Florida
|
65-1001686
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
7300
Alondra Boulevard, Suite 108, Paramount, California
|
90723
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Title
of each class
|
Name
of each exchange on which registered
|
|
None
|
|
Not
applicable
|
Large
accelerated filer
|
¨
|
Accelerated
filer
|
¨
|
|
Non-accelerated
filer
(Do
not check if smaller reporting company)
|
¨
|
Smaller
reporting company
|
ý
|
•
|
the
recognition of an agreement to issue 450,000 shares of Series B preferred
stock with a fair value of $3,780,000;
|
•
|
the
recognition of the Company’s acquisition of a 51% interest in Shandong
Jiajia as a capital transaction implemented through reverse acquisition
accounting;
|
•
|
the
reclassification of costs totaling $10,418,000 from fair value of equity
interests initially recorded in our statement of operations to costs
related to our acquisition of a 51% interest in Shandong
Jiajia;
|
•
|
the
correction of the accounting treatment accorded a convertible note payable
to a related party and principal stockholder, Mr. David Aubel;
and
|
•
|
the
restatement of historical balance sheets and related disclosures to give
retroactive effect to a 1 for 40 reverse stock split completed on March
11, 2008.
|
•
|
adjust
the fair value of assets and liabilities of the accounting acquiree
(formerly MediaReady, Inc.) recognized in connection with the acquisition
of a 51% interest in Shandong Jiajia completed on December 31,
2007 accounted for as a capital transaction implemented through a reverse
acquisition; and
|
•
|
recognize
the accrual of certain professional fees, totaling $141,800 in expense,
which were erroneously omitted from previous
filings.
|
•
|
reclassify
2,000,000 warrants issued to Mr. Chen as additional consideration valued
at $480,000 from equity to derivative liability as there was insufficient
authorized common shares to settle the contract as of
12/31/2007
|
•
|
further
adjust the method of recording the reverse recapitalization transaction
with Shandong Jiajia completed on December 31,
2007
|
Part
I
Part
II
|
•
Item 2.
|
Properties.
|
•
Item 7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations,
|
|
•
Item 8.
|
Financial
Statements and Supplementary Data including consolidated balance sheets,
consolidated statements of operations, consolidated statements of
stockholders’ deficit, consolidated statements of cash flows and notes to
consolidated audited financial statements, and
|
|
•
Item 9A (T)
|
Controls
and Procedures.
|
Page
No.
|
||
PART
I.
|
||
Item
1.
|
Business.
|
1
|
Item
1A.
|
Risk
Factors.
|
7
|
Item
1B.
|
Unresolved
Staff Comments.
|
12
|
Item
2.
|
Properties.
|
12
|
Item
3.
|
Legal
Proceedings.
|
13
|
Item
4
|
Submission
Of Matters To A Vote Of Security Holders.
|
13
|
PART
II
|
||
Item
5.
|
Market
For Registrant's Common Equity; Related Stockholder Matters And Issuer
Purchase Of Equity Securities.
|
13
|
Item
6.
|
Selected
Financial Data.
|
14
|
Item
7.
|
Management's
Discussion And Analysis Of Financial Condition And Results Of
Operations.
|
14
|
Item
7A.
|
Quantitative
And Qualitative Disclosures About Market Risk.
|
23
|
Item
8.
|
Financial
Statements And Supplementary Data.
|
24
|
Item
9.
|
Changes
in and Disagreements with Accountants on Accounting Financial
Disclosure.
|
24
|
Item
9A(T).
|
Controls
And Procedures.
|
24
|
Item
9B.
|
Other
Information.
|
26
|
Part
III
|
||
Item
10
|
Directors,
Executive Officers And Corporate Governance.
|
27
|
Item
11
|
Executive
Compensation.
|
29
|
Item
12
|
Security
Ownership Of Certain Beneficial Owners And Management And Related
Stockholder Matters.
|
30
|
Item
13
|
Certain
Relationships And Related Transactions, And Director
Independence.
|
32
|
Item
14
|
Principal
Accountant Fees And Services.
|
32
|
Part
IV
|
||
Item
15.
|
Exhibits,
Financial Statement Schedules.
|
33
|
•
|
the
shipper when the merchandise departs if the trade pricing term is on a CIF
(cost, insurance and freight) or CFR (cost and freight cost) basis,
or
|
•
|
from
the recipient when merchandise arrives at destination port if the trade
pricing term is on a FOB (free on board)
basis.
|
•
|
the
prior receipt of all regulatory approvals and licenses from the necessary
governmental agencies in China related to this acquisition,
and
|
•
|
the
receipt of two years of audited financial statements of Shandong Jiajia
together with the interim period for the nine months ended
September 30, 2007.
|
•
|
instead
of contributing all $2,000,000 to Shandong Jiajia's registered capital, we
agreed to contribute $1,040,816 to increase the registered capital and the
remaining $959,184 will be made available to Shandong Jiajia for working
capital purposes, and
|
•
|
the
date by which Shandong Jiajia is required to satisfy certain conditions to
the delivery of such funds has been extended to April 30,
2008.
|
•
|
none
of the members of our management have any experience in operating a U.S.
public company and the costs associated therewith may adversely impact our
operating results, and,
|
•
|
we
will need to upgrade the internal accounting systems at Shandong Jiajia,
as well as educating its staff as to the proper collection and recordation
of financial data to ensure that we can continue to file our annual,
quarterly and other reports with the Securities and Exchange Commission on
a timely basis.
|
•
|
quarantines
or closures of some of our offices, which would severely disrupt Shandong
Jiajia's operations,
|
•
|
the
sickness or death of its key officers and employees, or
|
•
|
a
general slowdown in the Chinese
economy.
|
•
|
up
to 4,500,000 shares of our common stock issuable upon the possible
conversion of 450,000 shares of Series B Convertible preferred stock
which we are obligated to issue under the terms of an agreement;
and
|
•
|
2,000,000
shares of our common stock issuable upon the exercise of common stock
purchase warrants at an exercise price of $.30 per
share.
