8-K 1 chinaresources8k.htm CURRENT REPORT <B>bp53100 -- China Resources Development -- 8K





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________


FORM 8-K




CURRENT REPORT


Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported)  February 10, 2004




CHINA RESOURCES DEVELOPMENT, INC.

(Exact name of registrant as specified in its charter)



                      

Nevada

        

0-26046

        

87-0263643

 

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

   
 

                                             

 

                                             

 

                                             



Room 2105, West Tower, Shun Tak Centre,

200 Connaught Road C, Sheung Wan, Hong Kong

(Address of Principal Executive Office) (Zip Code)



011-852-2810-7205

(Registrant’s telephone number, including area code)



Not Applicable

(Former Name or Former Address, If Changed Since Last Report.)










Item 2.   Acquisition or Disposition of Assets.


On February 10, 2004, the Registrant’s wholly-owned subsidiary, Hainan Cihui Industrial Co. Ltd. (“HARC”), disposed of its 100% equity interest in Shenzhen Xubu Investment Co. Ltd. (“Xubu”) to an unaffiliated third party, effective January 1, 2004, for total consideration of Rmb17,256,000 (US$2,084,058) (the “Purchase Consideration”). Xubu was formed to seek investment opportunities in China; however, no such opportunities were consummated. The assets of Xubu mainly consisted of fixed assets and cash. The Purchase Consideration was offset by capital in the amount of Rmb16,025,910 (US$1,935,496) that had been withdrawn from Xubu by HARC. The net Purchase Consideration to be received by HARC is Rmb1,230,090 (US$148,562), which is due and payable on or before May 10, 2004.


(“Rmb” refers to Renminbi yuan, the lawful currency of the People’s Republic of China. Translation of amounts from Renminbi to U.S. dollars have been made at the single rate of exchange as quoted by the People’s Bank of China (the “PBOC Rate”) on December 31, 2003, which was US$1.00 = Rmb8.28. The Renminbi is not freely convertible into foreign currencies, and no representation is made that the Renminbi amounts referred to herein could have been or could be converted into U.S. dollars at the PBOC Rate or at all.)

Item 7.   Financial Statements and Exhibits.


(a)

Financial Statements.


None.


(b)

Pro Forma Financial Information


The unaudited pro forma financial information includes (1) a pro forma condensed consolidated statement of operations for the year ended December 31, 2002 (2) pro forma condensed consolidated statements of operations for the three months and nine months ended September 30, 2003, and (3) a pro forma condensed consolidated balance sheet as of September 30, 2003. The historical financial information has been derived from the audited financial statements included in the Company’s annual report on Form 10-KSB for the year ended December 31, 2002, and the unaudited financial statements included in the Company’s quarterly report on Form 10-QSB for the quarter ended September 30, 2003. The unaudited pro forma financial statements should be read in conjunction with the historical financial statements used in the preparation of such pro forma financial statements. The pro forma financial information presented in not necessarily indicative of that which would have been attained had the transaction occurred at an earlier date.


The assumptions used in developing the pro forma adjustments include (1) all historical expenses and income for the periods concerned would have been diminished had the disposition occurred at the beginning of such periods, and (2) the sales proceeds would remain the same had the disposition occurred on the balance sheet date.





2




(c)

Exhibits.

The following exhibit is filed with this report:

 

Exhibit No.

     

Exhibit Description

 

10.18  

 

Agreement for the Sale and Purchase of Shares in Shenzhen Xubu

Investment Co. Ltd. by and between HARC and Su Wei Min dated

February 10, 2004.

 

10.19  

 

Agreement for the Sale and Purchase of Shares in Shenzhen Xubu

Investment Co. Ltd. by and between Li Fei Lie, as nominee for HARC

and Su Wei Min dated February 10, 2004.






3






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, hereunto duly authorized.



                                                                                      

CHINA RESOURCES DEVELOPMENT, INC.

   
   

Date:  February 24, 2004

By:  

/s/ CHING LUNG PO

  

Ching Lung Po

Chairman

  






4




PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

FOR THE YEAR ENDED DECEMBER 31, 2003

(Amounts in thousands, except share and per share data)


  


Historical

  

Pro forma

adjustments

  


Pro forma

 
  

RMB

  

RMB

  

RMB

 

                                                                                                            

     

  

     

  

     

  

NET SALES

 

9,170

     

9,170

 
          

COST OF SALES

 

(8,504

)

    

(8,504

)

          

GROSS PROFIT

 

666

     

666

 
          

DEPRECIATION

 

(842

)

 

529

  

(313

)

          

VALUATION ALLOWANCE

 

(48,178

)

    

(48,178

)

          

SELLING, GENERAL AND

   ADMINISTRATIVE EXPENSES

 


(11,164


)

 


3,478

  


(7,686


)

          

FINANCIAL INCOME, NET

 

669

  

(1

)

 

668

 
          

OTHER EXPENSES, NET

 

(1,333

)

 

106

  

(1,227

)

          

LOSS BEFORE INCOME TAXES

 

(60,182

)

    

(56,070

)

          

INCOME TAXES

 

(50

)

    

(50

)

          

NET LOSS

 

(60,232

)

    

(56,120

)

          

LOSS PER SHARE:

         

   Basic and diluted

 

(71.89

)

    

(66.98

)

          

WEIGHTED AVERAGE NUMBER

   OF SHARES OUTSTANDING

 


837,823

     


837,823

 
          

————————

Note: Pro forma adjustments present adjustments to the results of operations to reflect the disposition of Xubu as if it had occurred on January 1, 2002 and applicable historical expenses of the Company for the year 2002 would have been adjusted accordingly.







