UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549




FORM 10–Q/A


(AMENDMENT NO. 1)




(Mark One)




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




For the quarterly period ended March 31, 2009




[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




For the transition period from ___________ to _____________




Commission File Number: 000-53208




SINO GREEN LAND CORPORATION


(Exact Name of Registrant as Specified in Its Charter)




Nevada
54-0484915(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)




Suite 2711A, 27/F, Exchange Tower,


33 Wang Chiu Road, Kowloon Bay,


Kowloon, Hong Kong


People's Republic of China


(Address of principal executive offices, Zip Code)




+852-3104-0598


(Registrant's telephone number, including area code)




_____________________________________________________


(Former name, former address and former fiscal year, if changed since last report)




Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.




Yes [ x ]         No [ ]




Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).




Yes [ ]         No [ ]




1




Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.




Large accelerated filer [ ]
Accelerated filer [ ]Non-accelerated filer [ ]
Smaller reporting company [ x ](Do not check if a smaller reporting company)




Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).




Yes [ ]         No [ x ]




The number of shares outstanding of each of the issuer's classes of common stock, as of  September 30, 2010  is as follows:




Class of Securities
Shares OutstandingCommon Stock, $0.001 par value
147,759,340




2




TABLE OF CONTENTS




PART IFINANCIAL INFORMATIONITEM 1.
FINANCIAL STATEMENTSConsolidated Balance Sheets as of March 31, 2009 (Unaudited and Restated) and December 31, 2008 (Restated)
5Consolidated Statements of Income and Other Comprehensive Income for the Three Months Ended March 31, 2009 (Unaudited and Restated) and 2008

(Unaudited and Restated)
6Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2009 (Unaudited and Restated) and 2008 (Unaudited and Restated)
7Notes to Consolidated Financial Statements (Unaudited)
8-22ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
23ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
31ITEM 4.
CONTROLS AND PROCEDURES
31PART II

OTHER INFORMATIONITEM 6.
EXHIBITS.
34





3





EXPLANATORY NOTE




This quarterly report on Form 10-Q/A is being filed as Amendment to our quarterly report on Form 10-Q. We are amending this quarterly report to reflect restated financial statements following our determination that the financial statements previously filed with our annual report should not be relied upon for the reasons set forth in our report on Form 8-K, which was filed with the SEC on August 27, 2010.  As a result, we are also including a revised Item 4 “Controls and Procedures” to reflect the ineffectiveness of our internal controls, and a revised “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to reflect the restated financial information.   Currently dated Exhibits 31.1, 31.2 and 32.1 are included in this filing.




4





SINO GREEN LAND CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSAS OF MARCH 31, 2009 AND DECEMBER 31, 2008MARCH 31,


DECEMBER 31,2009


2008( Unaudited & Restated)


(Restated)ASSETSCurrent AssetsCash and cash equivalents

$
479,139


$
544,860Accounts receivable, net


187,740



200,731Due from related parties


356,063



352,799Inventories


6,733



16,931Other current assets


346,896



58,045Total Current Assets


1,376,571



1,173,366Property and Equipment, net


120,269



139,765Advances


485,153



497,568Long-term Prepayments


17,010,390



16,258,707Total Assets

$
18,992,382


$
18,069,406LIABILITIES AND SHAREHOLDERS' EQUITYCurrent LiabilitiesAccounts payable and accrued expenses

$
997,611


$
1,529,786Advances from customers


56,357



56,443Due to related parties


1,108,899



129,444Convertible debenture


360,710



360,710Derivative liability


379,066



340,266Total Current Liabilities


2,902,644



2,416,650Shareholders' EquityCommon stock, $0.001 par value, 780,000,000shares authorized,  83,314,851and 81,648,554

issued and outstanding as of March 31, 2009 andDecember 31, 2008, respectively


83,315



81,649Additional paid in capital


4,917,686



4,919,351Other comprehensive income


1,049,032



1,075,973


Retained earnings


10,039,705



9,575,783Total shareholders' equity


16,089,738



15,652,756Total Liabilities and Stockholders' Equity

$
18,992,382


$
18,069,406




The accompanying notes are integral part of these unaudited consolidated financial statements.




5




SINO GREEN LAND CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOMEFOR THE THREE ENDED MARCH 31, 2009 AND 2008(UNAUDITED)




THREE MONTHS ENDEDMARCH 31,2009


2008(Restated)Sales

$
18,530,563


$
7,842,711Cost of goods sold


16,407,579



6,793,365Gross profit


2,122,984



1,049,346Operating expensesSelling expenses


399,055



220,806General and administrative expenses


936,952



90,320Total operating expenses


1,336,007



311,126Operating income


786,977



738,220Other income(expense)Interest expenses (income)


(22,500
)


377Change in derivative liability


(38,800
)Others, net


(261,755
)Total other income (expense)


(323,055
)


377Net income


463,922



738,596Other comprehensive income (loss)Foreign currency

translation gain (loss)


(26,941
)


31,510Comprehensive income

$
436,981


$
770,106


Net income per shareBasic

$
0.01


$
0.01Diluted

$
0.01


$
0.01Weighted average number of shares outstandingBasic


83,314,851



81,648,554Diluted


83,866,207



81,648,554




The accompanying notes are integral part of these unaudited consolidated financial statements.




6




SINO GREEN LAND CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008(UNAUDITED)




MARCH 31,2009


2008Cash flows from operating activities

(Restated)


(Restated)Net income

$
463,922


$
738,596Adjustments to reconcile net income to net cashprovided by (used in) operating activitiesDepreciation


21,010



17,057Amortization


174,850



1,127Change in derivative liability


38,800Decrease / (Increase) in current assetsAccounts receivable


12,679



73,007Inventories


10,168



13,755Other current assets


(288,803
)


(3,256
)Advances


11,652



-Long-term prepaid expense


(950,916
)


(458,456
)Increase (decrease) in current liabilitiesAccounts payable & accrued expense


(477,268
)


(60,470
)Advances from customer


-



(46,856
)Tax payables


509



943Other payables


(55,344
)


48,571Net cash provided by (used in) operating activities


(1,038,741
)


324,017Cash flows from investing activitiesAcquisition of plant, property, and equipment


(1,736
)


(885
)Net cash provided by (used in) investing activities


(1,736
)


(885
)Cash flows from financing activitiesProceeds from related parties


975,603



13,115Net cash provided by financing activities


975,603



13,115Effect of exchange rate change on cash and cash equivalents


(847
)


38,067Net increase in cash and cash equivalents


(65,721
)


374,315Cash and cash equivalents, beginning balance


544,860



443,046Cash and cash equivalents, ending balance

$
479,139


$
817,361Supplement disclosure of cash flow informationInterest expense paid

$
-


$
-Income taxes paid

$
-


$
-




The accompanying notes are integral part of these unaudited consolidated financial statements.




7




SINO GREEN LAND CORPORATION AND SUBSIDIARIESNOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS




1. ORGANIZATION AND DESCRIPTION OF BUSINESS




Organization




Sino Green Land Corporation (the “Company”) was incorporated in Nevada in March 2008 under the name of Henry County Plywood Corporation, as the successor by merger to a Virginia corporation organized in May 1948 under the same name. On March 23, 2009, the Company’s corporate name was changed to Sino Green Land Corporation.




