UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 10-Q/A
Amendment No. 1
_____________
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934:
For the Quarterly Period ended June 30, 2008
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE ACT
For the transition period from __________________ to __________________
Commission File Number: 000-50029
CHINA HEALTH RESOURCE, INC.
(Name of Small Business Issuer in its Charter)
_____________
Delaware | 73-1629948 |
(State or Other Jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
343 Sui Zhou Zhong Road
Sui Ning, Si Chuan Province, P.R. China
(Address of Principal Executive Offices)
+(86-825) 239-1788
(Issuer’s Telephone Number)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 o
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 o | Accelerated filer o |
Non-accelerated filer o | Smaller Reporting Company x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
Number of shares outstanding of each of the issuer’s classes of common equity, as of July 31, 2008:
99,288,894 shares of Class A Common Stock of par value $0.01
2,000 shares of Class B Common Stock of par value $0.01
EXPLANATORY NOTE
In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (“Exchange Act”), we are filing this abbreviated Amendment No. 1 to the Quarterly Report on Form 10-Q (this “Form 10-Q/A No. 1”) of China Health Resource, Inc. (the “Company”) for the period ended June 30, 2008, previously filed with the Securities and Exchange Commission (the “Commission”) on August 14, 2008 (the “Original Filing”), to effect the amendments described below:
(a) Part I, Item 1 - Financial Statements. The consolidated financial statements for the period ended June 30, 2008 have been revised to reflect the recapitalization effected in the comparable period ended June 30, 2007; and
(b) Part II, Item 6 – Exhibit. The certifications contained in exhibits 31.1 and 31.2 have been revised to include the information inadvertently omitted and required by Item 601(b)(31) of Regulation S-K as filed herewith.
Except for the foregoing amended information, this Form 10-Q/A No. 1 continues to describe conditions as of the date of the Original Filing. Accordingly, this Form 10-Q/A No. 1 should be read in conjunction with our filings with the Commission made subsequently to the Original Filing.
Part I, Item 1 - Financial Statements.
Item 1 - Financial Statements of the period ended June 30, 2008 is hereby amended and restated to read in its entirety as follows:
- 1 -
China Health Resource, Inc. and Subsidiary
Consolidated Balance Sheets
As of June 30, 2008 (unaudited) and December 31, 2007 (audited)
ASSETS |
| June 30, 2008 |
|
| December 31, 2007 |
|
| (Unaudited) |
|
| (Audited) |
CURRENT ASSETS |
|
|
|
|
|
Cash and cash equivalents | $ | 23,517 |
|
| 36,127 |
Accounts receivable | $ | 539,887 |
|
| 460,414 |
Note receivable-related party | $ | 676,498 |
|
| 628,390 |
Employee advances |
| - |
|
| 7,197 |
Prepaid expenses | $ | 2,078,579 |
|
| 2,143,827 |
Inventory | $ | 65,940 |
|
| 61,918 |
TOTAL CURRENT ASSETS | $ | 3,384,421 |
|
| 3,337,873 |
|
|
|
|
|
|
FIXED ASSETS |
|
|
|
|
|
Property, plant, and equipment | $ | 754,978 |
|
| 717,831 |
Accumulated depreciation | $ | (133,294) |
|
| (114,217) |
TOTAL NET FIXED ASSETS | $ | 621,684 |
|
| 603,614 |
|
|
|
|
|
|
TOTAL ASSETS | $ | 4,006,105 |
|
| 3,941,487 |
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
Accounts payable and accrued liabilities | $ | 482,567 |
|
| 207,957 |
Due to shareholder | $ | 83,258 |
|
| 83,258 |
Taxes payable | $ | 56,732 |
|
| 98,996 |
Notes payable - current portion | $ | 438,478 |
|
| 588,724 |
TOTAL CURRENT LIABILITIES | $ | 1,061,036 |
|
| 978,935 |
|
|
|
|
|
|
LONG-TERM LIABILITIES |
|
|
|
|
|
Notes payable | $ | - |
|
| - |
TOTAL LONG-TERM LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES | $ | 1,061,036 |
|
| 978,935 |
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
|
Common stock Class A (500,000,000 shares authorized, 99,288,894 issued and outstanding, par value $0.01) |
| 992,889 |
|
| 992,889 |
Common stock Class B (8,344 shares authorized, 2,000 issued and outstanding, par value $0.01) |
| 20 |
|
| 20 |
Additional paid in capital |
| 2,195,468 |
|
| 2,195,468 |
Accumulated other comprehensive income |
| 134,863 |
|
| 76,117 |
Retained earnings (deficit) |
| (416,785) |
|
| (301,942) |
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) |
| 2,906,456 |
|
| 2,962,552 |
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY | $ | 3,967,491 |
|
| 3,941,487 |
The accompanying notes are an integral part of these financial statements.
