-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Eh+Vc/Y06Fx5s/O3y5GbYlIL9QjDAp3DA7LwkJ1Cv/aMuM/s4uhlkWeyHGeNB6gp ixD//+g6HpJFWiOxKoS0tw== 0000950144-96-005336.txt : 19960814 0000950144-96-005336.hdr.sgml : 19960814 ACCESSION NUMBER: 0000950144-96-005336 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHINA RESOURCES DEVELOPMENT INC CENTRAL INDEX KEY: 0000793628 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MISCELLANEOUS NONDURABLE GOODS [5190] IRS NUMBER: 870263643 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-26046 FILM NUMBER: 96610848 BUSINESS ADDRESS: STREET 1: 244O S PROGRESS DR CITY: SALT LAKE CITY STATE: UT ZIP: 84119 BUSINESS PHONE: 8019722887 MAIL ADDRESS: STREET 1: C/O BAKER & HOSTETLER STREET 2: P O BOX 112 CITY: ORLANDO STATE: FL ZIP: 32802 FORMER COMPANY: FORMER CONFORMED NAME: MAGENTA CORP DATE OF NAME CHANGE: 19940217 10-Q 1 CHINA RESOURCES DEVELOPMENT, INC. FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------------ FORM 10-Q (Mark One) [X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 1996 or ------------- [ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to ----------- ------------ ------------------------------ CHINA RESOURCES DEVELOPMENT, INC. (Exact Name of Registrant as Specified in Charter) Nevada 33-5628-NY 87-0263643 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 23/F Office Tower, Convention Plaza 1 Harbour Road Wanchai, Hong Kong (Address of principal executive offices) Registrant's telephone number, including area code: 011-852-2537-6689 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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 41,528,000 shares of common stock, $.001 par value, as of August 13, 1996. Page 1 of 28 pages Exhibit Index on Page 23 2 CONVENTIONS Unless otherwise specified, all references in this report to "U.S. Dollars," "Dollars," "U.S.$," or "$" are to United States dollars; and all references to "Renminbi" or "Rmb" or "yuan" are to Renminbi yuan, which is the lawful currency of the People's Republic of China ("China" or "PRC"). The Company and Billion Luck maintain their accounts in U.S. Dollars and Hong Kong Dollars, respectively. HARC and the Operating Subsidiaries maintain their accounts in Renminbi yuan. The financial statements of the Company and its subsidiaries are prepared in Renminbi. Translations of amounts from Renminbi to U.S. Dollars are for the convenience of the reader. Unless otherwise indicated, any translations from Renminbi to U.S. Dollars or from U.S. Dollars to Renminbi have been made at the single rate of exchange as quoted by the People's Bank of China (the "PBOC Rate") on June 30, 1996, which was U.S.$1.00 = Rmb8.32. The Renminbi is not freely convertible into foreign currencies and the quotation of exchange rates does not imply convertibility of Renminbi into U.S. Dollars or other currencies. All foreign exchange transactions take place either through the Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People's Bank of China. No representation is made that the Renminbi or U.S. Dollar amounts referred to herein could have been or could be converted into U.S. Dollars or Renminbi, as the case may be, at the PBOC Rate or at all. References to "Billion Luck" refer to Billion Luck Company Ltd., a British Virgin Islands company, which is a wholly-owned subsidiary of the Company. References to "Company" are to China Resources Development, Inc., and include, unless the context requires otherwise, the operations of Billion Luck, HARC, First Supply, and Second Supply (all as hereinafter defined). References to "Farming Bureau" are to the Hainan Agricultural Reclamation General Company, a division of the Ministry of Agriculture, the PRC government agency responsible for matters relating to agriculture. References to "First Supply" are to First Goods And Materials Supply And Sales Corporation, a company organized in the PRC and a wholly-owned subsidiary of HARC. References to "Guilinyang Farm" are to Hainan Province Guilinyang State Farm, a PRC entity which is owned and controlled by the Farming Bureau. References to "Hainan" are to Hainan Province of the PRC. References to "Hainan State Farms" are to the rubber farms in Hainan controlled by the Farming Bureau. References to "HARC" are to Hainan Agricultural Resources Company Limited, a company organized in the PRC, whose capital is owned 56% by Billion Luck, 39% by the Farming Bureau and 5% by Guilinyang Farm. References to "Operating Subsidiaries" are to the consolidated operations, assets and/or activities, as the context indicates, of First Supply and Second Supply. -2- 3 References to the "PRC" or "China" are to the People's Republic of China and include all territory claimed by or under the control of the Central Government, except Hong Kong, Macau, and Taiwan. References to "Second Supply" are to Second Goods And Materials Supply And Sales Corporation, a company organized in the PRC and a wholly-owned subsidiary of HARC. References to "Tons" are to metric tons. -3- 4 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. CHINA RESOURCES DEVELOPMENT, INC., AND SUBSIDIARIES CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED) FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (Amounts in thousands, except share and per share data)
