Dixie Lee International Industries (DLII) 10QSB 2005 Q3 Quarterly report (small business)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2004

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____ TO ____

Commission File Number: 333-91484

WOOD PRODUCTS, INC.
(Exact name of small business issuer as specified in its charter)

Nevada	98-0363723
(State or other jurisdiction of incorporation	(IRS Employer Identification No.)
or organization)

You Yi Cun Liuying Park No. 8, Huangsi Dajie, Beijing, PRC 100011
(Address of principal executive offices)

011 86 13910109328
(Issuer’s Telephone Number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), YesXXNo ___ and (2) has been subject to such filing requirements for the past 90 days. YesXXNo ___ As of February 21, 2005, the issuer had 33,375,000 shares issued and outstanding of its common stock.

PART I – FINANCIAL INFORMATION

Item 1.     Financial Statements

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Wood Products, Inc.
(A Development Stage Company)
Interim Financial Statements
For the nine-month periods ended
December 31, 2004 and 2003
(Unaudited – Expressed in US Dollars)

Contents

Interim Financial Statements

F-1

Wood Products, Inc.
(A Development Stage Company)
Balance Sheets
(Stated in US Dollars)
 

		December 31			March 31
		2004			2004
		(Unaudited)
Assets
Current
Cash	$	-		$	6,297
Prepaid expense		154			390
		154			6,687
Website development costs, net of amortization		-			1,082
Total Assets	$	154		$	7,769
Liabilities and Capital Deficit
Liabilities
Current
Accounts payable and accrued liabilities	$	9,510		$	9,824
Loan payable (Note 2)		44,163			-
Due to Stockholder (Note 2)		-			25,671
		53,673			35,495
Capital Deficit
Share capital (Note 3)
Authorized
100,000,000 common shares with par value $0.001
Issued and outstanding
33,750,000 common shares		33,750			33,750
Additional paid-in capital		80,901			80,901
Deficit accumulated in the development stage		(168,170	)		(142,377	)
Total Capital Deficit		(53,519	)		(27,726	)
Total Liabilities and Capital Deficit	$	154		$	7,769

The accompanying notes are an integral part of these financial statements.

F-2

     Wood Products, Inc.
(A Development Stage Company)
Statements of Changes in Stockholders’ Equity (Capital Deficit)
(Stated in US Dollars) 

For the period from January 8, 2002 (inception) to December 31, 2004

											Deficit			Total
											Accumulated			Stockholders’
	Common Shares				Shares			Additional			in the			Equity
					to be			Paid-in			Development			(Capital
	Shares		Amount		Issued			Capital			Stage			Deficit)
Issuance of common shares
at $0.001 per share on inception	10,000	$	10	$	-		$	(9	)	$	-		$	1
Shares to be issued	-		-		750			-			-			750
Net loss for the period	-		-		-			-			(7,145	)		(7,145	)
Balance, March 31, 2002	10,000		10		750			(9	)		(7,145	)		(6,394	)
Issuance of common shares at
$0.001 per share	24,750,000		24,750		(750	)		-			-			24,000
Issuance of common shares at
$0.004 per share	8,990,000		8,990		-			26,970			-			35,960
Compensation expense for shares
issued below market price	-		-		-			53,940			-			53,940
Net loss for the year	-		-		-			-			(107,137	)		(107,137	)
Balance, March 31, 2003	33,750,000		33,750		-			80,901			(114,282	)		369
Net loss for the year	-		-		-			-			(28,095	)		(28,095	)
Balance, March 31, 2004	33,750,000		33,750		-			80,901			(142,377	)		(27,726	)
Net loss for the period	-		-		-			-			(25,793	)		(25,793	)
Balance, December 31, 2004
(unaudited)	33,750,000	$	33,750	$	-		$	80,901		$	(168,170	)	$	(53,519	)

The accompanying notes are an integral part of these financial statements.

F-3

Wood Products, Inc.
(A Development Stage Company)
Statements of Operations
(Stated in US Dollars)
(Unaudited)
 

														For the
														period from
		Three-month						Nine-month						January 8
		periods ended						periods ended						2002
		December 31						December 31						(inception) to
														December 31
		2004			2003			2004			2003			2004
														(Cumulative)
Expenses
Compensation expense	$	-		$	-		$	-		$	-		$	53,940
Office and administration		434			2,281			4,991			6,583			16,875
Professional fees		9,335			2,452			19,695			10,946			93,851
Website development		-			170			1,107			510			3,504
Net loss for the period	$	(9,769	)	$	(4,903	)	$	(25,793	)	$	(18,039	)	$	(168,170	)
Basic and diluted loss per
share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average shares
outstanding		33,750,000			33,750,000			33,750,000			33,750,000

The accompanying notes are an integral part of these financial statements.