|
Location
|
Approximate
Square Feet
|
Annual
Rent
|
Expiration
of Lease
|
|||
Shanghai
Branch
Shanghai
|
7,008
|
$64,140
(RMB 674,063)
|
May 31,
2009
|
|||
Xiamen
Branch
Xiamen City,
Fujian Province
|
1,026
|
$1,459
(RMB 10,800)
|
December 31,
2008
|
|||
Lianyungang
office
Lianyungang City,
Jiangsu Province
|
1,184
|
$4,054
(RMB 30,000)
|
March 15,
2009
|
|||
Rizhao
office
Rizhao City,
Shandong Province
|
1,076
|
$1,054
(RMB 7,800)
|
October 11,
2008
|
High
|
Low
|
|||||||
2006
|
||||||||
First
quarter ended March 31, 2006
|
$
|
12.00
|
$
|
8.00
|
||||
Second
quarter ended June 30, 2006
|
$
|
8.80
|
$
|
4.80
|
||||
Third
quarter ended September 30, 2006
|
$
|
7.60
|
$
|
4.40
|
||||
Fourth
quarter ended December 31, 2006
|
$
|
4.80
|
$
|
2.40
|
||||
2007
|
||||||||
First
quarter ended March 31, 2007
|
$
|
6.80
|
$
|
2.40
|
||||
Second
quarter ended June 30, 2007
|
$
|
3.60
|
$
|
1.60
|
||||
Third
quarter ended September 30, 2007
|
$
|
2.80
|
$
|
.80
|
||||
Fourth
quarter ended December 31, 2007
|
$
|
2.00
|
$
|
.40
|
||||
2008
|
||||||||
First
quarter ended March 31, 2008
|
$
|
1.20
|
$
|
.40
|
•
|
three
individuals, who included Messrs. Wei Chen and Hui Liu, minority
shareholders, officers and directors of Shandong Jiajia, who owned
1,000,000 shares of our Series A Convertible preferred stock
converted those shares into an aggregate of 2,500,000 shares of our common
stock; and three individuals and two entities, which included
Mr. Chen, who owned 725,000 shares of Series B Convertible
preferred stock converted those shares into an aggregate of 8,450,000
shares of our common stock.
|
•
|
the
prior receipt of all regulatory approvals and licenses from the necessary
governmental agencies in China related to this acquisition,
and
|
•
|
the
receipt of two years of audited financial statements of Shandong Jiajia
together with the interim period for the nine months ended
September 30, 2007.
|
•
|
effective
consolidation of resources among relatively independent
affiliates;
|
•
|
maintaining
the balance between the collection of accounts receivable and the
extension of longer credit terms offered to our current and prospective
clients in an effort to boost sales; and
|
•
|
our
ability to effectively handle the increases in costs due to soaring fuel
prices and the weak U.S. dollar.
|
•
|
When
merchandise departs the shipper’s location when the trade pricing terms
are CIF (cost, insurance and freight),
|
•
|
When
merchandise departs the shipper’s location when the trade pricing terms
are CFR (cost and freight cost), or
|
•
|
When
the merchandise arrives at the destination port if the trade pricing terms
are FOB (free on board)
destination.”
|
Risk-free
rate
|
2.5 | % | ||
Expected
Volatility
|
175 | % | ||
Life
|
3
years
|
|||
Dividend
yield
|
0 | % |
Fiscal
year ended December 31, 2007
|
Fiscal
year ended December 31, 2006
|
$
Change
|
%
Change
|
||||||||||||
Restated
|
|||||||||||||||
Sales
|
$
|
35,298,453
|
$
|
30,311,924
|
$
|
4,986,529
|
16.5
|
%
|
|||||||
Cost
of Sales
|
34,036,196
|
30,884,771
|
3,151,425
|
10.2
|
%
|
||||||||||
Gross
Profit
|
1,262,257
|
(572,847
|
)
|
1,835,104
|
320.3
|
%
|
|||||||||
Selling
Expenses
|
37,546
|
35,350
|
2,196
|
6.2
|
%
|
||||||||||
General
and Administrative Expenses
|
640,631
|
617,432
|
23,199
|
3.8
|
%
|
||||||||||
Total
Operating Expenses
|
678,177
|
912,276
|
(234,099
|
)
|
(25.7
|
)%
|
|||||||||
Income
(loss) from Operations
|
584,080
|
(1,485,123
|
)
|
2,069,203
|
139.3
|
%
|
|||||||||
Total
Other Income
|
13,575
|
18,812
|
(5,237
|
)
|
(27.8
|
)%
|
|||||||||
Net
income (loss)
|
$
|
275,630
|
$
|
(1,476,700
|
)
|
$
|
1,752,330
|
118.7
|
%
|
Fiscal
year ended December 31, 2007
|
Fiscal
year ended December 31, 2006
|
||||
Restated
|
|||||
Other
Key Indicators:
|
|||||
Cost
of Sales as a percentage of Sales
|
96%
|
102%
|
|||
Gross
Profit (Loss) Margin
|
4%
|
(2)%
|
|||
Selling
Expenses as a percentage of Sales
|
0%
|
0%
|
|||
General
and Administration Expenses as a percentage of Sales
|
2%
|
2%
|
|||
Total
Operating Expenses as a percentage of Sales
|
2%
|
3%
|
December
31, 2007
|
December
31, 2006
|
|||||||||||||||
United
States
|
$
|
215
|
0.02
|
%
|
$
|
-
|
-
|
%
|
||||||||
China
|
1,121,390
|
99.98
|
%
|
822,908
|
100
|
%
|
||||||||||
$
|
1,121,605
|
100
|
%
|
$
|
822,908
|
100
|
%
|
•
|
satisfied
$448,985 of accrued compensation due our then president and CEO, Mr.
Jeffrey Harrell, through the issuance of 581,247 shares of our common
stock, and
|
•
|
converted
a $2,521,380 note payable due a principal shareholder of our company, Mr.
David Aubel, into 2,864,606 shares of our common
stock.
|
•
|
Any
obligation under certain guarantee contracts;
|
•
|
Any
retained or contingent interest in assets transferred to an unconsolidated
entity or similar arrangement that serves as credit, liquidity or market
risk support to that entity for such assets;
|
•
|
Any
obligation under a contract that would be accounted for as a derivative
instrument, except that it is both indexed to our stock and classified in
stockholder’s equity in our statement of financial position;
and
|
•
|
Any
obligation arising out of a material variable interest held by us in an
unconsolidated entity that provides financing, liquidity, market risk or
credit risk support to us, or engages in leasing, hedging or research and
development services with us.
|
Name
|
Age
|
Positions
|
|||
V.
