UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 

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

For the quarterly period ended March 31, 2011

AMERICAN JIANYE GREENTECH HOLDINGS, LTD.
(Exact name of registrant as specified in Charter)
 
Nevada
 
333-144228
 
20-5548974
(State or other jurisdiction of
incorporation or organization)
 
(Commission File No.)
 
(IRS Employee Identification No.)

136-20 38th Ave. Unit 3G
 Flushing, NY 11354
(Address of Principal Executive Offices)
 


718-395-8706
(Issuer Telephone number)
 


Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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. Yes x  No  o

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 (§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   o   No Q
 
Indicate by check mark whether the registrant is a larger accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one)
 
Large accelerated filer ¨
Accelerated filer ¨
Non-accelerated filer ¨
Smaller reporting company Q

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

State the number of shares outstanding of each of the issuer’s classes of common equity, as of  May 23, 2011: 33,710,148 shares of common stock.
 
 



 
 

 

AMERICAN JIANYE GREENTECH HOLDINGS, LTD.
FORM 10-Q
September 30, 2010
INDEX

PART I-- FINANCIAL INFORMATION
 
Item 1.
Financial Statements
    F-1  
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
    2  
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
    6  
Item 4.
Control and Procedures
    6  

PART II-- OTHER INFORMATION
 
 Item 1
Legal Proceedings
    7  
 Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
    7  
 Item 3.
Defaults Upon Senior Securities
    7  
 Item 4.
(Removed and Reserved)
    7  
 Item 5.
Other Information
    7  
 Item 6.
Exhibits
    7  
           
SIGNATURE
      8  
 
 
 

 
 
ITEM 1. Financial Information

AMERICAN JIANYE GREENTECH HOLDINGS, LTD.

 
FINANCIAL STATEMENTS
 
Page #
 
       
Condensed Consolidated Balance Sheets as of March 31, 2011 (Unaudited) and December 31, 2010
    F-1  
         
Condensed Consolidated Statements of Operations for the three months ended March 31, 2011 and 2010 (Unaudited)
    F-2  
         
Consolidated Statements of Stockholders' Equity as of for the three months ended March 31, 2011 (Unaudited)
    F-3  
         
Condensed Consolidated Statement of Cash Flows for the three months ended March 31 2011 and 2010 (Unaudited)
    F-4  
         
Notes to the Financial Statements (Unaudited)
    F-5 – F-15  
 
 
 

 
 
AMERICAN JIANYE GREENTECH HOLDINGS, LTD.
CONSOLIDATED BALANCE SHEETS

   
March 31,
   
December 31,
 
   
2011
   
2010
 
Assets
           
Current Assets
           
Cash and cash equivalents
    79,019       655,640  
Accounts receivable, net
    4,278,312       198,239  
Prepaid construction costs
    18,837,841       18,718,399  
Notes receivable for stock subscription
    -       510,000  
Due from a shareholder
    577,772       -  
Other current assets
    147,234       38,165  
      23,920,178       20,120,443  
                 
Restricted Cash
    60,000       -  
Property, plant and equipment
    4,887,832       4,857,036  
Deposits for acquisition of a land use right
    1,679,364       1,668,740  
Other deposits
    -       -  
Total Assets
    30,547,374       26,646,219  
Liabilities and Stockholders’ Equity
           
Current Liabilities
           
Accounts payable
    15,806,701       10,458,783  
Accounts payable- related parties
    -       792,457  
Accrued expenses
    392,767       382,751  
Income tax payable
    1,048,818       3,757,791  
Due to related parties
    169,440       178,055  
Due to a shareholder
    -       107,922  
Total liabilities
    17,417,726       15,677,759  
                 
Stockholders’ Equity
               
                 
                 
                 
Common stock, $0.001 par value, 394,500,000 shares authorized, 33,110,148 and 32,010,148 fully-paid shares issued and outstanding as of March 31, 2011 and December 31, 2010 respectively
    33,110       32,010  
                 
                 
0 and 1,100,000 unpaid shares issued and outstanding as of March 31, 2011 and December 31, 2010 respectively
    -       1,100  
                 
                 
Preferred stock, $0.001 par value, 5,500,000 shares authorized, 0 shares issued and outstanding
    -       -  
Additional paid-in capital
    926,890       926,890  
Accumulated other comprehensive income
    332,838       261,489  
Retained earnings
    11,836,810       9,746,971  
Total stockholders’ equity
    13,129,648       10,968,460  
                 
Total Liabilities and Stockholders’ Equity
    30,547,374       26,646,219  

The Accompanying Notes are an integral part of the Financial Statements.

 
F-1

 

AMERICAN JIANYE GREENTECH HOLDINGS LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS

   
For the three months Ended
 
   
March 31,
2011
   
March 31,
2010
 
             
Sales
  $ 18,742,380     $ 9,654,458  
                 
Cost of sales
    15,818,070       8,132,783  
                 
Gross profit
    2,924,310       1,521,675  
                 
Operating expenses:
               
Selling, general and administrative
    134,233       99,090  
                 
Income from operations
    2,790,077       1,422,585  
                 
Provision for income taxes
    700,238       355,665  
                 
Net Income
    2,089,839       1,066,920  
                 
Other comprehensive income
               
Foreign currency translation adjustment
    71,349       363  
                 
Comprehensive income
  $ 2,161,188     $ 1,067,283  
                 
Net Income Per Share-
               
Basic and Diluted
  $ 0.07     $ 0.03  
                 
Weighted Average Shares Outstanding:
               
Basic and Diluted
    31,465,277       31,100,770  
 
The Accompanying Notes are an integral part of the Financial Statements.

