U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
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S | Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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| For the quarterly period ended March 31, 2008 |
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£ | Transition Report under Section 13 or 15(d) of the Exchange Act |
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| For the Transition Period from ________to __________ |
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Commission File Number: 0-25997
CHINA HOLDINGS, INC.
(Exact Name of Registrant as Specified in its Charter)
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WYOMING | 91-1939533 |
(State of other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification Number) |
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69930 Highway 111, Suite 108 | |
Rancho Mirage, CA | 92270 |
(Address of principal executive offices) | (Zip Code) |
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Registrant's Phone: (760) 219-2776 |
Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or 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£ NoS
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer £
Accelerated filer
£
Non-accelerated filer £
Smaller reporting company
S
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YesS No£
As of March 31 2008, the issuer had 3,190,400 shares of common stock issued and outstanding.
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| TABLE OF CONTENTS | Page |
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PART I – FINANCIAL INFORMATION |
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Item 1. | Financial Statements | 3 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operation | 8 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 10 |
Item 4. | Controls and Procedures | 10 |
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PART II – OTHER INFORMATION |
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Item 1. | Legal Proceedings | 10 |
Item 1A. | Risk Factors | 10 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 11 |
Item 3. | Defaults Upon Senior Securities | 11 |
Item 4. | Submission of Matters to a Vote of Security Holders | 11 |
Item 5. | Other Information | 11 |
Item 6. | Exhibits | 11 |
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ITEM 1. Financial Statements
Financial Statements for 3 month period ended March 31, 2008 have been prepared by the Management Group of China Holdings, Inc.
China Holdings, Inc.
(A Development Stage Company)
BALANCE SHEET
| | | | | | |
ASSETS | | March 31, 2008 | | December 31, 2007 |
| | | | |
CURRENT ASSETS: | | | | |
| Deposit Cash/New Business Oper. | $ | 0 | $ | 0 |
| | Total Current Assets | | 0 | | 0 |
FIXED ASSETS: (Note 3) | | | | |
| Property/Equipment Less | | 0 | | 0 |
| Accumulated Depreciation | | 0 | | 0 |
| | Net Fixed Assets | | 0 | | 0 |
TOTAL ASSETS | $ | 0 | $ | 0 |
LIABILITIES & SHAREHOLDERS' EQUITY | | | | |
Current Liabilities: (Note 4) | | | | |
| Misc. Accrued Liabilities | $ | 0 | $ | 0 |
| Other Liabilities | | 0 | | 0 |
| | Total current liabilities | | 0 | | 0 |
LONG TERM LIABILITIES: (Note 5) | | 176,321 | | 176,321 |
| Net Total Long Term Liabilities | | 0 | | 0 |
TOTAL LIABILITIES | | 0 | | 0 |
SHAREHOLDERS' EQUITY (NOTE 1) | | | | |
| 1,000 shares authorized; -0- shares issued and outstanding | | 0 | | 0 |
| Common stock, par value $ .001; 99,999,000 shares authorized; issued & outstanding 3,190,400 | | 3,190 | | 3,190 |
| Paid-in capital | | 20,000 | | 20,000 |
| Retained earnings <Accum. Deficit> | | <199,511> | | <199,511> |
NET EQUITY/RETAINED EARNINGS <DEFICIT> | | <176,321> | | <176,321> |
TOTAL ASSETS/LIABILITIES | $ | 0 | $ | 0 |
The accompanying notes are an integral part of these financial statements.
