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JUQUN,INC. - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operations

January 21, 2014

JuQun, Inc. (the "Company" or "JQ"), the successor upon a merger with TTI Industries, Incorporated , is a development stage company, and was incorporated under the laws of the State of Nevada on September 5, 2012 . The Company intends to serve as a vehicle to effect an asset acquisition, merger, or exchange of capital stock or other business combination with a domestic or foreign business. The Company is still devoting substantially all of its efforts on locating a business and it has not initiated principal operations. The Company's monthly burn rate is $28,000 . For the three months ended November 30, 2013 , the Company has a net loss of approximately $606,249 , of which 522,503 was non cash stock for services expense. To date management has been able to finance the initial phase of implementation of the Company's business plan via loans from directors. At November 30, 2013 , we had approximately $42,450 in cash available as a result of the loans from our principle shareholders as referenced above. We estimate our monthly expenses moving forward will run approximately $28,000 per month, during which period we expect we will be identifying an operating business and negotiate and consummate an acquisition, and prepare and file a Form 8k disclosing the details of the acquisition, which we estimate to cost an additional $20,000 . Our estimate of monthly expenses includes expenditures for office expense, accounting, legal, travel, and various filing fees, taxes and costs. The exact use of funds and the amount of expenditures are uncertain. We may need to raise additional funds to pay for the costs associated with this. Operations Three Months Ended November 30, 2013 Compared to November 30, 2012 Revenue We had no revenue for the Three months ended November 30, 2013 or the three months ended November 30, 2012 . Expenses For the three months ended November30, 2013 we incurred $606,249 , in expenses compared to $_134,031 during the same period last year. The increase was mainly due to stock for services non cash expense of $522,503 . After deducting that the company incurred $83,746 in costs down from $134,031 in the prior year. Costs were down as professional expenses decreased. In the three months ended November 30, 2013 we incurred $4936 in accrued interest on a related party loan compared to $5,918 in the previous year as out debt total decreased. Net Loss During the three months ended November 30, 2013 we lost $606,249 compared to $134,031 for the same period in the prior year. The difference of $472,218 was mainly stock for services. Going Concern Our financial statements have been prepared assuming we will continue as a going concern. The Company has experienced a loss from operations and needs to begin its business plan. There is no assurance that the Company can continue as a going concern. 13 Liquidity and Capital Resources At November 30, 2013 the Company's assets were $42,450 , with liabilities of $385,563 . The liabilities consisted of $330,000 related party loan and accounts payable of $55,563 . For the three months ended November 30, 2013 cash flows used in operations were $97,639 . HISTORY JuQun, Inc. JuQun Inc. , formerly TTI Industries, Incorporated . ("JQ"), was incorporated in the State of Nevada on September 5, 2012 , by its predecessor, TTI Industries, Incorporated ("TTI"), as a wholly owned subsidiary of TTI. On September 19, 2012 , TTI was merged into JQ pursuant to a short form merger into JQ, its wholly owned subsidiary. The merger resulted in a successor corporation, JQ, which is the Registrant herein. TTI Industries, Incorporated TTI was incorporated in the State of Texas . Prior to May 6, 1998 , TTI operated under the name, " Environmental Plus, Inc. ", and conducted a business of construction and repair of industrial cooling towers mostly in Texas , Louisiana , and Arkansas , for electric utility companies. The Company incurred operating losses in the second half of the 1990's, and in May of 1998, changed its name to TTI Industries, Incorporated and changed its trading symbol to TTIA. In 2000, the Company's management formulated and initiated a new business plan for the production and sale of a series of pest control products for the home and garden, with an emphasis on products that were safe for children, pets and wildlife; environmentally friendly; priced at a low cost; and utilizing attractive animal-shaped designs. Sufficient capital could not be located to pursue this business plan, the business was unsuccessful, and in March of 2002 the Company filed a Chapter 11 Bankruptcy proceeding in Santa Clara, California . The Chapter 11 proceeding was converted to a Chapter 7 proceeding in December of 2002, and TTI was discharged from Bankruptcy on April 4, 2004 In January of 2009, caretaker management was brought into TTI to groom it as a public company which would seek to acquire an operating business. In June of 2012, the caretaker management of TTI was replaced by new management, which has