC are generally not consolidated in
the financial statements of companies that report under the periodic reporting
requirements of the United States Securities and Exchange Commission. However,
as a result of the aforementioned factors specific to Jiangxi Fenglin,
management believes that it is appropriate to consolidate the joint venture's
operations into our consolidated financial statements.
We produce various compound fertilizers. These ingredients used are blended in
different proportions and packed into 50 kilogram bags. As of December 31, 2002,
we have established an annual production capacity of 125,000 metric tons for
compound fertilizers in Guangxi and Jiangxi, two of the largest agricultural
provinces in China, and we intend to enter markets in other provinces in China.
The consolidated financial statements of the Company include the accounts of the
Company and its wholly-owned and majority-owned subsidiaries. All material
intercompany balances and transactions are eliminated at consolidation. The
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles in the United States and have been
presented in U.S. Dollars ("$"). The functional currency of the Company's PRC
operations is the Chinese Renminbi ("RMB"). The accounts of foreign operations
are prepared in their local currency and are translated into RMB using the
applicable rate of exchange. The resulting translation adjustments are included
in comprehensive income (loss). Transactions denominated in currencies other
than the U.S. Dollars are translated into USD using the applicable exchange
rates. Monetary assets and liabilities denominated in other currencies are
translated into U.S. Dollars at the applicable rate of exchange at the balance
sheet date. The resulting exchange gains or losses are credited or charged to
the consolidated statements of operations.
Consolidated Results of Operations:
Three Months Ended December 31, 2002 and 2001:
Sales. The sales for the three months ended December 31, 2002 were $269,195
as compared to sales of $127,907 for the three months ended December 31, 2001,
an increase of $141,288 or 110%. The increase was due to higher demands from our
major customers.
Gross Profit. Gross profit for the three months ended December 31, 2002 was
$84,620 or 31.4% of revenues, as compared to $34,345 or 26.9% of revenues for
the three months ended December 31, 2001. The gross profit margin increased in
2002 as compared to 2001 as a result of higher sales prices to increasing demand
from our customers.
Administrative and General Expenses. Administrative and general expenses for
the three months ended December 31, 2002 were $64,638 or 24% of revenues, as
compared to $44,661 or 34.9% of revenues for the three months ended December 31,
2001, an increase of $19,977. The increase of administrative and general
expenses is mainly due to higher wages and travel expenses.
9
Selling Expenses. Selling expenses for the three months ended December 31,
2002 were $32,139 or 11.94% of revenues, as compared to $7,890 or 6.2% of
revenues for the three months ended December 31, 2001, an increase of $24,249.
Selling expenses increased in 2002 compared to 2001 as a result of increasing
sales due to the higher demand from major customers.
Loss from Operations. Loss from operations was $12,157 for the three months
ended December 31, 2002, as compared to a loss from operations of $18,206 for
the three months ended December 31, 2001.
Other Income (Expense). We recorded interest income of $5,418 and $494 for
the three months ended December 31, 2002 and 2001, respectively.
We recorded interest expense of $1,814 and $3,192 for the three months ended
December 31, 2002 and 2001, respectively. As of December 31, 2002, we had a bank
loan of $120,482 which bears interest at 6.04% per annum and is due at April 4,
2003.
Income Taxes. During the three months ended December 31, 2002, we
recorded income tax of $9,899. We recognized income tax refund of $584 for the
three months ended December 31, 2001.
Minority Interest. For the three months ended December 31, 2002 and 2001, we
recorded a minority interest of $4,251 and $836 respectively, to reflect the
interest of the Company's 30% joint venture partner in the net income of Jiangxi
Fenglin.
Net Loss. Net loss was $14,201 for the three months ended December 31, 2002,
as compared to a net loss of $19,484 for the three months ended December 31,
2001. The reason for recording less net loss for the three months ended December
31, 2002 than the three months ended December 31, 2001 was primarily the result
of the increasing sales and profit margin.
Consolidated Financial Condition:
Liquidity and Capital Resources - December 31, 2002
We reported a 110% increase in sales during the three months ended December 31,
2002 compared to the three months ended December 31, 2001. The Company believes
that it has adequate funds to support operations for the current fiscal year
ending September 30, 2003.
To address its on-going and long-term cash needs, we plan to initiate
discussions with investment banks and financial institutions and attempt to
raise funds to support current and future operations. This includes attempting
to raise additional working capital through the sale of additional capital stock
or through additional bank or third party borrowings. We cannot provide any
assurance that it will be able to raise any such funds.
10
Operating. For the three months ended December 31, 2002, our operations
utilized cash resources of $42,938 as compared to generating $83,538 for the
three months ended December 31, 2001. Our operations utilized more cash
resources in 2002 as compared to 2001 primarily as a result of the settlement of
accounts payable and other payables, and purchasing more raw materials for the
upcoming planting season. At December 31, 2002, cash and cash equivalents
decreased by $50,101 to $78,514, as compared to $128,615 at September 30, 2002.
We had working capital of $545,227, at December 31, 2002, as compared to
$553,661 at September 30, 2002, resulting in current ratios of 1.42:1 and 1.41:1
at December 31, 2002 and September 30, 2002, respectively.
Accounts receivable. Accounts receivable decreased by $56,451, to
$878,149 at December 31, 2002, from $934,600 at September 30, 2002. Accounts
receivable decreased during the three months ended December 31, 2002 as a result
of settlement of part of the accounts receivable.
Inventories. Inventories increased by $53,297, to $338,183 at December
31, 2002, from $284,886 at September 30, 2002 in anticipation of the current
selling season during the spring and summer.