Jeffrey Harrell
|
42
|
Chairman,
President, Chief Executive Officer, Secretary, Treasurer and sole
director
|
Name
|
Age
|
Positions
|
|||
Hui
Liu
|
45
|
Chief
Executive Officer
|
|||
Wei
Chen
|
37
|
General
Manager, Shanghai Branch
|
•
|
compliance
with laws, rules and regulations,
|
•
|
conflicts
of interest,
|
•
|
insider
trading,
|
•
|
corporate
opportunities,
|
•
|
competition
and fair dealing,
|
•
|
discrimination
and harassment,
|
•
|
health
and safety,
|
•
|
record
keeping,
|
•
|
confidentiality,
|
•
|
protection
and proper use of company assets,
|
•
|
payments
to government personnel,
|
•
|
waivers
of the Code of Business Conduct and Ethics,
|
•
|
reporting
any illegal or unethical behavior, and
|
•
|
compliance
procedures.
|
•
|
disclosures
made in our filings with the Securities and Exchange
Commission,
|
•
|
deficiencies
in internal controls or fraud involving management or other employees who
have a significant role in our financial reporting, disclosure or internal
controls,
|
•
|
conflicts
of interests, and
|
•
|
knowledge
of material violations of securities or other laws, rules or regulations
to which we are subject.
|
•
|
understands
generally accepted accounting principles and financial
statements,
|
•
|
is
able to assess the general application of such principles in connection
with accounting for estimates, accruals and reserves,
|
•
|
has
experience preparing, auditing, analyzing or evaluating financial
statements comparable to the breadth and complexity to our financial
statements,
|
•
|
understands
internal controls over financial reporting, and
|
•
|
understands
audit committee functions.
|
•
|
our
principal executive officer or other individual serving in a similar
capacity,
|
•
|
our
two most highly compensated executive officers other than our principal
executive officer who were serving as executive officers at
December 31, 2007 as that term is defined under Rule 3b-7 of the
Securities Exchange Act of 1934. In the case of our company this includes
the executive officers of our Shandong Jiajia subsidiary,
and
|
•
|
up
to two additional individuals for whom disclosure would have been required
but for the fact that the individual was not serving as an executive
officer at December 31, 2007.
|
SUMMARY
COMPENSATION TABLE
|
|||||||||||||||||||||||||||||||||
Name
and Principal Position
(a)
|
Year
(b)
|
Salary
($)
(c)
|
Bonus
($)
(d)
|
Stock
Awards
($)
(e)
|
Option
Awards
($)
(f)
|
Non-Equity
Incentive
Plan
Compensation
($)
(g)
|
Nonqualified
Deferred
Compensation
Earnings
($)
(h)
|
All
Other
Compensation
($)
(i)
|
Total
($)
(j)
|
||||||||||||||||||||||||
V.
Jeffrey Harrell (1)
|
2007
|
200,000
|
-
|
-
|
-
|
-
|
-
|
-
|
200,000
|
||||||||||||||||||||||||
2006
|
200,000
|
-
|
-
|
-
|
-
|
-
|
-
|
200,000
|
|||||||||||||||||||||||||
Hui
Liu (2)
|
2007
|
3,732
|
14,785
|
-
|
-
|
-
|
-
|
11,500
|
30,017
|
||||||||||||||||||||||||
Wei
Chen
|
2007
|
26,642
|
-
|
-
|
-
|
-
|
-
|
-
|
26,642
|
(1)
|
During
2007 Mr. Harrell converted $193,500 of accrued but unpaid compensation
into 135,000 shares of our common stock. At December 31, 2007 we owed Mr.
Harrell an aggregate of approximately $419,000 of accrued but unpaid
compensation. Pursuant to the terms of the Share Exchange Agreement, on
March 20, 2008 he converted all amounts due him into 581,247 shares of our
common stock in full satisfaction of those obligations.
|
(2)
|
In
2007 Mr. Liu received a $14,785 bonus and $10,958 for travel
allowance and $542 for a car
allowance.
|
OPTION
AWARDS
|
STOCK
AWARDS
|
|||||||||||||||||||||||||||||||||||
Name
(a)
|
Number
of
Securities
Underlying
Unexercised
options
(#)
exercisable
(b)
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
unexercisable
(c)
|
Equity
incentive
plan
awards:
Number
of
Securities
Underlying
Unexercised
Unearned
options
(#)
(d)
|
Option
Exercise
price
($)
(e)
|
Option
expiration
date
(f)
|
Number
of
shares
or
units
of
stock
that
have
not
vested
(#)
(g)
|
Market
value
of
shares
or
units
of
stock
that
have
not
vested
($)
(h)
|
Equity
Incentive
plan
awards:
Number
of
Unearned
shares,
units
or
other
rights
that
have
not
Vested
(#)
(i)
|
Equity
Incentive
plan
awards:
Market
or
payout
value
of
unearned
shares,
units
or
other
rights
that
have
not
vested
(#)
(j)
|
|||||||||||||||||||||||||||
V.
Jeffrey Harrell
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||||||||
Hiu
Liu
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||||||||
Wei
Chen
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
•
|
each
person who is the beneficial owner of more than 5% of the outstanding
shares of voting securities;
|
•
|
each
director;
|
•
|
each
named executive officer; and
|
•
|
all
named executive officers and directors as a group.
|
•
|
understands
audit committee functions.
|
Amount
and Nature of Beneficial Ownership(1)
|
|||||
Name
|
No. of
Shares
|
%
of Class
|
|||
V.
Jeffrey Harrell
|
|
731,336
|
|
3.8%
|
|
Wei
Chen (2)
|
4,762,500
|
22.3%
|
|||
Hui
Liu (3)
|
312,500
|
1.6%
|
|||
All
named executive officers and directors as a group (three
persons)
|
5,806,336
|
27.1%
|
|||
China
Direct, Inc. (4)
|
9,312,500
|
39.0%
|
|||
Dragon
Venture (Shanghai) Capital Management Co., Ltd. (5)
|
1,400,000
|
7.2%
|
|||
David
J. Aubel (6)
|
2,864,608
|
14.8%
|
|||
Lili
Gong (7)
|
1,000,000
|
5.2%
|
(1)
|
The
inclusion of any shares as deemed beneficially owned does not constitute
an admission of beneficial ownership by the named
shareholder.
|
|
(2)
|
Mr. Wei
Chen is an executive officer and minority shareholder of Shandong Jiajia.
Mr. Chen's address is 8 S. Henan Road Lane 1001 Apt. 3404, Shanghai,
China 200000. The number of shares beneficially owned by Mr. Chen
includes 2,000,000 shares of our common stock issuable upon the exercise
of warrants with an exercise price of $0.30 per share.
|
|
(3)
|
Mr. Hui
Liu is an executive officer and minority shareholder of Shandong Jiajia.
