[X]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
FOR THE QUARTERLY PERIOD ENDED: March 31, 2012
|
|
or
|
|
[ ]
|
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: 000-31497
|
Florida
|
65-1001686
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
23F. Gutai Beach Building No. 969, Zhongshan Road (South), Shanghai, China
|
200011
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
|
[ ]
|
Accelerated filer
|
[ ]
|
|||
Non-accelerated filer
|
[ ]
|
Smaller reporting company
|
[X]
|
|||
Page No.
|
||
PART I. - FINANCIAL INFORMATION
|
||
Item 1.
|
Financial Statements.
|
1
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
15
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
19
|
Item 4.
|
Controls and Procedures.
|
19
|
PART II - OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings.
|
19
|
Item 1A.
|
Risk Factors.
|
19
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
19
|
Item 3.
|
Defaults Upon Senior Securities.
|
20
|
Item 4.
|
Mine Safety Disclosures.
|
20
|
Item 5.
|
Other Information.
|
20
|
Item 6.
|
Exhibits.
|
20
|
Signatures
|
22
|
•
|
our history of losses and declining margins,
|
•
|
our history of providing advances to related parties and loans to unrelated parties which could adversely impact our liquidity,
|
•
|
our dependence on third party equipment and services to operate our business,
|
•
|
our dependence on third party cargo agents,
|
•
|
credit risks,
|
•
|
the slowdown of the Chinese economy or risks of inflation,
|
•
|
the impact of changes in the political and economic policies and reforms of the Chinese government; fluctuations in the exchange rate between the U.S. dollar and the Renminbi,
|
•
|
uncertainties associated with the Peoples Republic of China ("PRC")’s legal system,
|
•
|
currency exchange restrictions and fluctuations in the value of the RMB,
|
•
|
economic, legal restrictions and business conditions in China,
|
•
|
adverse impact of recent Chinese accounting scandals,
|
•
|
material weaknesses in our internal control over financial reporting,
|
•
|
the closely-held nature of our securities,
|
•
|
limited public market for our common stock, and
|
•
|
the potential dilutive impact of the exercise of warrants, including warrants with cashless exercise provisions, or the conversion of preferred stock.
|
·
|
"China Logistics," "we," "us," "our," the "Company," and similar terms refer to China Logistics Group, Inc., a Florida corporation, and its subsidiary,
|
·
|
"Shandong Jiajia" refers to Shandong Jiajia International Freight & Forwarding Co., Ltd., a Chinese company and a majority owned subsidiary of China Logistics, and its branches in Shanghai, Qingdao, Tianjin, Xiamen, and Lianyungang,
|
·
|
"China" or the "PRC" refers to the People's Republic of China, and
|
·
|
"RMB" refers to the Renminbi, which is the currency of mainland PRC.
|
CHINA LOGISTICS GROUP, INC. AND SUBSIDIARIES
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
March 31, 2012
|
December 31, 2011
|
|||||||
(As Restated)
|
(As Restated)
|
|||||||
ASSETS
|
(unaudited)
|
|||||||
Current assets:
|
||||||||
Cash
|
$
|
2,321,902
|
$
|
1,396,896
|
||||
Accounts receivable, net
|
1,961,938
|
3,407,307
|
||||||
Notes receivable
|
23,764
|
-
|
||||||
Other receivables
|
618,429
|
583,008
|
||||||
Advances to vendors and other current assets
|
686,359
|
24,356
|
||||||
Due from related parties
|
598,570
|
630,465
|
||||||
Total current assets
|
6,210,962
|
6,042,032
|
||||||
Property and equipment, net
|
35,145
|
37,674
|
||||||
Total assets
|
$
|
6,246,107
|
$
|
6,079,706
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable - trade
|
$
|
2,343,600
|
$
|
3,100,660
|
||||
Accrued expenses and other current liabilities
|
928,645
|
630,353
|
||||||
Advances from customers
|
711,442
|
485,102
|
||||||
Due to related parties
|
1,032,975
|
1,350,743
|
||||||
Foreign tax payable
|
8,986
|
10,267
|
||||||
Total current liabilities
|
5,025,648
|
5,577,125
|
||||||
Shareholders’ equity:
|
||||||||
China Logistics Group, Inc. shareholders' equity:
|
||||||||
Preferred stock - $0.001 par value, 450,000 shares authorized Series B convertible issued and outstanding at March 31, 2012 and December 31, 2011
|
450
|
450
|
||||||
Common stock, $0.001 par value, 500,000,000 shares authorized; 41,508,203 shares issued and outstanding at March 31, 2012 and December 31, 2011
|
41,508
|
41,508
|
||||||
Additional paid-in capital
|
20,636,980
|
20,636,980
|
||||||
Accumulated deficit
|
(19,484,424
|
)
|
(19,763,182
|
)
|
||||
Accumulated other comprehensive loss
|
(61,007
|
)
|
(141,899
|
)
