-----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, HK1/LguE7o/wTTg5LEvLnaRm2R9KMSq9OpSh/ciQznB6sUJ3dEdrI7ll96DYd3eC P1A5d/KCRYTR24QJ5pRvlg== 0001116502-02-001120.txt : 20020814 0001116502-02-001120.hdr.sgml : 20020814 20020814144249 ACCESSION NUMBER: 0001116502-02-001120 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHINA RESOURCES DEVELOPMENT INC CENTRAL INDEX KEY: 0000793628 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MISCELLANEOUS NONDURABLE GOODS [5190] IRS NUMBER: 970263643 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-26046 FILM NUMBER: 02734940 BUSINESS ADDRESS: STREET 1: ROOM 2105 WEST TOWER SHUN TAK CENTRE STREET 2: 168-200 CONNAUGHT ROAD CENTRAL CITY: SHEUNG WAN HONG KONG BUSINESS PHONE: 011-852-28 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 10QSB 1 chinaresources-10qsb.txt QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarter period ended June 30, 2002 ------------- [x] 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 0-26046 87-02623643 (State or other Jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) Room 2105, West Tower, Shun Tak Centre, 200 Connaught Road C., Sheung Wan, Hong Kong Telephone: 011-852-2810-7205 (Address and telephone number of principal executive offices) 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 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: 837,823 shares of common stock, $0.001 par value, as of August 12, 2002. CONVENTIONS Unless otherwise specified, all references in this report to "U.S. Dollars," "Dollars," "US$," or "$" are to United States dollars; all references to "Hong Kong Dollars" or "HK$" are to Hong Kong 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 its subsidiaries maintain their accounts in Renminbi. The financial statements of the Company and its subsidiaries are prepared in Renminbi. Translations of amounts from Renminbi to U.S. Dollars and from Hong Kong Dollars 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, 2002, which was approximately U.S.$1.00 = Rmb8.28. Translations from Hong Kong Dollars to U.S. Dollars have been made at the single rate of exchange as quoted by the Hongkong and Shanghai Banking Corporation Limited on June 30, 2002, which was approximately US$1.00 = HK$7.80. 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" are 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 its subsidiaries (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 "Hainan" are to Hainan Province of the PRC. References to "HARC" are to Hainan Cihui Industrial Company Limited (formerly known as Hainan Zhongwei Agricultural Resources Company Limited), a company organized in the PRC, and is a wholly-owned subsidiary of the Company. References to the "PRC" or "China" include all territory claimed by or under the control of the Central Government, except Hong Kong, Macau, and Taiwan. 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CHINA RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Amounts in thousands, except share and per share data)
Three Months Ended June 30, Six Months Ended June 30, -------------------------------- -------------------------------- 2002 2001 2002 2002 2001 2002 -------- -------- -------- -------- -------- -------- RMB RMB US$ RMB RMB US$ NET SALES 1,782 1,499 215 3,496 6,027 422 COST OF SALES (1,550) (1,287) (187) (3,015) (5,633) (364) -------- -------- -------- -------- -------- -------- GROSS PROFIT 232 212 28 481 394 58 DEPRECIATION (201) (232) (24) (412) (405) (50) AMORTIZATION -- (2,190) -- -- (3,528) -- SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (2,847) (4,035) (344) (5,871) (7,836) (709) FINANCIAL INCOME/ (EXPENSES), NET 145 618 18 427 548 52 OTHER INCOME/(EXPENSES), NET (4,924) (16,732) (595) (4,513) (6,185) (545) -------- -------- -------- -------- -------- -------- LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (7,595) (22,359) (917) (9,888) (17,012) (1,194) INCOME TAXES -- -- -- -- (1,262) -- -------- -------- -------- -------- -------- -------- LOSS FROM CONTINUING OPERATIONS BEFORE MINORITY INTERESTS (7,595) (22,359) (917) (9,888) (18,274) (1,194) MINORITY