Mr. Liu's address is Golden Plaza North Building Suite 1618B, 20
Middle Hongkong Road, Qingdao, China, 266071.
|
|
(4)
|
The
shares of our common stock shown are beneficially owned by China Direct,
Inc., address: 431 Fairway Drive Suite 200, Deerfield Beach,
Florida 33441. Dr. James Wang and Mr. Marc Siegel, executive
officers of China Direct, Inc., hold voting and dispositive control over
securities owned by China Direct, Inc. in their capacities of Chief
Executive Officer and President, respectively. The shares
of common stock beneficially owned by China Direct, Inc.
include:
|
|
•
|
4,750,000
shares of common stock held of record by Capital One Resource Co., Ltd., a
wholly owned subsidiary of CDI China, Inc., which is in turn a wholly
owned subsidiary of China Direct, Inc.,
|
|
•
|
62,500
shares of common stock held of record by China Direct Investments, Inc., a
wholly owned subsidiaries of China Direct, Inc., and
|
|
•
|
450,000
shares of Series B preferred stock to be issued to China Direct
Investments, Inc. which has no voting rights but is convertible at the
option of the holder into 4,500,000 shares of common stock. Under the
terms of the consulting agreement entered into with China Direct, Inc. in
December 2007, we agreed to issue it 450,000 shares of our
Series B preferred stock as compensation for services to be rendered,
which such shares are to be issued on or before June 30, 2008.
However, as pursuant to the terms of the agreement even if the agreement
should be terminated prior to its expiration such compensation will be
payable, under the rules of the Securities and Exchange Commission, China
Direct Investments, Inc. is deemed to beneficially own such
securities.
|
|
(5)
|
Dragon
Venture (Shanghai) Capital Management Co. Ltd. is a subsidiary of Dragon
Capital Group Corp. Mr. Lawrence Wang, the CEO of Dragon Capital
Group Corp., has voting and dispositive control over securities owned by
Dragon Venture (Shanghai) Capital Management Co., Ltd. by virtue of his
position as CEO of Dragon Capital Group Corp. Dragon Venture (Shanghai)
Capital Management Co. Ltd.'s address is 335 Guo Ding Road, 2 Building,
Suite 2009, Shanghai, China 200433.
|
|
(6)
|
Mr. Aubel's
address is 4901 NW 17th Way, Fort Lauderdale,
FL 33309.
|
|
(7)
|
Ms. Gong's
address is Room 501, No. 19 Lane, Tianshan Road, Shanghai,
20051
|
2007
|
2006
|
|||||||
Audit
Fees
|
$
|
65,000
|
$
|
156,568
|
||||
Audit-Related
Fees
|
0
|
0
|
||||||
Tax
Fees
|
0
|
0
|
||||||
All
Other Fees
|
18,000
|
0
|
||||||
Total
|
$
|
83,000
|
$
|
156,568
|
Exhibit
No.
|
Description
|
||
3.1 |
Articles
of Incorporation (1)
|
||
3.2 |
Articles
of Amendment (1)
|
||
3.3 |
Articles
of Amendment (5)
|
||
3.4 |
Articles
of Amendment (2)
|
||
3.5 |
Form of
Articles of Amendment (10)
|
||
3.6 |
Bylaws
(1)
|
||
4.1 |
Trilogy
Capital Partners, Inc. Warrant Agreement dated June 1,
2006(3)
|
||
4.2 |
Form of
common stock purchase warrant issued to Mr. Chen *
|
||
10.1 |
Debt
Conversion Agreement with David Aubel dated December 3, 2005
(4)
|
||
10.2 |
Amendment
to Debt Conversion Agreement with David Aubel dated May 15, 2006
(6)
|
||
10.3 |
Consulting
and Management Agreement dated May 22, 2007 with China Direct
Investments, Inc. (7)
|
||
10.4 |
Consulting
and Management Agreement dated September 5, 2007 with Capital One
Resource Co., Ltd (8)
|
||
10.5 |
Acquisition
Agreement dated as of December 31, 2007 between MediaREADY, Inc.,
Shandong Jiajia International Freight & Forwarding (Logistics Co.)
Ltd., and Messrs. Hui Liu and Wei Chen (2)
|
||
10.6 |
Finder's
Agreement dated as of December 31, 2007 between MediaREADY, Inc. and
Dragon Venture (Shanghai) Capital Management Co., Ltd.
(2)
|
||
10.7 |
Consulting
Agreement dated as of December 31, 2007 between MediaREADY, Inc. and
China Direct, Inc. (2)
|
||
10.8 |
Form of
Amendment to Acquisition Agreement dated as of January 28, 2008
between MediaREADY, Inc., Shandong Jiajia International Freight &
Forwarding Ltd., and Messrs. Hui Liu and Wei Chen
(9)
|
||
10.9 |
Form of
Amendment to Finder's Agreement dated as of January 28, 2008 between
MediaREADY, Inc. and Dragon Venture (Shanghai) Capital Management Co.,
Ltd. (9)
|
||
10.10 |
Form of
Amendment to Acquisition Agreement dated as of March 13, 2008 between
MediaREADY, Inc., Shandong Jiajia International Freight & Forwarding
Ltd., and Messrs. Hui Liu and Wei Chen (11)
|
||
10.11 |
Promissory
Note dated January 1, 2003 between Video Without Boundaries, Inc. and
David Aubel in the principal amount of $561,517.27 (incorporated herein by
reference to Exhibit 10.11 filed as a part of the Company’s Form 10-Q
filed with the Commission on December 22, 2008 (Commission File No.