 
F-2

 

AMERICAN JIANYE GREENTECH HOLDINGS LTD.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2011

               
Additional
   
Other
             
   
Common Stock
   
Paid-in
   
Comprehensive
   
Retained
       
   
Share
   
Amount
   
Capital
   
Income
   
Earnings
   
Total
 
                                     
Balance, December 31, 2010
    33,110,148     $ 33,110     $ 926,890     $ 261,489     $ 9,746,971     $ 10,968,460  
                                                 
Net income for the period ended Mar 31, 2011
    -       -       -       -       2,089,839       2,089,839  
                                                 
Foreign currency translation adjustments
                            71,349       -       71,349  
  
                                               
Balance, March 31, 2011
    33,110,148       33,110       926,890       332,838       11,836,810       13,129,648  
 
The Accompanying Notes are an integral part of the Financial Statements.
 
 
F-3

 
 
AMERICAN JIANYE GREENTECH HOLDINGS, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS

   
For the three Months Ended
 
   
March 31,
2011
   
March 31,
2010
 
Cash flows from operating activities
           
Net income
  $ 2,089,839     $ 1,066,920  
Adjustments to reconcile net income to net cash used in operating activities:
               
                 
Depreciation expense
    126       70  
Changes in assets and liabilities:
               
Accounts receivable
    (4,065,653 )     (9,613,010 )
Increase in prepayment
    (274 )        
Other current assets
    (108,475 )     (58,993 )
Other deposits
    -       -  
Accounts payable
    4,469,367       8,132,783  
Accrued expenses
    7,745       36,538  
Decrease in other current liabilities
            (16 )
Income tax payable
    (2,724,080 )     355,698  
Net cash provided by operating activities
    (331,405 )     (80,010 )
Cash flows from investing activities
               
Restricted Cash
    (60,000 )        
Construction in process
    -       (293,400 )
Prepaid construction costs
    -       -  
Deposit payment for land use right
    -       -  
Purchases of property, plant and equipment
    -          
Net cash used in investing activities
    (60,000 )     (293,400 )
Cash flows from financing activities
               
Advances from related parties
    (9,718 )     298,972  
Amount due from a shareholder
    (686,503 )        
Subscription receivable
    510,000       -  
Issuance of common stock
    -       -  
Net cash used in financing activities
    (186,221 )     298,972  
Net increase in cash and cash equivalents
    (577,626 )     (74,438 )
Effect of exchange rate changes on cash and cash equivalent
    1,005       75  
                 
Cash and cash equivalents
               
Beginning
    655,640       80,366  
Ending
  $ 79,019     $ 6,003  
Supplemental disclosure of cash flows
               
Cash paid during the period for:
               
Interest paid
  $ -     $ -  
Income tax
  $ 1,136,080     $ -  
 
The Accompanying Notes are an integral part of the Financial Statements.
 
 
F-4

 
 
AMERICAN JIANYE GREENTECH HOLDINGS, LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2011

NOTE 1-  NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

Nature of operations

American Jianye Greentech Holdings, Ltd. (the ‘Company” or “American Jianye”) was originally incorporated on August 30, 2006, in the State of Nevada as Gateway Certifications, Inc.

On November 13, 2009, the Company entered into and completed the transactions contemplated under a Share Exchange Agreement (the “Exchange Agreement”) with each of the shareholders (the “Shareholders”) of Jianye Greentech Holdings, Ltd., a British Virgin Islands corporation (“Jianye”), pursuant to which the Company purchased from the Shareholders all issued and outstanding shares of Jianye’ common stock in consideration for the issuance of an aggregate of 3,548,796 shares of the Company common stock (the “Share Exchange”) (the “Merger”).

The Share Exchange resulted in a change in control of the Company with the Shareholders owning 3,548,796 shares of common stock of the Company out of a total of 3,941,796 issued and outstanding shares after giving effect to the Share Exchange. As a result of the Exchange Agreement, (i) Jianye became a wholly-owned subsidiary of the Company and (ii) the Company succeeded to the business of Jianye as its sole business. Accordingly, the Company changed its name to American Jianye Greentech Holdings, Ltd. The Company also effectuated a forward-split of its common stock on a 7.89-for-1 basis. The Merger will be accounted for as a reverse merger to be reflected as a recapitalization with Jianye as the accounting acquirer.

Jianye Greentech Holdings Ltd (“Jianye BVI”) was incorporated on April 17, 2008 under the laws of British Virgin Islands. Jianye BVI is a holding company that owns 100% of Hong Kong Jianye Greentech Holdings Limited (“Jianye Hong Kong”), a corporation incorporated on May 2, 2008 under the laws of Hong Kong. Jianye BVI and Jianye Hong Kong currently have no operations and operate as investment holding companies.

On September 28, 2009, Jianye Hong Kong established Heilongjian New Jianye New Clean Fuel Marketing Ltd. (“Jianye China”), a wholly owned subsidiary in China, with registered capital of US$50,000. As a result, Jianye BVI owns 100% of the equity of Jianye China through Jianye Hong Kong. Jianye China’s primary business is to distribute ethanol and methanol as alternative fuel for automobile use.

On November 2009, the Company changed its name to American Jianye Greentech Holdings, Ltd. to more accurately reflect the business it intends to enter subsequent to the merger with Gateway and will focus its efforts for growth in the area of ethanol and methanol fuel.

Basis of presentation

The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America.

On September 30, 2009, the Company adopted changes issued by the Financial Accounting Standards Board (“FASB”) to the authoritative hierarchy of GAAP.  These changes establish the FASB Accounting Standards Codification (“ASC”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP.  Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants.  The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions (“FSP”), or Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standards Updates (“ASUs”).  ASUs will not be authoritative in their own right as they will only serve to update the ASC.  These changes and the ASC itself do not change GAAP.  Other than the manner in which new accounting guidance is referenced, the adoption of these changes had no impact on the Company’s consolidated financial statements.

 
F-5

 

AMERICAN JIANYE GREENTECH HOLDINGS, LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2011

Basis of Consolidation

The consolidated financial statements include the accounts of American Jianye Greentech Holdings, Ltd and its wholly owned subsidiaries.  All significant intercompany accounts and transactions are eliminated.

Name of Company
 
Place of
incorporation
 
Attributable
interest
 
           
Jianye Greentech Holding Ltd.
 
British Virgin Islands
   
100
%
             
Hong Kong Jianye Greentech Holding Limited
 
Hong Kong
   
100
%
             
Heilongjian Jianye New Clean Fuel Marketing Co. Ltd.
 