The Company, through its Chinese operating subsidiaries and a variable interest entity, is engaged in the wholesale distribution, marketing and sales of premium fruits through wholesale centers and to supermarkets in China.




On January 15, 2009, the Company entered into a share exchange agreement with Organic Region Group Limited (“Organic Region”), its stockholders and its wholly owned subsidiaries, Zhuhai Organic Region Modern Agriculture Ltd. (“Zhuhai Organic”), and Guangzhou Organic Region Agriculture Ltd. (“Guangzhou Organic”), Fuji Sunrise International Enterprises Limited (“Fuji Sunrise”), Southern International Develop Limited (“Southern International”) and HK Organic Region Limited (“HK Organic”). Pursuant to the share exchange agreement and a related agreement with the Company’s two former principal stockholders:




·
The Company issued to the former stockholders of Organic Region a total of 81,648,554 shares of common stock, constituting approximately 98% of our outstanding stock, in exchange for all of the capital stock of Organic Region; and




·
Our former majority stockholders sold to the Company 1,666,298 shares of common stock, representing 50% of the outstanding shares, for $500,000 non-interest bearing convertible promissory notes. The Company cancelled these shares. As of April 27, 2009, the Company had paid the principal and accrued interest on the notes in full and had no further obligations to the former majority stockholders.




Prior to the closing of these transactions, the Company, then known as Henry County Plywood Corporation, was not engaged in any business activity.




8





The Company is the sole stockholder of Organic Region, a British Virgin Islands corporation which was incorporated on January 30, 2003.




Under generally accepted accounting principles, the acquisition by the Company of Organic Region is equivalent to the acquisition by Organic Region of the Company, then known as Henry County Plywood Corporation, with the issuance of stock by Organic Region for the net monetary assets of the Company. This transaction is reflected as a recapitalization, and is accounted for as a change in capital structure. Accordingly, the accounting for the acquisition is identical to that resulting from a reverse acquisition. Under reverse acquisition accounting, the comparative historical financial statements of the Company, as the legal acquirer, are those of the accounting acquirer, Organic Region. The accompanying financial statements reflect the recapitalization of the stockholders’ equity as if the transactions occurred as of the beginning of the first period presented. Thus, only the 81,648,554 shares of common stock issued to the former Organic Region stockholders are deemed to be outstanding for all periods reported prior to the date of the reverse acquisition. As a result of the reverse acquisition effected by the share exchange agreement, the Company’s business has become the business of the Organic Region. The 1,666,297 shares of common stock that were outstanding on January 15, 2009, net of the 1,666,298 shares that were purchased by the Company and cancelled, are treated as if they were issued on January 15, 2009, as part of a recapitalization.




The Company has an exclusive agreement with Xiong Luo, who is one of the Company’s senior executive officers and the owner and holder of the business license for Guangzhou Greenland Co. Ltd. (“Guangzhou Greenland”). Pursuant to this agreement, Organic Region provides consulting services, including business operations, human resources and research and development services, to Mr. Luo with respect to Guangzhou Greenland to enable Guangzhou Greenland to operate the fruit trading business in China. In exchange for such services, Mr. Luo agreed to pay a consulting services fee to Organic Region equal to all of the revenues obtained by Guangzhou Greenland. The agreement gave the Company the ability to substantially influence Guangzhou Greenland’s daily operations and financial affairs, appoint its senior executives and approve all matters requiring stockholder approval. Mr. Luo also irrevocably granted the Company an exclusive option to purchase, to the extent permitted under PRC law, all or part of the equity interests in Guangzhou Greenland and agreed to entrust all the rights to exercise voting power to the person appointed by the Company. Guangzhou Greenland is considered a variable interest entity under ASC 810 (Originally issued as FIN 46R), and its financial statements are included in our consolidated financial statements. Substantially all of the Company’s revenue is derived from the business of Guangzhou Greenland.




2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




Unaudited Interim Financial Information




The accompanying unaudited financial statements (see note 12 for a description of the r estatement) of the Company have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. These statements should be read in conjunction with the Company's audited financial statements and notes thereto for the fiscal year ended December 31, 2008, as restated. See Note 12 . The results of the three month period ended March 31, 2009 are not necessarily indicative of the results to be expected for the full year ending December 31, 2009.




9




Principles of consolidation




The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Zhuhai Organic and Guangzhou Organic, Fuji Sunrise, HK Organic, Southern International, and Guangzhou Metro Green Trading Ltd, together with its 100% Variable Interest Entity (VIE), Guangzhou Greenland. All significant inter-company accounts and transactions have been eliminated in consolidation.




In accordance with ASC 810, VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. All VIEs with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.




Use of estimates




The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated 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.




Cash and cash equivalents




The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.




Accounts receivable




The Company’s policy is to maintain reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. As of March 31, 2009 and December 31, 2008, the Company had accounts receivables, of $187,740 and $200,731 net of allowance for bad debts in the amount of $9,250 and $9,264, respectively.




10




Advances




As of March 31, 2009 and December 31, 2008, the advances of the Company amounted to $485,153 and $497,568, respectively.




Inventories




Inventories are valued at the lower of cost (determined on a weighted average basis) or market value. Management compares the cost of inventories with market value and an allowance is provided to reduce the value of inventories to their net market value. Inventories consisted of produce in the amount of $6,733 and $16,931 as of March 31, 2009 and December 31, 2008, respectively.




Property and equipment




Property and equipment are recorded at cost. Gains or losses on disposals are reflected as gain or loss in the year of disposal. The cost of improvements that extend the life of plant, property, and equipment are capitalized. These capitalized costs may include structural improvements, equipment, and fixtures. All ordinary repair and maintenance costs are expensed as incurred.




Depreciation for financial reporting purposes is provided using the straight-line method over the estimated useful lives of the assets: 5 to 10 years for manufacturing machinery, 5 years for office equipment, and 5 years for motor vehicles.




Impairment




The Company applies the provisions ASC 360-10 (Originally issued as FAS No. 144). ASC 360-10 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.




The Company tests long-lived assets, including property, plant and equipment, for recoverability at least annually or more frequently upon the occurrence of an event or when circumstances indicate that the net carrying amount is greater than its fair value. Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally measured by discounting expected future cash flows as the rate the Company utilizes to evaluate potential investments. The Company estimates fair value based on the information available in making whatever estimates, judgments and projections are considered necessary. There was no impairment of long-lived assets for the year ended December 31, 2008, or the period ended March 31, 2009.




11




Derivative liability




The derivative liability represents the value of warrants to purchase common stock that were issued in connection with certain debt and preferred stock offerings in 2008 and 2009. The warrants are reported at fair value using the Black-Scholes model with changes in value reflected in earnings for the period.




Revenue recognition




The Company’s revenue recognition policies are in compliance with ASC 605 (Originally issued as Staff Accounting Bulletin (SAB) 104). Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue. Discounts provided to customers by the Company at the time of sale are recognized as a reduction in sales as the products are sold. Sales taxes are not recorded as a component of sales.




