<PAGE> 1
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of December 8, 2000
------------
DF China Technology Inc.
(Registrant's name)
8th Floor, North Wing, Kwai Shun Industrial Centre
51-63 Container Port Road, Kwai Chung
New Territories, Hong Kong, China
(Address of principal executive offices)
[Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.]
Form 20-F X Form 40-F
---- ----
[Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.]
Yes No X
---- ----
[If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b):82-_________]
<PAGE> 2
1. Attached for filing are the unaudited, interim, consolidated financial
statements of the registrant, DF China Technology Inc., and its subsidiaries for
the six months ended September 30, 2000.
2. The following sets forth a press release issued on December 8, 2000, by DF
China Technology, Inc.
DF CHINA TECHNOLOGY BEGINS TO ESTABLISH 3D CINEMA CHAIN
(Hong Kong, December 8, 2000) - DF China Technology Inc. (DFCT) has signed
contracts in Guangdong Province, PRC, as the first step in establishing a 3D
mini cinema chain in mainland China. Through ChangsVision, a DFCT subsidiary,
the company plans to supply 150,000 mini cinemas with 3D technology and generate
estimated gross revenue of US$500 million per year, according to DFCT Chairman
and CEO Horace Yao.
"Part of the 3D imaging technology marketed by ChangsVision is
currently the most advanced in the world," says Mr. Yao. The technology has been
developed by Prof. Li Chang, the leading scientist in 3D imaging technology in
China. He holds more than 20 international patents in our targeted markets.
In China there are reportedly 500,000 mini cinemas, most of which show
general films. ChangsVision aims to reach one-third of these cinemas within
three years, providing 3D converting equipment and hardware such as set-top
boxes, 3D spectacles and, eventually, 3D video programs produced by the company.
Mini cinemas can use the set-top box to surf the Internet at a speed, 300 times
faster than telephone dial-up speed.
DFCT first entered the high-tech arena in early 2000 when it joined
efforts with Tianjin 3D Image Technique Co Ltd. to develop a prototype
set-top-box with built-in 3D display circuitry and software package featuring
3-D imagery for DFCT's business-to-business e-commerce platform. Mini cinemas
offer a second potentially lucrative market for the 3D set-top box package.
DF China Technology, Inc. (DFCT) is a Nasdaq-listed, Hong Kong-based
company engaged in multiple business ventures with Dransfield Holdings Limited,
a Hong Kong-based investment holding company (HKSE code: 632) with interests in
paper and related personal products; logistical services; and food and beverage.
Dransfield Holdings is also a major shareholder of DF China Technology Inc.
The above is a forward-looking statement. Many factors could cause
actual results to differ materially from those projected. Such factors include,
inter alia, delay in producing 3D titles, delay in organizing our distribution
channel and a marketing team adequate to cover targeted number of cinemas, delay
in obtaining needed licenses, ticket price not easily affordable by the masses,
change in laws relating to the film industry in China and technological changes
which may adversely affect our market share.
-End-
3. The following sets forth a press release issued on December 15, 2000, by DF
China Technology, Inc.
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DF CHINA TECHNOLOGY EXPANDS REVENUE SOURCES
THROUGH RECENT ACQUISITION
(Hong Kong, December 15, 2000) - DF China Technology Inc. (Nasdaq:
DFCT), through its recent acquisition of a 21% stake in Tianjin 3D Image
Technique Co Ltd., begins to expand its revenue sources.
"ChangsVision Inc., a subsidiary of DFCT, has been nominated to become
the global marketing arm of Tianjin 3D Image Technique Co Ltd. The scope of
ChangsVision's marketing activities shall include distribution of 3D converting
equipment and hardware such as set-top-boxes, 3D spectacles and eventually
extend to educational and leisure fields," says Ken Mak, CEO of ChangsVision.