PRC
   
100
%

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

Foreign Currency Translation

The Company’s financial statements are presented in the U.S. dollar ($), which is the Company’s reporting currency, while its functional currency is Chinese Renminbi (RMB). Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of income. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange ruling at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the statements of income.

In accordance with ASC 830, Foreign Currency Matters, the Company translated the assets and liabilities into US $ using the rate of exchange prevailing at the applicable balance sheet date and the statements of income and cash flows are translated at an average rate during the reporting period.  Adjustments resulting from the translation are recorded in shareholders’ equity as part of accumulated other comprehensive income.

Below is a table with foreign exchange rates used for translation:
 
   
March 31,
2011
 
Three months end RMB : USD exchange rate
    6.5501  
Average Three months RMB : USD exchange rate
    6.5713  
 
 
F-6

 
 
AMERICAN JIANYE GREENTECH HOLDINGS, LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2011

Segment Reporting

The Company determines and discloses its segments in accordance with ASC 280, Segment Reporting. The Company’s management reporting structure provided for only one segment in 2011 and 2010 and accordingly, no separate segment information is presented.

Revenue Recognition

Revenues represent the invoiced value of goods sold recognized upon the shipment of goods to customers. Revenues are recognized when all of the following criteria are met:

    Persuasive evidence of an arrangement exists;

    Delivery has occurred or services have been rendered;

    The seller’s price to the buyer is fixed or determinable; and

    Collectability is reasonably assured.

The majority of the Company’s revenue results from sales contracts with distributors and revenue are recorded upon the shipment of goods. Management conducts credit background checks for new customers as a means to reduce the subjectivity of assuring collectability.

Cash and Cash Equivalents

Cash and cash equivalents include cash and all highly liquid instruments with original maturities of three months or less.
 
Accounts Receivable
 
Accounts receivable are carried at original invoice amount less estimates made for doubtful receivables. Management determines the allowance for doubtful accounts at the end of the period based on a review of the current status of existing receivables, account aging, historical collection experience, subsequent collections, management’s evaluation of the effect of existing economic conditions, and other known factors. The provision is provided for the above estimates made for all doubtful receivables. Account balances are charged off against the allowance only when the Company considers it is probable that a receivable will not be recovered. Recoveries of trade receivables previously written off are recorded when received. The allowance of doubtful accounts at March 31, 2011and December 31, 2010 was $19,138 and $696, respectively.
 
Property and Equipment

Property and equipment are recorded at cost, less accumulated depreciation.  Depreciation is computed on the straight-line method over the estimated useful lives of the related assets as follows:

Equipment
3 to 5 years

Expenditures for major renewals and betterment that extend the useful lives of property and equipment are capitalized.  Expenditures for repairs and maintenance are charged to expense as incurred.  When property and equipment are retired or otherwise disposed of, the asset and accumulated depreciation are removed from the accounts and the resulting profit or loss is reflected in the statement of income for the period.
 
Construction in progress represents direct costs of construction or the acquisition cost of buildings or machinery and design fees. Capitalization of these costs ceases and the construction in progress is transferred to plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. No depreciation is provided until the assets are completed and ready for their intended use.
 
 
F-7

 
 
AMERICAN JIANYE GREENTECH HOLDINGS, LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011

Income Taxes
 
The Company follows ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
 
The Company adopted ASC 740-10-25 on January 1, 2007, which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position.  The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the 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 a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize any additional liabilities for uncertain tax positions as a result of the implementation of ASC 740-10-25.
 
Fair Value Measurements
 
ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.
 
ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.  ASC 820 establishes three levels of inputs that may be used to measure fair value:
 
    Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company holds. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
 
    Level 2 – Valuation based on quoted prices in markets that are not active for which all significant inputs are observable, either directly or indirectly.
 
    Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
 
The Company adopted ASC 820, Fair Value Measurements and Disclosures, on January 1, 2008 for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually). ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The Company has also adopted ASC 820, on January 1, 2009 for non financial assets and non financial liabilities, as these items are not recognized at fair value on a recurring basis. The adoption of ASC 820 for all financial assets and liabilities and non-financial assets and non-financial liabilities did not have any impact on the Company’s consolidated financial statements.
 
Financial instruments include cash, accounts receivable, prepayments and other receivables, short-term borrowings from banks, accounts payable and accrued expenses and other payables. The carrying amounts of cash, accounts receivable, prepayments and other receivables, short-term loans, accounts payable and accrued expenses approximate their fair value due to the short term maturities of these instruments. See footnote 10 regarding the fair value of the Company’s warrants, which are classified as Level 3 liabilities in the fair value hierarchy.
 
 
F-8

 
 
AMERICAN JIANYE GREENTECH HOLDINGS, LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011
 
Concentrations

·  
Customers: The Company distributes ethanol and methanol as alternative fuel for automobile use in China. The Company performs ongoing credit evaluations of its customers’ financial condition and generally, requires no collateral. For the three months ended March 31, 2011, three customers accounted for 79.42% of the Company’s total revenues. Three customers represented 72.86% of accounts receivable in aggregate at March 31, 2011:

Customer
   
Sales for the Three-Month Period
Ended March 31, 2011
   
Sales for the Three-Month Period
Ended March 31, 2010
 
  A     $ 5,952,229       31.76 %   $ 9,654,458       100.00 %
  B     $ 4,749,896       25.34 %   $ -       -  
  C     $ 4,182,815       22.32 %   $ -       -  
        $ 14,884,940       79.42 %   $ 9,654,458       100.00 %

Accounts Receivable

Customer
   
Accounts Receivable at
March 31, 2011
   
Accounts Receivable at
December31, 2010
 
  A     $ 66,994       1.58 %   $ 119,053       76.99 %
  B     $ 1,483,161       34.87 %   $ 26,275       16.99 %
  C     $ 1,548,465       36.41 %                
        $ 3,098,620       72.86 %   $ 145,328       93.98 %

Suppliers:   For the three months ended March 31, 2011, six suppliers accounted for more than 100.00% of the Company’s total purchase. Management believes other vendors could supply similar products, but their terms may not be as favorable as currently being offered by this vendor.