Cost of Goods Sold




The “Cost of Goods Sold” line item of the Consolidated Statements of Income includes product costs and the amortization of the long-term leases on which the produce is grown and for which the full payment was made at the commencement of the lease. Discounts provided to the Company by vendors at the time of purchase are recognized as a reduction in inventory cost as the products are delivered.




All other costs, including warehousing costs, transportation costs, salaries, rent expense and depreciation expense, are shown separately in Selling Expense or General and Administrative Expense in the Consolidated Statements of Income.




Income taxes




The Company utilizes ASC 740 (Originally issued as SFAS No. 109, “Accounting for 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 basis 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 accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.




The Company records a valuation allowance for deferred tax assets, if any, based on its estimates of its future taxable income as well as its tax planning strategies when it is more likely than not that a portion or all of its deferred tax assets will not be realized. If the Company is able to utilize more of its deferred tax assets than the net amount previously recorded when unanticipated events occur, an adjustment to deferred tax assets would increase the Company net income when those events occur. The Company does not have any significant deferred tax asset or liabilities in the PRC tax jurisdiction.




12




Foreign currency translation




The Company uses the United States dollar for financial reporting purposes. The Company’s subsidiaries maintain their books and records in their functional currency - Chinese Yuan Renminbi ( RMB ), being the primary currency of the economic environment in which their operations are conducted. Such financial statements were translated into United States dollars in accordance with ASC 830 (Originally issued as Statement of Financial Accounts Standards (“SFAS”) No. 52, “Foreign Currency Translation”). According to the Statement, all assets and liabilities are translated at the current exchange rate, stockholder’s equity are translated at the historical rates and income statement and statement of cash flows items are translated at the average exchange rate for the period. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet. The resulting translation adjustments are reported under other comprehensive income in accordance with ASC 220 (Originally issued as SFAS No. 130, “Reporting Comprehensive Income”) as a component of shareholders’ equity.




Fair values of financial instruments




ASC 825 (Originally issued as Statement of Financial Accounting Standard No. 107, “Disclosures about Fair Value of Financial Instruments”) requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for assets and liabilities qualifying as financial instruments are a reasonable estimate of fair value.




The Company’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, other receivables, advances to suppliers, accounts payable and other payables.




As of the balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheet. This is attributed to the short maturities of the instruments and that interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profile at respective balance sheet dates.




Segment reporting




ASC 280 (Originally issued as Statement of Financial Accounting Standards No. 131, “SFAS 131”), “Disclosure about Segments of an Enterprise and Related Information” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.




ASC 280 (Originally issued as SFAS No. 131) has no effect on the Company’s consolidated financial statements as the Company operates in one reportable business segment.




Statement of cash flows




In accordance with ASC 230 (Originally issued as SFAS No. 95), "Statement of Cash Flows," cash flows from the Company's operations is calculated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet.




Recent Accounting Pronouncements




In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements”. This Statement amends ARB 51 to establish accounting and reporting standards for the noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS No. 160 is effective for the Company’s fiscal year beginning January 1, 2009. Management does not believe this pronouncement will have a material effect on financial statements.




13




In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This Statement replaces SFAS No. 141, Business Combinations. This Statement retains the fundamental requirements in Statement 141 that the acquisition method of accounting (which Statement 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. This Statement also establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) will apply prospectively to business combinations for which the acquisition date is on or after Company’s fiscal year beginning January 1, 2009. The Company will be required to expense costs related to any acquisitions after December 31, 2008. Management does not believe this pronouncement will have a material effect on financial statements.




In June 2008, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) Emerging Issues Task Force (EITF) No. 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities.” Under the FSP, unvested share-based payment awards that contain rights to receive nonforfeitable dividends (whether paid or unpaid) are participating securities, and should be included in the two-class method of computing EPS. This FSP will be effective for us beginning July 1, 2009 and the Company does not expect that FSP EITF to have a material effect on financial statements.





Reclassifications




Certain prior year amounts have been reclassified to conform with the current year's presentation, none of which had an impact on total assets, stockholders' equity, net income, or net earnings per share.




3. PROPERTY AND EQUIPMENT, NET




Property and equipment consist of the following as of March 31, 2009 and December 31, 2008:




March 31, 2009


December 31, 2008Manufacturing machinery

$
404,076


$
411,299Office equipment


39,716



38,037Motor vehicle


24,158



17,589Less: Accumulated Depreciation


(347,681
)


(327,160
)Property & Equipment, net

$
120,269


$
139,765




Depreciation expenses for the three month periods ended March 31, 2009 and 2008 were $21,010 and $17,057 respectively.




4. DUE FROM/(TO) RELATED PARTIES




The Company had a balance due from one company who is under common control. The amounts were $356,063 and $352,799 as of March 31, 2009 and December 31, 2008, respectively. The amount due is interest free, unsecured and due on demand.




14




The Company had due to related parties which are due to two companies which are under common control. The amounts were $858,899 and $129,444 as of March 31, 2009 and December 31, 2008, respectively. The amount due is interest free, unsecured and due on demand.




As of March 31, 2009 and December 31, 2008, the Company has short-term note payable to shareholders in the amount of $250,000 and $0, respectively.




On January 15, 2009, the Company entered into a redemption agreement, or the Redemption Agreement, with the Majority Stockholders, whereby the Majority Stockholders surrendered an aggregate of 1,666,298 shares of our common stock for redemption in exchange for our issuance of a convertible promissory note to each, or the Notes, in the aggregate principal amount of five hundred thousand dollars $500,000 in favor of the Majority Stockholders.




On March 31, 2009, the Company entered into a verbal agreement with the Majority Stockholders, pursuant to which the Company paid the Majority Stockholders $250,000, or one-half, of the principal amount due under the n otes and agreed to pay them the remaining $250,000 on or before April 30, 2009, without penalty. Subsequently, the Company paid $250,000 on April 27, 2009.




5. LONG-TERM PREPAYMENTS




GZ Greenland Agriculture has entered in to eight land leasing and developing agreements with various parties since 2005. The various parties are authorized to manage and plant the lands by GZ Greenland Agriculture who in return has the priority to purchase the agricultural products at fair market price. The life term of the rental agreements are twenty-five years with various due dates. GZ Greenland Agriculture is contracted to pay the fixed leasing fee of the entire contract period in lump sum at the inception of the agreements. GZ Greenland Agriculture uses straight-line method to amortize the Long-term prepayments, during the life time of the contracts. As of March 31, 2009 and December 31, 2008, the Company has Long-term prepayments (net) in the amount of $17,010,039 and $16,258,707, respectively.




The details of Long-term prepayments are listed below as of March 31, 2009 and December 31, 2008:




March 31, 2009


December 31, 2008Long-term prepayment –Cost

$
18,375,280


$
17,450,561Accumulated amortization


(1,364,890
)


(1,191,854
)Net

$
17,010,390


$
16,258,707




Amortization expenses for the three month periods ended March 31, 2009 and 2008 were $776,066 and $528,461 respectively.