000-31497)).
|
||
10.12 |
Security
Agreement dated May 23, 2001 between ValuSales.com, Inc. and David Aubel
(incorporated herein by reference to Exhibit 10.12 filed as a part of the
Company’s Form 10-Q filed with the Commission on December 22, 2008
(Commission File No. 000-31497)).
|
||
10.14 |
Conversion
Agreement effective as of March 20, 2008 between China Logistics Group,
Inc. and David Aubel (incorporated herein by reference to Exhibit 10.14
filed as a part of the Company’s Form 10-Q filed with the Commission on
December 22, 2008 (Commission File No. 000-31497)).
|
||
10.15 |
Conversion
Agreement effective as of March 20, 2008 between China Logistics Group,
Inc. and V. Jeffrey Harrell (incorporated herein by reference to Exhibit
10.15 filed as a part of the Company’s Form 10-Q filed with the Commission
on December 22, 2008 (Commission File No. 000-31497)).
|
||
14.1 |
Code
of Business Conduct and Ethics *
|
||
21.1 |
Subsidiaries
of the Registrant *
|
||
31.1 |
Section 302
Certificate of Chief Executive Officer **
|
||
31.2 |
Section 302
Certificate of principal financial and accounting
officer **
|
||
32.1 |
Section 906
Certificate of Chief Executive Officer and principal financial and
accounting officer **
|
(1)
|
Incorporated
by reference to the registration statement on Form 10-SB, SEC File
No. 0-31497, as filed with the Securities and Exchange Commission on
September 11, 2000, as amended.
|
(2)
|
Incorporated
by reference to the Current Report on Form 8-K as filed on
January 7, 2008.
|
(3)
|
Incorporated
by reference to the Current Report on Form 8-K as filed on
June 2, 2006.
|
(4)
|
Incorporated
by reference to the Annual Report on Form 10-KSB for the year
ended December 31, 2004.
|
(5)
|
Incorporated
by reference to the Current Report on Form 8-K as filed on
September 27, 2006.
|
(6)
|
Incorporated
by reference to the Quarterly Report on Form 10-QSB for the period
ended September 30, 2006.
|
(7)
|
Incorporated
by reference to the Current Report on Form 8-K as filed on
May 23, 2007.
|
(8)
|
Incorporated
by reference to the Current Report on Form 8-K as filed on
September 10, 2007.
|
(9)
|
Incorporated
by reference to the Current Report on Form 8-K as filed on
January 31, 2008.
|
(10)
|
Incorporated
by reference to the definitive information statement on Schedule 14C as
filed on February 14, 2008.
|
(11)
|
Incorporated
by reference to the Current Report on Form 8-K as filed on
March 18, 2008.
|
CHINA
LOGISTICS GROUP, INC.
|
||
|
||
Date: February 11, 2010
|
By:
|
/s/
Wei Chen
|
Wei
Chen
|
||
Chairman,
Chief Executive Officer and President
(Principal
Executive Officer)
|
||
Date:
February 11, 2010
|
By:
|
/s/
Yuan Huang
|
Yuan
Huang
|
||
Chief
Financial Officer
(Principal
Financial and Accounting
Officer)
|
Signature
|
Title
|
Date
|
||
|
||||
/s/
Wei Chen
|
|
Chief
Executive Officer, and director
|
|
February
11, 2010
|
Wei
Chen
|
||||
Yuan
Huang
|
|
Principal
Financial and Accounting Officer
|
|
February
11, 2010
|
Yuan
Huang
|
||||
/s/
Hui Liu
|
Director
|
February
11, 2010
|
||
Hui
Liu
|
Report
of Independent Registered Public Accounting Firm
|
|
F-2
|
Consolidated
Financial Statements:
|
||
Consolidated
Balance Sheets
|
F-3
|
|
Consolidated
Statements of Operations
|
F-4
|
|
Consolidated
Statements of Stockholders’ Deficit
|
F-5
|
|
Consolidated
Statements of Cash Flows
|
F-6
|
|
Notes
to Consolidated Financial Statements
|
F-7
|
/s/ Sherb
& Co., LLP
|
|
Certified
Public Accountants
|
2007
|
2006
|
|||||||
ASSETS
|
Restated
|
|||||||
Current
assets:
|
||||||||
Cash
|
$
|
1,121,605
|
$
|
822,908
|
||||
Accounts receivable, net of allowance for doubtful accounts of $794,715
and $1,262,902 at December 31, 2007 and 2006,
respectively
|
3,131,831
|
1,903,884
|
||||||
Accounts receivable - related party
|
7,000
|
-
|
||||||
Other receivables
|
-
|
181,060
|
||||||
Due from related parties
|
511,435
|
282,559
|
||||||
Prepayments and other current assets
|
328,065
|
14,828
|
||||||
Total current assets
|
5,099,936
|
3,205,239
|
||||||
Property and equipment, net
|
42,336
|
50,309
|
||||||
Deposits
|
-
|
4,683
|
||||||
Total assets
|
$
|
5,142,272
|
$
|
3,260,231
|
||||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||||||
Current
liabilities:
|
||||||||
Cash
overdraft
|
$
|
12,633
|
$
|
-
|
||||
Accounts payable – trade
|
3,608,885
|
2,733,055
|
||||||
Accrued compensation – related party
|
446,985
|
-
|
||||||
Other accruals and current liabilities
|
485,101
|
319,237
|
||||||
Convertible note payable/related party
|
2,373,179
|
-
|
||||||
Advances from customers
|
683,436
|
110,559
|
||||||
Due to related parties
|
229,252
|
214,211
|
||||||
Foreign tax payable
|
36,117
|
8,872
|
||||||
Total current liabilities
|
7,875,588
|
3,385,934
|
||||||
Derivative
liability
|
480,000
|
-
|
||||||
Total
liabilities
|
8,355,588
|
3,385,934
|
||||||
Minority
interest
|
601,028
|
-
|
||||||
Stockholders'
deficit:
|
||||||||
Preferred
stock - $.001 par value, 5,000,000 shares authorized
|
||||||||
Series
A preferred stock - 1,000,000 shares issued and outstanding at
December 31, 2007 and 2006, respectively
|
1,000
|
1,000
|
||||||
Series
B preferred stock - 1,295,000 and 120,000 shares issued and outstanding at
December 31, 2007 and 2006, respectively
|
1,295
|
120
|
||||||
Common
stock - $.001 par value, 200,000,000 shares authorized, 4,999,350 and 0
shares issued and outstanding at December 31, 2007 and 2006,
respectively
|
4,999
|
-
|
||||||
Additional
paid-in capital
|
12,447,625
|
3,058,800