Accounts Payable

Supplier
   
Accounts Payable at
March 31, 2011
   
Accounts Payable at
December31, 2010
 
  A     $ 10,994,891       69.56 %     10,341,098       91.91 %
  B     $ 2,330,580       14.74 %     75,184       0.67 %
  C     $ 1,523,183       9.64 %     -       -  
  D     $ 552,663       3.50 %     -       -  
  E     $ 355,720       2.25 %     -       -  
  F     $ 49,664       0.31 %     42,501       0.38 %
  G     $ -       -       792,457       7.04 %
        $ 15,806,701       100.00 %     11,251,240       100.00 %
 
 
F-9

 
 
AMERICAN JIANYE GREENTECH HOLDINGS, LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011

Recent accounting pronouncements

ASC Update (“ASU”) No. 2010-01, Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash. This update clarifies that the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected in earnings per share prospectively and is not a stock dividend. This ASU codified the consensus reached in EITF Issue No. 09-E “Accounting for Stock Dividends, Including Distributions to Shareholders with Components of Stock and Cash”. ASU 2010-01 is effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis. The adoption of this update did not have any material impact on the Company’s financial statements.
 
ASC Update (“ASU”) No. 2010-02, Consolidation (Topics 810) – Accounting and Reporting for Decreases in Ownership of a Subsidiary - A Scope Clarification.  This update provides guidance for non-controlling interests and changes in ownership interests of a subsidiary. An entity is required to deconsolidate a subsidiary when the entity ceases to have a controlling financial interest in the subsidiary. Upon deconsolidation of a subsidiary, an entity recognizes a gain or loss on the transaction and measures any retained investment in the subsidiary at fair value. The gain or loss includes any gain or loss associated with the difference between the fair value of the retained investment in the subsidiary and its carrying amount at the date the subsidiary is deconsolidated. In contrast, an entity is required to account for a decrease in its ownership interest of a subsidiary that does not result in a change of control of the subsidiary as an equity transaction.  The adoption of this update did not have any material impact on the Company’s financial statements.
 
ASC Update (“ASU”) No. 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. This update requires some new disclosures and clarifies some existing disclosure requirements about fair value measurement as set forth in Codification Subtopic 820-10. The FASB’s objective is to improve these disclosures and, thus, increase the transparency in financial reporting. Specifically, ASU 2010-06 amends Codification Subtopic 820-10 to now require:

 
A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers; and
 
 
In the reconciliation for fair value measurements using significant unobservable inputs, a reporting entity should present separately information about purchases, sales, issuances, and settlements.

In addition, ASU 2010-06 clarifies the requirements of the following existing disclosures:
 
 
For purposes of reporting fair value measurement for each class of assets and liabilities, a reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities; and
 
 
A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements.

ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. Early application is permitted.

ASC Update (“ASU”) No. 2010-09, Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements. This update is to remove the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated in both issued and revised financial statements. Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of U.S. GAAP. The FASB also clarified that if the financial statements have been revised, then an entity that is not an SEC filer should disclose both the date that the financial statements were issued or available to be issued and the date the revised financial statements were issued or available to be issued. The FASB believes these amendments remove potential conflicts with the SEC’s literature.
In addition, the amendments in the ASU requires an entity that is a conduit bond obligor for conduit debt securities that are traded in a public market to evaluate subsequent events through the date of issuance of its financial statements and must disclose such date. All of the amendments in the ASU were effective upon issuance (February 24, 2010) except for the use of the issued date for conduit debt obligors. That amendment is effective for interim or annual periods ending after June 15, 2010.
 
 
F-10

 
 
AMERICAN JIANYE GREENTECH HOLDINGS, LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011

ASC Update (“ASU”) No. 2010-10, Consolidation (Topic 810): Amendments for Certain Investment Funds. This update is to defer the effective date of certain amendments to the consolidation requirements of FASB Accounting Standards Codification TM (Codification) Topic 810, Consolidation, resulting from the issuance of FASB Accounting Standard No. 167, Amendments to FASB Interpretation 46(R). Specifically, the amendments to the consolidation requirements of Topic 810 resulting from the issuance of Statement 167 are deferred for a reporting entity’s interest in an entity:

•           That has all the attributes of an investment company; or
 
•           For which it is industry practice to apply measurement principles for financial reporting purposes that are consistent with those followed by investment companies.

The ASU does not defer the disclosure requirements in the Statement 167 amendments to Topic 810. The amendments in this ASU are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009, and for interim for interim periods within that first annual reporting period. Early application is not permitted.

ASC Update (“ASU”) No. 2010-13, Compensation – Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades. This update is to codify the consensus reached in EITF Issue No. 09-J, “Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades.” The amendments to the Codification clarify that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity shares trades should not be considered to contain a condition that is not a market, performance, or services condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The adoption of this update did not have any material impact on the Company’s financial statements.

ASC Update (“ASU”) No. 2010-21, Accounting for Technical Amendments to Various SEC Rules and Schedules. This update amends various SEC paragraphs in the FASB Accounting Standards Codification pursuant to SEC Final Rule, “Technical Amendments to Rules Forms, Schedules and Codification of Financial Reporting Policies”. The adoption of this update did not have any material impact on the Company’s financial statements.

ASC Update (“ASU”) No. 2010-22, Accounting for Various Topics. This update amends various SEC paragraphs in the FASB Accounting Standards Codification based on external comments received and the issuance of Staff Accounting Bulletin (SAB) No. 112 which amends or rescinds portion of certain SAB topics. SAB 112 was issued to bring existing SEC guidance into conformity with ASC 805 “Business Combination” and ASC 810 “Consolidation”. The adoption of this update did not have any material impact on the Company’s financial statements.

ASC Update (“ASU”) No. 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations. This update reflects the decision reached in EITF Issue No. 10-G. The amendments in this ASU affect any public entity as defined by Topic 805, Business Combinations, that enters into business combinations that are material on an individual or aggregate basis. The amendments in this ASU specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption.