Amount due from related parties. Amount due from related parties remained
unchanged between December 31, 2002 and September 30, 2002 as a result of no
money movement to related companies.
Investing. During the three months ended December 31, 2002 and 2001,
additions to property, plant and equipment aggregated $7,163 and $35,768,
respectively.
Financing. During the there months ended December 31, 2002, we did not
record any financing activities. During the three months ended December 31,
2001, one of our subsidiaries repaid $36,144 of the short-term bank loans and
repaid $19,880 of the unsecured short-term loan.
Inflation and Currency Matters:
In recent years, the Chinese economy has experienced periods of rapid economic
growth as well as relatively high rates of inflation, which in turn has resulted
in the periodic adoption by the Chinese government of various corrective
measures designed to regulate growth and contain inflation. Since 1993, the
Chinese government has implemented an economic program designed to control
inflation, which has resulted in the tightening of working capital available to
Chinese business enterprises. Our success depends in substantial part on the
continued growth and development of the Chinese economy. During the fiscal
quarters ended December 31, 2002 and 2001, inflation and changing prices have
11
had a minor impact on our operations and financial position. The actual rate of
inflation in the agricultural sector has been nominal, and the price level of
fertilizer products has been stable.
Foreign operations are subject to certain risks inherent in conducting business
abroad, including price and currency exchange controls, and fluctuations in the
relative value of currencies. Changes in the relative value of currencies occur
periodically and may, in certain instances, materially affect the Company's
results of operations. In addition, the Renminbi is not freely convertible into
foreign currencies, and the ability to convert the Renminbi is subject to the
availability of foreign currencies. Effective December 1, 1998, all foreign
exchange transactions involving the Renminbi must take place through authorized
banks in China at the prevailing exchange rates quoted by the People's Bank of
China. The Company expects that a portion of its revenues will need to be
converted into other currencies to meet foreign exchange currency obligations,
including the payment of any dividends declared.
Although the central government of China has repeatedly indicated that it does
not intend to devalue its currency in the near future, recent announcements by
the central government of China indicate that devaluation is an increasing
possibility. Should the central government of China decide to devalue the
Renminbi, we do not believe that such an action would have a detrimental effect
on our operations, since we conduct virtually all of its business in China, and
the sale of our products is settled in Renminbi. However, devaluation of the
Renminbi against the United States dollar would adversely affect our financial
performance when measured in United States dollars.
New Accounting Pronouncements:
In July 2001, the FASB issued Statement No.142 "Goodwill and Other Intangible
Assets". Statement No.142 requires the use of a nonamortization approach to
account for purchased goodwill and indefinite lived intangibles. Under a
nonamortization approach, goodwill and indefinite lived intangibles will not be
amortized into results of operations, but instead would be reviewed for
impairment and written down and charged to results of operations only in the
periods in which the recorded value of goodwill and indefinite lived intangibles
is more than its fair value. The provisions of Statement No.142 will be
effective for us in fiscal 2003. We do not expect this standard, when
implemented, to have a material effect on its future results of operations or
financial position.
In August 2001, the FASB issued SFAS No.144, "Accounting for Impairment or
Disposal of Long-Lived Assets". This statement supersedes Statement No.121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposal of", and the accounting and reporting provisions of APB Opinion 30,
"Reporting the Results of Operation - Reporting the Effects of Disposal of a
Segment of a Business, and the disposal of a segment of a business. This
statement is effective for us in fiscal 2003. We do not expect the adoption of
Statement No.144 to have a material impact on our future results of operations
or financial position.
12
In April 2002, the FASB issued Statement No.145 "Rescission of FASB Statements
No.4, 44 and 64. Amendment of FASB Statement No.13, and Technical Corrections".
The Statement addresses the accounting for extinguishment of debt,
sale-leaseback transactions and certain lease modifications. The statement is
effective for us in fiscal 2003. We do not expect the adoption of Statement
No.145 to have a material impact on our future results of operations or
financial position.
In July 2002, the FASB issued Statement No.146, "Accounting for Cost Associated
with Exit or Disposal Activities". The statement addresses financial accounting
and reporting for costs associated with exit or disposal activities and
supercedes Emerging Issues Task Force Issue No.94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(Including Certain Costs Incurred in a Restructing)." The provisions of
Statement No.146 are effective for exit or disposal activities that are
initiated after December 31, 2002. We do not expect the adoption of Statement
No.146 to have a material impact on our future results of operations or
financial position.
13
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
During the three months ended December 31, 2002, we did not issued any shares of
common stock.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
99.1 Certification by Chief Executive Officer
99.2 Certification by Chief Financial Officer
(b) Reports on Form 8-K:
Three Months Ended December 31, 2002 - None
14
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AGROCAN CORPORATION
-------------------
(Registrant)
Date: February 14, 2002 By: /s/ LAWRENCE HON
----------------------------------
Lawrence Hon
President and Chief
Executive Officer
(Duly Authorized
Officer)
Date: February 14, 2002 By: /s/ CARL YUEN
----------------------------------
Carl Yuen
Chief Financial Officer
(Principal Financial
and Accounting Officer)
15
CERTIFICATIONS
I, Lawrence Hon, Chief Executive Officer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Agrocan Corporation
a Delaware Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: February 14, 2003
/s/ Lawrence Hon, Chief Executive Officer
-----------------------------------------
Principal Executive Officer
I, Carl Yuen, Chief Financial Officer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Agrocan Corporation
a Delaware Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: February 14, 2003
/s/ Carl Yuen, Chief Financial Officer
--------------------------------------
Principal Financial Officer