Amortization expenses for the next five years after March 31, 2009 are as follows:




2010

$
735,0112011


735,0112012


735,0112013


735,0112014


735,011After


13,335,534Total

$
17,010,390




15




6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES




Accounts payable and accrued expenses comprised the following as of March 31, 2009 and December 31, 2008:




March 31, 2009


December 31, 2008Accounts payable

$
783,356


$
804,437Accrued payroll


61,499



90,916Accrued expenses


131,155



557,692Other payable


21,602



76,741$
997,611


$
1,529,786




7. SHORT-TERM CONVERTIBLE NOTES




On April 23, 2008, Organic Region, which was then a privately-owned company, issued for $500,000 its one-year 18% convertible notes with common stock warrants in the total amount of $500,000.  Upon the completion of the reverse acquisition the Company assumed the notes and related warrant obligations. The warrant holder are entitled to purchase up to $500,000 of securities at a per share price equal to 115% of the lowest cash price paid in a financing, which is defined as the consummation of one or more equity financings by the Company with aggregate proceeds of at least $3,000,000.





As of March 31, 2009, the Company had not raised $3,000,000 in financing, so the exercise price and the number of shares issuable upon exercise of the warrants had not been determined at March 31, 2009.




As of December 31, 2008, $340,266 was recorded as the warrant liability and $360,710 was recorded as the convertible debt on the balance sheet.  As of March 31, 2009, the warrant liability and convertible debt were $379,066 and $360,710, respectively.




8. EQUITY TRANSACTIONS




On January 15, 2009, the Company completed the reverse acquisition as described in Note 1. Pursuant to the share exchange agreement, the Company issued 81,648,554 shares of common stock in exchange for all of the outstanding common stock of Organic Region.





Warrants
  At December 31, 2008 and March 31, 2009, there were outstanding warrants to $500,000 of securities at a per share price equal to 115% of the lowest cash price paid in a financing, which is defined as the consummation of one or more equity financings by the Company with aggregate proceeds of at least $3,000,000.   The warrants were assumed by the Company in connection with the reverse acquisition described in Note 1.  As of March 31, 2009, the Company had not raised $3,000,000 in financing, so the exercise price and the number of shares issuable upon exercise of the warrants had not been determined at March 31, 2009.




16




Fair Value of Warrants




ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels:




[ ]
Level one — Quoted market prices in active markets for identical assets or liabilities;[ ]
Level two — Inputs other than level one inputs that are either directly or indirectly observable; and[ ]
Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.




Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter.




Assets and liabilities measured at fair value on a recurring basis are summarized as follows:




Fair value measurement using inputs


Carrying amount atFinancial instruments

Level 1


Level 2


Level 3


3/31/2009


Liabilities:Derivative instruments - Warrants
$
—

$
379,066

$
—

$
379,066Total
$
—

$
379,066

$
—

$
379,066




The fair value of warrants associated with the April 2008 debt issuance (Organic Region Warrants) that are reported as a liability was calculated using the Black Scholes model with the following assumptions:




Organic Region WarrantsMarch 31,


December 31,2009


2008Market price of common stock:

$
0.10


$
0.09Exercise price:

$
0.098


$
0.098Expected term (years):


5.0



5.0Dividend yield:


–



–Expected volatility:


98.25
%


112.01
%Risk-free interest rate:


1.50
%


1.50
%




As of March 31, 2009, none of the warrants had been exercised.




The risk-free rate of return reflects the interest rate for United States Treasury Note with similar time-to-maturity to that of the warrants.




17




9. INCOME TAXES




The Company’s operations are conducted solely in the PRC. It does not conduct any operations in the United States or The British Virgin Islands and is not subject to income tax in either jurisdiction. For certain operations in PRC, the Company has incurred net accumulated operating losses for income tax purposes. The Company believes that it is more likely than not that these net accumulated operating losses generated in the PRC will not be utilized in the future. Therefore, the Company has provided full valuation allowance for the deferred tax assets arising from the losses at these locations as of March 31, 2009 and December 31, 2008. Accordingly, the Company has no net deferred tax assets.




Under the current PRC enterprise income tax law, which became effective January 1, 2008, there is a standard enterprise income tax rate of 25%. The tax holidays that were granted under the former tax law, will continue in effect until they expire. Guangzhou Greenland has a two year income tax exemption in 2008 and 2009 and will have a 50% tax reduction from 2010 to 2012.




The income tax rate of Xiong Luo, with respect to Guangzhou Greenland , which is part of consolidated financial statement as of March 31, 2009 and December 31, 2008 as a VIE under ASC 810-10 (Originally issued as FIN 46R), is 1.8% of the fixed income amount accounted by the local national tax bureau in which he conducts the businesses.




The provision for income taxes from continuing operations on income consists of the following for the three months ended March 31, 2009 and 2008:




2009


2008PRC Current Income Expense

$
-


$
-Total Provision for Income Tax

$
-


$
-




The following is a reconciliation of the provision for income taxes at the tax rates of BVI and PRC to the income taxes reflected in the Statement of Operations for the three months ended March 31, 2009 and 2008.




2009


2008Tax rate in BVI


0
%


0
%Foreign income tax - PRC


25
%


33
%Exempt from income tax


(25
% )


(33
% )Foreign income tax – PRC(VIE)


1.8
%


1.8
%Exempt from income tax due to special tax policies


(1.8
% )


(1.8
% )Tax expense at actual rate


0
%


0
%




10. CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS




Operations of the Company are all carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC, and by the general state of the PRC's economy.




Operations of the Company in the PRC are subject to specific considerations and significant risks. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. Results of operations of the company may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.




There were no major customers who accounted for more than 10% of the total net revenue for the three month periods ended March 31, 2009 and for the year ended December 31, 2008.




Three vendors provided 79%, 13% and 8% of the goods to the Company during the three month periods ended March 31, 2009. Three vendors provided 91%, 3% and 6% of the goods to the Company during the year ended December 31, 2008. Accounts payable to these vendors amounted $783,356 and $804,438 on March 31, 2009 and December 31, 2008.




The Company extends credit to its customers based upon its assessment of their credit worthiness and generally does not require collateral. Credit losses have not been significant.




18




11. COMMITMENT




Operation Leases




The Company leases various office facilities under operating leases that terminate on various dates.




The Company incurred rent expenses $26,363 and $26,882 for the three months ended March 31, 2009 and 2008.




The rent expenses for the next five years after March 31, 2009 are as follows:




2009

$
86,9382010


49,0902011


51,0252012


32,0632013


28,611After


72,775$
320,502




12 . RESTATEMENT OF FINANCIAL STATEMENTS




On August 23, 2010, the Company concluded, after a review of the pertinent facts, that the previously issued financial statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2009 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2010, September 30, 2009, June 30, 2009 and March 31, 2009, respectively, should not be relied upon due to the following:





·
The Company improperly allocated, for financial statement purposes, the proceeds received in connection with the April 2008 debt financing transaction and the August and December 2009 and January 2010 preferred stock financing transactions (collectively, “the financings”). The restated financial statements include the effects of properly allocating the financing proceeds between (1) the debt or preferred stock, as applicable, (2) any derivative liabilities associated with warrants for the purchase of common stock, and (3) any beneficial conversion features (“BCF”), as a component of additional paid-in capital, which allow the debt and preferred shareholders to convert their investment into the Company’s common stock on favorable terms.