continued as the management of JQ, the successor corporation as a result of the Merger. New management loaned $175,000 in cash to TTI between June 1, 2011 and the close of its last fiscal year on August 31, 2012 . No loan documents and no promissory note were generated to evidence this loan, and the loan was designated a non interest bearing loan. This loan was converted into 38,293,216 shares of TTI's restricted common stock on September 4, 2012 . The funds have been used to settle outstanding debts and taxes, bring TTI current under Texas law, rehire the TTI's transfer agent, hire outside accountants to prepare an audit of the TTI and the successor company, JQ, retain legal counsel, and provide working capital. TTI was a reporting company under the Securities Exchange Act of 1934 (the "34 Act"), and filed reports under the 34 Act through February of 2000. From May, 2000 through September of 2009, TTI was delinquent and failed to file reports under the 34 Act due to its business reversals and its lack of operations. In September of 2009, the SEC issued an order under Section 12 (j)of the Securities Exchange Act of 1934 (the "34 Act") against TTI. As a result, trading of TTI's common stock was suspended pursuant to Section 12(k) of the 34 Act,and TTI's registration of its common stock was revoked under the 34 Act. As a result TTI, which formerly traded on the Over The Counter Pink Sheets, ceased trading on the Pink Sheets, and TTI does not currently trade on any public market. Merger of TTI Industries, Incorporated into JuQun, Inc. On September 5, 2012 , TTI organized a wholly owned subsidiary in Nevada , under the name, JuQun Inc. On September 19 , pursuant to the terms of an Agreement and Plan of Merger with Wholly Owned Subsidiary, TTI as parent Texas corporation, merged itself into JuQun, Inc. , its Nevada subsidiary, with JuQun, Inc. , the former Nevada subsidiary, becoming the surviving corporation. JQ is therefore the registrant herein. 14 The purpose of the merger was to change the domicile of the TTI from Texas to Nevada , to increase its authorized capital stock from 100,000,000 shares to 150,000,000 shares, and to accomplish a one for seven reverse split of its outstanding common stock. The Company chose Nevada because it is more convenient to the West Coast where the Company has advisors, and there is no Corporate State Income Tax. The Terms of the merger provided for the conversion of the outstanding Shares of Common Stock of TTI Industries , to be automatically converted upon consummation of the merger in to common shares of JuQun, on the basis of the conversion of each seven shares of TTI Industries Common stock into one Common share of JuQun common stock. The nominal common shares of Juqun outstanding immediately prior to the merger were automatically canceled and returned to treasury upon consummation of the merger. As a result, the merger effectively accomplished a one for seven reverse split of the formerly outstanding shares of TTI, without changing the ownership percentage of any shareholder. Pursuant to the terms of this Merger, JuQun, Inc. ("JQ"), the officers and directors of TTI became the officers and directors of JQ, the 68,825,188 outstanding capital shares of TTI were automatically changed and converted into 9,832,170 common shares of JQ, and any and all taxes owed by TTI were assumed by JQ. As a result of the merger the Articles of Incorporation and Bylaws of JQ continued as the Articles of Incorporation and Bylaws of the combined entity. On September 26, 2012 , immediately after consummation of the merger, management arranged for the loan of $500,000 to JQ, to be used as working capital. This loan was made, but no loan documents and no promissory note were generated to evidence this loan, and the loan has been designated a non interest bearing loan. The loan proceeds have been used primarily to fund continuing legal work of outside attorneys, continuing work of outside auditors, the costs of the Company's transfer agent, Nevada State costs and fees, and the travel expenses of the Company's CEO, Tom Chia , and his advisors, as Mr. Chia explores the acquisition of an operating business by the Company. PLAN OF OPERATION JuQun, Inc. (the "Company", or JQ), the successor corporation to the merger, and the registrant herein, will attempt to locate and negotiate with a business entity for the combination of that target company with the Company. Because the principle officers and controlling shareholders of the Company are located in China , it is anticipated, but cannot be assured, that the operating business ultimately to be acquired will be an operating business located in China . Further, because our two controlling shareholders, Messrs Tom Chia and Paul Wong , who also service as the principle officers of the Company, have various existing business interests and relationships in China , it is very possible that the operating business to be acquired will be a business in which one or both of these individuals have an investment or interest or with whom they have an existing relationship. We plan to remain open to the prospect of an