 
F-11

 

AMERICAN JIANYE GREENTECH HOLDINGS, LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011

NOTE 2 - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of following:

   
March 31,
2011
   
December 31,
2010
 
             
Equipment
  $ 1,596       1,585  
      1,596       1,585  
Less: Accumulated depreciation
    (452 )     (323 )
      1,144       1,262  
Constriction in progress
    4,886,688       4,855,774  
    $ 4,887,832     $ 4,857,036  

Depreciation expense was approximately $452and $323 for the three months ended March 31, 2011 and 2010.

NOTE 3 – PREPAID CONSTRUCTION COSTS

Prepaid construction costs are paid for the construction of plants in the production bases in Tieling City in Liaoning Province of the PRC.

NOTE 4 – DEPOSITS FOR ACQUISITION OF A LAND USE RIGHT

Deposits are paid for acquisition of the land use right of the production bases in Tieling City in Liaoning Province of the PRC.

The total acquisition costs of the land use right is amounting to $9,147,729 (RMB 60,300,000). The unpaid balance, amounting to $7,478,989 (RMB 49,300,000) will be paid on or before January 25, 2012.

NOTE 5 – NOTES RECEIVABLE FOR STOCK SUBSCRIPTION

The Notes receivable are the proceeds of the stock issued but the subscribers have not paid before the year ended December 31, 2010. All of these receivables have been settled in the first quarter of 2011.

NOTE 6 – DUE FROM/TO A SHAREHOLDER

The amount due from a shareholders is receivable from Mr. Haipeng Wang. This amount is unsecured, interest-free and repayable on demand.

The amount due to a shareholders is payable to Mr. Haipeng Wang. This amount is unsecured, interest-free and repayable on demand.
 
 
F-12

 
 
AMERICAN JIANYE GREENTECH HOLDINGS, LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011

NOTE 7 – EARNINGS PER SHARE

The Company calculates earnings per share in accordance with ASC 260, Earnings Per Share, which requires a dual presentation of basic and diluted earnings per share. Basic earnings per share are computed using the weighted average number of shares outstanding during the fiscal year. Diluted earnings per share represents basic earnings per share adjusted to include the potentially dilutive effect of outstanding stock options.  Potentially dilutive common shares consist of convertible preferred stock (using the if-converted method) and exercisable warrants outstanding.

The following table sets forth the computation of basic and diluted net income per common share:


Three months Ended ,March 31,
 
2011
   
2010
 
             
Net income
 
$
2,089,839
   
$
1,066,920
 
                 
Weighted-average shares of common stock outstanding
               
Basic
   
31,465,277
     
31,100,770
 
Dilutive shares:
   
-
     
-
 
                 
Diluted
   
31,465,277
     
31,100,770
 
                 
Basic and dilutive earnings per share
 
$
0.07
   
$
0.03
 


NOTE 8 - INCOME TAXES

Jianye Greentech Holdings Ltd was incorporated in British Virgin Islands and is not subject to any income tax.

Hong Kong Jianye Greentech Holdings Limited was incorporated in Hong Kong and has not yet realized income as of March 31,2011 and no provision for income taxes has been made.

Heilongjian New Jianye New Clean Fuel Marketing Ltd. was incorporated in the People’s Republic of China and is subject to PRC Enterprise Income Tax on net income at a rate of 25%.

Deferred tax assets and liabilities are measured based on the difference between the financial statement and tax bases of assets and liabilities at the applicable tax rates. There were no significant components of the deferred tax for the period ended March 31, 2011 and 2010.
 
 
F-13

 
 
AMERICAN JIANYE GREENTECH HOLDINGS, LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011

NOTE 9 - STOCKHOLDERS’ EQUITY
 
On November 24, 2009, the Company filed an Amended and Restated Articles of Incorporation with the Secretary of State of Nevada, to effect a 7.89 for 1 forward split of the issued and outstanding common shares of the Company whereby every one share of common stock held were exchanged for 7.89 shares of common stock. As a result, the issued and outstanding shares of common stock were increased from 3,941,796 prior to the forward split to approximately 31,100,770 following the forward stock split. The authorized capital were changed at 394,500,000 shares of common stock and any shareholder who beneficially owned a fractional share of common stock after the forward stock split had their fractional share rounded up to the nearest whole share. All references in the accompanying financial statements to the number of shares outstanding, per share amounts of the Company’s common stock have been adjusted to reflect the effect of the stock forward split. Shareholders’ equity reflects the stock forward split by reclassifying from “Common Stock” to “Additional Paid-in Capital” an amount equal to the par value of the increased shares arising from the forward split.

In November 2009, the Company’s Board of Directors approved another Amended and Restated Articles of Incorporation with the Secretary of State of Nevada, to amend the Company’s Articles of Incorporation to: (i) change the name of the Company to “American Jianye Greentech Holdings Ltd.” (ii) increase the number of the Company’s authorized shares of capital stock from 394,500,000 shares to 400,000,000 of which 394,500,000 shares will be common stock par value $0.001 per share and 5,500,000 shares will be preferred stock par value $0.001 per share; and (iii) authorize the Board of Directors to provide for the issuance of shares of preferred stock in series and, by filing a certificate pursuant to the Nevada Revised Statutes, to establish from time to time the number of shares to be included in each such series, and to fix the designation, power, preferences and rights of the shares of each such series and the qualifications, limitations and restrictions.

NOTE 10-  CAPITALIZATION

The common stock was $33,110 with paid-in capital $926,890 as of December 31, 2010.  1,710,000 shares of common stock at par value of $0.001 each share were issued for the year ended December 31, 2010. 1,100,000 of these issued common stocks were not yet paid as at December 31, 2010.

10,000 shares were issued in the second quarter of 2010 for the engagement of a financial consultant. The market price was valued at $1 per share on the issue date of these shares.

600,000 shares were issued and fully paid in the last quarter of 2010.