F-1




PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2003

(Amounts in thousands, except share and per share data)


  

Three months ended 

September 30, 2003

  

Nine Months Ended 

September 30, 2003

 
  


Historical

  

Pro forma

adjustments

  


Pro forma

  


Historical

  

Pro forma

adjustments

  


Pro forma

 
  

RMB

  

RMB

  

RMB

  

RMB

  

RMB

  

RMB

 
                   

NET SALES

     

853

   

  

   

 

853

   

 

1,297

   

  

   

 

1,297

 
                   

COST OF SALES

 

(761

)

    

(761

)

 

(1,205

)

    

(1,205

)

                   

GROSS PROFIT

 

92

     

92

  

92

     

92

 
                   

DEPRECIATION

 

(202

)

 

142

  

(60

)

 

(554

)

 

426

  

(128

)

                   

SELLING, GENERAL AND

ADMINISTRATIVE EXPENSES

 


(17,097


)

 


635

  


(16,462


)

 


(26,985


)

 


1,725

  


(25,260


)

                   

FINANCIAL INCOME, NET

 

87

  

(1

)

 

86

  

346

  

(1)

)

 

345

 
                   

OTHER INCOME, NET

 

1,084

     

1,084

  

1,153

     

1,153

 
                   

LOSS FROM CONTINUING OPERATIONS

  BEFORE INCOME TAXES

 


(16,036


)

    


(15,260


)

 


(25,948


)

    


(23,798


)

                   

INCOME TAXES

 

—

     

—

  

—

     

—

 
                   

LOSS FROM CONTINUING OPERATIONS

 

(16,036

)

    

(15,260

)

 

(25,948

)

    

(23,798

)

                   

DISCONTINUED OPERATIONS

                  

  Income from operations of discontinued

   supermarket segment (including gain

   on disposal of RMB327 in 2003),

   net of taxes of RMB0

 




—

     




—

  




366

     




366

 
 
 
 

 

                  

NET LOSS

 

(16,036

)

    

(15,260

)

 

(25,582

)

    

(23,432

)

                   

LOSS PER SHARE: basic and diluted

                  

   Continuing operations

 

(15.56

)

    

(14.81

)

 

(28.75

)

    

(26.37

)

   Discontinued operations

 

—

     

—

  

0.41

     

0.41

 
  

(15.56

)

    

(14.81

)

 

(28.34

)

    

(25.96

)

                   

WEIGHTED AVERAGE NUMBER 

  OF SHARES OUTSTANDING

 


1,030,345

     


1,030,345

  


902,702

     


902,702

 

————————

Note: Pro forma adjustments present adjustments to the results of operations to reflect the disposition of Xubu as if it had occurred on January 1, 2003 and applicable historical expenses of the Company for the periods concerned would have been adjusted accordingly.







F-2




PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2003

(Amounts in thousands, except share and per share data)


    

Pro forma

adjustments

   
  

Historical

  

Pro forma

 
  

RMB

 

RMB

 

RMB

 

                                                                                                            

     

 

     

 

     

  

ASSETS

     

 

     

 

     

  

CURRENT ASSETS:

       

  Cash and cash equivalents

 

12,249

 

(180

)

12,069

 

  Trading securities

 

749

   

749

 

  Trade receivables

 

277

   

277

 

  Other receivables, deposits and prepayments

 

790

 

767

 

1,557

 

  Short term loans receivable

 

1,113

   

1,113

 
        

TOTAL CURRENT ASSETS

 

15,178

   

15,765

 

PROPERTY AND EQUIPMENT

 

2,679

 

(1,243

)

1,436

 

INVESTMENTS

 

48,000

   

48,000

 

GOODWILL

 

5,865

   

5,865

 
        

TOTAL ASSETS

 

71,722

   

71,066

 
        

LIABILITIES AND SHAREHOLDERS’ EQUITY

       

CURRENT LIABILITIES:

       

  Accounts payable

 

154

   

154

 

  Other payables and accrued liabilities

 

4,196

 

(187

)

4,009

 

  Current portion of capital lease

 

140

   

140

 

  Amounts due to related companies

 

366

   

366

 
        

TOTAL CURRENT LIABILITIES

 

4,856

   

4,669

 

Capital lease net of current portion

 

365

   

365

 
        

TOTAL LIABILITIES

 

5,221

   

5,034

 
        

SHAREHOLDERS’ EQUITY

       

  Preferred stock, authorized – 10,000,000 shares

       

    Series B preferred stock, US$0.001 par value: 

       

      Authorized - 320,000 shares

      Issued and outstanding – 320,000 shares

 


3

   


3

 

  Common stock, US$0.001 par value:

       

    Authorized – 200,000,000 shares

    Issued and outstanding – 1,143,823 shares

 


9

   


9

 

Additional paid-in capital

 

181,681

   

181,681

 

Reserves

 

28,028

   

28,028

 

Accumulated deficit

 

(143,374

)

(469

)

(143,843

)

Accumulated other comprehensive gains

 

154

   

154

 
        

TOTAL SHAREHOLDERS’ EQUITY

 

66,501

   

66,032

 
        

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

71,722

   

71,066

 

————————

Note: Pro forma adjustments present adjustments to the September 30, 2003 balance sheet to reflect the disposition of Xubu as if it had occurred on September 30, 2003.




F-3




INDEX TO EXHIBITS



Exhibit No.

     

Exhibit Title

10.18

 

Agreement for the Sale and Purchase of Shares in Shenzhen Xubu Investment Co. Ltd. by and between HARC and Su Wei Min dated February 10, 2004.

10.19

 

Agreement for the Sale and Purchase of Shares in Shenzhen Xubu Investment Co. Ltd. by and between Li Fei Lie, as nominee for HARC and Su Wei Min dated February 10, 2004.