INTERESTS -- 145 -- -- 1,198 -- -------- -------- -------- -------- -------- -------- LOSS FROM CONTINUING OPERATIONS (7,595) (22,214) (917) (9,888) (17,076) (1,194) DISCONTINUED OPERATIONS Loss from operations of discontinued timber segment -- -- -- -- (24) -- -------- -------- -------- -------- -------- -------- NET LOSS (7,595) (22,214) (917) (9,888) (17,100) (1,194) ======== ======== ======== ======== ======== ======== LOSS PER SHARE: Basic and diluted Continuing operations (9.07) (26.51) (1.09) (11.80) (20.38) (1.43) Discontinued operations -- -- -- -- (0.03) -- -------- -------- -------- -------- -------- -------- (9.07) (26.51) (1.09) (11.80) (20.41) (1.43) ======== ======== ======== ======== ======== ======== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 837,823 837,823 837,823 837,823 837,823 837,823 ======== ======== ======== ======== ======== ========
See notes to condensed consolidated financial statements. 3 CHINA RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2002 AND DECEMBER 31, 2001 (Amounts in thousands, except share and per share data)
June 30, December 31, June 30, 2002 2001 2002 -------- -------- -------- RMB RMB US$ Notes (Unaudited) (Note) (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents 4,881 7,627 589 Trading securities 1,300 5,744 157 Inventories - finished goods 566 610 68 Other receivables, deposits and prepayments 873 4,635 106 Short term loans receivable 2 7,314 15,488 883 Amounts due from related companies -- 636 -- Amounts due from employees 1,075 896 130 -------- -------- -------- TOTAL CURRENT ASSETS 16,009 35,636 1,933 PROPERTY AND EQUIPMENT 3 6,878 7,279 831 INVESTMENTS 109,615 109,615 13,239 VALUE-ADDED TAX RECEIVABLE 4,687 4,687 566 -------- -------- -------- TOTAL ASSETS 137,189 157,217 16,569 ======== ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable 257 247 31 Other payables and accrued liabilities 4 6,307 16,569 762 Income taxes 454 454 55 Amounts due to related companies 366 366 44 -------- -------- -------- TOTAL CURRENT LIABILITIES 7,384 17,636 892 -------- -------- -------- SHAREHOLDERS' EQUITY Common stock, US$0.001 par value: Authorized - 200,000,000 shares Issued and outstanding - 837,823 shares in 2002 and 2001 7 7 1 Preferred stock, authorized - 10,000,000 shares in 2002 and 2001 Series B preferred stock, US$0.001 par value: Authorized - 320,000 shares Issued and outstanding - 320,000 shares in 2002 and 2001 3 3 -- Additional paid-in capital 169,052 169,052 20,417 Reserves 28,028 28,028 3,385 Accumulated deficit (67,448) (57,560) (8,146) Accumulated other comprehensive gains 163 51 20 -------- -------- -------- TOTAL SHAREHOLDERS' EQUITY 129,805 139,581 15,677 -------- -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 137,189 157,217 16,569 ======== ======== ========
Note: The balance sheet at December 31, 2001 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. See notes to condensed consolidated financial statements. 4 CHINA RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Amounts in thousands)
Six months ended June 30, ----------------------------- 2002 2001 2002 ------- ------- ------- RMB RMB US$ Net cash (used in)/provided by operating activities (10,897) 33,813 (1,316) ------- ------- ------- INVESTING ACTIVITIES Purchases of property and equipment (11) (36) (1) Acquisition of minority interest in a subsidiary -- (36,478) -- Advances of short term loans to third parties (12,190) -- (1,473) Repayments of short term loans from third parties 20,352 -- 2,458 ------- ------- ------- Net cash provided by/(used in) investing activities 8,151 (36,514) 984 ------- ------- ------- NET DECREASE IN CASH AND CASH EQUIVALENTS (2,746) (2,701) (332) Cash and cash equivalents, at beginning of period 7,627 37,547 921 ------- ------- ------- Cash and cash equivalents, at end of period 4,881 34,846 589 ======= ======= =======