700,000 shares were issued and the subscription proceeds were settled in the first quarter of 2011.

Subscription agreements were entered for issuance of 1,000,000 shares at a price of $0.15 per share. $60,000 as proceeds for 400,000 shares were settled in the first quarter of 2011. The remaining proceeds of $90,000 for 600,000 shares are expected to be settled in the second and third quarters of 2011. The issue of these 600,000 shares is reported as reduction in stockholders’ equity as the proceeds have not been received prior to the issuance of the financial statements.

7,950,000 shares held by the former shareholders were retired on November 17, 2009, according to Share Exchange Agreement dated November 12, 2009, but 299,378 of these retired shares were later restored and reported as issued and fully paid common stock in April, 2010.

 
F-14

 

 
AMERICAN JIANYE GREENTECH HOLDINGS, LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011

NOTE 11-  RELATED PARTY TRANSACTIONS

Transactions with Harbin Dayang Trading Co., Ltd

Mr. Haipeng Wang, the Chairman of the Group, holds 15% interest, and his father, Mr. Jianye Wang holds 70% interest in this company.

As of March 31, 2011, no advance received from or paid to this related company.

Transactions with Heilongjiang Jianye Real Estates Co., Ltd

Harbin Dayang Trading Co., Ltd, another related company of the Group, holds 97.72% interest, and Mr. Haipeng Wang has 1.14% interest, in this company.

As of March 31, 2011, we had a balance of payable to this related company totaling $330,424. This advance bears no interest and is payable on demand.

Transactions with Heilongjiang Jianye Fuel Co., Ltd

Mr. Haipeng Wang, Mr. Haipeng Wang; and Heilongjiang Jianye Real Estates Co., Ltd, another related company of the Group, are the majority shareholders of Heilongjiang Jianye Fuel Co., Ltd, hold in total of 97.83% interests.

As of March 31, 2011, we had a balance of advance paid to this related company totaling $2,290. This advance bears no interest and is payable on demand.

Transactions with Zhaodong City Jianye Fuel Co., Ltd

China Jianye Fuel, Inc., of which the majority shareholder is Mr. Jianye Wang, holds 100% interests in this company.

As of March 31, 2011 we had an account receivable amounting to $188,679, and an account payable amounting to $0, to this related company.

For the year ended March 31, 2011, no inventories had been purchased from this related company.

Transactions with Heilongjiang Jianye Buidling Mgt Co., Ltd

Mr. Jianye Wang holds 25% interest, and Mr. Haipeng Wang holds 8.33% interest, in this company.

As of March 31, 2011, we had a balance of advance received from this related company totaling $27,694. This advance bears no interest and is payable on demand.

Transactions with Harbin Jianye Construction Engineering Co., Ltd

Harbin Dayang Trading Co., Ltd , Heilongjiang Jianye Real Estates Co., Ltd, related companies of the Group, holds 49% and 40% of interests respectively, and Mr. Haipeng Wang holds 11% interest of this company.

Harbin Jianye Construction Engineering Co., Ltd is the main contractor of the construction project for production bases in Tieling City of the Liaoning Province in the PRC.
 
As of March 31, 2011, we had balances of prepaid construction costs to this related company totaling $23,715,612.
 
Due from shareholder – At March 31, 2010, the Company had advances from the Company’s Chairman and major shareholder in the amount of $577,772. The advances to this shareholder are non-interest bearing and without fixed terms of repayment.

NOTE 12 - COMMITMENTS

The Group has entered into an agreement for the acquisition of land use right. The total acquisition costs of the land use right is amounting to $9,147,729 (RMB 60,300,000). The unpaid balance, amounting to $7,478,989 (RMB 49,300,000) will be paid on or before January 25, 2012.

NOTE 13 - SUBSEQUENT EVENTS

In preparing these financial statements, the Company evaluated the events and transactions that occurred from January 1, 2011 through May 21, 2011, the date these financial statements were issued. The Company has made the required additional disclosures in reporting periods in which subsequent events occur.
 
 
F-15

 
 
Item 2.   Management’s Discussion And Analysis Of Financial Condition And Plan Of Operation.

This Quarterly Report contains forward-looking statements within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,” “management believes” and similar language. The forward-looking statements are based on the current expectations of the Company and are subject to certain risks, uncertainties and assumptions, including those set forth in the discussion under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report. Actual results may differ materially from results anticipated in these forward-looking statements. We base the forward-looking statements on information currently available to us, and we assume no obligation to update them.

Investors are also advised to refer to the information in our previous filings with the Securities and Exchange Commission (SEC), especially on Forms 10-K, 10-Q and 8-K, in which we discuss in more detail various important factors that could cause actual results to differ from expected or historic results. It is not possible to foresee or identify all such factors. As such, investors should not consider any list of such factors to be an exhaustive statement of all risks and uncertainties or potentially inaccurate assumptions.

Results of Operations

Jianye Greentech Holdings Ltd (“Jianye BVI”) was incorporated on April 17, 2008 under the laws of British Virgin Islands. Jianye BVI is a holding company that owns 100% of Hong Kong Jianye Greentech Holdings Limited (“Jianye Hong Kong”), a corporation incorporated on May 2, 2008 under the laws of Hong Kong. Jianye BVI and Jianye Hong Kong currently have no operations and operate as investment holding companies. On September 28, 2009, Jianye Hong Kong established Heilongjian New Jianye New Clean Fuel Marketing Ltd. (“Jianye China”), a wholly owned subsidiary in China, with registered capital of US$50,000. As a result, Jianye BVI owns 100% of the equity of Jianye China through Jianye Hong Kong. Jianye China’s primary business is to distribute ethanol and methanol as alternative fuel for automobile use.

Heilongjian New Jianye Clean Fuel Marketing Ltd. (“Jianye China”) commenced operation in September 2009.   Jianye China’s primary business is to distribute ethanol and methanol as alternative fuel for automobile use.

For the three months ended March 31, 2011, we derived our revenues of $18,742,380 from the sales of methanol-based and ethanol based fuels to our customers, comparing to $9,654,458 for the three months ended March 31, 2010.