- 2 -
China Health Resource, Inc. and Subsidiary
Unaudited Consolidated Statements of Income
For the Three Months Ended June 30, 2008 and 2007
| For the Three Months Ended | ||||
| June 30, 2008 |
|
| June 30, 2007 | |
REVENUES |
|
|
|
|
|
Sales | $ | 234,566 |
|
| 2,262 |
Cost of sales | $ | 154,862 |
|
| 770 |
GROSS PROFIT | $ | 79,704 |
|
| 1,492 |
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
Selling, general, and administrative | $ | 77,512 |
|
| 151,428 |
Interest expense | $ | 14,392 |
|
| 6,880 |
Distribution costs | $ | - |
|
| - |
TOTAL OPERATING EXPENSES | $ | 91,903 |
|
| 158,308 |
|
|
|
|
|
|
OPERATING INCOME (LOSS) | $ | (12,199) |
|
| (156,816) |
|
|
|
|
|
|
OTHER INCOME / (EXPENSES) |
|
|
|
|
|
Non-operating expenses |
| - |
|
| - |
Government grants | $ | (229) |
|
| - |
Other | $ | 2,682 |
|
| - |
TOTAL OTHER INCOME / (EXPENSE) | $ | 2,453 |
|
| - |
|
|
|
|
|
|
NET INCOME (LOSS) BEFORE TAXES | $ | (9,746) |
|
| (156,816) |
|
|
|
|
|
|
INCOME TAX EXPENSE |
| - |
|
| - |
|
|
|
|
|
|
NET INCOME (LOSS) | $ | (9,746) |
|
| (156,816) |
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME (LOSS) |
|
|
|
|
|
Foreign currency translation (loss) gain | $ | 15,457 |
|
| 18,409 |
|
|
|
|
|
|
COMPREHENSIVE INCOME (LOSS) | $ | 5,711 |
|
| (138,407) |
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
|
|
|
|
|
Basic |
| 99,288,842 |
|
| 36,779,632 |
Fully diluted |
| 109,631,435 |
|
| 46,458,482 |
|
|
|
|
|
|
NET LOSS PER COMMON SHARE |
|
|
|
|
|
Basic |
| ** |
|
| ** |
Fully diluted |
| ** |
|
| ** |
|
|
|
|
|
|
**Less than $.01 |
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
- 3 -
China Health Resource, Inc. and Subsidiary
Unaudited Consolidated Statements of Income
For the Six Months Ended June 30, 2008 and 2007
| For the Six Months Ended | ||||
| June 30, 2008 |
|
| June 30, 2007 | |
REVENUES |
|
|
|
|
|
Sales | $ | 234,566 |
|
| 191,211 |
Cost of sales | $ | 154,862 |
|
| 138,745 |
GROSS PROFIT | $ | 79,704 |
|
| 52,466 |
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
Selling, general, and administrative | $ | 145,957 |
|
| 347,345 |
Interest expense | $ | 26,825 |
|
| 14,663 |
Distribution costs | $ | - |
|
| - |
TOTAL OPERATING EXPENSES | $ | 172,781 |
|
| 362,008 |
|
|
|
|
|
|
OPERATING INCOME (LOSS) | $ | (93,077) |
|
| (309,542) |
|
|
|
|
|
|
OTHER INCOME / (EXPENSES) |
|
|
|
|
|
Non-operating expenses |
| - |
|
| - |
Government grants | $ | 14,167 |
|
| - |
Other | $ | 2,682 |
|
| - |
TOTAL OTHER INCOME / (EXPENSE) | $ | 16,849 |
|
| - |
|
|
|
|
|
|
NET INCOME (LOSS) BEFORE TAXES | $ | (76,228) |
|
| (309,542) |
|
|
|
|
|
|
INCOME TAX EXPENSE |
|
|
|
| - |
|
|
|
|
|
|
NET INCOME (LOSS) | $ | (76,228) |
|
| (309,542) |
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME (LOSS) |
|
|
|
|
|
Foreign currency translation (loss) gain | $ | 58,746 |
|
| 20,638 |
|
|
|
|
|
|
COMPREHENSIVE INCOME (LOSS) | $ | (17,482) |
|
| (288,904) |
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
|
|
|
|
|
Basic |
| 99,288,842 |
|
| 38,040,743 |
Fully diluted |
| 109,631,435 |
|
| 48,051,465 |
|
|
|
|
|
|
NET LOSS PER COMMON SHARE |
|
|
|
|
|
Basic |
| ** |
|
| ** |
Fully diluted |
| ** |
|
| ** |
|
|
|
|
|
|
**Less than $.01 |
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
- 4 -
China Health Resource, Inc. and Subsidiary
Unaudited Consolidated Statement of Cash Flows