Three Months Ended Six Months Ended Note June 30, June 30, ------------------------------- --------------------------------- 1996 1995 1996 1996 1995 1996 RMB RMB US$ RMB RMB US$ (unaudited) (unaudited) SALES 540,599 420,709 64,976 795,719 598,139 95,639 COST OF SALES (478,773) (403,052) (57,545) (719,794) (569,741) (86,514) -------- ------ ------- ------- ------- ------ GROSS PROFIT 61,826 17,657 7,431 75,925 28,398 9,125 DEPRECIATION OF FIXED (613) (616) (74) (1,208) (1,192) (145) ASSETS SELLING AND (15,187) (14,203) (1,825) (25,173) (22,729) (3,026) ADMINISTRATIVE EXPENSES ------ ------ ------- ------- ------- ------ OPERATING INCOME 46,026 2,838 5,532 49,544 4,477 5,954 FINANCIAL (EXPENSES), (16,487) (934) (1,982) (21,676) (2,502) (2,605) NET OTHER INCOME/ (LOSSES), (5,095) 13,421 (612) 4,243 15,541 510 NET ------ ------ ------- ------- ------- ------ INCOME BEFORE INCOME 24,444 15,325 2,938 32,111 17,516 3,859 TAXES INCOME TAXES (3,586) (1,941) (431) (5,577) (2,612) (670) ------ ------ ------- ------- ------- ------ NET INCOME BEFORE 20,858 13,384 2,507 26,534 14,904 3,189 MINORITY INTERESTS MINORITY INTERESTS (10,221) (5,962) (1,228) (13,401) (6,807) (1,611) ------ ------ ------- ------- ------- ------ NET INCOME FOR THE 10,637 7,422 1,279 13,133 8,097 1,578 PERIOD ====== ====== ======= ======= ======= ====== EARNINGS PER SHARE 2 0.479 0.619 0.058 0.592 0.675 0.071 ====== ====== ======= ======= ======= =======
The accompanying notes are an integral part of these condensed consolidated financial statements. -4- 5 CHINA RESOURCES DEVELOPMENT, INC., AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1996 AND DECEMBER 31, 1995 (Amounts in thousands)
June 30, 1996 December 31, 1995 June 30, 1996 ------------- ----------------- ------------- RMB RMB US$ Notes (unaudited) (audited) (unaudited) ---- ASSETS CURRENT ASSETS Cash and cash equivalents 92,156 56,942 11,076 Trade receivables 52,675 31,991 6,331 Other receivables, deposits and prepayments 123,836 52,871 14,884 Inventories 3 65,031 103,776 7,816 Amounts due from related companies 330,394 288,503 39,711 Amount due from Farming Bureau 24,351 80,427 2,927 Other current assets --- 19,448 --- ------- ------- ------ TOTAL CURRENT ASSETS 688,443 633,958 82,745 FIXED ASSETS 4 21,795 21,491 2,620 INVESTMENTS 12,163 11,963 1,462 GOODWILL 1,063 1,076 128 ------- ------- ------ TOTAL ASSETS 723,464 668,488 86,955 ======= ======= ====== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Bank loans 292,560 293,000 35,164 Amounts due to related 17,966 22,654 2,159 companies Amounts due to shareholders 300 15,727 36 Accounts payable 90,182 39,876 10,839 Income taxes payable 14,267 10,265 1,715 Other payables and accrued liabilities 58,080 21,533 6,981 Short term advances -- 86,917 -- ------- ------- ------ TOTAL CURRENT 473,355 489,972 56,894 LIABILITIES MINORITY INTERESTS 87,304 74,067 10,493 ------- ------- ------ TOTAL LIABILITIES 560,659 564,039 67,387 ======= ======= ======
-5- 6
June 30, 1996 December 31, 1995 June 30, 1996 ------------- ----------------- ------------- RMB RMB US$ Notes (unaudited) (audited) (unaudited) ----- SHAREHOLDERS' EQUITY Common Stock, US$0.001 par value: Authorized - 200,000,000 shares in 1996 and 1995 Issued and outstanding - 41,528,000 shares in 1996 and 12,000,000 shares in 1995 347 101 42 Preferred stock, authorized - 10,000,000 shares in 1996 and 1995: Series A preferred stock. US$1 par value: Authorized, issued and outstanding - 6,400,000 shares in 1996 and 1995 53,930 53,930 6,482 Series B convertible preferred stock, US$0.001 par value: Authorized - 2,500 shares in 1996 and 1995. Issued and outstanding - none in 1996 and --- --- --- 370 shares in 1995 Additional paid-in capital 65,938 20,961 7,925 Reserves 8,930 8,930 1,073 Retained earnings 33,660 20,527 4,046 ------- ------- ------- TOTAL SHAREHOLDERS' EQUITY 162,805 104,449 19,568 ------- ------- ------- TOTAL LIABILITIES AND 723,464 668,488 86,955 SHAREHOLDERS' EQUITY ======= ======= =======
The accompanying notes are an integral part of these condensed consolidated financial statements. -6- 7 CHINA RESOURCES DEVELOPMENT, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Amounts in thousands, except share and per share data)