See notes to condensed consolidated financial statements. 5 CHINA RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Amounts in thousands, except per share data) 1. BASIS OF PRESENTATION As of December 31, 2001, the Company meets the eligibility requirements for entry into the Small Business (SB) disclosure system. Accordingly, this quarterly report is filed on Form 10-QSB. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-QSB and Article 10 of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America 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 three month and six month periods ended June 30, 2002, are not necessarily indicative of the results that may be expected for the year ending December 31, 2002. The balance sheet at December 31, 2001 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2001. Certain comparative amounts have been reclassified to conform with the current period classifications. 2. SHORT TERM LOANS RECEIVABLE In March 2002, the Company advanced an interest free short term loan of RMB10,600 to an unaffiliated third party. The loan was repaid in April 2002. In addition, the Company advanced short term loans to two unaffiliated third parties of RMB1,272 and RMB318, respectively, in the second quarter of 2002. These two loans bear annual interest rates of 10%. Short term loans amounting to RMB9,752, which were advanced to two unaffiliated third parties in 2001, were repaid in the first half of 2002. 3. PROPERTY AND EQUIPMENT
June 30, December 31, 2002 2001 RMB RMB At cost: Buildings 4,260 4,260 Machinery, equipment and motor vehicles 4,135 4,124 Fixtures and furniture 208 208 ---------- ---------- 8,603 8,592 Accumulated depreciation (1,725) (1,313) ---------- ---------- 6,878 7,279 ========== ==========
6 4. OTHER PAYABLES AND ACCRUED LIABILITIES
June 30, December 31, 2002 2001 RMB RMB Advances from a former vice president - 11,298 Accrued salary of a director 1,297 1,106 Other payables 2,523 1,368 Accrued liabilities 2,487 2,797 ---------- ---------- 6,307 16,569 ========== ==========
5. SEGMENT FINANCIAL INFORMATION
Three months ended Six months ended June 30, June 30, 2002 2001 2002 2001 RMB RMB RMB RMB Net sales: Supermarket operations, net sales to unaffiliated customers 1,782 1,499 3,496 2,842 Natural rubber, net sales to unaffiliated customers - - - 3,185 ------- ------- ------- ------- Total consolidated net sales 1,782 1,499 3,496 6,027 ======= ======= ======= ======= Segment profit/(loss): Supermarket operations 89 125 224 214 Natural rubber - (517) - (1,018) ------- ------- ------- ------- Total segment income/(loss) 89 (392) 224 (804) Reconciling items: Corporate expenses (7,829) (22,585) (10,539) (16,756) Interest income 145 618 427 777 Interest expense - - - (229) ------- ------- ------- ------- Total consolidated loss before income taxes and discontinued operations (7,595) (22,359) (9,888) (17,012) ======= ======= ======= ======= June 30, December 31, 2002 2001 RMB RMB Segment assets: Supermarket operations 7,120 6,895 Natural rubber - - ---------- ---------- Total segment assets 7,120 6,895 Reconciling items: Corporate assets 20,454 40,707 Investments 109,615 109,615 ---------- ---------- Total consolidated assets 137,189 157,217 ========== ==========
7 6. COMPREHENSIVE LOSS
Three months ended Six months ended June 30, June 30, 2002 2001 2002 2001 RMB RMB RMB RMB Total comprehensive loss 7,593 22,215 9,776 17,085 ====== ====== ====== ======
8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The following table shows the selected unaudited condensed consolidated statement of operations data of the Company and its subsidiaries for the three months and six months ended June 30, 2002 and 2001. The data should be read in conjunction with the unaudited Condensed Consolidated Financial Statements of the Company and related notes thereto. The discussions below are presented in the Company's primary operating currency, which is the Renminbi Yuan ("RMB"). For information purposes only, the amounts may be translated into U.S. dollars at an exchange rate of $1.00 = RMB8.28, which represents the approximate single rate of exchange as quoted by the People's Bank of China on June 30, 2002. No representation is made that RMB amounts could have been, or could be, converted into U.S. dollars at that rate or any other rate.