|
||||||
Accumulated
deficit
|
(16,042,873
|
)
|
(3,188,209
|
)
|
||||
Accumulated
other comprehensive (loss) income
|
(226,390
|
)
|
2,586
|
|||||
Total stockholders' deficit
|
(3,814,344
|
)
|
(125,703)
|
|||||
Total liabilities and stockholders' deficit
|
$
|
5,142,272
|
$
|
3,260,231
|
2007
|
2006
|
|||||||
Restated
|
||||||||
Sales
|
$ | 35,298,453 | $ | 30,311,924 | ||||
Cost
of sales
|
34,036,196 | 30,884,771 | ||||||
Gross
profit (loss)
|
1,262,257 | (572,847 | ) | |||||
Operating
expenses:
|
||||||||
Selling
expenses
|
37,546 | 35,350 | ||||||
General
and administrative expenses
|
583,564 | 617,432 | ||||||
Bad
debt expense
|
57,067 | 259,494 | ||||||
Total
operating expenses
|
678,177 | 912,276 | ||||||
Income
(loss) from operations
|
584,080 | (1,485,123 | ) | |||||
Other
income:
|
||||||||
Other
income
|
13,575 | 18,588 | ||||||
Interest
income
|
- | 224 | ||||||
Total
other income
|
13,575 | 18,812 | ||||||
Income
(loss) before income taxes and minority interest
|
597,655 | (1,466,311 | ) | |||||
Foreign
taxes
|
(57,205 | ) | (10,389 | ) | ||||
Income
(loss) before minority interest
|
540,450 | (1,476,700 | ) | |||||
Minority
interest in income of consolidated income
|
264,820 | - | ||||||
Net
income (loss)
|
275,630 | (1,476,700 | ) | |||||
Other
comprehensive income (loss):
|
||||||||
Foreign
currency translation adjustments
|
(228,976 | ) | 12,754 | |||||
Comprehensive
income (loss)
|
$ | 46,654 | $ | (1,463,946 | ) | |||
Earnings
(loss) per share:
|
||||||||
Basic
|
$ | 20.12 | $ | N/A | ||||
Diluted
|
$ | 0.05 | $ | N/A | ||||
Weighted-average
number of shares outstanding
|
||||||||
Basic
|
13,697 | - | ||||||
Diluted
|
5,617,314 | - |
Accumulated
|
Accumulated
|
|||||||||||||||||||||||||||||||||||
Series
A
|
Series
B
|
Additional
|
Retained
|
Other
|
||||||||||||||||||||||||||||||||
Preferred
Stock
|
Preferred
Stock
|
Common
Stock
|
Paid-In
|
Earnings
|
Comprehensive
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
(Deficit)
|
Income/Loss
|
Total
|
|||||||||||||||||||||||||||
Restated
|
Restated
|
Restated
|
Restated
|
Restated
|
Restated
|
Restated
|
Restated
|
Restated
|
Restated
|
|||||||||||||||||||||||||||
Balance
December 31, 2005
|
1,000,000
|
$
|
1,000
|
120,000
|
$
|
120
|
-
|
$
|
-
|
$
|
3,058,800
|
$
|
(1,711,509
|
)
|
$
|
(10,168
|
)
|
$
|
1,338,243
|
|||||||||||||||||
Net
loss for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,476,700
|
)
|
-
|
(1,476,700
|
)
|
||||||||||||||||||||||||
Foreign
currency translation adjustments
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
12,754
|
12,754
|
||||||||||||||||||||||||||
Balance
December 31, 2006
|
1,000,000
|
1,000
|
120,000
|
120
|
-
|
-
|
3,058,800
|
(3,188,209
|
)
|
2,586
|
(125,703
|
)
|
||||||||||||||||||||||||
Recapitalization
for reverse acquisition
|
-
|
-
|
1,175,000
|
1,175
|
4,999,350
|
4,999
|
9,388,825
|
(13,130,294
|
)
|
-
|
(3,735,295
|
)
|
||||||||||||||||||||||||
Foreign
currency translation adjustments
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(228,976
|
)
|
(228,976
|
)
|
||||||||||||||||||||||||
Net
income for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
275,630
|
-
|
275,630
|
||||||||||||||||||||||||||
Balance
December 31, 2007
|
1,000,000
|
$
|
1,000
|
1,295,000
|
$
|
1,295
|
4,999,350
|
$
|
4,999
|
$
|
12,447,625
|
$
|
(16,042,873
|
)
|
$
|
(226,390
|
)
|
$
|
(3, 814 ,344
|
)
|
For
the Year Ended
|
||||||||
December
31,
|
||||||||
2007
|
2006
|
|||||||
Restated
|
||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income (loss)
|
$
|
275,630
|
$
|
(1,476,700
|
)
|
|||
Adjustments
to reconcile net income (loss) to net cash provided by (used in) operating
activities:
|
||||||||
Depreciation
expense
|
18,406
|
1,129
|
||||||
Minority
interest
|
264,820
|
-
|
||||||
Allowance
for doubtful accounts
|
68,149
|
341,503
|
||||||
Changes
in assets and liabilities:
|
||||||||
(Increase)
decrease in accounts receivable
|
(1,227,947
|
)
|
148,724
|
|||||
(Increase)
decrease in other receivables
|
114,158
|
(62,468
|
)
|
|||||
(Increase)
decrease in other assets
|
(419
|
)
|
3,642
|
|||||
(Increase)
decrease in prepaid expenses and other current
assets
|
(313,237)
|
6,014
|
||||||
Increase
in accounts payable and accrued expenses
|
1,054,327
|
807,279
|
||||||
(Decrease)
in other payables
|
(162,440
|
)
|
(37,138
|
)
|
||||
Increase
in taxes payable
|
27,245
|
3,713
|
||||||
Increase
in advances from customers
|
572,877
|
109,604
|
||||||
NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
691,569
|
(154,698
|
)
|
|||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Capital
expenditures
|
(13,504
|
)
|
-
|
|||||
Retirement
of property and equipment
|
-
|
4,743
|
||||||
Advances
to related parties
|
(419,940
|
)
|
(44,775
|
)
|
||||
NET
CASH USED IN INVESTING ACTIVITIES
|
(433,444
|
)
|
(40,032
|
)
|
||||
EFFECT
OF EXCHANGE RATE ON CASH
|
40,572
|
12,754
|
||||||
NET
INCREASE (DECREASE) IN CASH
|
298,697
|
(181,976
|
)
|
|||||
CASH -
beginning of year
|
822,908
|
1,004,884
|
||||||
CASH
- end of year
|
$
|
1,121,605
|
$
|
822,908
|
||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||
Cash
paid during the period for foreign taxes
|
$
|
31,361
|
$
|
10,389
|
•
|
the
prior receipt of all regulatory approvals and licenses from the necessary
governmental agencies in China related to this acquisition,
and
|
|
•
|
the
receipt of two years of audited financial statements of Shandong Jiajia
together with the interim period for the nine months ended
September 30, 2007.