ChangsVision has set a five-year marketing timetable with five initial
revenue streams:
1. Distribution of 3D converting equipment and 3D video programs
to mini cinema chains in China. This effort has commenced in
late October.
2. Hardware sales such as 3D spectacles to mini cinemas and other
customers on a recurring basis.
3. 3D corporate video and 54" 3D back projection system which
effort will commence in January after the launch of the
world's first 3D corporate video, set for completion in
January 2001.
4. Advertising and e-commerce will start a year from March 2001
when distribution of 3D video programs to mini cinemas and
specialty institutions such as universities will have reached
a critical mass.
5. Distribution of 3D educational and entertainment programs will
commence once a critical mass of users has been built up from
the four models above. This will probably commence in two
years' time.
"Our initial marketing effort should be focused on making China a
success, then expand to the global market," explains Mr Mak.
The investment in Tianjin 3D Image Technique Co Ltd. provides a second
stream of revenue for DFCT. "More importantly, 3D mini cinema chain will provide
a cost effective channel of distribution and exposure opportunities for many of
the Fast Moving Consumer Products which Dransfield is developing," remarks Mr
Horace Yao, Chairman & CEO of DFCT.
DF China Technology, Inc. (DFCT) is a Nasdaq-listed, Hong Kong-based
company engaged in multiple business ventures with Dransfield Holdings Limited,
a Hong Kong-based investment holding company (HKSE code: 632) with interests in
paper and related personal products; logistical services; and food and beverage.
Dransfield Holdings is also a major shareholder of DF China Technology Inc.
The above is a forward-looking statement. Many factors could cause
actual results to differ materially from those projected in the statement. Such
factors include, but are not limited to delay in producing 3D titles, delay in
organizing our distribution channel and a marketing team adequate to cover
targeted cinemas, delays in obtaining needed licenses, ticket price which may
not be easily afforded by the masses, change in laws relating to the film
industry in China and rapid technological changes which may adversely affect our
market share.
-End-
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4. The following changes in executive directors and officers of the company have
taken place. Warren Ma resigned as executive director of the company on November
30, 2000. Andy Pang resigned as executive director of the company effective
December 31, 2000. Richard Lum was appointed executive director of the company
effective December 21, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DF CHINA TECHNOLOGY INC.
By: /s/ Thomas J. Kenan
--------------------------------
Thomas J. Kenan, Director
Date: December 22, 2000
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DF CHINA TECHNOLOGY INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2000 AND SEPTEMBER 30, 2000
(Amounts in thousands, except number of shares and per share data)
<TABLE>
<CAPTION>
(Unaudited)
Notes 3/31/00 9/30/00 9/30/00
HK$ HK$ US$
---------- ---------- ----------
<S> <C> <C> <C> <C>
ASSETS
Current assets
Cash and bank balances 1,710 2,235 286
Accounts receivable, net 41 1,516 195
Inventories, net 4 2,147 4,011 514
Prepaid expenses 1,137 3,094 397
Income tax recoverable 92 9 1
---------- ---------- ----------
Total current assets 5,127 10,865 1,393
Fixed assets 200,909 203,766 26,124
Interest in associated company -- 12,936 1,658
Loan to a related company 14,350 -- --
Deposit for fixed assets 4,397 3,661 469
Other assets 200 200 26
---------- ---------- ----------
224,983 231,428 29,670
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable 65 1,354 174
Accrued liabilities 3,870 4,476 573
Due to a minority shareholder -- -- --
Total current liabilities 3,935 5,830 747
Due to holding company 5 -- 2,071 266
Loan from a related company 14,350 -- --
---------- ---------- ----------
18,285 7,901 1,013
========== ========== ==========
Shareholders' equity:
Common Stock, no par value,
40,000,000 shares authorized;
19,916,218 shares issued, 225,001 241,919 31,015
and fully paid up
Unpaid subscription receivable (3,835) -- --
Contributed surplus 6 4,277 4,673 599
Accumulated deficit (18,745) (23,065) (2,957)
Total shareholders' equity 206,698 223,527 28,657
---------- ---------- ----------
Total liabilities and shareholders' equity 224,983 231,428 29,670
========== ========== ==========
</TABLE>
The accompanying notes form an integral part of these
consolidated financial statements.