|
||||
Total China Logistics Group, Inc. shareholders' equity
|
1,133,507
|
773,857
|
||||||
Non-controlling interest
|
86,952
|
(271,276
|
)
|
|||||
Total shareholders’ equity
|
1,220,459
|
502,581
|
||||||
Total liabilities and shareholders’ equity
|
$
|
6,246,107
|
$
|
6,079,706
|
CHINA LOGISTICS GROUP, INC. AND SUBSIDIARIES
|
||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
|
||||||||
(Unaudited)
|
||||||||
Three Months Ended March 31,
|
||||||||
2012
|
2011
|
|||||||
(As Restated)
|
(As Restated)
|
|||||||
Sales
|
$ | 5,367,060 | $ | 4,609,433 | ||||
Cost of sales
|
4,561,091 | 4,250,723 | ||||||
Gross profit
|
805,969 | 358,710 | ||||||
Operating expenses:
|
||||||||
Selling, general and administrative
|
241,746 | 297,798 | ||||||
Gain on disposal of property and equipment
|
(1,089 | ) | - | |||||
Depreciation and amortization
|
1,612 | 8,586 | ||||||
Bad debt expense
|
- | 284,446 | ||||||
Bad debt recovery
|
- | (533,534 | ) | |||||
Total operating expenses
|
242,269 | 57,296 | ||||||
Income from operations
|
563,700 | 301,414 | ||||||
Other income (expenses):
|
||||||||
Other expense
|
(1,698 | ) | (8,346 | ) | ||||
Interest income (expense)
|
1,198 | (1,796 | ) | |||||
Total other expenses
|
(500 | ) | (10,142 | ) | ||||
Income before income taxes
|
563,200 | 291,272 | ||||||
Foreign taxes
|
3,935 | 1,548 | ||||||
Net Income
|
559,265 | 289,724 | ||||||
Less: net income attributable to the non-controlling interest
|
280,508 | 181,230 | ||||||
Net income attributable to China Logistics Group, Inc.
|
$ | 278,757 | $ | 108,494 | ||||
Comprehensive Income:
|
||||||||
Net income
|
$ | 559,265 | $ | 289,724 | ||||
Foreign currency translation adjustment
|
80,893 | 13,733 | ||||||
Comprehensive income
|
$ | 640,158 | $ | 303,457 | ||||
Earnings per common share:
|
||||||||
Basic
|
$ | 0.01 | $ | 0.00 | ||||
Diluted
|
$ | 0.01 | $ | 0.00 | ||||
Weighted average number of shares outstanding:
|
||||||||
Basic
|
41,508,203 | 41,508,203 | ||||||
Diluted
|
46,008,203 | 46,008,203 |
CHINA LOGISTICS GROUP, INC. AND SUBSIDIARIES
|
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(Unaudited)
|
||||||||
For the Three Months Ended
|
||||||||
March 31,
|
||||||||
2012
|
2011
|
|||||||
(As Restated)
|
(As Restated)
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income
|
$
|
559,265
|
$
|
289,724
|
||||
Adjustments to reconcile net income to net cash from operating activities:
|
||||||||
Depreciation expense
|
1,612
|
8,586
|
||||||
Allowance for doubtful accounts
|
-
|
(249,088
|
) | |||||
Gain from disposal of property plant
|
(1,089
|
)
|
-
|
|||||
Increase (decrease) in cash attributable to changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
1,445,370
|
(441,386
|
)
|
|||||
Notes receivable
|
(23,764
|
)
|
-
|
|||||
Other receivables
|
(35,421
|
)
|
118,990
|
|||||
Repayment of advances to related parties
|
51,130
|
66,278
|
||||||
Advances to related parties
|
(19,236
|
)
|
(86,338
|
)
|
||||
Accounts payable
|
(757,060
|
)
|
(186,030
|
)
|
||||
Other accruals and current liabilities
|
298,294
|
376,833
|
||||||
Taxes payable
|
(1,281
|
)
|
(4,464
|
)
|
||||
Advances to vendors and other current assets
|
(662,003
|
)
|
(92,335
|
)
|
||||
Advances from customers
|
226,340
|
659,042
|
||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
1,082,157
|
459,812
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase of property and equipment
|
|
-
|
(2,217
|
)
|
||||
Proceeds from disposal of property and equipment
|
1,426
|
-
|
||||||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
|
1,426
|
(2,217
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Payments of advance from related parties
|
(318,325
|
)
|
(658,368
|
)
|
||||
Advances from related parties
|
557
|
-
|
||||||
NET CASH USED IN FINANCING ACTIVITIES
|
(317,768
|
)
|
(658,368
|
)
|
||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
159,191
|
36,722
|
||||||
NET INCREASE (DECREASE) IN CASH
|
925,006
|
(164,051
|
)
|
|||||
CASH - beginning of period
|
1,396,896
|
1,309,848
|
||||||
CASH - end of period
|
$
|
2,321,902
|
$
|
1,145,797
|
||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||
Cash paid during the period for foreign taxes
|
$
|
23,843
|
$
|
27,059
|
•
|
When merchandise departs the shipper’s location if the trade pricing terms are CIF (cost, insurance and freight),
|
||
•
|
When merchandise departs the shipper’s location if the trade pricing terms are CFR (cost and freight), or
|
||
•
|
When the merchandise arrives at the destination port if the trade pricing terms are FOB (free on board) destination.