·
Due to the improper allocation of proceeds on the April 2008 debt financing which resulted in an incorrect basis for the debt, the Company improperly reported the loss on debt extinguishment upon its settlement in August 2009. The debt settlement is appropriately reported in the restated annual financial statements for 2009. The settlement occurred in August 2009, and therefore does not affect the March 31, 2009 income statement presented herein. However, the accompanying balance sheets appropriately reflect the impact of the proper allocation of proceeds to the debt as of March 31, 2009, and its ultimate settlement is appropriately reflected in the December 31, 2009 financial statements, as restated.




·
Certain warrants containing variable exercise terms associated with the financings were reported as a component of paid-in capital instead of properly reflecting them as a derivative liability at fair value, with changes in fair value reported in the income statement each period. The restated financial statements include the effects of reporting the derivative liabilities and their associated changes in value correctly.




·
A BCF was inappropriately recorded as a debt discount on the April 2008 financing in addition to being amortized over the subsequent 12 months with a charge to expense. Furthermore, separate BCFs associated with the December 2009 and January 2010 preferred stock financings were erroneously omitted due to a misallocation of proceeds for financial statement purposes. The restated financial statements include the effects of allocating financing proceeds to the applicable BCFs by recording a preferred stock discount with a credit to additional paid-in capital. The discounts were then charged immediately to retained earnings as deemed preferred stock dividends pursuant to the terms of the agreement which provide immediate conversion rights.




·
Earnings per share has been restated to include the effects of the restated financial statements




The Company’s management has determined that as a result of such accounting matters, its reported net income was understated by $108,693 for the three months ended March 31, 2009, overstated by 3,529,126 for the year ended December 31, 2009 and understated by $112,650 for the year ended December 31, 2008.




Set forth below is a comparative presentation of the balance sheet and income statement as of and for the three months ended March 31, 2009 as restated and as initially reported in the Company’s Reports on Form 10-Q previously filed with the Securities and Exchange Commission. These financial statements include the restated balance sheet as of March 31, 2009 and December 31, 2008.




19




SINO GREEN LAND CORPORATION AND SUBSIDIARIES




For the three months ended March 31, 2009




Three months ended March 31, 2009As Reported


As RestatedINCOME STATEMENT:Sales

$
18,530,563


$
18,530,563Cost of goods sold


16,407,579



16,407,579Gross profit


2,122,984



2,122,984Operating expense:Selling expenses


399,055



399,055General & administrative expenses


936,952



936,952Total operating expenses


1,336,007



1,336,007Operating income


786,977



786,977Other income/(expense):Other income (expense), net


(284,248
)


(261,755
)Interest expense


(22,500
)


(22,500
)Beneficial conversion feature expense


(125,000
)


-Change in derivative liability


-



(38,800
)Total other income/(expense)


(431,748
)


(323,055
)Net income


355,229



463,922Other comprehensive loss:Foreign currency translation gain/(loss)


(26,941
)


(26,941
)Comprehensive income (loss)

$
328,288


$
436,981Net income (loss) per share:Basic

$
0.00


$
0.01Diluted

$
0.00


$
0.01Weighted average number of shares outstandingBasic


83,314,851



83,314,851Diluted


83,866,207



83,866,207





20




As of March 31, 2009 and December 31, 2008




As Reported


As Restated


As Reported


As Restated3/31/2009


3/31/2009


12/31/2008


12/31/2008BALANCE SHEET:Convertible debenture

$
461,120


$
360,710


$
313,627


$
360,710Derivative liability






379,066







340,266Additional Paid-in Capital


5,417,686



4,917,686



5,419,351



4,919,351Retained earnings


9,818,362



10,039,705



9,463,133



9,575,783




21




ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS




The following discussion of the results of our operations and financial condition should be read in conjunction with our financial statements and the related notes, which appear elsewhere in this quarterly report. The following discussion includes forward-looking statements.





Statements in this quarterly report include “forward-looking statements.” Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in this quarterly report, including the risks described under “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K/A for the year ended December 31, 2009, which includes restated financial statements for the years ended December 31, 2009 and 2008. In addition, such statements could be affected by risks and uncertainties related to the effects of our restatement of our financial statements, weather and natural disasters, our ability to conduct business in the PRC, product demand, including the demand for fruit and vegetable products, our ability to develop and maintain good relations with local cooperative suppliers, our ability to raise any financing which we may require for our operations, including financing for our green produce hub, competition, government regulations and requirements, pricing and development difficulties, our ability to make acquisitions and successfully integrate those acquisitions with our business, as well as general industry and market conditions and growth rates, and general economic conditions. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this quarterly report.




Overview




We are engaged in the wholesale distribution, marketing and sales of premium fruits in China. Our main products include Fuji apples, emperor bananas and tangerine oranges. We purchase our products directly from farming cooperative groups to whom we provide varying degrees of farming, harvesting and marketing services. Almost all of our products are sold by us at the Guangdong Yun Cheng wholesale market and the Beijing Xin Fadi agricultural products wholesale market, two major markets for the sale of agricultural products in their respective areas, where we lease space to sell our produce. We sell to trading agents who sell our products to customers in and around the provinces in which the produce is grown.




Fruits, such as apples, bananas and oranges, as well as vegetables are considered staples in the Chinese diet, similar to rice and meat, and historically, demand for these products has not fluctuated with the ups and downs of the general economy. As a result, we have not yet seen a significant decline in our business from the recent economic downturn and the global credit crisis. However, if economic conditions further deteriorate, including business layoffs, downsizing, industry slowdowns and other similar factors that affect our distributors, customers, suppliers, farmers and creditors, we could see a reduction in the demand for our products which could have a material adverse effect on our business operations. Since we promote our products as premium foods, in troubled economic times, consumers may purchase cheaper fruits and vegetables rather than our products, which could affect both our revenue and our gross margin.




22




All fruits and vegetables are perishable, and are subject to spoilage if they are not delivered to market in a timely manner. Our ability to both purchase and sell produce is dependent upon a number of factors which are not under our control. Severe weather conditions and natural disasters, such as floods, droughts, frosts, earthquakes or pestilence, may affect our ability both to purchase products and to sell our products at the wholesale markets. Under these conditions, we may incur a higher cost of cold storage with no assurance that, even in the best conditions, spoilage cannot be avoided.




Since weather conditions are not uniform throughout China, our competitive position may be impaired if our competitors are able to deliver produce to market at a time when we are not able to make deliveries, either because we are unable to purchase the produce or because we are unable to bring the produce to market.




Agricultural products generally are subject to disease, blight and infestation by insects. Any disease, blight or infestation that affects our produce could materially impair our ability to generate revenue from the affected fruit.




We only have long-term arrangements to purchase produce from five farming cooperatives. If we are not able to purchase our produce from these farmers, whether because of a shortage, because of government regulations or otherwise, we may be unable to purchase produce from other co-ops or farmers, and if we are able to purchase produce, our costs may be greater, which could impair our gross margins.




Substantially all of our produce is grown by farming cooperatives on land which we lease pursuant to 25-year lease and development agreements which we entered into during the period from 2005 to 2010. All of these leases were entered into with the farmers who held the land use rights from the government. The farming cooperatives do not pay us rent for the land. We amortize our payments over the life of the leases. The amortization of our lease payments is included in cost of goods sold.