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<PAGE> 6
DF CHINA TECHNOLOGY INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 2000
(Amounts in thousands, except number of shares and per share data)
<TABLE>
<CAPTION>
Three Months Ended September 30 Six Months Ended September 30
Notes
1999 2000 2000 1999 2000 2000
HK$ HK$ US$ HK$ HK$ US$
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales :
Hygienic paper
- third parties -- 2,343 300 -- 4,504 577
- fellow subsidiaries 136 4 1 316 4 1
Other paper products to third parties 265 437 56 501 783 100
---------- ---------- ---------- ---------- ---------- ----------
401 2,784 357 817 5,291 678
Cost of sales:
Hygienic paper (136) (1,837) (236) (316) (3,906) (501)
Other paper products (261) (416) (53) (450) (741) (95)
---------- ---------- ---------- ---------- ---------- ----------
(397) (2,253) (289) (766) (4,647) (596)
Gross profit 4 531 68 51 644 82
Selling, general and administrative
expenses
- third parties (761) (1,801) (231) (1,726) (3,828) (491)
- fellow subsidiaries (395) (433) (56) (848) (856) (110)
---------- ---------- ---------- ---------- ---------- ----------
(1,156) (2,234) (287) (2,574) (4,684) (601)
Interest income -- -- -- -- 1 --
Interest expense -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
-- -- -- -- 1 --
Other income / (expenses)
- compensation from supplier -- -- -- -- -- --
- loss on disposal of subsidiaries -- -- -- -- -- --
- corporate promotion expenses 7 (57) (74) (9) (151) (300) (38)
- others 18 17 2 36 19 2
---------- ---------- ---------- ---------- ---------- ----------
(39) (57) (7) (115) (281) (36)
Loss before income taxes (1,191) (1,760) (226) (2,638) (4,320) (555)
Provision for income taxes 3
- Current -- -- -- -- -- --
- Deferred -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
-- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Net loss (1,191) (1,760) (226) (2,638) (4,320) (555)
========== ========== ========== ========== ========== ==========
Basic net loss per share (cents) 8 (7.64) (8.84) (1.13) (16.93) (21.69) (2.79)
========== ========== ========== ========== ========== ==========
Shares used in computation of
basic loss per share 15,585,000 19,916,218 19,916,218 15,585,000 19,916,218 19,916,218
========== ========== ========== ========== ========== ==========
</TABLE>
The accompanying notes form an integral part of these
consolidated financial statements.
6
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DF CHINA TECHNOLOGY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 2000
(Amounts in thousands, except number of shares and per share data)
<TABLE>
<CAPTION>
Six months Ended September 30
1999 2000 2000
HK$ HK$ US$
<S> <C> <C> <C>
Net cash provided by operating activities 223 326 42
Cash flows from investing activities:
Acquisition of fixed assets (462) (145) (19)
Acquisition of further interest in a subsidiary -- -- --
Proceeds from disposal of subsidiaries -- -- --
----- ----- ---
Net cash used in investing activities (462) (145) (19)
----- ----- ---
Cash flows from financing activities:
Advances from holding company 1,851 -- --
Repayment of loan to holding company -- (3,157) (405)
Repayment of loan to a minority shareholder (894) -- --
New issue of common stock -- 3,501 449
Bank loans and overdrafts, secured -- -- --
----- ----- ---
Net cash provided by financing activities 957 344 44
----- ----- ---
Net (decrease) in cash and cash equivalents 718 525 67
Cash and cash equivalents, at beginning
of period 1,203 1,710 219
----- ----- ---
Cash and cash equivalents, at end of period 1,921 2,235 286
===== ===== ===
</TABLE>
The accompanying notes form an integral part of these
consolidated financial statements.