|
March 31, 2012
|
March 31, 2011
|
December 31, 2011
|
|||||||
Balance sheet
|
6.3122
|
6.5501
|
6.3523
|
||||||
Statement of operations
|
6.2976
|
6.5713
|
6.4544
|
Three Months Ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Numerator:
|
||||||||
Net Income applicable to common stockholders (A)
|
$
|
278,757
|
$
|
108,494
|
||||
Denominators:
|
||||||||
Denominator for basic earnings per share
|
||||||||
Weighted average shares outstanding (B)
|
41,508,203
|
41,508,203
|
||||||
Denominator for diluted earnings per share
|
||||||||
Series A and B convertible preferred stock
|
4,500,000 | 4,500,000 | ||||||
Denominator for diluted earnings per share adjusted weighted average shares outstanding (C)
|
46,008,203
|
46,008,203
|
||||||
Basic and Diluted Earnings Per Common Share:
|
||||||||
Earnings per share- basic (A)/(B)
|
$
|
0.01
|
$
|
0.00
|
||||
Earnings per share- diluted (A)/(C)
|
$
|
0.01
|
$
|
0.00
|
Useful Lives
|
March 31, 2012
|
December 31, 2011
|
|||||
(Unaudited)
|
|||||||
Computer equipment
|
4 years
|
$
|
49,353
|
$
|
54,045
|
||
Furniture and equipment
|
4-5 years
|
108,904
|
112,089
|
||||
|
158,257
|
166,134
|
|||||
Less: accumulated depreciation
|
(123,112
|
) |
(128,460
|
)
|
|||
$
|
35,145
|
$
|
37,674
|
March 31, 2012
|
December 31, 2011
|
|||||
(Unaudited)
(As Restated)
|
(As Restated)
|
|||||
Loans receivable
|
$
|
388,031
|
$
|
427,590
|
||
Legal deposit
|
31,685
|
31,488
|
||||
Deferred expense
|
139,699
|
51,331
|
||||
Other
|
59,014
|
72,599
|
||||
$
|
618,429
|
$
|
583,008
|
March 31, 2012
|
December 31, 2011
|
|||||
(Unaudited)
(As Restated)
|
(As Restated)
|
|||||
Loans payable
|
$
|
796,121
|
$
|
494,905
|
||
Accrued expenses
|
87,948
|
84,101
|
||||
Accrued salaries
|
44,576
|
51,347
|
||||
$
|
928,645
|
$
|
630,353
|
Number of Shares Underlying Warrants
|
Weighted Average Exercise Price
|
Weighted Average Contractual Term
|
|||||||
Outstanding at December 31, 2011
|
31,558,500
|
$
|
0.20
|
1.00
|
|||||
Granted
|
- | - | - | ||||||
Exercised
|
- | - | - | ||||||
Outstanding at March 31, 2012
|
31,558,500
|
$
|
0.20
|
1.00
|
March 31, 2012
|
December 31, 2011
|
|||||||
(Unaudited)
|
||||||||
Due from Shangdong Huibo Import & Export Co., Ltd.
|
$
|
365,458
|
$
|
365,918
|
||||
Due from Tianjin Sincere Logistics Co., Ltd.
|
148,570
|
199,240
|
||||||
Due from Tiang Gu Office
|
18,820
|
-
|
||||||
Due from Lianyunbu
|
65,722
|
65,307
|
||||||
Total
|
$
|
598,570
|
$
|
630,465
|
March 31, 2012
|
December 31, 2011
|
|||||||
(Unaudited)
|
||||||||
Due to Xiangfen Chen
|
$
|
88,225
|
$
|
87,667
|
||||
Due to Bin Liu
|
-
|
296,872
|
||||||
Due to Tianjin Sincere Logistics Co., Ltd.
|
539,608
|
561,062
|
||||||
Due to CD International Enterprises, Inc.