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China Holdings, Inc.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the Three Months Ending March 2008 & 2007
| | | | | | |
| | March 31,
2007 | | March 31,
2008 |
Misc. Income | $ | -0- | $ | -0- |
Operating Expenses: | | | | |
| Interest Expense | | -0- | | -0- |
| Admin Support | | -0- | | -0- |
| Depreciation (Note 3) | | -0- | | -0- |
| Misc. Expenses | | -0- | | -0- |
| New Business Development Expenses | | -0- | | -0- |
| Computer Services/Software Systems | | -0- | | -0- |
| | Total Operating Expenses | | -0- | | -0- |
Income (Loss) From Operations | | -0- | | -0- |
Other Income/ (Expense):
Misc. Other Income/ (Expense) | | -0- | | -0- |
Credit/ Other Income | | -0- | | -0- |
| Total Net Other Income | | -0- | | -0- |
Net Income (Loss) | $ | -0- | $ | -0- |
Per share information: | | | | |
Basic (Loss) per common share | | 0.000 | | 0.000 |
Basic weighted average number | | | | |
| Common Stock shares outstanding | $ | 3,190,400 | $ | 3,190,400 |
Diluted (Loss) per common share | $ | 0.000 | $ | 0.000 |
Diluted weighted average number | | | | |
| Common Stock shares outstanding | | 3,190,400 | | 3,190,400 |
The accompanying notes are an integral part of these financial statements.
4
China Holdings, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Three Months Ending March 31, 2008
| | | | | | | |
| | | 2008 | | 2007 |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | |
| Income <Loss> From Operations* | A | $ | -0- | $ | -0- |
TRANSACTIONS NOT REQUIRING CASH: | | | | | |
| Depreciation (NOTE 3) | | | -0- | | -0- |
Total transactions not requiring cash | A | | -0- | | -0- |
CASH PROVIDED (USED) DUE TO CHANGES IN: | | | | | |
| Current/Fixed Assets decrease/<increase> | | | -0- | | -0- |
| Current liabilities/(decrease)/increase | | | | | |
| | Increase/Decrease Operating Expenses | | | -0- | | -0- |
| | Increase NP Cash Advances/New Business | | | -0- | | -0- |
| | Incr/Decr Other Current Liabilities | | | -0- | | -0- |
| | Increase NP Misc. Items | | | -0- | | -0- |
| Total Net Increase Current Liabilities | | | -0- | | -0- |
| Decrease Long Term Liability | | | -0- | | -0- |
Total Incr/(Decr.) Current/Long Term Liabilities | A | | -0- | | -0- |
Net cash provided/(used) Operating Activities | A | | -0- | | -0- |
Cash Flows from Investing Activities: | A | | -0- | | -0- |
Cash Flows from Financing Activities: | A | | -0- | | -0- |
Net Cash Increase(Decrease) = TOTAL OF A LINES | | | -0- | | -0- |
Cash, Beginning of period | | | -0- | | -0- |
Cash, End of period | | $ | -0- | $ | -0- |
The accompanying notes are an integral part of these financial statements.
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China Holdings, Inc.
(A Development Stage Company)
Notes to Financial Statements
For The Three Months Ended March 31, 2008
GENERAL:
The condensed consolidated financial statements of China Holdings, Inc. included herein, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Although certain information normally included in financial statements prepared in accordance with generally accepted accounting principles has been condensed or omitted, China Holdings, Inc. believes that the disclosures are adequate to make the information presented not misleading. The condensed financial statements for the three month period ended March 31, 2008 should be read in conjunction with the financial statements and notes thereto included in this report.
The condensed consolidated financial statements included herein reflect all normal recurring adjustments that, in the opinion of management, are necessary for fair presentation.
The Company has not commenced operations and has no working capital.
NOTE 1 - ORGANIZATION AND BUSINESS PLAN:
Company was organized under the laws of the State of Nevada on April 28, 1994 under the name of China Holdings, Inc. The Company was incorporated to engage in any lawful activities.
The Company's articles initially authorized 1,000 shares of Preferred Stock and 10,000 shares of Common Stock, both at a par value of $.001 per share.
Common Stock.