Series B Series A Convertible Additional Common Preferred Preferred Paid-In Retained Stock Stock Stock Capital Reserves Earnings RMB RMB RMB RMB RMB RMB Balance at December 31, 1994 101 -- -- 1,407 2,657 7,625 Issuance of 6,400,000 shares of -- 53,930 -- -- -- -- Series A preferred stock Issuance of 370 shares of Series -- -- -- 19,554 -- -- B preferred stock, net of share issuance costs Net income -- -- -- -- -- 19,175 Transfer to reserves -- -- -- -- 6,273 (6,273) ------ ------- ---------- ------ ------ ------- Balance at December 31, 1995 101 53,930 -- 20,961 8,930 20,527 Issuance of 883 shares of Series -- -- -- 45,223 -- -- B convertible preferred stock, net of shares issuance costs Issuance of 29,528,582 shares of 246 -- -- (246) -- -- common stock pursuant to the conversion of 1,253 shares of series B convertible preferred stock Net income -- -- -- -- -- 13,133 ------ ------- ---------- ------ ------ ------ Balance at June 30, 1996 347 53,930 -- 65,938 8,930 33,660 ====== ======= ========== ====== ====== ======
-7- 8 CHINA RESOURCES DEVELOPMENT, INC., AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (Amounts in thousands)
Six months ended June 30 ---------------------------------------------------- 1996 1995 1996 RMB RMB US$ (unaudited) (unaudited) (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income 13,133 8,097 1,578 Adjustments to reconcile net income to net cash provided by operating activities: Minority interests 13,401 6,807 1,611 Depreciation and amortization 1,208 1,192 145 Loss on disposal of fixed assets 5 385 1 Decrease/(increase) in assets: Trade receivables (20,684) (1,341) (2,486) Other receivables, deposits and prepayments (70,965) (18,355) (8,530) Inventories 38,745 28,923 4,657 Amount due from Farming Bureau 56,076 (11,517) 6,740 Amounts due from related companies (41,891) (1,525) (5,035) Other current assets 19,448 -- 2,337 Increase/(decrease) in liabilities: Amounts due to related companies (4,688) 1,196 (563) Accounts payable 50,306 3,865 6,046 Income taxes payable 4,002 2,612 481 Other payables and accrued liabilities 36,547 4,959 4,393 Amounts due to Farming Bureau -- (14,978) -- Net cash provided by operating ------- ------- ------ activities 94,643 10,320 11,375 ------- ------- ------ CASH FLOWS PROVIDED BY/(USED IN) INVESTING ACTIVITIES: Purchases of fixed assets (1,504) (3,481) (181) Purchases of investments (200) -- (24) Reduction of minority interests (164) -- (20) Additions to construction in progress -- (1,658) -- Proceeds from sale of fixed assets -- 1,603 -- ------- ------- ------ Net cash used in investing activities (1,868) (3,536) (225) ------- ------- ------
-8- 9
Six months ended June 30, ---------------------------------------------------- 1996 1995 1996 RMB RMB US$ (unaudited) (unaudited) (unaudited) CASH FLOWS PROVIDED BY/(USED IN) FINANCING ACTIVITIES: Issue of share capital less share offering costs 45,223 -- 5,436 Loans from shareholders -- 4,131 -- Repayment of loans to shareholders (15,427) -- (1,854) Repayments of bank borrowings (440) (4,200) (53) Cash remitted to Farming Bureau -- (849) -- Short term advances (86,917) -- (10,447) Loans to related companies -- (18,506) -- Cash from repayment of loans by related companies -- 8,403 -- ------- ------- ------ Net cash used in financing activities (57,561) (11,021) (6,918) ------- ------- ------ NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS: 35,214 (4,237) 4,232 Cash and cash equivalents, at beginning of period 56,942 69,157 6,844 ------- ------- ------ Cash and cash equivalents, at end of period 92,156 64,920 11,076 ======= ======= ======
The accompanying notes are an integral part of these condensed consolidated financial statements. -9- 10 CHINA RESOURCES DEVELOPMENT, INC., AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share and per share data) 1. BASIS OF PRESENTATION: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months period ended June 30, 1996 is not necessarily indicative of the results that may be expected for the year ending December 31, 1996. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1995. 2. EARNINGS PER SHARE: The computations of primary earnings per share for the three months and six months ended on June 30, 1996, are based on the weighted average number of common stock outstanding after giving effect to dilutive stock options and series B convertible preferred stock, which are included as common share equivalents using the treasury stock method and assumed to be converted to common stock, respectively. The number of shares used in computing the primary earnings per share is 22,192,850. Fully diluted earnings per share is not materially different from primary earnings per share. For the three months and six months ended June 30, 1995, primary earnings per share is based on an aggregate of 12,000,000 shares of common stock outstanding.