acquisition of an operating business in which one or both of these individuals are already involved. As a result, the Board of Directors has declared as a policy that the Company may transact business with some of our officers, directors and affiliates, as well as with firms in which one or more of our officers, directors or affiliates have a material interest, and may consider the acquisition of an operating business in which one or more of them may already have some interest. In such event there will be a resulting conflict which will arise between the respective interests of the Company and the dual interests of such persons, or their related persons or entities. We believe that in such circumstances, transactions can be effected on terms at least as favorable to us as those available from unrelated third parties. 15 With respect to transactions involving real or apparent conflicts of interest, we have adopted policies and procedures which require that: (i) the fact of the relationship or interest giving rise to the potential conflict be disclosed or known to the directors who authorize or approve the transaction prior to such authorization or approval, (ii) the transaction be approved by a majority of our disinterested outside directors, and (iii) the transaction be fair and reasonable to us at the time it is authorized or approved by our directors. We are considered a blank check company. The U.S. Securities and Exchange Commission (the "SEC") defines those companies as "any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies." Under SEC Rule 12b-2 under the Securities Act of 1933, as amended (the "Securities Act"), we also qualify as a "shell company," because we have no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements. Our current business plan is to attempt to identify and negotiate with a business target for the merger of that entity with and into the Company. In certain instances, a target company may wish to become a subsidiary of the Company or may wish to contribute or sell assets to the Company, or may wish to joint venture with the Company or license the Company, rather than to merge. No assurances can be given that we will be successful in identifying or negotiating with any target company. We seek to provide a method for a foreign or domestic private company to become a reporting or public company whose securities may ultimately be qualified for trading in the United States secondary markets. However, our securities do not currently trade in any public market, and there is no assurance that our securities will ever be qualified for trading in such markets. The Company has not restricted its search for any specific kind of business, and it may acquire a business which is in its preliminary or development stage, a business which is already in operation, or a business in essentially any stage of its business life. It is impossible to predict the status of any business in which the Company may become engaged. Such a business may be motivated by the need for additional capital, may desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer. The Company will participate in a business combination only after the negotiation and execution of appropriate agreements. Negotiations with a target company will likely focus on the percentage of the Company which the target company shareholders would acquire in exchange for their shareholdings. Although the terms of such agreements cannot be predicted, generally such agreements will require certain representations and warranties of the parties thereto, will specify certain events of default, will detail the terms of closing and the conditions which must be satisfied by the parties prior to and after such closing and will include miscellaneous other terms. Any merger or acquisition effected by the Company can be expected to have a significant dilutive effect on the percentage of shares held by the Company's shareholders at such time. A business combination with a target company may result in the substitution by the target company of its own management and board of directors. No assurances can be given that we will be able to enter into a business combination or transaction, or, if we do enter into such a business combination or transaction, no assurances can be given as to the terms of a business combination or transaction, or as to the nature of the target operating business. It is anticipated that the investigation of specific business acquisition and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If a decision is made not to make the acquisition, the costs incurred in the investigation will not be recoverable. 16 Statements contained in this Report, including statements regarding our search for and intended acquisition of an operating business, and our belief or current expectations with respect to our ability to negotiate and close on such an acquisition, are all forward-looking statements, and speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements.


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Source: Edgar Glimpses


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