|
405,142
|
405,142
|
||||||
Total
|
$
|
1,032,975
|
$
|
1,350,743
|
For the Three Months Ended March 31,
|
||||||||||||||||
2012
|
2011
|
|||||||||||||||
Revenues
|
Assets
|
Revenues
|
Assets
|
|||||||||||||
United States
|
$
|
-
|
$
|
5,726
|
$
|
-
|
$
|
10,128
|
||||||||
People’s Republic of China
|
5,367,060
|
6,242,381
|
4,609,433
|
6,856,389
|
||||||||||||
Totals
|
$
|
5,367,060
|
$
|
6,248,107
|
$
|
4,609,433
|
$
|
6,866,517
|
Period | Total | |||
Period ended March 31, 2012
|
$
|
29,577
|
||
Total
|
$
|
29,577
|
Condensed Unaudited Consolidated Balance Sheet:
|
March 31, 2012
|
||||||||||
As Previously Reported
|
Adjustments to Restate
|
As Restated
|
|||||||||
Accounts receivable, net
|
1,948,175
|
13,763
|
(a)(b)
|
1,961,938
|
|||||||
Notes receivables, net
|
-
|
23,764
|
(c)
|
23,764
|
|||||||
Advances to vendors and other current assets
|
545,532
|
140,827
|
(a)(b)
|
686,359
|
|||||||
Total current assets
|
6,032,608
|
178,354
|
6,210,962
|
||||||||
Total Assets
|
$
|
6,067,753
|
$
|
178,354
|
$
|
6,246,107
|
|||||
Accounts payable – trade
|
2,703,328
|
(359,728
|
)
|
(a)(b)
|
2,343,600
|
||||||
Accrued expenses and other current liabilities
|
1,087,364
|
(158,719
|
)
|
(a)(b)
|
928,645
|
||||||
Total current liabilities
|
5,544,095
|
(518,447
|
)
|
5,025,648
|
|||||||
Total Liabilities
|
5,544,095
|
(518,447
|
)
|
5,025,648
|
|||||||
Stockholders’ Equity:
|
|||||||||||
Accumulated deficit
|
(19,939,440
|
)
|
37,178
|
(a)
|
|||||||
417,838
|
(b)
|
(19,484,424
|
)
|
||||||||
Accumulated other comprehensive loss
|
(84,646
|
)
|
(1,984
|
)
|
(a)
|
||||||
4,117
|
(b)
|
(61,007
|
)
|
||||||||
21,506
|
(a)(b)(c)
|
||||||||||
Total China Logistics Group, Inc. shareholders' equity
|
654,852
|
478,655
|
(a)(b)
|
1,133,507
|
|||||||
Non-controlling interest
|
(131,194
|
)
|
92,342
|
(a)
|
86,952
|
||||||
105,143
|
(b)
|
||||||||||
20,661
|
(a)(b)
|
||||||||||
Total shareholders' equity
|
523,658
|
696,801
|
1,220,459
|
||||||||
Total Liabilities and Stockholders’ Equity
|
$
|
6,067,753
|
$
|
178,354
|
$
|
6,246,107
|
(a)
|
To adjust for the understatement of accounts receivable, net, advances to vendors and other current assets, and the overstatement of accounts payable and accrued expenses in 2011
|
(b)
|
To adjust for the overstatement of accounts payable and accrued expenses and understatement of allowance for doubtful accounts related to 2009, 2010 and 2011.
|
(c)
|
To properly reflect note receivable balance incorrectly included in accumulated other comprehensive loss.
|
Condensed Unaudited Consolidated Statement of Operations and Comprehensive Income
|
For the Three Months ended March 31, 2012
|
|||||||||||
As Previously Reported
|
Adjustments to Restate
|
As Restated
|
||||||||||
Comprehensive income:
|
||||||||||||
Net income
|
$
|
559,265
|
$
|
-
|
$
|
559,265
|
||||||
Foreign currency translation gain
|
59,387
|
21,506
|
80,893
|
|||||||||
Comprehensive income
|
$
|
618,652
|
$
|
21,506
|
$
|
640,158
|
||||||
Earnings per common share:
|
||||||||||||
Basic
|
$
|
0.01
|
$
|
-
|
$
|
0.01
|
||||||
Diluted
|
$
|
0.01
|
$
|
-
|
$
|
0.01
|
(a)
|
To adjust comprehensive income for foreign currency translation gains related to the restatement of certain assets and liabilities.
|
Condensed Unaudited Consolidated Statement of Cash Flows:
|
For the Three Months ended March 31, 2012
|
|||||||||||
As Previously Reported
|
Adjustments to Restate
|
As Restated
|
||||||||||
Net income
|
$
|
559,265
|
$
|
-
|
$
|
559,265
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Bad debt
|
11,358
|
(11,358
|
) |
-
|
||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable
|
1,434,098
|
11,272
|
|
1,445,370
|
||||||||
Notes receivable
|
(23,764
|
)
|
(23,764
|
)
|
||||||||
Other receivables
|
(19,679
|
)
|
(15,742
|
)
|
(35,421
|
)
|
||||||
Advances to vendors and other current assets
|
(545,532
|
)
|
(116,471
|
)
|
(662,003
|
)
|
||||||
Accounts payable
|
(870,959
|
)
|
113,899
|
(757,060
|
)
|
|||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
1,124,321
|
(42,164
|
)
|
1,082,157
|
||||||||
EFFECT OF EXCHANGE RATE ON CASH
|
117,027
|
42,164
|
159,191
|
|||||||||
NET INCREASE IN CASH
|
925,006
|
-
|
925,006
|
Condensed Unaudited Consolidated Statement of Operations and Comprehensive Income
|
For the Three Months ended March 31, 2011
|
|||||||||||
As Previously Reported
|
Adjustments to Restate
|
As Restated
|
||||||||||
Sales
|
$
|
4,609,433
|
$
|
-
|
$
|
4,609,433
|
||||||
Cost of sales
|
4,190,551
|
60,172
|
4,250,723
|
|||||||||
Gross profit
|
418,882
|
(60,172
|
)
|
358,710
|
||||||||
Operating expenses:
|
||||||||||||
Selling, general and administrative
|
294,137
|
3,661
|
|
297,798
|
|
|||||||
Bad debt |
51,135
|
233,311
|
284,446
|
|||||||||
Bad debt recovery | - |
(533,534
|
) |
(533,534
|
) | |||||||
Total operating expenses
|
353,858
|
(296,562
|
)
|
57,296
|
||||||||
Income from operations
|
65,024
|
236,390
|
301,414
|
|||||||||
Income before income taxes
|
54,882
|
236,390
|
291,272
|
|||||||||
Net income
|
53,334
|
236,390
|
289,724
|
|||||||||
Less: net income attributable to non-controlling interest
|
88,661
|
92,569
|
181,230
|
|||||||||
Net income attributable to China Logistics Group, Inc.