The current uncertainty arising out of domestic and global economic conditions, including the disruption in credit markets, may affect our ability to obtain either debt or equity financing which we may require in order to expand our business. Although our products are considered staples in Chinese consumers’ daily life, and, historically, demand for such staples has not fluctuated with the ups and downs of the general economy, if the current economic situation continues to deteriorate, we could see a more drastic reduction in the demand for our products. Since we are marketing our products as premium produce, consumers, in a time of economic difficulties, could purchase non-premium produce, which could have a material adverse effect on our business.




Seasonality




Our fresh fruit business is highly seasonal. Fuji apples are harvested mainly from late August until early November and are sold throughout the year. Tangerine oranges are harvested in late September through late November with the result that we have limited sales of tangerine oranges in the third quarter of the year. Emperor bananas are harvested throughout the year. They grow in an eight-month cycle, and are cultivated and harvested all year long. As harvested fruits cannot be stored at room temperature for a long time, they must be processed for sale as soon as they are harvested or stored at a cold temperature. As a result, the sales volume for our produce occurs during the harvesting season and for the months following the harvesting season.




We generally experience higher sales in the second half of the year. Sales in second half of 2009 accounted for approximately 63% of our revenue for 2009, and sales in the second half of 2008 accounted for approximately 59% of our revenue for 2008. If sales in the second half of the year are lower than expected, our operating results would be adversely affected, and it would have a disproportionately large impact on our annual operating results. Sales of tangerine oranges were nominal during the third quarter of 2009.




23




Because of the large number of green foods products which we plan to distribute through at our green foods distribution hub, there will be many different seasons for the different products we operate. We cannot predict at this time how the seasonality of the various products we propose to sell will affect our overall profitability.




Taxation




The PRC Enterprise Income Tax Law and Implementing Rules impose a unified EIT rate of 25.0% on all domestic-invested enterprises and foreign-invested enterprises, or FIEs, unless they qualify under certain limited exceptions. The law gives the FIEs established before March 16, 2007, such as our subsidiaries Zhuhai Organic and Guangzhou Organic, a five-year grandfather period during which they can continue to enjoy their existing preferential tax treatment. During this five-year grandfather period, the old FIEs which enjoyed tax rates lower than 25% under the original EIT law shall gradually increase their EIT rate by 2% per year until the tax rate reaches 25%. In addition, the FIEs that are eligible for a full exemption and 50% reduction under the original law are allowed to retain their preferential treatment until these holidays expire.




Under the current income tax laws and the related implementing rules, FIEs engaging in agriculture businesses, such as Guangzhou Organic, are entitled to a two-year tax exemption from PRC enterprise income tax, subject to approval from local taxation authorities. Guangzhou Organic is tax exempt for 2008 to 2009 and is entitled to a 50% tax reduction for the three years thereafter. Due to the absence of significant business in 2008, Zhuhai Organic was entitled to tax exemption in 2007, and will be entitled to a one-year tax exemption after the business resumes. However, Zhuhai Organic did not constitute a significant source of revenue or income in 2009 or 2008. Currently, pursuant to income tax law, the income tax rate for foreign-capitalized enterprises is 25% and the value-added tax rate is 13%.




Accounting Treatment of Financing Instruments




In April 2008, Organic Region, which was then a privately-owned company, issued, for $500,000, its one-year 18% convertible notes in the principal amount of $500,000 and warrants to purchase common stock after Organic Region effects a going public transaction, which includes a reverse acquisition with a publicly traded shell corporation. Due to variability in the terms of the warrants’ exercise price for which accounting rules preclude them from being considered as indexed to our common stock, the warrants are recorded at fair value, with changes in value reported in the income statement each period. Although the debt was paid off in 2009, the warrants remain outstanding.




Restatement of Financial Statements




On August 23, 2010, we concluded, after a review of the pertinent facts, that the previously issued financial statements contained in our annual report on Form 10-K for the year ended December 31, 2009 and our quarterly reports on Form 10-Q for the quarters ended March 31, 2010, September 30, 2009, June 30, 2009 and March 31, 2009 should not be relied upon for reasons set forth in Note 12 of Notes to Consolidated Financial Statements. This quarterly report reflects restated financial statements for the three months ended March 31, 2009 because of our failure to account properly for the treatment of securities issued in financings during 2009 and 2008. As a result, our net income, as originally reported, was understated by $108,693 for the three months ended March 31, 2009




24




Results of Operations




Three Months Ended March 31, 2009 and March 31, 2008




The following table sets forth the key components of our results of operations for the three months ended March 31, 2009 and 2008, in thousands of U.S. dollars and as a percentage of sales (dollars in thousands):




Three Months Ended March 31,2009 (Unaudited  and Restated)


2008 (Unaudited)% of





% ofDollars


Sales


Dollars


SalesSales

$
18,531





$
7,843Cost of Sales


16,408



88.5
%


6,793



86.6
%Gross Profit


2,123



11.5
%


1,049



13.4
%Operating ExpensesSelling Expenses


399



2.2
%


221



2.8
%Administrative Expenses


937



5.1
%


90



1.2
%Operating Income


787



4.2
%


738



9.4
%Interest Expenses


(23
)


(0.1
%)Change in derivative liability


(39
)


(0.2
%)Other (expense), net


(262
)


(1.4
%)Income Before Income Taxes


464



2.5
%


739



9.4
%Net income


464



2.5
%


739



9.4
%Foreign Currency translation gain (loss)


(27
)


(0.1
%)


32



0.4
%Comprehensive income


437



2.4
%


770



9.8
%




Sales.Sales increased approximately $10.7 million, or 136.28%, to approximately $18.5 million in the three months ended March 31, 2009 from approximately $7.8 million in the same period last year. Our production had declined during the first quarter of 2008 as a result of heavy snow in the regions where our products are grown. During the first quarter of 2009, more favorable weather conditions resulted in increased production and increased sales. Our production capacity also increased in the first quarter of 2009, as compared to the same period in 2008 because we cultivated an additional 28,000 mu (1 acre=6 mu) of land. This additional production contributed an additional $5.9 million in sales.




Cost of Sales. Our cost of sales is primarily comprised of the cost of purchasing produce from the farming cooperatives plus amortization of land use rights.  Our cost of sales increased approximately $9.6 million, or 141.52%, to approximately $16.4 million in the three months ended March 31, 2009 from approximately $6.8 million in the three months ended March 31, 2008. This increase was mainly due to increased production that resulted from the favorable weather and the increase in land area on which our products are produced.




Gross Profit and Gross Margin.Our gross profit increased approximately $1.1 million to approximately $2.1 million in the three months ended March 31, 2009 from approximately $1.0 million in the same period last year.




Gross profit was 11.46% and 13.38% for the three months ended March 31, 2009 and 2008, respectively. Our gross margin was relatively stable since it's largely determinate by the margin of the wholesale prices we buy from our suppliers and the reseller price we sell at distribution centers, both of which have remained relatively stable during the first quarters of 2008 and 2009.