3. INVENTORIES: June 30, December 31, 1996 1995 ----------- ------------ RMB RMB (unaudited) (audited) Inventories comprise: Finished goods 65,031 103,776 ========== ============ 4. FIXED ASSETS: June 30, December 31, 1996 1995 ----------- ------------ RMB RMB (unaudited) (audited) Cost: Buildings 5,739 5,739 Plant, machinery and equipment 11,435 10,267 Transportation vehicles and equipment 8,772 8,448 ----------- ----------- 25,946 24,454 ----------- -----------
-10- 11 Accumulated depreciation: Buildings 837 607 Plant, machinery and equipment 2,015 1,563 Transportation vehicles and equipment 1,299 793 ------ ------ 4,151 2,963 ------ ------ Net book value 21,795 21,491 ====== ====== 5. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Six months ended June 30 -------------------------- 1996 1995 RMB RMB (unaudited) (unaudited) Cash paid during the period for interest expenses 12,801 17,826 ====== ======
-11- 12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATION RESULTS OF OPERATIONS The following table shows the selected unaudited condensed consolidated income statements data of the Company and its subsidiaries for the three months and six months ended June 30, 1995 and 1996. The data should be read in conjunction with the unaudited Condensed Consolidated Financial Statements of the Company and related Notes thereto: (Amounts in thousands)
Three months Six months ended ended June 30, June 30, -------- -------- 1996 1995 1996 1995 RMB RMB RMB RMB Sales: Distribution of natural rubber 354,069 375,239 587,420 519,027 Procurement of materials and supplies 186,530 45,470 208,299 79,112 ------- ------- ------- ------- 540,599 420,709 795,719 598,139 ------- ------- ------- ------- Gross profit 61,826 17,657 75,925 28,398 Gross profit margin (%) 11.44 4.20 9.54 4.75 Income before income taxes 24,444 15,325 32,111 17,516 Income taxes (3,586) (1,941) (5,577) (2,612) ------- ------- ------- ------- Net income 20,858 13,384 26,534 14,904 Minority interests (10,221) (5,962) (13,401) (6,807) ------- ------- ------- ------- Net income after minority interests 10,637 7,422 13,133 8,097 ======= ======= ======= =======
-12- 13 SALES AND GROSS PROFIT For the second quarter of fiscal 1996, the Company's total sales increased by 28% to Rmb541 million from Rmb421 million for the corresponding quarter in last year, which was due to the increase in procurement of materials and supplies. Following the completion of the Company's offshore private placement on March 8, 1996, the net proceeds raised from the offering were injected into the Company's subsidiaries in Hainan as working capital to expand the distribution operations. The Company has expanded into the trading of other agricultural products, such as coffee beans, and the corresponding sales revenue was included under the procurement of materials and supplies. The total sales of such agricultural products for the quarter amounted to approximately Rmb150 million with a gross profit of approximately Rmb25 million, or a gross profit margin of 17%. The natural rubber sales and the procurement of other materials and supplies were comparable to the corresponding quarter in last year. For the second quarter of fiscal 1996, the gross profit margin of natural rubber sales increased to 6.1% from 4.1% for the corresponding period in fiscal 1995. The increase was mainly the result of purchase discounts received from farms in 1996. The overall gross profit margin increased from 4.2% to 11.4% for the second quarter of fiscal 1996 as compared with the corresponding quarter in last year, which was due to the higher gross profit margin resulting from trading of other agricultural products, as well as the purchase discounts received from rubber distribution. For the first half year of 1996, the Company's total sales increased by 33% to Rmb796 million from Rmb598 million for the corresponding period in last year. The overall gross profit margin also increased from 4.7% to 9.5%. The increase of both net sales and gross profit margin was due to the contribution from the trading of other agricultural products as previously discussed. SELLING AND ADMINISTRATIVE EXPENSES Selling and administrative expenses increased by 11%, or Rmb2.5 million, for the first half year of fiscal 1996 compared to the same period in fiscal 1995. The increase was mainly due to the increase in salaries and staff welfare expenses, and more selling expenses were incurred for the distribution of the agricultural products. FINANCIAL EXPENSES, NET The net financial expenses increased by Rmb19.2 million from Rmb2.5 million for the first half year of fiscal 1995 to Rmb21.7 million for the corresponding period in 1996. The net financial expenses for the second quarter of fiscal 1996 also increased by Rmb15.5 million as compared with the corresponding quarter in last year. The increase was due to the fact that less interest income was received from related companies as a result of the overall decrease in advances to related companies in fiscal 1996. OTHER INCOME/(LOSSES), NET Other