|
$
|
(35,327
|
)
|
$
|
142,821
|
$
|
108,494
|
|||||
Comprehensive Income:
|
||||||||||||
Net income
|
$
|
53,334
|
$
|
236,390
|
$
|
289,724
|
||||||
Foreign currency translation gain
|
12,390
|
1,343
|
13,733
|
|||||||||
Comprehensive Income
|
$
|
65,724
|
$
|
237,733
|
$
|
303,457
|
||||||
Earnings per common share:
|
||||||||||||
Basic
|
$
|
0.00
|
$
|
-
|
$
|
0.00
|
||||||
Diluted
|
$
|
0.00
|
$
|
-
|
$
|
0.00
|
(a)
|
To adjust comprehensive income for foreign currency translation gains related to the restatement of certain assets and liabilities.
|
Condensed Unaudited Consolidated Statement of Cash Flows:
|
For the Three Months ended March 31, 2011
|
|||||||||||
As Previously Reported
|
Adjustments to Restate
|
As Restated
|
||||||||||
Net income
|
$
|
53,334
|
$
|
236,390
|
$
|
289,724
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Bad debt
|
51,135
|
(300,223
|
) |
(249,088
|
) | |||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable
|
(628,370
|
)
|
186,984
|
|
(441,386
|
)
|
||||||
Accounts payable
|
(225,547
|
)
|
39,517
|
(186,030
|
)
|
|||||||
Other accruals and current liabilities
|
307,833
|
69,000
|
376,833
|
|||||||||
Advance to vendors and other current assets
|
43,378
|
(135,713
|
)
|
(92,335
|
)
|
|||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
363,857
|
95,955
|
459,812
|
|||||||||
EFFECT OF EXCHANGE RATE ON CASH
|
132,677
|
(95,955
|
)
|
36,722
|
||||||||
NET DECREASE IN CASH
|
(164,051
|
)
|
-
|
(164,051
|
)
|
March 31, 2012
|
December 31, 2011
|
|||||||||||||||
United States
|
$
|
5,726
|
0.2%
|
$
|
22,256
|
1.6%
|
||||||||||
China
|
2,316,176
|
99.8%
|
1,374,640
|
98.4%
|
||||||||||||
$
|
2,321,902
|
100%
|
$
|
1,396,896
|
100%
|
•
|
Any obligation under certain guarantee contracts,
|
||
•
|
Any retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets,
|
||
•
|
Any obligation under a contract that would be accounted for as a derivative instrument, except that it is both indexed to our stock and classified in stockholder’s equity in our statement of financial position, and
|
||
•
|
Any obligation arising out of a material variable interest held by us in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us, or engages in leasing, hedging or research and development services with us.
|
•
|
when the cargo departs the shipper's destination if the trade pricing term is on a CIF (cost, insurance and freight) or CFR (cost and freight) basis;
|
||
•
|
when merchandise arrives at the destination port if the trade pricing term is on a FOB (free on board) basis.
|
Exhibit No.
|
Description
|
||
3.1
|
Articles of Incorporation (Incorporated by reference to registration statement on from 10-SB, SEC File No. 0-31497, as filed with the SEC on September 11, 2000, as amended).
|
||
3.2
|
Articles of Amendment to the Articles of Incorporation (Incorporated by reference to registration statement on from 10-SB, SEC File No. 0-31497, as filed with the SEC on September 11, 2000, as amended).
|
||
3.3
|
Articles of Amendment to the Articles of Incorporation (Incorporated by reference to Current Report on Form 8-K as filed with the SEC on September 27, 2006).
|
||
3.4
|
Articles of Amendment to the Articles of Incorporation (Incorporated by reference to Current Report on Form 8-K as filed with the SEC on January 7, 2008).
|
||
3.5
|
Articles of Amendment to the Articles of Incorporation (Incorporated by reference to the definitive Information Statement on Schedule 14C as filed with the SEC on February 14, 2008).