Selling Expenses. Our selling expenses are comprised of marketing expense, the salaries of our marketing staff, bonus, rent, trading expense, and depreciation. Our selling expenses increased almost $0.2 million, or 80.73%, to approximately $0.4 in the three months ended March 31, 2009 from slightly more than $0.2 million in the same period last year. Our selling expenses increased with the increases in production from quarter to quarter. However, as a percentage of sales, we were able to decrease our selling expenses as a percentage of sales to 2.2% in the three months ended March 31, 2009 from 2.8% in the same period of 2008.




25




General and Administrative Expenses. Our general and administrative expenses are comprised of trip expense, office expense, research and development expense, market research expense, exhibition expense, audit expense, advisory expense and other expenses associated with our status as a public company. Our administrative expenses increased approximately $0.8 million, or 937.37%, to approximately $0.9 million in the three months ended March 31, 2009 from approximately $0.1 million in the three months ended March 31, 2008. Our administrative expenses increased during the first quarter of 2009 as a result of fees and expenses related to the reverse merger transaction which was consummated on January 15, 2009. As a percentage of net sales, administrative expenses increased to 3.7% in the three months ended March 31, 2009, as compared to 1.2% in the same period last year.




Interest Expense.  The interest expense was $22,500 inthe three months ended March 31, 2009 compared to $377 in the same period in 2008.  The interest expense in 2009 reflected the $500,000 convertible debentures we issued in April 2008.





Change in derivative liability.  Change of derivative liability was $38,800 in thethree months ended March 31, 2009compared to $0 in 2008, representing the change in fair value of warrants outstanding. The change in fair value, as computed using the Black-Scholes option pricing model, primarily reflected the increase in our stock price, which was $0.10 at March 31, 2009 and $0.09 at December 31, 2008.




Tax. Since our operating subsidiaries benefited from a tax exemption for agriculture products for 2008 and 2009, we did not incur any income tax liability in 2008 or 2009.




Net Income. As a result of the factors described above, our net income decreased approximately $0.3 million to approximately $0.5 million or $0.01 per share (both basic and diluted) in the three months ended March 31, 2009 from $0.7 million , or $0.01 per share (basic and diluted) for the in the same period of 2008.




Liquidity and Capital Resources




General




Historically, our primary capital needs have been to fund our working capital requirements and leases of farmland, and our primary sources of funds have been cash generated from operations.




As of March 31, 2009, we had cash and cash equivalents of approximately $0.5 million. The following table provides detailed information about our net cash flow for all financial statements periods presented in this report.




Cash Flow


(All amounts in thousands of U.S. dollars)




Three Months Ended March 31,2009


2008Net cash provided by (used in) operating activities

$
(1,039
)

$
324Net cash used in investing activities


(2
)


(1
)Net cash provided by (used in) financing activities


976



13Net cash flows


(66
)


374




26




Operating Activities




Net cash used in operating activities was approximately $ 1.0 million in the three months ended March 31, 2009, a decrease of approximately $ 1.3 million, from approximately $ 0.3 million in net cash provided by operating activities in the same period last year. Such decrease of net cash provided by operating activities was primarily attributable to Organic Region’s payment of liabilities incurred by Guangzhou Organic and to increases in accounts payable and accrued selling expenses, and long-term prepaid expense for land leases .




Investing Activities




Our cash used in investing activities primarily consists of payments related to the acquisition or sale of property, plant and equipment.




Net cash used for investing activities in the three months ended March 31, 2009 and 2008 was approximately $ 1,736 and $ 885 , respectively.




Financing Activities




Net cash generated by financing activities in the three months ended March 31, 2009 totaled approximately $ 1.0 million, compared to approximately $ 13,115 in the same period last year. The difference in the cash generated by financing activities for 2009 and 2008 is attributable to loans from related parties on January 15, 2009 disclosed elsewhere herein, which was used for cash consideration and the payment of administrative expenses in connection with the reverse acquisition transaction.




Critical Accounting Policies and Estimates




The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial conditions and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments.




We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements.




Accounts Receivable– Our policy is to maintain reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves.




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Inventories– Inventories are valued at the lower of cost (determined on a weighted average basis) or market value. Management compares the cost of inventories with market value and an allowance is provided to reduce the value of inventories to their net market value.




Impairment– We apply the provisions of ASC 360-10 (Originally issued as FAS No. 144).. ASC 360-10 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. We test long-lived assets, including property, plant and equipment and intangible assets subject to periodic amortization, for recoverability at least annually or more frequently upon the occurrence of an event or when circumstances indicate that the net carrying amount is greater than its fair value. Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. We consider historical performance and future estimated results in our evaluation of potential impairment, and then we compare the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, we measure the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally measured by discounting expected future cash flows as the rate we utilize to evaluate potential investments. We estimate fair value based on the information available in making whatever estimates, judgments and projections are considered necessary.




Revenue Recognition– Our revenue recognition policies are in compliance with ASC 605 (Originally issued as Staff Accounting Bulletin (SAB) 104). Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue. Revenues from the sale of products are recognized at the point of sale of our products. Discounts provided to customers by us at the time of sale are recognized as a reduction in sales as the products are sold. Discounts provided by vendors are not recognized as a reduction in sales provided the coupons are redeemable at any retailer that accepts coupons. Sales taxes are not recorded as a component of sales. The “Cost of Goods Sold” line item of the Consolidated Statements of Income includes product costs, net of discounts and allowances. Discounts provided to us by vendors at the time of purchase are recognized as a reduction in inventory cost as the products are delivered. All other costs, including warehousing costs, transportation costs; salaries, rent expense and depreciation expense, are shown separately in selling expenses or general and administrative expense in our consolidated statements of income.




Fair Value Measurements And Financial Instruments




We determine the fair value of financial instruments in accordance with standards pertaining to fair value measurements. Such standards define fair value and establish a framework for measuring fair value in GAAP. Fair value involves significant estimates impacts the financials in many areas such as derivatives, stock comp and deferred compensation. These estimates can have significant impact on our financial statements based on the assumptions we use. See Note 7 to the consolidated financial statements for further information regarding our derivative and stock option positions.




Foreign Currency Translation– We use United States dollars for financial reporting purposes, and it is our functional currency. Our subsidiaries maintain their books and records in their functional currency -RMB, which is currency of China, where all of our operations are conducted. Such financial statements were translated into United States dollars in accordance with ASC 830 (Originally issued as Statement of Financial Accounts Standards (“SFAS”) No. 52, “Foreign Currency Translation”). According to the Statement, all assets and liabilities are translated at the current exchange rate on the balance sheet date, shareholder’s equity are translated at the historical rates and income statement items are translated at the average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with ASC 220 (Originally issued as SFAS No. 130, “Reporting Comprehensive Income”) as a component of shareholders’ equity.




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Recent Accounting Pronouncements




In September 2006, the FASB issued SFAS 158 “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R).” This statement improves financial reporting by requiring an employer to recognize the over funded or under funded status of a defined benefit postretirement plan (other than a multi-employer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. This statement also improves financial reporting by requiring an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. An employer with publicly traded equity securities is required to initially recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after December 15, 2006. An employer without publicly traded equity securities is required to recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after June 15, 2007. However, an employer without publicly traded equity securities is required to disclose the following information in the notes to financial statements for a fiscal year ending after December 15, 2006, but before June 16, 2007, unless it has applied the recognition provisions of this statement in preparing those financial statements: (a) a brief description of the provisions of this statement; (b) the date that adoption is required; and (c) the date the employer plans to adopt the recognition provisions of this Statement, if earlier. The requirement to measure plan assets and benefit obligations as of the date of the employer’s fiscal year-end statement of financial position is effective for fiscal years ending after December 15, 2008. Our management is currently evaluating the effect of this pronouncement on our financial statements.