income/(losses) mainly represented income from long term investments, rental income and profits or losses on trading of futures contracts. The decrease of net income of Rmb11.3 million from Rmb15.5 million for the first half year of fiscal 1995 to Rmb4.2 million for the same period of fiscal 1996 -13- 14 was mainly due to the fact that greater profits on trading of futures contracts were realized in fiscal 1995 than in fiscal 1996. LIQUIDITY AND CAPITAL RESOURCES The Company's primary liquidity needs are to fund accounts receivable, inventories and rubber purchase deposits and to expand business operations. The Company has financed its working capital requirements through a combination of internally generated cash, short term bank borrowing and issuance of share capital. Net cash provided by operating activities was Rmb94.6 million and Rmb10.3 million for the six months ended June 30, 1996 and 1995, respectively. Net cash flows from the Operating Subsidiaries' operating activities are attributable to the Operating Subsidiaries' income and changes in operating assets and liabilities. During the six months ended June 30, 1996, the Company issued an additional 883 shares of series B convertible preferred stock at US$10,000 per share with a gross proceeds of US$8.83 million. All the 1,253 shares of series B convertible preferred stock issued by the Company were converted to common stock as of June 30, 1996. There has been no other significant change in financial condition and liquidity since the fiscal year ended December 31, 1995. The Company believes that the net proceeds from its capital raising efforts, together with the internally generated funds, will be sufficient to satisfy its anticipated working capital needs for at least the next 12 months. -14- 15 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS: None. ITEM 2. CHANGES IN SECURITIES: As of July 1, 1995, pursuant to the recommendation of a committee of disinterested persons appointed by the board of directors in accordance with the terms of the Stock Option Plan (the "Plan") adopted by the Company as of March 31, 1995, the board of directors granted options to the following officers and directors to purchase shares of the Company's Common Stock: Yiu Yat Hung 6,000 shares Tam Cheuk Ho 6,000 shares Han Jianzhun 6,000 shares Li Feilie 100,000 shares
In addition, the board of directors granted options to the following employees and consultant to purchase shares of the Company's Common Stock: Brender Services Limited 100,000 shares Wong Wah On 6,000 shares Cheung Yu Shum 500,000 shares Tse Chi Kai 300,000 shares Ma Sin Ling 500,000 shares Cheung Siu Yin 10,000 shares Woo Pui Yan 10,000 shares Kwok Kwan Hung 386,000 shares Fu Yang Guang 200,000 shares Lin Jia Ping 270,000 shares
All of the stock options were issued in accordance with the terms of the Plan at an exercise price of US$3.78 (the fair market value of the Common Stock as of July 1, 1995) and would have been exercisable beginning on July 1, 1996, and until July 1, 2005. As of May 20, 1996, the board of directors, in accordance with the recommendation, with respect to stock options granted to directors and officers, of a committee of disinterested persons appointed by the board of directors in accordance with the terms of the Plan, reduced the exercise prices of all of the outstanding options to US$0.42 (the fair market value of the Common Stock as of May 20, 1996). By virtue of this action, the outstanding options are now exercisable beginning on May 20, 1997, and until May 20, 2006. Stock options have now been granted with respect to all 2,400,000 shares of Common Stock subject to the Plan, and all stock options remain outstanding. -15- 16 ITEM 3. DEFAULTS UPON SENIOR SECURITIES: None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: None. ITEM 5. OTHER INFORMATION: None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K: (a) The following Exhibits are filed as part of this Form 10-Q or incorporated by reference as indicated below:
Exhibit No. Exhibit Description ----------- ------------------- 3.1 Articles of Incorporation of the Registrant, filed on January 15, 1986 (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 3.2 By-laws of the Registrant (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 3.3 Certificate of Amendment of Articles of Incorporation of the Registrant, filed on November 18, 1994 (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 3.4 Certificate of Amendment of Articles of Incorporation of the Registrant, filed on November 18, 1994 (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 3.5 Certificate of Amendment of Articles of Incorporation of the Registrant, effective March 31, 1995, and filed on June 19, 1995 (Filed with Quarterly Report on Form 10-Q/A for the fiscal quarter ended March 31, 1995, and incorporated herein by reference.) 4.1 Certificate of Designation of Series B Convertible Preferred Stock, filed on December 13, 1995 (Filed with Current Report on Form 8-K dated March 8, 1996, and incorporated herein by reference.)