For the Six Months Ended June 30, 2008 and 2007
| For the Six Months Ended | |||
| June 30, 2008 |
| June 30, 2007 | |
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
Net income after income tax | $ | (114,843) |
| (309,542) |
Adjustments to reconcile net income to net cash used in operating activities | $ | - |
| - |
Depreciation | $ | 19,077 |
| 15,938 |
Amortization of prepaid expenses | $ | - |
| 108,410 |
Common stock issued for services | $ | - |
| 51,225 |
Accounts receivable | $ | (72,276) |
| (22,749) |
Other receivable | $ | (48,108) |
| - |
Employee advances | $ | - |
| - |
Prepaid expenses | $ | 65,248 |
| - |
Inventory | $ | (4,022) |
| (51) |
Intangible assets | $ | - |
| (39) |
Accounts payable and accrued liabilities | $ | 274,610 |
| (89,171) |
Tax payable | $ | (42,264) |
| 71 |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ | 77,423 |
| (245,908) |
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Issuance of note receivable | $ | - |
| - |
Proceeds from notes receivable | $ | - |
| - |
Purchase of property, plant, and equipment | $ | (37,147) |
| (52,335) |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | $ | (37,147) |
| (52,335) |
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Proceeds from issuance of short-term note | $ | - |
| 295 |
Proceeds from shareholder loan | $ | - |
| 83,258 |
Payments on short-term-note payable | $ | (150,246) |
| - |
Retirement of common stock | $ | - |
| - |
Proceeds from issuance of common stock | $ | - |
| - |
Note payable from unrelated party | $ | - |
| 27,903 |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | $ | (150,246) |
| 111,456 |
|
|
|
|
|
FOREIGN CURRENCY TRANSLATION | $ | 58,746 |
| 20,638 |
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH AND | $ | (51,224) |
| (166,149) |
CASH EQUIVALENTS |
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS: |
|
|
|
|
Beginning of period | $ | 36,127 |
| 179,868 |
End of period | $ | (15,097) |
| 13,719 |
- 5 -
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
Common stock issued for settlement of certain accounts payable | $ | - |
| 699,554 |
Common stock issued for services | $ | - |
| 51,225 |
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
- 6 -
Part II, Item 6 – Exhibits.
| (a) – Exhibits. |
(1). Exhibits: Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits following the signature page of this Form 10-Q/A, which is incorporated herein by reference.
- 7 -
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CHINA HEALTH RESOURCE, INC.
Dated: November 12, 2008 | By: /s/ Chen, Jiang________________________ |
| Chen, Jiang |
| Chief Executive Officer and Director |
| (Principal Executive Officer) |
Dated: November 12, 2008 | By: /s/ Zhou, Yi________________________ |
| Zhou, Yi |
| Chief Financial Officer and Director |
| (Principal Financial and Accounting Officer) |
- 8 -
INDEX TO EXHIBITS
Exhibit No. | Description |
10.1 | License Agreement between Suining Shi Yin Fa Bai Zhi Chan Ye You Xian Gong Si and Sichuan Province Suining City DAR Association (English Translation)* |
31.1 | Certification of Chief Executive Officer |
31.2 | Certification of Chief Financial Officer |
32.1 | Section 1350 Certifications of Chief Executive Officer |
32.2 | Section 1350 Certifications of Chief Financial Officer |
* Previously Filed.
- 9 -