During 1996, certain consulting services were rendered to the Company by the majority stockholder, Magellan Capital Corporation, (a Nevada Corporation doing business in California) and 4 other individuals. The value of such services were at the stated par value for 1,041 shares issued on July 15, 1995 and have been stated on the Balance sheet, the Statement of Operations and the Cash Flow Statement at $936 for the year ending 12/31/96, which amount reflects the par value of the original issue on the date of the 900 for 1 forward stock split on the 1,041 shares. Revised number of shares issued and outstanding after the foregoing split were 936,900, with a total value of $936.00 as of the end of the year September 30, 1996.
On December 30, 1998, 2,053,500 shares were sold for $2,054 cash at the stated par value of $.001 per share. Total shares outstanding at year end 12/31/98 were 2,990,400, with a total value of $2,990.
On September 25, 2001, 200,000 shares were issued at the stated par value of $.001 per share for services rendered through September, 2001: 100,000 shares to Darren J. Holm, the newly appointed President of the Company and 50,000 shares each to Randall Baker, Secretary and Norm LeBoeuf, Controller.
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The total number of Common Stock shares outstanding and issued as of the end of March 31, 2006 and 2003 were 3,190,400, total value $53,190. No other transactions have taken place since those dates for the Common Stock of the Company: Total Common Stock Shares outstanding and issued at March 31, 2007 were 3,190,400, total value of $53,190.
Preferred Stock.
The original articles of incorporation, April 28, 1994, authorized 1,000 shares of Preferred Stock with a stated par value of $.001 per share. From inception (April 28, 1994) through March 31, 2007, no Preferred Stock Shares have been issued, and, none are outstanding.
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Articles of Incorporation (as revised) authorize China Holdings, Inc. to issue up to 99,999,000 shares of Common Stock with a par value of $.001 per share and 1,000 shares of Preferred Stock, with a par value of $.001 per share. As of the period ending March 31, 2007, there were 3,190,400 shares of Common Stock issued and outstanding. As of March 31, 2007, no Preferred Stock were issued or outstanding.
NOTE 3 - FIXED ASSETS:
The Company has no Fixed Assets for the period ending March 31, 2007 and December 31, 2006.
NOTE 4 - CURRENT LIABILITIES:
Following are the Current Liabilities of the Company as of March 31, 2008 and December 31, 2007 were:
| | | | | |
Category Description | | Amounts due
3/31/08 | | Amounts due
12/31/07 |
Current Liabilities | $ | 0 | $ | 0 |
| TOTAL LIABILITIES | $ | 0 | $ | 0 |
NOTE 5. LONG TERM LIABILITY
Assets and current liabilities have been consolidated into a long term liability note in favor of a D.K. Mork, the majority stock holder of China Holdings, Inc., as set fourth in Part I - Item 6.
NOTE 6. GOING CONCERN AND INCIDENTAL COSTS:
Incidental costs to maintain legal registrations of the Company in the State of Nevada and with the Security and Exchange Commissions have been paid or assumed by Mr. Dempsey Mork, Chief Financial Officer/ Director, the majority shareholder of China Holdings, Inc. This will continue for the foreseeable future.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This Form 10-Q includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated by reference in this Form 10-Q which address activities, events or developments which the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof); finding suitable merger or acquisition candidates; expansion and growth of the Company's business and operations; and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it beli eves are appropriate under the circumstances. However, whether actual results or developments will conform with the Company's expectations and predictions is subject to a number of risks and uncertainties, including general economic, market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by the Company; changes in laws or regulation; and other factors, most of which are beyond the control of the Company.
These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology, such as "believes," "anticipates," "expects," "estimates," "plans," "may," "will," or similar terms. These statements appear in a number of places in this Filing and include statements regarding the intent, belief or current expectations of the Company, and its directors or its officers with respect to, among other things: (i) trends affecting the Company's financial condition or results of operations for its limited history; (ii) the Company's business and growth strategies; and, (iii) the Company's financing plans. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-l ooking statements as a result of various factors. Such factors that could adversely affect actual results and performance include, but are not limited to, the Company's limited operating history, potential fluctuations in quarterly operating results and expenses, government regulation, technological change and competition.