-16- 17 10.1 Assignment Agreement dated January 21, 1994, by and between Hong Wah (Holdings) Limited and Billion Luck Company Ltd. (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.2 Contract on Investment for the Setting up of Hainan Agricultural Resources Company Ltd. dated January 31, 1994, by and among Hainan Province Agricultural Reclamation General Company (the Farming Bureau), Hainan Province Guilinyang State Farm, and Billion Luck Company Ltd. (Original Chinese version with English translation filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.3 Loan Agreement dated May 10, 1994, by and among Everbright Finance & Investment Co. Limited, Worlder International Company Limited, Hong Wah Investment Holdings Limited, Silverich Limited, Brender Services Limited, and Billion Luck Company Ltd. (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.4 Credit Agreement dated June 1, 1994, by and among Everbright Finance & Investment Co. Limited, Worlder International Company Limited, Hong Wah Investment Holdings Limited and Billion Luck Company Ltd. (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.5 Contract on the Transfer of Share Ownership of Hainan Zhongya Aluminum Co., Ltd. dated July 11, 1994, by and between Hainan Province Guilinyang State Farm and Hainan Agricultural Resources Co., Ltd. (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.6 Letter Agreement dated August 8, 1994, by and among Everbright Finance & Investment Co. Limited, Worlder International Company Limited, Hong Wah Investment Holdings Limited and Billion Luck Company Ltd., supplementing Credit Agreement dated June 1, 1994 (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.7 Letter Agreement dated October 24, 1994, by and among Everbright Finance & Investment Co. Limited, Worlder International Company Limited, and Billion Luck Company Ltd. (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.8 Acquisition Agreement, by and among the Registrant and the shareholders of Billion Luck Company Ltd. (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.9 Agreement on Service and Cooperation dated November 5, 1994, by and between Hainan Province Agricultural Reclamation General Company (the Farming Bureau) and Hainan Agricultural Resources Company Ltd. (Original Chinese version with English translation
-17- 18 filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.10 Land Use Agreement dated November 5, 1994, by and between Hainan Province Agricultural Reclamation No. 1 Materials Supply & Sales Company (First Supply) and Hainan Province Agricultural Reclamation Jin Long Materials General Company (Original Chinese version with certified English translation filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.)herewith.) 10.11 Land Use Agreement dated November 5, 1994, by and between Hainan Province Agricultural Reclamation No. 2 Materials Supply & Sales Company (Second Supply) and Hainan Province Agricultural Reclamation Jin Huan Materials General Company (Original Chinese version with certified English translation filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.12 Long-Term Sale and Purchase Agreement dated November 5, 1994, by and among Hainan Province Agricultural Reclamation General Company (the Farming Bureau), Hainan Agricultural Resources Company Ltd., Hainan Province Agricultural Reclamation No. 1 Materials Supply & Marketing Company (First Supply), and Hainan Province Agricultural Reclamation No. 2 Materials Supply & Marketing Company (Second Supply) (Original Chinese version with English translation filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.13 Agreement on Assignment of Accounts Receivable dated November 5, 1994, by and among Hainan Province Agricultural Reclamation General Company (the Farming Bureau), Billion Luck Company Ltd., Hainan Province Guilinyang State Farm, Hainan Agricultural Resources Company Ltd., Hainan Province Agricultural Reclamation No. 1 Materials Supply & Marketing Company (First Supply), and Hainan Province Agricultural Reclamation No. 2 Materials Supply & Marketing Company (Second Supply) (Original Chinese version with English translation filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.14 Rental Agreement, by and between General Bureau of Hainan State Farms (the Farming Bureau) and Hainan Agricultural Resources Company Limited (Original Chinese version with English Translation filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.15 Guaranty Agreement, by and among Hainan Province Agricultural Reclamation General Company (the Farming Bureau), Hainan Agricultural Reclamation No. 1 Materials Supply & Sales Company (First Supply) and Hainan Agricultural Reclamation No. 2 Materials Supply & Sales Company (Second Supply) (Original Chinese version with certified English Translation filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.)
-18- 19 10.16 Financial Consulting Agreement dated February 1, 1994, by and between Brender Services Limited and Billion Luck Company Ltd., and Extension Agreement dated November 1, 1994, by and between Brender Services Limited and Billion Luck Company Ltd. (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.17 Exchange Agreement, by and among the Registrant, Hong Wah Investment Holdings Limited, Everbright Finance & Investment Co. Ltd., Worlder International Company Limited and Silverich Limited, executed as of March 31, 1995 (Filed with Quarterly Report on Form 10-Q/A for the fiscal quarter ended March 31, 1995, and incorporated herein by reference.) 10.18 China Resources Development, Inc., 1995 Stock Option Plan, adopted as of March 31, 1995 (Filed with Quarterly Report on Form 10-Q/A for the fiscal quarter ended March 31, 1995, and the Current Report on Form 8-K dated June 19, 1995, and incorporated herein by reference.) 10.19 Consulting Agreement between the Registrant and Brender Services Limited, dated April 30, 1995 (Filed with Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1995, and incorporated herein by reference.) 10.20 Letter dated June 1, 1995, extending the repayment date to December 31, 1995, for loans extended to Billion Luck by Everbright Finance & Investment Co. Limited, Worlder International Company Limited and Hong Wah Investment Holdings Limited, pursuant to Credit Agreement dated June 1, 1994 (Filed with Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1995, and incorporated herein by reference.) 10.21 Agreement on Administrative Expenses Apportionment between First Supply and Jin Ling Corporation, dated March 15, 1995 (Original Chinese version with English translation filed with Annual Report on Form 10-K for the fiscal year ended December 31, 1995, and incorporated herein by reference.) 10.22 Agreement on Administrative Expenses Apportionment between Second Supply and Jin Huan Corporation, dated March 15, 1995 (Original Chinese version with English translation filed with Annual Report on Form 10-K for the fiscal year ended December 31, 1995, and incorporated herein by reference.) 10.23 Agreement on Rubber Purchase Deposits among HARC, First Supply, Second Supply and the Farming Bureau, dated March 30, 1995 (Original Chinese version with English translation filed with Annual Report on Form 10-K for the fiscal year ended December 31, 1995, and incorporated herein by reference.) 10.24 Employment Agreement between Billion Luck and Han Jian Zhun, dated August 1, 1995 (Filed with Annual Report on Form 10-K for the fiscal year ended December 31, 1995, and incorporated herein by reference.)