F-4

Wood Products, Inc.
(A Development Stage Company)
Statements of Cash Flows
(Stated in US Dollars)
(Unaudited)
 

								Period from
		For the nine-month						January 8
		period ended						2002
		December 31						(inception)
								to December 31
		2004			2003			2004
								(Cumulative)
Operating activities
Net loss for the period	$	(25,793	)	$	(18,039	)	$	(168,170	)
Adjustments to reconcile net loss for the period
to cash used in operating activities
Amortization		1,082			510			2,038
Non-cash compensation expense		-			-			53,940
(Increase) decrease in prepaid expense		236			(760	)		(154	)
Increase (decrease) in accounts payable and
accrued liabilities		(314	)		2,557			9,510
Cash used in operating activities		(24,789	)		(15,732	)		(102,836	)
Financing activities
Advances from (repayment of loans from)
stockholder		(25,671	)		10,701			-
Proceeds from loan payable		44,163			-			44,163
Proceeds from subscriptions and issuance of
common shares		-			-			60,711
Cash provided by financing activities		18,492			10,701			104,874
Investing activity
Increase in deferred website development costs		-			-			(2,038	)
Decrease in cash		(6,297	)		(5,031	)		-
Cash,beginning of period		6,297			9,181			-
Cash, end of period	$	-		$	4,150		$	-
Supplemental information
Interest and taxes paid	$	-		$	-		$	-
Non-cash financing activities:
Compensation expense on issuance of shares	$	-		$	-		$	53,940

The accompanying notes are an integral part of these financial statements.

F-5

Wood Products, Inc.
(A Development Stage Company)
Notes to the Financial Statements
(Stated in US Dollars)
(Unaudited)

December 31, 2004

1. Nature of Business and Ability to Continue Operations Wood Products, Inc. was incorporated on January 8, 2002 under the laws of the State of Nevada. The Company was previously organizing its business to supply Canadian building products and component material packages for packaged homes for export to customers worldwide. In July 2004, the Company entered into an agreement with Harper & Harper, Ltd. ("Harper & Harper), in connection with the acquisition of 100% of the outstanding shares of Harper & Harper in exchange for 35 million shares of the Company's common stock. The closing of the agreement is subject to and will coincide with the execution of the Share Transfer Agreement between the City of Shijiazjuang and Harper & Harper in connection with the acquisition of an interest in a thermal electronic project in China. As of the date of these financial statements, the agreement has not yet been closed. The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These statements reflect all adjustments, consisting of normal recurring adjustments which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended March 31, 2004 and notes thereto included in the Company's 10-KSB annual report. The Company follows the same accounting policies in the preparation of interim reports. Results of operations for the interim periods are not indicative of annual results. These accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As at December 31, 2004, the Company has no established source of revenue, has accumulated operating losses of $168,170 since its inception and has a working capital deficit of $53,519. The continuation of the Company is dependent upon the continuing financial support of creditors, obtaining long-term financing to complete the acquisition of Harper & Harper, the acquisition of an interest in the thermal electronic project in China and the development of the project to achieve and maintain a profitable level of operations. Management plans to raise additional equity capital as necessary to finance the operating and capital requirements of the Company. While the Company is expending its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available to sustain operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might arise from this uncertainty. On August 26, 2004, Harper & Harper assigned its 5% interest in a waste water treatment plant construction and management company based in Beijing, China to the Company in accordance with the acquisition agreement between the Company and Harper & Harper.

F-6

Wood Products, Inc.
(A Development Stage Company)
Notes to the Financial Statements
(Stated in US Dollars)
(Unaudited)

December 31, 2004

1.	Nature of Business and Ability to Continue Operations (Continued) On September 5, 2004, the Company's Board of Directors approved the acquisition of 15% of the issued and outstanding shares of North Space Steel Structure Co. Ltd. ("North Space"), a steel fabrication company in Beijing, China. North Space and the management of the Company is formalizing the terms of the acquisition and are preparing formal written agreement for execution. As at the date of these financial statements, no formal agreement has yet been executed. In December 2004, subject to regulatory and shareholders’ approval, the Company applied to change its name to China Industrial Corporation.
2.	Loan Payable andDue to Stockholder Proceeds from the loan payable were used to repay the amounts due to a former stockholder of the Company on August 15, 2004, as well as to cover general and administrative expenses of the Company. The loan payable is unsecured, non-interest bearing, due on demand and payable to an unrelated party.
3.	Capital Stock In April 2004, the Company forward split its common stock on a ten for one basis. The financial statements have been adjusted retroactively to account for the stock split.

F-7

Item 2.     Management's Plan of Operation

Statements contained herein which are not historical facts are forward-looking statements as that term is defined by the Private Securities Litigation Reform Act of 1995. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance and that actual results may differ materially from those in the forward-looking statements. Such risks and uncertainties include, without limitation: established competitors who have substantially greater financial resources and operating histories, regulatory delays or denials, ability to compete as a start-up company in a highly competitive market, and access to sources of capital.