|
•
|
the
recognition of an agreement to issue 450,00 shares of Series B preferred
stock with a fair value of $3,780,000;
|
•
|
the
recognition of the Company’s acquisition of a 51% interest in Shandong
Jiajia as a capital transaction implemented through reverse acquisition
accounting;
|
•
|
the
correction of the accounting treatment accorded a convertible note payable
to a related party and principal stockholder, Mr. David Aubel;
and,
|
•
|
the
restatement of historical balance sheets and related disclosures to give
retroactive effect to a 1 for 40 reverse stock split completed on March
11, 2008;
|
•
|
the
recognition of an accrual of certain professional fees, totaling $141,800
in expense, which were erroneously omitted.
|
•
|
the
adjustment to the initially reported carrying
values of assets and liabilities of the accounting acquiree
(formerly MediaReady, Inc.) recognized in connection with the acquisition
of a 51% interest in Shandong Jiajia International Freight Forwarding Co.,
Ltd. accounted for as a capital transaction implemented through a reverse
acquisition;
|
Adjustment
|
||||||||||||
As
Filed
|
to
Restate
|
Restated
|
||||||||||
Other
Accruals and Current Liabilites
|
$
|
343,301
|
$
|
141,800
|
$
|
485,101
|
||||||
Accumulated
Deficit
|
$
|
(313,084
|
)
|
$
|
(141,800
|
)
|
$
|
(454,884
|
)
|
|||
Minority
Interest component (49%)
|
69,482
|
69,482
|
||||||||||
$
|
(313,084
|
)
|
$
|
(72,318
|
)
|
$
|
(385,402
|
)
|
Adjustment
|
||||||||||||
As
Filed
|
to
Restate
|
Restated
|
||||||||||
General
and administrative expenses (including bad debt
expense)
|
$
|
498,831
|
$
|
141,800
|
$
|
640,631
|
||||||
Net
Income (Loss)
|
$
|
347,948
|
$
|
(141,800
|
)
|
206,148
|
||||||
Minority
Interest component (49%)
|
-
|
69,482
|
69,482
|
|||||||||
Net
Income (Loss)
|
347,948
|
(72,318
|
)
|
275,630
|
||||||||
Earnings
(Loss) Per Share:
|
||||||||||||
Basic
|
$
|
0.10
|
$
|
(0.02
|
)
|
$
|
0.08
|
|||||
Diluted
|
$
|
0.04
|
$
|
(0.01
|
)
|
$
|
0.03
|
|||||
Adjustment
|
|||||||||||||
As
Filed
|
To
Restate
|
Restated
|
|||||||||||
Accounts
receivable – related party
|
$ | 160,350 | $ | (153,350 | ) |
(a)
|
$ | 7,000 | |||||
Deferred
expenses
|
5,450 | (5,450 | ) | - | |||||||||
Prepaid
expenses and other current assets
|
338,895 | (10,830 | ) | 328,065 | |||||||||
Property
and equipment, net
|
46,622 | (4,286 | ) | 42,336 | |||||||||
Intangible
assets
|
821 | (821 | ) | - | |||||||||
Deposits
|
12,000 | (12,000 | ) | - | |||||||||
$ | 564, 138 | $ | (186,737 | ) | $ | 377,401 | |||||||
Accounts
payable – trade (b)
|
$ | 4,444,825 | $ | (835,940 | ) |
(b)
|
$ | 3,608,885 | |||||
Other
accruals and current liabilities (c)
|
343,301 | 141,800 |
(c)
|
485,101 | |||||||||
Minority
Interest (d)
|
670,510 | (69,482 | ) |
(d)
|
601,028 | ||||||||
Additional
paid-in capital
|
(3,379,049 | ) | 649,203 | (2,729,846 | ) | ||||||||
Accumulated
deficit
|
(313,084 | ) | (72,318 | ) | (385,402 | ) | |||||||
$ | 1,766,503 | $ | (186,737 | ) | $ | 1,579,766 |
(a)
|
Reflects
adjustment to accounts receivable balance due from a single customer
subsequently deemed uncollectible.
|
(b)
|
Reflects
adjustment including $764,220 due to a single vendor, formally forgiven in
April 2008, and previously reported as a gain in the second quarter
2008.
|
(c)
|
Reflects
recording of accrued professional fees at December 31, 2007 by Shandong
Jiajia as discussed above.
|
(d)
|
Reflects
the effect on minority interest (49%) of $141,800 in professional fees
recognized by Shandong Jiajia, see adjustment (c).
|
•
|
reclassification
of 2,000,000 warrants issued to Mr. Chen as additional consideration
valued at $480,000 from equity to derivative liability as there were
insufficient authorized common shares to settle the contract as of
12/31/2007
|
•
|
further
adjustment to the method of recording the reverse recapitalization
transaction with Shandong Jiajia completed on December 31,
2007
|
Adjustment
|
||||||||||||
As
Filed
|
To
Restate
|
Restated
|
||||||||||
Derivative
liability
|
-
|
480,000
|
480,000
|
|||||||||
Total
liabilities
|
7,875,588
|
480,000
|
8,355,588
|
|||||||||
Additional
paid-in capital
|
(2,729,846
|
)
|
15,177,471
|
12,447,625
|
||||||||
Accumulated
deficit
|
(385,402
|
)
|
(15,657,471
|
)
|
(16,042,873
|
)
|
||||||
Total
stockholders’ deficit
|
$
|
(3,334,344
|
)
|
$
|
(480,000
|
)
|
$
|
(3,814,344
|
)
|
Adjustment
|
||||||||||||
As
Filed
|
to
Restate
|
Restated
|
||||||||||
Earnings
(Loss) Per Share:
|
||||||||||||
Basic
|
$
|
0.08
|
$
|
20.04
|
)
|
$
|
20.12
|
|||||
Diluted
|
$
|
0.03
|
$
|
0.02
|
$
|
0.05
|
||||||
Weighted-average
number of shares outstanding
|
||||||||||||
Basic
|
3,442,152
|
(3,428,455
|
)
|
13,697
|
||||||||
Diluted
|
9,045,589
|
(3,428,275
|
)
|
5,617,314
|
•
|
When
merchandise departs the shipper’s location when the trade pricing terms
are CIF (cost, insurance and freight),
|
•
|
When
merchandise departs the shipper’s location when the trade pricing terms
are CFR (cost and freight cost), or
|
•
|
When
the merchandise arrives at the destination port if the trade pricing terms
are FOB (free on board)
destination.