Our gross profit margin during the three months ended March 31, 2011 was 15.6%, comparing to 15.76% in last year. This figure represents our regular gross profit margin as a marketing company and distributor. We expect our gross profit margin to be significant higher than that after our own refinery is built and produces our own fuels in the future. The construction of factory and production facilities is expected to complete at the end of fiscal year of 2011.

Selling, general and administrative expenses for the three months ended March 31, 2011 were $134,233 or 0.72% of net sales, comparing to $99,090 or 1.03% for the last fiscal year. Selling, general and administrative expenses consist primarily of payroll, local taxes, investor relation expenses and professional fees.

Income from operations for the three months ended March 31, 2011 was $2,790,077, and net income after income taxes for the same period was $2,089,839, comparing to $1,422,585 and $1,066,920 respectively for the same period of last year.

Our business operates primarily in Chinese Renminbi (“RMB”), but we report our results in our SEC filings in U.S. Dollars.  The conversion of our accounts from RMB to Dollars results in translation adjustments.  While our net income is added to the retained earnings on our balance sheet; the translation adjustments are added to a line item on our balance sheet labeled “accumulated other comprehensive income,” since it is more reflective of changes in the relative values of U.S. and Chinese currencies than of the success of our business.  During the three months ended March 31, 2011 , the effect of converting our financial results to Dollars was to add $71,349 to our accumulated other comprehensive income.
 
 
2

 
 
Liquidity and Capital Resources

Our operations to date have been funded primarily by operation and capital contributions.

Our working capital at March 31, 2011 totaled $6,502,452. Included in our working capital, however, there was $18,837,841 of prepaid construction costs which will be transferred to plant and equipment upon completion of construction. We have, therefore, relatively small amount of liquid assets.

Capital Expenditure

Total capital expenditures during the three months ended March 31, 2011 was $60,000.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.

Critical Accounting Policies and Estimates

This discussion and analysis of our financial condition and results of operations are based on our financial statements that have been prepared under accounting principle generally accepted in the United States of America. 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 the 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.

Cash and Cash Equivalents

Cash and cash equivalents include cash and all highly liquid instruments with original maturities of three months or less.

Accounts Receivable

Accounts receivable are carried at original invoice amount less estimates made for doubtful receivables. Management determines the allowance for doubtful accounts at the end of the period based on a review of the current status of existing receivables, account aging, historical collection experience, subsequent collections, management’s evaluation of the effect of existing economic conditions, and other known factors. The provision is provided for the above estimates made for all doubtful receivables. Account balances are charged off against the allowance only when the Company considers it is probable that a receivable will not be recovered. Recoveries of trade receivables previously written off are recorded when received.

Recent accounting pronouncements

ASC Update (“ASU”) No. 2010-01, Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash. This update clarifies that the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected in earnings per share prospectively and is not a stock dividend. This ASU codified the consensus reached in EITF Issue No. 09-E “Accounting for Stock Dividends, Including Distributions to Shareholders with Components of Stock and Cash”. ASU 2010-01 is effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis. The adoption of this update did not have any material impact on the Company’s financial statements.
 
 
3

 
 
ASC Update (“ASU”) No. 2010-02, Consolidation (Topics 810) – Accounting and Reporting for Decreases in Ownership of a Subsidiary - A Scope Clarification.  This update provides guidance for non-controlling interests and changes in ownership interests of a subsidiary. An entity is required to deconsolidate a subsidiary when the entity ceases to have a controlling financial interest in the subsidiary. Upon deconsolidation of a subsidiary, an entity recognizes a gain or loss on the transaction and measures any retained investment in the subsidiary at fair value. The gain or loss includes any gain or loss associated with the difference between the fair value of the retained investment in the subsidiary and its carrying amount at the date the subsidiary is deconsolidated. In contrast, an entity is required to account for a decrease in its ownership interest of a subsidiary that does not result in a change of control of the subsidiary as an equity transaction.  The adoption of this update did not have any material impact on the Company’s financial statements.
 
ASC Update (“ASU”) No. 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. This update requires some new disclosures and clarifies some existing disclosure requirements about fair value measurement as set forth in Codification Subtopic 820-10. The FASB’s objective is to improve these disclosures and, thus, increase the transparency in financial reporting. Specifically, ASU 2010-06 amends Codification Subtopic 820-10 to now require:

 
A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers; and

 
In the reconciliation for fair value measurements using significant unobservable inputs, a reporting entity should present separately information about purchases, sales, issuances, and settlements.
 
In addition, ASU 2010-06 clarifies the requirements of the following existing disclosures:

 
For purposes of reporting fair value measurement for each class of assets and liabilities, a reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities; and

 
A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements.

ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. Early application is permitted.

ASC Update (“ASU”) No. 2010-09, Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements. This update is to remove the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated in both issued and revised financial statements. Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of U.S. GAAP. The FASB also clarified that if the financial statements have been revised, then an entity that is not an SEC filer should disclose both the date that the financial statements were issued or available to be issued and the date the revised financial statements were issued or available to be issued. The FASB believes these amendments remove potential conflicts with the SEC’s literature.

In addition, the amendments in the ASU requires an entity that is a conduit bond obligor for conduit debt securities that are traded in a public market to evaluate subsequent events through the date of issuance of its financial statements and must disclose such date. All of the amendments in the ASU were effective upon issuance (February 24, 2010) except for the use of the issued date for conduit debt obligors. That amendment is effective for interim or annual periods ending after June 15, 2010.
 
 
4

 
 
ASC Update (“ASU”) No. 2010-10, Consolidation (Topic 810): Amendments for Certain Investment Funds. This update is to defer the effective date of certain amendments to the consolidation requirements of FASB Accounting Standards Codification (Codification) Topic 810, Consolidation, resulting from the issuance of FASB Accounting Standard No. 167, Amendments to FASB Interpretation 46(R). Specifically, the amendments to the consolidation requirements of Topic 810 resulting from the issuance of Statement 167 are deferred for a reporting entity’s interest in an entity:

 
That has all the attributes of an investment company; or
 
 
For which it is industry practice to apply measurement principles for financial reporting purposes that are consistent with those followed by investment companies.