-19- 20 10.25 Employment Agreement between Billion Luck and Li Fei Lie, dated August 1, 1995 (Filed with Annual Report on Form 10-K for the fiscal year ended December 31, 1995, and incorporated herein by reference.) 10.26 Contract on Investment in the Xilian Timber Mill between HARC and the State-Run Xilian Farm of Hainan Province dated July 7, 1994, and Supplementary Agreement dated December 24, 1994 (Original Chinese version with English translation filed with Annual Report on Form 10-K for the fiscal year ended December 31, 1995, and incorporated herein by reference.) 11 Computation of Earnings (Loss) Per Share (Contained in Financial Statements in Part I, Item 1, hereof.) 27 Financial Data Schedule, For SEC Use Only (Filed herewith.) (b) During the three months ended June 30, 1996, the Company did not file a Current Report on Form 8-K.
-20- 21 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. CHINA RESOURCES DEVELOPMENT, INC. August 13, 1996 By: /s/ Li Shunxing ------------------------------ Li Shunxing, President By: /s/ Tam Cheuk Ho ------------------------------ Tam Cheuk Ho, Chief Financial Officer -21- 22 EXHIBITS -22- 23 EXHIBITS INDEX
Exhibit No. Exhibit Description Page No. ----------- ------------------- -------- 3.1 Articles of Incorporation of the Registrant, filed on January 15, 1986 (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated by reference.) 3.2 By-laws of the Registrant (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated by reference.) 3.3 Certificate of Amendment of Articles of Incorporation of the Registrant, filed on November 18, 1994 (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated by reference.) 3.4 Certificate of Amendment of Articles of Incorporation of the Registrant, filed on November 18, 1994 (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated by reference.) 3.5 Certificate of Amendment of Articles of Incorporation of the Registrant, effective March 31, 1995, and filed on June 19, 1995 (Filed with Quarterly Report on Form 10- Q/A for the fiscal quarter ended March 31, 1995, and incorporated by reference.) 4.1 Certificate of Designation of Series B Convertible Preferred Stock, filed on December 13, 1995 (Filed with Current Report on Form 8-K dated March 8, 1996, and incorporated herein by reference.) 10.1 Assignment Agreement dated January 21, 1994, by and between Hong Wah (Holdings) Limited and Billion Luck Company Ltd. (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.2 Contract on Investment for the Setting up of Hainan Agricultural Resources Company Ltd. dated January 31, 1994, by and among Hainan Province Agricultural Reclamation General Company (the Farming Bureau), Hainan Province Guilinyang State Farm, and Billion Luck Company Ltd. (Original Chinese version with English translation filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.3 Loan Agreement dated May 10, 1994, by and among Everbright Finance & Investment Co. Limited, Worlder International Company Limited, Hong Wah Investment Holdings Limited, Silverich Limited, Brender Services Limited, and Billion Luck Company Ltd. (Filed with Annual Report on
-23- 24 Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.4 Credit Agreement dated June 1, 1994, by and among Everbright Finance & Investment Co. Limited, Worlder International Company Limited, Hong Wah Investment Holdings Limited and Billion Luck Company Ltd. (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.5 Contract on the Transfer of Share Ownership of Hainan Zhongya Aluminum Co., Ltd. dated July 11, 1994, by and between Hainan Province Guilinyang State Farm and Hainan Agricultural Resources Co., Ltd. (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.6 Letter Agreement dated August 8, 1994, by and among Everbright Finance & Investment Co. Limited, Worlder International Company Limited, Hong Wah Investment Holdings Limited and Billion Luck Company Ltd., supplementing Credit Agreement dated June 1, 1994 (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.7 Letter Agreement dated October 24, 1994, by and among Everbright Finance & Investment Co. Limited, Worlder International Company Limited, and Billion Luck Company Ltd. (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.8 Acquisition Agreement, by and among the Registrant and the shareholders of Billion Luck Company Ltd. (Filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.9 Agreement on Service and Cooperation dated November 5, 1994, by and between Hainan Province Agricultural Reclamation General Company (the Farming Bureau) and Hainan Agricultural Resources Company Ltd. (Original Chinese version with English translation filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.10 Land Use Agreement dated November 5, 1994, by and between Hainan Province Agricultural Reclamation No. 1 Materials Supply & Sales Company (First Supply) and Hainan Province Agricultural Reclamation Jin Long Materials General Company (Original Chinese version with certified English translation filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.)herewith.)