|
||
3.6
|
Bylaws (Incorporated by reference to registration statement on from 10-SB, SEC File No. 0-31497, as filed with the SEC on September 11, 2000, as amended).
|
||
4.1
|
Form of common stock purchase warrant issued in the 2008 unit offering (Incorporated by reference to Current Report on Form 8-K as filed with the SEC on April 24, 2008).
|
||
10.1
|
Acquisition Agreement dated as of December 31, 2007 between MediaREADY, Inc., Shandong Jiajia International Freight & Forwarding (Logistics Co.) Ltd. and Messrs. Hui Lui and Wei Chen (Incorporated by to reference to Current Report on Form 8-K as filed with the SEC on January 7, 2008).
|
||
10.2
|
Amendment to Acquisition Agreement as of January 28, 2008 between MediaREADY, Inc., Shandong Jiajia International Freight & Forwarding (Logistics Co.) Ltd. and Messrs. Hui Lui and Wei Chen (Incorporated by to reference to Current Report on Form 8-K as filed with the SEC on January 31, 2008).
|
||
10.3
|
Amendment to Acquisition Agreement as of March 13, 2008 between MediaREADY, Inc., Shandong Jiajia International Freight & Forwarding (Logistics Co.) Ltd. and Messrs. Hui Lui and Wei Chen (Incorporated by to reference to Current Report on Form 8-K as filed with the SEC on March 18, 2008).
|
||
10.4
|
Form of subscription agreement for 2008 unit offering (Incorporated by to reference to Current Report on Form 8-K as filed with the SEC on April 14, 2008).
|
||
10.5
|
Lease Agreement dated June 1, 2011 between Wei Chen and Shandong Jiajia International Freight & Forwarding ,Ltd.(Incorporated by reference to the Annual Report on Form 10-K for the period ended December 31, 2011)
|
||
10.6
|
Office Lease Contract dated January 26, 2011 between Sinochem International Information Company, Qingdao Branch (On behalf of China Foreign Economic and Trade Trust Limited Company) and Shandong Jiajia International Freight & Forwarding ,Ltd.(Incorporated by reference to the Annual Report on Form 10-K for the period ended December 31, 2011)
|
||
10.7
|
Rental Agreement dated March 25, 2011 between Yonggan Fan and Shandong Jiajia International Freight & Forwarding ,Ltd. (Incorporated by reference to the Annual Report on Form 10-K for the period ended December 31, 2011)
|
10.8
|
Lease Agreement dated December 31, 2011 between Xiangfen Chen and Shandong Jiajia International Freight & Forwarding, Ltd. (Incorporated by reference to the Annual Report on Form 10-K for the period ended December 31, 2011)
|
||
10.9
|
Promissory Notes due China Direct Investments, Inc. including note extension (Incorporated by reference to the Annual Report on Form 10-K for the period ended December 31, 2011)
|
||
10.10
|
Employment Agreement dated October 12, 2011 between China Logistics Group, Inc. and Yuan Huang (Incorporated by reference to the Annual Report on Form 10-K for the period ended December 31, 2011)
|
||
14.1
|
Code of Business Conduct and Ethics (Incorporated by reference to the Annual Report on Form 10-K for the fiscal year ended December 31, 2007).
|
||
21.1
|
Subsidiaries of the Registrant (Incorporated by reference to the Annual Report on Form 10-K for the fiscal year ended December 31, 2007).
|
||
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer *
|
||
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer *
|
||
32.1
|
Section 1350 Certification of Chief Executive Officer*
|
||
32.2
|
Section 1350 Certification of Chief Financial Officer*
|
||
101.INS
|
XBRL INSTANCE DOCUMENT **
|
||
101.SCH
|
XBRL TAXONOMY EXTENSION SCHEMA **
|
||
101.CAL
|
XBRL TAXONOMY EXTENSION CALCULATION LINKBASE **
|
||
101.DEF
|
XBRL TAXONOMY EXTENSION DEFINITION LINKBASE **
|
||
101.LAB
|
XBRL TAXONOMY EXTENSION LABEL LINKBASE **
|
||
101.PRE
|
XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE **
|
Date: June xx, 2013
|
CHINA LOGISTICS GROUP, INC.
|
|
By:
|
/s/ Wei Chen
|
|
Wei Chen
|
||
Chairman, Chief Executive Officer and President
(principal executive officer)
|
||
By:
|
/s/ Yuan Huang
|
|
Yuan Huang
|
||
Chief Financial Officer (principal financial and accounting officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q/A for the period ended March 31, 2012 of China Logistics Group, Inc..
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|||
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|||
June xx, 2013
|
/s/Wei Chen
Wei Chen, Chief Executive Officer, principal executive officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q/A for the period ended March 31, 2012 of China Logistics Group, Inc..