The ASU does not defer the disclosure requirements in the Statement 167 amendments to Topic 810. The amendments in this ASU are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009, and for interim for interim periods within that first annual reporting period. Early application is not permitted.

ASC Update (“ASU”) No. 2010-13, Compensation – Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades. This update is to codify the consensus reached in EITF Issue No. 09-J, “Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades.” The amendments to the Codification clarify that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity shares trades should not be considered to contain a condition that is not a market, performance, or services condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The adoption of this update did not have any material impact on the Company’s financial statements.

ASC Update (“ASU”) No. 2010-21, Accounting for Technical Amendments to Various SEC Rules and Schedules. This update amends various SEC paragraphs in the FASB Accounting Standards Codification pursuant to SEC Final Rule, “Technical Amendments to Rules Forms, Schedules and Codification of Financial Reporting Policies”. The adoption of this update did not have any material impact on the Company’s financial statements.

ASC Update (“ASU”) No. 2010-22, Accounting for Various Topics. This update amends various SEC paragraphs in the FASB Accounting Standards Codification based on external comments received and the issuance of Staff Accounting Bulletin (SAB) No. 112 which amends or rescinds portion of certain SAB topics. SAB 112 was issued to bring existing SEC guidance into conformity with ASC 805 “Business Combination” and ASC 810 “Consolidation”. The adoption of this update did not have any material impact on the Company’s financial statements.

ASC Update (“ASU”) No. 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations. This update reflects the decision reached in EITF Issue No. 10-G. The amendments in this ASU affect any public entity as defined by Topic 805, Business Combinations, that enters into business combinations that are material on an individual or aggregate basis. The amendments in this ASU specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted.

Impact of Accounting Pronouncements
 
There were no recent accounting pronouncements that have had a material effect on the Company’s financial position or results of operations.
 
 
5

 
 
Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not required for smaller reporting companies.

Item 4.Controls and Procedures.

Evaluation of disclosure controls and procedures .

The term “disclosure controls and procedures” (defined in SEC Rule 13a-15(e)) refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within required time periods. The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, such controls and procedures were effective.

Changes in internal controls.

The term “internal control over financial reporting” (defined in SEC Rule 13a-15(f)) refers to the process of a company that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated any changes in the Company’s internal control over financial reporting that occurred during the first three quarters of the year. Covered by this quarterly report, and they have concluded that there was no change to the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting.

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934.  We have assessed the effectiveness of those internal controls as of June 30, 2010 using the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) Internal Control - Integrated Framework as a basis for our assessment.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.  All internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management is currently reviewing its staffing and their training in order to remedy the weaknesses identified in this assessment.  To date, we are not aware of significant accounting problems resulting from these weaknesses; so we have to weigh the cost of improvement against the benefit of strengthened controls

 
6

 
 
PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

To the best knowledge of the officers and directors, the Company was not a party to any legal proceeding or litigation as of March 31, 2011.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. (Removed and Reserved)

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit
 
Description of Exhibit 
  31.1  
Chief Executive Officer Certification of Periodic Financial Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
       
  31.2  
Chief Financial Officer Certification of Periodic Financial Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
       
  32.1  
Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002
       
  32.2  
Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002

 
7

 

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.
 
 
AMERICAN JIANYE GREENTECH HOLDINGS, LTD.
 
       
 
By:
/s/ Haipeng Wang
 
   
Name: Haipeng Wang
 
   
Title: President
 
   
Date: May 23, 2011
 
   
(Principal Executive Officer)
 
       
 
By:
/s/ Yulin Yang
 
   
Name:  Yulin Yang
 
   
Title: Chief Financial Officer
 
   
Date: May 23, 2011
 
   
(Principal Accounting Officer)
 
 
 
8

 
Exhibit 31.1

CERTIFICATION PURSUANT TO RULES 13a-14(a) and 15d-14(a) UNDER THE SECURITIES
EXCHANGE ACT OF 1934

I, Haipeng Wang, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of American Jianye Greentech Holdings, Ltd. (the “Registrant”);

2.           Based on my knowledge, this quarterly 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 quarterly report;

3.           Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4.           I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant, and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5.           I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date:  May 23, 2011
 
/s/  Haipeng Wang
 
   
Name:  Haipeng Wang
 
   
Title: President
 
   
(Principal Executive Officer)
 
 
 
 

 
Exhibit 31.2

CERTIFICATION PURSUANT TO RULES 13a-14(a) and 15d-14(a) UNDER THE SECURITIES
EXCHANGE ACT OF 1934

I, Yulin Yang, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of American Jianye Greentech Holdings, Ltd. (the “Registrant”);

2.           Based on my knowledge, this quarterly 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 quarterly report;

3.           Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4.           I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant, and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5.           I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)  all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date: May 23, 2011
 
/s/  Yulin Yang
 
   
Name:  Yulin Yang
 
   
Title:  Chief Financial Officer
 
   
(Principal Accounting Officer)
 
 
 
 

 
 
Exhibit 32.1
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with the Quarterly Report of American Jianye Greentech Holdings, Ltd.  (the "Company") on Form 10-Q for the period ending March 31, 2011, 2010 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Haipeng Wang, President of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
 
(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
 
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
 
Date:  May 23, 2011
 
/s/  Haipeng Wang
 
   
Name:  Haipeng Wang
 
   
Title:  President
 
   
(Principal Executive Officer)
 
 
This certification accompanies this Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.
 
 
 

 
 
Exhibit 32.2
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with the Quarterly Report of American Jianye Greentech Holdings, Ltd. (the "Company") on Form 10-Q for the period ending March 31, 2011 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Yulin Yang, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
 
(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
 
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
 
Date:  May 23, 2011
 
/s/  Yulin Yang
 
   
Name:  Yulin Yang
 
   
Name:  Chief Financial Officer
 
   
(Principal Financial Officer)
 
 
This certification accompanies this Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.