In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements”. This Statement amends ARB 51 to establish accounting and reporting standards for the noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS No. 160 is effective for our fiscal year beginning October 1, 2009. Our management is currently evaluating the effect of this pronouncement on our financial statements.




In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This statement replaces SFAS No. 141, Business Combinations. This statement retains the fundamental requirements in SFAS 141 that the acquisition method of accounting (which SFAS 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. This statement also establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) will apply prospectively to business combinations for which the acquisition date is on or after the Company’s fiscal year beginning October 1, 2009. While we have not yet evaluated this statement for the impact, if any, that SFAS No. 141(R) will have on our consolidated financial statements, we will be required to expense costs related to any acquisitions after September 30, 2009.




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On March 19, 2008, the FASB issued FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities. The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. “Use and complexity of derivative instruments and hedging activities have increased significantly over the past several years. This has led to concerns among investors that the existing disclosure requirements in FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, do not provide enough information about how these instruments and activities affect the entity’s financial position and performance,” explained Kevin Stoklosa, project manager. “By requiring additional information about how and why derivative instruments are being used, the new standard gives investors better information upon which to base their decisions.” The new standard also improves transparency about the location and amounts of derivative instruments in an entity’s financial statements; how derivative instruments and related hedged items are accounted for under Statement 133; and how derivative instruments and related hedged items affect its financial position, financial performance, and cash flows. FASB Statement No. 161 achieves these improvements by requiring disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity’s liquidity by requiring disclosure of derivative features that are credit risk–related. Finally, it requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. Management is currently evaluating the effect of this pronouncement on our financial statements.




In May of 2008, the FASB issued SFAS No.162, The Hierarchy of Generally Accepted Accounting Principles. The pronouncement mandates the GAAP hierarchy reside in the accounting literature as opposed to the audit literature. This has the practical impact of elevating FASB Statements of Financial Accounting Concepts in the GAAP hierarchy. This pronouncement will become effective 60 days following SEC approval. We do not believe this pronouncement will impact our financial statements.




In May of 2008, the FASB issued SFAS No. 163, Accounting for Financial Guarantee Insurance Contracts–an interpretation of FASB Statement No. 60. The scope of the statement is limited to financial guarantee insurance (and reinsurance) contracts. The pronouncement is effective for fiscal years beginning after December 31, 2008. We do not believe this pronouncement will impact our financial statements.




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, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to an investor in our securities.




ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.




Not Applicable.




ITEM 4.
CONTROLS AND PROCEDURES.




Evaluation of Disclosure Controls and Procedures.




The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including to our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.




As required by Rule 13a-15 and Rule 15d-15 under the Exchange Act, our management, including Mr. Xiong Luo , our chief executive officer and Ms. Huasong Sheena Shen , our chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2009 . For the reasons set forth in the following paragraphs, our management, under the direction of Mr. Luo and Ms. Shen concluded that as of March 31, 2009, our disclosure controls and procedures were not effective.




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At December 31, 2008, we were a privately-owned company, and, accordingly, we did not make a determination as to the effectiveness of our internal controls over financial reporting.  For the reasons set forth below, our internal controls over financial reporting were not effective at December 31, 2008 or March 31, 2009.




On August 23, 2010, we concluded, after a review of the pertinent facts, that the previously issued financial statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2009, and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2010, September 30, June 30 and March 31, 2009, respectively, should not be relied upon due to the following:




·
The Company improperly allocated, for financial statement purposes, the proceeds received in connection with the April 2008 debt financing transaction and the August and December 2009 and January 2010 preferred stock financing transactions (collectively, “the financings”). The restated financial statements include the effects of properly allocating the financing proceeds between (1) the debt or preferred stock, as applicable, (2) any derivative liabilities associated with warrants for the purchase of common stock, and (3) any beneficial conversion features (“BCF”), as a component of additional paid-in capital, which allow the debt and preferred shareholders to convert their investment into the Company’s common stock on favorable terms.




·
Due to the improper allocation of proceeds on the April 2008 debt financing which resulted in an incorrect basis for the debt, the Company improperly reported the loss on debt extinguishment upon its settlement in August 2009. The debt settlement is appropriately reported in the restated annual financial statements for 2009. The settlement occurred in August 2009, and therefore does not affect the income statements presented. However, the accompanying balance sheets appropriately reflect the impact of settlement.




·
Certain warrants containing variable exercise terms associated with the financings were reported as a component of paid-in capital instead of properly reflecting them as a derivative liability at fair value, with changes in fair value reported in the income statement each period. The restated financial statements include the effects of reporting the derivative liabilities and their associated changes in value correctly.




·
A BCF was inappropriately recorded as a debt discount on the April 2008 financing in addition to being amortized over the subsequent 12 months with a charge to expense. Furthermore, separate BCFs associated with the December 2009 and January 2010 preferred stock financings were erroneously omitted due to a misallocation of proceeds for financial statement purposes. The restated financial statements include the effects of allocating financing proceeds to the applicable BCFs by recording a preferred stock discount with a credit to additional paid-in capital. The discounts were then charged immediately to retained earnings as deemed preferred stock dividends pursuant to the terms of the agreement which provide immediate conversion rights.




·
Earnings per share has been restated to include the effects of the restated financial statements




We have restated its our balance sheet at March 31, 2009 and our income statement for the three months quarter ended March 31, 2009 and our statements of cash flows for the three months quarter ended March 31, 2009 and 2008 in this Form 10-Q. Our balance sheet at December 31, 2008 is restated in our annual report on Form 10-K/A, amendment no. 2, and is included in this Form 10-Q. The Company will restate its financial statements for the years ended December 31, 2009 and 2008 and the quarters ended March 31, 2010, September 30, June 30 and March 31, 2009, respectively.




We intends to take such steps as are necessary, including the engagement of accounting personnel with experience in US GAAP, in order that our financial controls and disclosure controls are effective.




Changes in Internal Control Over Financial Reporting.






During the fiscal quarter ended March 31, 2009, other than as reflected in this Item 4 and our restated financial statements , there were no changes in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.




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PART II




OTHER INFORMATION




ITEM 6.
EXHIBITS.




The following exhibits are filed as part of this report or incorporated by reference:




Exhibit No.
Description31.1
Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.31.2
Certification of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
Certification of Principal Executive Officer and Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.





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SIGNATURES




Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.




SINO GREEN LAND CORPORATIONDate: October 27 , 2010
By: /s/ Xiong LuoXiong Luo , Chief Executive Officer(Principal Executive Officer)Date: October 27 , 2010
By: /s/ Huasong Sheena ShenHuasong Sheena Shen , Chief Financial Officer(Principal Financial Officer and Principal Accounting Officer)