The following discussion and analysis should be read in conjunction with our financial statements and notes thereto included elsewhere in this Form 10-QSB. Except for the historical information contained herein, the discussion in this Form 10-QSB contains certain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this Form 10-QSB should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-QSB. The Company's actual results could differ materially from those discussed here.

On July 21, 2004, the Board of Directors approved in principle the acquisition of 100% of the outstanding shares of Harper & Harper, Ltd. The sole asset of Harper & Harper, Ltd. consists of its interest in a contract to purchase a fully-funded 28% interest in Shijiazhaung Dongfang Thermoelectric Group Company Limited ("Dongfang"). The Company and Harper & Harper, Ltd. have executed a formal written agreement with the closing scheduled to coincide with the execution of the Share Transfer Agreement between the City of Shijuazhuang and Harper & Harper, Ltd. As at the date of this Form 10 QSB, the agreement has not yet been closed. While management has no reason to believe that the transaction will not be completed, until and unless the Share Transfer Agreement is executed, management can provide no assurances that this undertaking will be completed.

We anticipate our cash needs to be insignificant until such time as we close our acquisition of Harper & Harper. At December 31, 2004, we had no cash on hand and our operating expenditures were being paid out of loans obtained from an unrelated party. Accordingly, we will continue to require such funding until such time as the acquisition of Harper & Harper closes.

If we do not achieve the necessary additional financing, or if the additional financing that we achieve is less than required, then we will scale back our operations according to the funds available to us. Notwithstanding that we may be able to continue our operations as an inactive company from proceeds of loans without additional financing we may not be able to achieve our business goals in connection with the acquisition.

We anticipate that if we pursue any additional financing following the closing of our acquisition of Harper & Harper, the financing would be an equity financing achieved through the sale of our common stock. We do not currently have any arrangement in place for any debt or equity financing. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our company. In the event we are not successful in obtaining such financing when necessary, we may not be able to proceed with our business plan.

In that regard, our financial statements for the year ended March 31, 2004 audited by BDO Dunwoody LLP, independent registered public accounting firm, to the extent and for the periods set forth in their report contained an explanatory paragraph regarding our company's ability to continue as a going concern. On August 26, 2004 Harper & Harper assigned its 5% investment interest in Zhong Huan Water Treatment Construction Co., Ltd. ("Zhong Huan"), a waste water treatment plant construction and management company based in Beijing, China.

On September 9, 2004 Harper & Harper assigned its right to acquire 15% interest in North Space Steel Structure Co., Ltd. (”North Space”) to the Company in accordance with the stock purchase agreement between the two companies. Management is formalizing the details of the transaction and preparing final acquisition and management contracts. While management has no reason to believe that the transaction will not be completed, until and unless a formal agreement is executed, management can provide no assurances that this undertaking will be completed.

3

There can be no assurance that the Company will be able to continue as a going concern or achieve material revenues or profitable operations. The Company requires financing, and no assurances can be given that financing will be available to the Company in the amounts required, or that, if available, will be on terms satisfactory to the Company.

Item 3. Controls and Procedures.

Based on their most recent evaluation, which was completed as of the end of the period covered by this periodic report on Form 10-QSB, the Company's Chief Executive Officer and Chief Financial Officer believe the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) were effective as of December 31, 2004 to ensure that information required to be disclosed by the Company in this report is accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. During the fiscal quarter to which this report relates, there were no significant changes in the Company's internal controls or other factors that could significantly affect these controls subsequent to the date of their evaluation and there were no corrective actions with regard to significant deficiencies and material weaknesses.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings -None.

Item 2. Changes in Securities and Use of Proceeds- None

Item 3. Defaults upon Senior Securities - None.

Item 4. Submission of Matters to a Vote of Securities Holders – None.

Item 5. Other Information –

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit	Description
Number
3.1	Articles of Incorporation, as currently in effect, (Incorporated by reference to the Registrant's Registration Statement on Form SB-2 dated June 28, 2002).
3.2	Bylaws, as currently in effect (Incorporated by reference to the Registrant's Registration Statement on Form SB-2 dated June 28, 2002).
31.1	Section 302 Certification by the Corporation's Chief Executive Officer. (Filed herewith).
31.2	Section 302 Certification by the Corporation's Chief Financial Officer. (Filed herewith).
32.1	Section 906 Certification by the Corporation's Chief Executive Officer. (Filed herewith).
32.2	Section 906 Certification by the Corporation's Chief Financial Officer. (Filed herewith).

(b) Reports on Form 8-K

None.

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SIGNATURES

                    In accordance with the requirements of the Exchange Act, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	WOOD PRODUCTS, INC.
Date: February 23, 2005	By:	/s/ Chris Harper
		Chris Harper, Chief Executive Officer
Date: February 23, 2005	By:	/s/ Alexander Chen
		Alexander Chen, Chief Financial Officer

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