-24- 25 10.11 Land Use Agreement dated November 5, 1994, by and between Hainan Province Agricultural Reclamation No. 2 Materials Supply & Sales Company (Second Supply) and Hainan Province Agricultural Reclamation Jin Huan Materials General Company (Original Chinese version with certified English translation filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.12 Long-Term Sale and Purchase Agreement dated November 5, 1994, by and among Hainan Province Agricultural Reclamation General Company (the Farming Bureau), Hainan Agricultural Resources Company Ltd., Hainan Province Agricultural Reclamation No. 1 Materials Supply & Marketing Company (First Supply), and Hainan Province Agricultural Reclamation No. 2 Materials Supply & Marketing Company (Second Supply) 0(Original Chinese version with English translation filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.13 Agreement on Assignment of Accounts Receivable dated November 5, 1994, by and among Hainan Province Agricultural Reclamation General Company (the Farming Bureau), Billion Luck Company Ltd., Hainan Province Guilinyang State Farm, Hainan Agricultural Resources Company Ltd., Hainan Province Agricultural Reclamation No. 1 Materials Supply & Marketing Company (First Supply), and Hainan Province Agricultural Reclamation No. 2 Materials Supply & Marketing Company (Second Supply) (Original Chinese version with English translation filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.14 Rental Agreement, by and between General Bureau of Hainan State Farms (the Farming Bureau) and Hainan Agricultural Resources Company Limited (Original Chinese version with English Translation filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.15 Guaranty Agreement, by and among Hainan Province Agricultural Reclamation General Company (the Farming Bureau), Hainan Agricultural Reclamation No. 1 Materials Supply & Sales Company (First Supply) and Hainan Agricultural Reclamation No. 2 Materials Supply & Sales Company (Second Supply) (Original Chinese version with certified English Translation filed with Annual Report on Form 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.16 Financial Consulting Agreement dated February 1, 1994, by and between Brender Services Limited and Billion Luck Company Ltd., and Extension Agreement dated November 1, 1994, by and between Brender Services Limited and Billion Luck Company Ltd. (Filed with Annual Report on Form
-25- 26 10-K/A for the fiscal year ended December 31, 1994, and incorporated herein by reference.) 10.17 Exchange Agreement, by and among the Registrant, Hong Wah Investment Holdings Limited, Everbright Finance & Investment Co. Ltd., Worlder International Company Limited and Silverich Limited, executed as of March 31, 1995 (Filed with Quarterly Report on Form 10-Q/A for the fiscal quarter ended March 31, 1995, and incorporated herein by reference.) 10.18 China Resources Development, Inc., 1995 Stock Option Plan, adopted as of March 31, 1995 (Filed with Quarterly Report on Form 10-Q/A for the fiscal quarter ended March 31, 1995, and the Current Report on Form 8-K dated June 19, 1995, and incorporated herein by reference.) 10.19 Consulting Agreement between the Registrant and Brender Services Limited, dated April 30, 1995 (Filed with Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1995, and incorporated herein by reference.) 10.20 Letter dated June 1, 1995, extending the repayment date to December 31, 1995, for loans extended to Billion Luck by Everbright Finance & Investment Co. Limited, Worlder International Company Limited and Hong Wah Investment Holdings Limited, pursuant to Credit Agreement dated June 1, 1994 (Filed with Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1995, and incorporated herein by reference.) 10.21 Agreement on Administrative Expenses Apportionment between First Supply and Jin Ling Corporation, dated March 15, 1995 (Original Chinese version with English translation filed with Annual Report on Form 10-K for the fiscal year ended December 31, 1995, and incorporated herein by reference.) 10.22 Agreement on Administrative Expenses Apportionment between Second Supply and Jin Huan Corporation, dated March 15, 1995 (Original Chinese version with English translation filed with Annual Report on Form 10-K for the fiscal year ended December 31, 1995, and incorporated herein by reference.) 10.23 Agreement on Rubber Purchase Deposits among HARC, First Supply, Second Supply and the Farming Bureau, dated March 30, 1995 (Original Chinese version with English translation filed with Annual Report on Form 10-K for the fiscal year ended December 31, 1995, and incorporated herein by reference.) 10.24 Employment Agreement between Billion Luck and Han Jian Zhun, dated August 1, 1995 (Filed with Annual Report on Form 10-K for the fiscal year ended December 31, 1995, and incorporated herein by reference.)
-26- 27 10.25 Employment Agreement between Billion Luck and Li Fei Lie, dated August 1, 1995 (Filed with Annual Report on Form 10-K for the fiscal year ended December 31, 1995, and incorporated herein by reference.) 10.26 Contract on Investment in the Xilian Timber Mill between HARC and the State-Run Xilian Farm of Hainan Province dated July 7, 1994, and Supplementary Agreement dated December 24, 1994 (Original Chinese version with English translation filed with Annual Report on Form 10-K for the fiscal year ended December 31, 1995, and incorporated herein by reference.) 11 Computation of Earnings (Loss) Per Share (Contained in Financial Statements in Part I, Item 1, hereof.) 27 Financial Data Schedule, For SEC Use Only (Filed herewith.)
-27- EX-27 2 FINANCIAL DATA SCHEDULE (FOR SEC USE ONLY)
5 1,000 RMB 6-MOS DEC-31-1995 JAN-01-1996 JUN-30-1996 8.32 92,156 0 52,675 0 65,031 688,443 25,946 4,151 723,464 473,355 0 0 53,930 347 108,528 723,464 795,719 799,962 719,794 746,175 0 0 21,676 32,111 5,577 13,133 0 0 0 13,133 0.592 0.592
-----END PRIVACY-ENHANCED MESSAGE-----