(Amounts in thousands) Three months ended June 30, Six months ended June 30, --------------------------- ------------------------- 2002 2001 2002 2001 RMB RMB RMB RMB Net sales: Supermarket operations 1,782 1,499 3,496 2,842 Natural rubber - - - 3,185 ---------- ---------- ---------- ---------- 1,782 1,499 3,496 6,027 ---------- ---------- ---------- ---------- Gross profit 232 212 481 394 Gross profit margin (%) 13.02 14.14 13.76 6.54 Loss from continuing operations before income taxes (7,595) (22,359) (9,888) (17,012) Income taxes - - - (1,262) ---------- ---------- ---------- ---------- Loss from continuing operations before minority interests (7,595) (22,359) (9,888) (18,274) Minority interests - 145 - 1,198 ---------- ---------- ---------- ---------- Loss from continuing operations (7,595) (22,214) (9,888) (17,076) Discontinued operations Loss from operations of discontinued timber segment - - - (24) ---------- ---------- ---------- ---------- Net loss (7,595) (22,214) (9,888) (17,100) ========== ========== ========== ==========
NET SALES AND GROSS PROFIT Net sales from supermarket operations increased by 23.0% from RMB2.8 million (US$343,000) for the first half of 2001 to RMB3.5 million (US$422,000) for the first half of 2002. For the first half of 2002, supermarket operations had gross profit and gross profit margin of RMB481,000 (US$58,000) and 13.8%, respectively. For the first half of 2001, supermarket operations had gross profit and gross profit margin of RMB398,000 (US$48,000) and 14.0%, respectively. For the second quarter of 2002, supermarket operations had gross profit and gross profit margin of RMB232,000 (US$28,000) and 13.0%, respectively. For the second quarter of 2001, supermarket operations had gross profit and gross profit margin of RMB212,000 (US$26,000) and 14.1%, respectively. The increase in net sales were due to increased sales volume resulting from the successful marketing efforts of the Company and its ability to retain its customers. The increase in net sales were also due to the Company's pricing strategy which slightly reduced the prices of certain popular products in order to attract more customers. 9 The Company periodically engages in the trading of natural rubber, depending on market conditions. The Company had sales of RMB3.2 million (US$385,000) for the first quarter of 2001, with a gross loss of RMB4,000 (US$483). SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses for the first half of 2002 decreased by RMB2.0 million (US$237,000) or 25.1% to RMB5.9 million (US$709,000) for the first half of 2002 from RMB7.8 million (US$946,000) for the first half of 2001. The decrease was due to the reduction in personnel and the Company's tightened cost control measures. Selling, general and administrative expenses for the second quarter of 2002 decreased by RMB1.2 million (US$144,000) or 29.4% to RMB2.8 million (US$344,000) for the second quarter of 2002 from RMB4.0 million (US$487,000) for the second quarter of 2001. The decrease was due to the reduction in personnel and the Company's tightened cost control measures. AMORTIZATION Amortization expense for the first half and second quarter of 2001 represented amortization of website technology, acquired on June 30, 2000, which was recorded on the straight-line basis over two years. The Company wrote off the acquired website technology in 2001. FINANCIAL INCOME, NET Net financial income for the first half of 2002 was RMB427,000 (US$52,000), which primarily represented interest income on short term loans receivable. Net financial income for the first half of 2001 was RMB548,000 (US$66,000), which was comprised of margin loan interest expenses of RMB229,000 (US$28,000) and interest income of RMB777,000 (US$94,000) from bank deposits. Net financial income for the second quarter of 2002 was RMB145,000 (US$18,000), which primarily represented interest income on short term loans receivable. Net financial income for the second quarter of 2001 was RMB618,000 (US$75,000), which primarily represented interest income from bank deposits. OTHER INCOME/(EXPENSES), NET Net expenses for the first half of 2002 represented a net loss on trading of marketable securities of RMB4.7 million (US$568,000) offset by arrangement fee income on short term loans of RMB119,000 (US$14,000). Net expenses for the first half of 2001 represented a net gain on trading of marketable securities of RMB7.3 million (US$882,000) and a premium earned on written call options of RMB3.2 million (US$386,000), offset by losses recognized on acquisition of minority interest in HARC and disposition of certain assets to the Farming Bureau of RMB16.7 million (US$2.0 million). Net expenses for the second quarter of 2002 represented a net loss on trading of marketable securities of RMB5.1 million (US$616,000) offset by arrangement fee income on short term loans of RMB119,000 (US$14,000). Other income for the second quarter of 2001 represented losses recognized on acquisition of minority interest in HARC and disposition of certain assets to the Farming Bureau of RMB16.7 million (US$2.0 million). INCOME TAXES It is management's intention to reinvest all the income attributable to the Company earned by its operations outside the US. Accordingly, no US federal and state income taxes have been provided in these consolidated financial statements. Income taxes consist of PRC federal income tax computed at 15% on assessable income for foreign investment enterprises operating in Hainan. 