|
Year
ended
|
||||||||
December
31,
|
||||||||
2007
|
2006
|
|||||||
Restated
|
||||||||
Numerator:
|
||||||||
Net
income (loss) applicable to common stockholders (A)
|
$
|
275,630
|
$
|
(1,476,700
|
)
|
|||
Denominator:
|
||||||||
Denominator
for basic earnings per share
|
||||||||
Weighted
average shares outstanding (B)
|
13,697
|
-
|
*
|
|||||
Denominator
for diluted earnings per share
|
||||||||
Treasury
stock method
|
||||||||
Options
|
1,871,245
|
--
|
||||||
Series
A and B preferred stock – unconverted
|
3,732,192
|
--
|
||||||
Adjusted
weighted average shares outstanding (C)
|
5,617,314
|
-
|
*
|
|||||
Basic
and diluted earnings per common share:
|
||||||||
Earnings
per share- basic (loss)(A)/(B)
|
$
|
20.12
|
$
|
N/A
|
*
|
|||
Earnings
per share- diluted (A)/(C)
|
$
|
0.05
|
$
|
N/A
|
*
|
Risk-free
rate
|
2.5 | % | ||
Expected
Volatility
|
175 | % | ||
Life
|
3
years
|
|||
Dividend
yield
|
0 | % |
2007
|
2006
|
|||||||
Restated
|
||||||||
Trade
receivables
|
$
|
3,926,546
|
$
|
3,166,786
|
||||
Less:
allowance for doubtful accounts
|
(794,715
|
)
|
(1,262,902
|
)
|
||||
$
|
3,131,831
|
$
|
1,903,884
|
Useful
Lives
|
2007
|
2006
|
|||||||
Restated
|
|||||||||
Computer
equipment
|
4
years
|
$
|
228,707
|
$
|
-
|
||||
Software
|
3
years
|
361,861
|
-
|
||||||
Furniture
and equipment
|
4-5
years
|
112,297
|
82,812
|
||||||
Total:
|
702,865
|
82,812
|
|||||||
Less:
accumulated depreciation
|
(660,529
|
)
|
(32,503
|
)
|
|||||
$
|
42,336
|
$
|
50,309
|
Risk-free
rate
|
2.5
|
%
|
||
Expected
Volatility
|
175
|
%
|
||
Life
|
3
years
|
|||
Dividend
yield
|
0
|
%
|
Year
Ended December 31,
|
||||||||
2007
|
2006
|
|||||||
Restated
|
||||||||
US
Operations
|
$
|
-
|
$
|
-
|
||||
Chinese
Operations
|
275,630
|
(1,476,700
|
)
|
|||||
$
|
275,630
|
$
|
(1,476,700
|
)
|
Year
Ended December 31,
|
||||||||
2007
|
2006
|
|||||||
Restated
|
||||||||
US
Operations
|
$
|
-
|
$
|
-
|
||||
Chinese
Operations
|
57,205
|
10,389
|
||||||
$
|
57,205
|
$
|
10,389
|
Year
Ended December 31,
|
||||||||
2007
|
2006
|
|||||||
Restated
|
||||||||
Income
tax provision (benefit) at Federal statutory rate
|
$
|
259,000
|
$
|
(513,000
|
)
|
|||
State
income taxes, net of Federal Benefit
|
34,000
|
(67,000
|
)
|
|||||
Permanent
differences
|
-
|
-
|
||||||
U.S.
tax rate in excess of foreign tax rate
|
(49,000
|
)
|
97,000
|
|||||
Abatement
of foreign income taxes
|
(187,000
|
)
|
494,000
|
|||||
Tax
provision (benefit)
|
$
|
57,000
|
$
|
11,000
|
December
31,
|
||||||||
2007
|
2006
|
|||||||
Restated
|
||||||||
Federal
net operating loss carryforward
|
$
|
3,700,000
|
$
|
3,500,000
|
||||
State
net operating loss carryforward
|
600,000
|
550,000
|
||||||
Provisions
|
-
|
545,000
|
||||||
Timing
differences
|
167,000
|
246,000
|
||||||
4,467,000
|
4,841,000
|
|||||||
Valuation
allowance
|
(4,467,000
|
)
|
(4,841,000
|
)
|
||||
Tax
provision (benefit)
|
$
|
-
|
$
|
-
|
Risk-free
rate
|
4.45
|
%
|
||
Volatility
|
96
|
%
|
Number
of
Shares
|
||||
2004
|
||||
Warrants
granted (five year term expiring April 2, 2009)
|
2,500
|
|||
Warrants
exercised
|
—
|
|||
2005
|
||||
Warrants
granted (five year term expiring April 2,
2010)
|
2,500
|
|||
Warrants
exercised
|
—
|
|||
2006
|
||||
Warrants
granted (three year term expiring May 31, 2009)
|
110,000
|
*
|
||
Warrants
exercised
|
—
|
|||
2006
|
||||
Warrants
granted (five year term expiring April 2, 2011)
|
2,500
|
|||
Warrants
exercised
|
—
|
|||
117,500
|
*
-
|
110,000
common share purchase warrants issued to Trilogy Partners, Inc. for
marketing and public relations services with a fair value of $396,000
expensed in 2006. These warrants expire May 31,
2009
|
Period
|
Total
|
|||
Period
Ended December 31, 2008
|
62,533
|
|||
Period
Ended December 31, 2009
|
$
|
121,000
|
||
Period
Ended December 31, 2010
|
48,000
|
|||
Period
Ended December 31, 2011
|
23,000
|
|||
Period
Ended December 31, 2012
|
23,000
|
|||
Thereafter
|
--
|
|||
$
|
261,000
|
Sales
|
Assets
|
|||||||
United
States
|
$
|
—
|
$
|
12,216
|
||||
Peoples Republic
of China
|
35,298,453
|
5,130,056
|
||||||
$
|
35,298,453
|
$
|
5,142,272
|
•
|
three
individuals, who included Messrs. Wei Chen and Hui Liu, minority
shareholders, officers and directors of Shandong Jiajia, who owned
1,000,000 shares of our Series A Convertible preferred stock
converted those shares into an aggregate of 2,500,000 shares of our common
stock; and
|
•
|
three
individuals and two entities, which included Mr. Chen, who owned
725,000 shares of Series B Convertible preferred stock converted
those shares into an aggregate of 8,450,000 shares of our common
stock.
|