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|||
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|||
June xx, 2013
|
/s/Yuan Huang
Yuan Huang, Chief Financial Officer, principal financial and accounting officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company.
|
June xx, 2013
|
/s/Wei Chen
Wei Chen, Chief Executive Officer, principal executive officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company.
|
June xx, 2013
|
/s/Yuan Huang
Yuan Huang, Chief Financial Officer, principal financial and accounting officer
|
Note 6 - Accrued Expenses and Other Current Liabilities
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2012
|
|||||||||||||||||||||||||||||||||||||||||||
Notes | |||||||||||||||||||||||||||||||||||||||||||
Note 6 - Accrued Expenses and Other Current Liabilities | NOTE 6 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities are comprised of non-interest bearing advances from unrelated parties used for working capital purposes and payable on demand, accruals for professional fees and other operating expenses that have yet to be billed, and accrued salaries. The components of accruals and other current liabilities at March 31, 2012 and December 31, 2011 were as follows:
|
Note 2 -basis of Presentation and Summary of Significant Accounting Policies
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2012
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 2 -basis of Presentation and Summary of Significant Accounting Policies | NOTE 2 BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited consolidated financial statements for the three month periods ended March 31, 2012 and 2011 have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The consolidated financial statements for the interim periods presented are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the periods presented. Financial results for interim periods are not necessarily indicative of results that should be expected for the full year. The accompanying consolidated financial statements include our accounts and our 51% owned subsidiary, Shandong Jiajia. All inter-company transactions and balances have been eliminated in consolidation.
Revenue Recognition
We provide freight forwarding services generally under contract with our customers. Our business model involves placing our customers freight on prearranged contracted transport. Our revenue recognition policy is in accordance with the guidance of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 605, Revenue Recognition. In general, we record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. We provide transportation services, generally under contract, by third parties with whom we have contracted these services.
Typically, we recognize revenue in connection with our freight forwarding service when the payment terms are as follows:
We recognize direct shipping costs concurrently with the recognition of the related revenue for each shipment. These costs are generally isolated by billings as we do not own the shipping containers or transportation vessels.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expenses during the reported periods.
Significant estimates for the periods reported include the allowance for doubtful accounts, which is based on an evaluation of our outstanding accounts receivable including the age of amounts due, the financial condition of our specific customers, knowledge of our industry segment in Asia, and historical bad debt experience. This evaluation methodology has provided a reasonable estimate of bad debt expense in the past and we intend to continue to employ this approach in our analysis of collectability. However, we are aware that given the varying recovery levels of our customers from the recent global economic situation meaningful time horizons may change. We intend to enhance our focus on the evaluation of our customers' sustainability and adjust our estimates as may be indicated.
We also rely on certain assumptions when deriving the fair value of our derivative liability and calculations underlying our provision for taxes in China. Assumptions and estimates employed in these areas can be material to our reported financial condition and results of operations. Actual results could differ from these estimates.
Stock Based Compensation
We account for stock options and other equity based compensation issued to employees by measuring the grant-date fair value of stock options and other equity based compensation issued to employees and recognizing the costs in the financial statements over the period during which the employees are required to provide services.
Basic and Diluted Earnings Per Share
Pursuant to ASC 260-10-45, basic income (loss) per common share is computed by dividing income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of the company, subject to anti-dilution limitations.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The carrying value of these instruments approximates fair value.
Concentration of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and accounts receivable. We deposit our cash with high credit quality financial institutions in the United States and China (the PRC). At March 31, 2012, we had deposits of $2,316,176 in banks in the PRC. In the PRC, there is no federal deposit insurance as in the United States; as such these amounts held in banks in the PRC are not insured. We have not experienced any losses in such bank accounts through March 31, 2012.
Accounts Receivable
The Company provides an allowance for doubtful accounts for the estimated uncollectible portion of its accounts receivable. This estimate is based on the historical collection experience and a review of the current status of trade receivables. There is no set threshold amount or age for accounts receivable write-offs; any decision is made by management on an account-by-account basis. The allowance for doubtful accounts totaled $2,902,981 and $2,884,655 at March 31, 2012 and December 31, 2011, respectively.
Advances to Vendors and Other Current Assets
Advances to vendors and other prepaid expenses consist primarily of prepayments or deposits from us for contracted shipping arrangements that have not been utilized by our customers. These amounts are recognized as cost of revenues as shipments are completed and customers utilize the shipping arrangement. Advances to vendors and other current assets totaled $686,359 and $24,356 at March 31, 2012 and December 31, 2011, respectively.
Property and Equipment and Long-Lived Assets
Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of property and equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful lives. Leasehold improvements, if any, are amortized on a straight-line basis over the shorter of the lease period or the estimated useful life.
We periodically evaluate the carrying value of long-lived assets to be held and used in the business, generally in conjunction with the annual business planning cycle, and when events and circumstances otherwise warrant. If the carrying value of a long-lived asset is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value for assets to be held and used. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risks involved. There was no impairment recognized during the three months ended March 31, 2012 and 2011.