10 DISCONTINUED OPERATIONS Discontinued operations represented the loss from the operations of the discontinued processed timber business resulting from the exchange of the Company's 58% interest in Hainan Weilin Timber Limited Liability Company as partial consideration for the minority interest of HARC in 2001. LIQUIDITY AND CAPITAL RESOURCES The Company's primary liquidity needs are to fund inventories, operating expenses, and to expand business operations. The Company has financed its working capital requirements primarily through internally generated cash. The Company had a working capital surplus of approximately RMB8.6 million (US$1.0 million) as of June 30, 2002, compared to that of approximately RMB18.0 million (US$2.2 million) as of December 31, 2001. Net cash used in operating activities for the six months ended June 30, 2002 was approximately RMB10.9 million (US$1.3 million), as compared to net cash provided by operating activities of RMB33.8 million (US$4.1 million) for the corresponding period in 2001. Net cash inflows/outflows from the Company's operating activities are attributable to the Company's net loss and changes in operating assets and liabilities. The cash inflows in 2001 primarily consisted of cash proceeds from the disposal of marketable securities. Net cash provided by investing activities for the six months ended June 30, 2002 was primarily attributable to advances and repayments of short term loans to/from third parties. Except as disclosed above, there has been no other significant changes in financial condition and liquidity since the fiscal year ended December 31, 2001. The Company believes that internally generated funds will be sufficient to satisfy its anticipated working capital needs for at least the next twelve months. MARKET RISK AND RISK MANAGEMENT POLICIES All of the Company's sales and purchases are made domestically and are denominated in RMB. Accordingly, the Company and its subsidiaries do not have material market risk with respect to currency fluctuation. As the reporting currency of the Company's consolidated financial statements is also RMB, there is no significant translation difference arising on consolidation. However, the Company may suffer exchange loss when it converts RMB to other currencies, such as Hong Kong Dollar or United States Dollar. The Company's interest income is most sensitive to changes in the general level of RMB interest rates. In this regard, changes in RMB interest rates affect the interest earned on the Company's cash equivalents. At June 30, 2002, the Company's cash equivalents are mainly RMB, Hong Kong Dollar and United States Dollar deposits with financial institutions, bearing market interest rates without fixed term. At June 30, 2002, the Company had short-term investments in marketable securities in the Hong Kong and United States stock markets with a total market value of RMB1.3 million (US$157,000). These investments expose the Company to market risks that may cause the future value of these investments to be lower than the original cost of such investments. The Company wrote put options to sell certain marketable securities in the United States in the second quarter of 2002. These options which expire on September 20, 2002 expose the Company to market risk relating to unfavourable changes in the price of the securities underlying the written option. 11 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS: NONE ITEM 2. CHANGES IN SECURITIES: NONE 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) 99.1 Certification of Chief Financial Officer 99.2 Certification of Chief Executive Officer (b) During the three months ended June 30, 2002, the Company filed one current report on Form 8-K. On May 3, 2002, the Company filed a Report on Form 8-K dated April 30, 2002, which reported, in Item 4, the changes in the Company's certifying accountant. No financial statements were filed. 12 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 12, 2002 By:/s/ Ching Lung Po ---------------------------------- Ching Lung Po, Chief Executive Officer By:/s/ Tam Cheuk Ho ----------------------------------- Tam Cheuk Ho, Chief Financial Officer 13 EX-99.1 3 certificaiton-cfo.txt CFO CERTIFICATION Exhibit 99.1 CERTIFICATION OF CHIEF FINANCIAL OFFICER Pursuant to Section 906 of the Sarbanes-Oxley Act 2002 (18 U.S.C. 1350), the undersigned, Tam Cheuk Ho, Chief Financial Officer of China Resources Development, Inc. (the "Company") has executed this certification in connection with the filing with the Securities and Exchange Commission of the Company's Quarterly Report on Form 10-QSB for the quarter ended June 30, 2002 (the "Report"). The undersigned certifies that: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company. IN WITNESS WHEREOF, the undersigned has executed this certification as of the 12th day of August, 2002. /s/ ---------------------------- Name: Tam Cheuk Ho ----------------------------- Title: Chief Financial Officer ---------------------------- EX-99.2 4 certificaiton-ceo.txt CEO CERTIFICATION Exhibit 99.2 CERTIFICATION OF CHIEF EXECUTIVE OFFICER Pursuant to Section 906 of the Sarbanes-Oxley Act 2002 (18 U.S.C. 1350), the undersigned, Ching Lung Po, Chief Executive Officer of China Resources Development, Inc. (the "Company") has executed this certification in connection with the filing with the Securities and Exchange Commission of the Company's Quarterly Report on Form 10-QSB for the quarter ended June 30, 2002 (the "Report"). The undersigned certifies that: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company. IN WITNESS WHEREOF, the undersigned has executed this certification as of the 12th day of August, 2002. /s/ ---------------------------- Name: Ching Lung Po ----------------------------- Title: Chief Executive Officer ---------------------------- -----END PRIVACY-ENHANCED MESSAGE-----