Consequently, all of the forward-looking statements made in this Form 10-QSB are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligations to update any such forward-looking statements.
GENERAL DESCRIPTION OF BUSINESS
The Company is looking for a merger or acquisition candidate.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The Company has a limited operating history upon which an evaluation of the Company, its current business and its prospects can be based. The Company's prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies in their early stages of development. Such risks include inadequate funding the company's inability to anticipate and adapt to a developing market, the failure of the company's infrastructure, changes in laws that adversely affect the company's business, the ability of the Company to manage its operations, including the amount and timing of capital expenditures and other costs relating to the expansion of the company's operations, the introduction and development of different or more extensive communities by direct and indirect competitors of the Company, including those with greater financial, technical and marketing resources, the inability of the Company to att ract, retain and motivate qualified personnel and general economic conditions.
The Company expects that its operating expenses will increase significantly, especially as it implements its business plan. To the extent that increases in its operating expenses precede or are not followed by commensurate increases in revenues, or that the Company is unable to adjust operating expense levels accordingly, the Company's business, results of operations and financial condition would be materially and adversely affected. There can be no assurances that the Company can achieve or sustain profitability or that the Company's operating losses will not increase in the future.
RESULTS OF OPERATIONS
The Company has achieved no significant revenue or profits to date, and the Company anticipates that it will continue to incur net losses for the foreseeable future. The Company incurred a net loss of approximately $0 for the three months ended March 31, 2008, compared with a net loss of $ 0 for the three months ended March 31, 2007.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception the Company has had limited operating capital, and has relied heavily on debt and equity financing.
The financial statements as of and for the period ended on December 31, 2007 expressed their substantial doubt as to the Company's ability to continue as a going concern. Without additional capital, it is unlikely that the Company can continue as a going concern. The Company plans to raise operating capital via debt and equity offerings. However, there are no assurances that such offerings will be successful or sufficient to fund the operations of the Company. In the event the offerings are insufficient, the Company has not formulated a plan to continue as a going concern. Moreover, if such offerings are successful, they may result in substantial dilution to the existing shareholders.
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CRITICAL ACCOUNTING POLICIES
In Financial Reporting release No. 60, "CAUTIONARY ADVICE REGARDING DISCLOSURE ABOUT CRITICAL ACCOUNTING POLICIES" ("FRR 60"), the Securities and Exchange Commission suggested that companies provide additional disclosure and commentary on their most critical accounting policies. In FRR 60, the SEC defined the most critical accounting policies as the ones that are most important to the portrayal of a company's financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, our most critical accounting policies include: non-cash compensation valuation that affects the total expenses reported in the current period and the valuation of shares and underlying mineral rights acquired with shares. The methods, estimates and judgments we use in applying t hese most critical accounting policies have a significant impact on the results we report in our financial statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is not exposed to market risk related to interest rates or foreign currencies.
CONTROLS AND PROCEDURES
ITEM 4. CONTROLS AND PROCEDURES
The Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. This evaluation was done under the supervision and with the participation of the Company's President and Chief Financial Officer. Based upon that evaluation, they concluded that on March 30, 2008, the Company's disclosure controls and procedures are effective in gathering, analyzing and disclosing information needed to satisfy the Company's disclosure obligations under the Exchange Act.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting identified in connection with the foregoing evaluation that occurred during the first quarter of 2008 that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any legal proceedings.
ITEM 1A. RISK FACTORS
There are no material changes in the risk factors set forth in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year-ended December 31, 2007.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no sales of unregistered equity securities during the covered time period.
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
The following documents are included or incorporated by reference as exhibits to
this report:
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ExhibitNumber |
Description
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31.1 | Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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31.2 | Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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32.1 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
(b) REPORTS ON FORM 8-K
None.
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SIGNATURES
In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: June 23, 2008
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| China Holdings, Inc. |
| Registrant |
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| By:/s/ Dempsey Mork____ |
| Dempsey Mork
Chairman of the Board
Chief Executive Officer |
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