Advances from Customers
Advances from customers consist of prepayments to us for contracted cargo that has not yet been shipped to the recipient and for other advance deposits. These amounts are recognized as revenue as revenue recognition criteria have been met. Advances from customers totaled $711,442 and $485,102, at March 31, 2012 and December 31, 2011, respectively.
Foreign Currency Translation
The accompanying consolidated financial statements are presented in United States dollars. The functional currency of Shandong Jiajia is the Renminbi (RMB), the official currency of the PRC. Assets and liabilities are translated from the local currency into the reporting currency, U.S. dollars, at the exchange rate prevailing at the balance sheet date. Revenues and expenses are translated at average exchange rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in the consolidated financial statements. Gains and losses resulting from the translation of local currency financial statements into U.S. dollars are reflected in other comprehensive income in the consolidated statement of stockholders equity and comprehensive income (loss).
RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place through PRC authorized institutions. Translation of amounts from RMB into United States dollars ($) has been made at the following exchange rates for the respective periods:
Noncontrolling Interest
Noncontrolling interests in our subsidiary are recorded as a component of our equity, separate from the parents equity. Purchase or sale of equity interests that do not result in a change of control are accounted for as equity transactions. Results of operations attributable to the noncontrolling interest are included in our consolidated results of operations and upon loss of control the interest sold, as well as the interest retained, if any, will be reported at fair value with any gain or loss recognized in earnings.
Income Taxes
We follow the asset and liability method of accounting for taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. If it is more likely than not that some portion of a deferred tax asset will not be realized, a valuation allowance is recognized.
Reclassifications
Certain amounts in the comparative prior financial statements have been reclassified to conform to the current years presentation. Such reclassifications had no effect on previously reported net income or net assets.
Recent Accounting Pronouncements
In September, 2011, the FASB issued Accounting Standards Update ("ASU") No. 2011-08, Intangibles Goodwill and Other, which simplifies how an entity is required to test goodwill for impairment. This ASU would allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under the ASU, an entity would not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The ASU includes a number of factors to consider in conducting the qualitative assessment. The ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. We have adopted this standard which did not have a material impact on our consolidated financial statements.
In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. Under the amendments, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The presentation option under current U.S. GAAP to present the components of other comprehensive income as part of the statement of changes in stockholders equity has been eliminated. The amendments in this Update should be applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted because compliance with amendments is already permitted. We have adopted this standard which did not have material impact on our consolidated financial statements.
A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, the Companys management has not determined whether implementation of such proposed standards would be material to its consolidated financial statements. |
Note 4 - Property and Equipment
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Note 4 - Property and Equipment | NOTE 4 PROPERTY AND EQUIPMENT
Property and equipment at March 31, 2012 and December 31, 2011 consisted of the following:
For the three months ended March 31, 2012, and 2011, depreciation expense totaled $1,612 and $8,586, respectively. |
Note 7 - Stockholders' Equity
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Mar. 31, 2012
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Note 7 - Stockholders' Equity | NOTE 7 STOCKHOLDERS EQUITY
Preferred Stock
We have 10,000,000 shares of preferred stock, par value $.001, authorized, 1,000,000 of which we designated as our Series A Convertible Preferred Stock in December 2007 in connection with our acquisition of a 51% interest in Shandong Jiajia. On March 28, 2008 shareholders holding the Series A Convertible Preferred Stock converted their 1,000,000 shares into 2,500,000 shares of common stock, and no shares of Series A Convertible Preferred Stock were outstanding at March 31, 2012 and December 31, 2011.
In December 2007 we designated 1,295,000 shares of our preferred stock as Series B Convertible Preferred stock in connection with our acquisition of a 51% interest in Shandong Jiajia. Each share of Series B Convertible Preferred Stock is convertible into 10 shares of our common stock. On March 28, 2008 holders of the Series B Convertible Preferred Stock converted 845,000 shares into 8,450,000 shares of common stock and 450,000 shares of Series B Convertible Preferred Stock held by CD International Enterprises, Inc. (China Direct) remained outstanding at March 31, 2012 and December 31, 2011.
Common Stock
We did not issue any common stock during the three month period ended March 31, 2012.
Common Stock Purchase Warrants
A summary of our the common stock warrant activity during the three month periods ended March 31, 2012 as follows:
The common stock purchase warrants outstanding at March 31, 2012 include 31,558,500 warrants issued in connection with the 2008 Unit Offering. These warrants are currently exercisable at $0.20 per share and expire on April 30, 2013. |
Note 5 - Other Receivables
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Note 5 - Other Receivables | NOTE 5 OTHER RECEIVABLES
Other receivables are comprised of advances to other entities with which we have a strategic or other business relationship, a refundable deposit we made as required by a Chinese court in connection with a lawsuit we filed against our former customer for amounts owed to us, and deferred expenses. The amounts advanced to our strategic partners are unsecured, repayable on demand, and bear no interest. We also advance money to employees for business trips which are then subsequently expensed upon processing of an expense report. The components of other receivables at March 31, 2012 and December 31, 2011 were as follows:
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