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<PAGE> 8
DF CHINA TECHNOLOGY INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2000
(Amounts in thousands, unless otherwise stated and
except number of shares and per share data)
1. BASIS PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of the management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a presentation have been included. Operating results for
the six months period ended September 30, 2000 are not necessarily
indicative of the results that may be expected for the year ending
March 31, 2001. For further information, refer to the consolidated
financial statements and footnotes thereto for the year ended March 31,
2000 included in the previous Registration Statement.
2. FOREIGN CURRENCY EXCHANGE
The financial information has been prepared in Hong Kong dollars
("HK$"), the official currency of Hong Kong. Solely for the convenience
of the reader, the financial statements have been translated into
United States dollars ("US$") prevailing on September 30, 2000 which
was US$1.00 = HK$7.8. No representation is made that the Hong Kong
dollar amounts could have been, or could be, converted into US$ at that
rate or any other certain rate on September 30, 2000.
3. INCOME TAXES
The Company was incorporated in the British Virgin Islands and, under
current law of the British Virgin Islands, is not subject to tax on
income or on capital gains.
Any income arising in and deriving from business carried on in Hong
Kong is subject to Hong Kong tax. No tax is charged on dividends
received and capital gains earned.
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DF CHINA TECHNOLOGY INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
(Amounts in thousands, unless otherwise stated and
except number of shares and per share data)
3. INCOME TAXES (continued)
Guangzhou Dransfield Paper Limited, a co-operative joint venture formed
in the PRC in which the Company has a 100% interest, and Jiangsu
Dransfield Paper Co. Ltd. ("JDP"), a wholly foreign owned venture
formed in the PRC in which the Company has a 80% interest, are subject
to PRC income taxes at the applicable tax rate of 33% for Sino-foreign
joint venture enterprises. These two ventures are eligible for full
exemption from joint venture income tax for the first two years
starting from its first profitable year of operations followed by a 50%
deduction from the third to fifth year. Under the Income Tax Law
applicable to Sino-foreign joint ventures, no PRC income tax was levied
on the above companies as they have either not commenced operation or
just commenced operation as at September 30, 2000.
Total income tax expense differs from the amount computed by applying
Hong Kong statutory income tax rate of 16% (1999: 16%) to income before
taxes as follows:
<TABLE>
<CAPTION>
(Unaudited)
Six months ended September 30
1999 2000 2000
HK$ HK$ US$
---------- ---------- ----------
<S> <C> <C> <C>
Computed expected income taxes -- -- --
Non-deductible losses of subsidiaries -- -- --
Valuations allowance -- -- --
---------- ---------- ----------
-- -- --
========== ========== ==========
</TABLE>
Deferred tax asset is comprised of the following :
<TABLE>
<CAPTION>
(Unaudited )
3/31/00 30/09/00 30/09/00
HK$ HK$ US$
---------- ---------- ----------
<S> <C> <C> <C>
Tax losses carried forward 1,474 2,165 278
Valuations allowance (1,474) (2,165) (278)
---------- ---------- ----------
-- -- --
========== ========== ==========
</TABLE>
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DF CHINA TECHNOLOGY INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Six Months ended September 30, 2000
(Amounts in thousands, unless otherwise stated and
except number of shares and per share data)
4. INVENTORIES, NET
Inventories are comprised of:
<TABLE>
<CAPTION>
(Unaudited)
3/31/00 9/30/00 9/30/00
HK$ HK$ US$
---------- ---------- ----------
<S> <C> <C> <C>
Raw materials 1,470 2,860 366
Finished goods 1,798 1,751 224
Less: Allowance for obsolescence (1,121) (600) (76)
---------- ---------- ----------
Inventories, net 2,147 4,011 514
========== ========== ==========
</TABLE>
5. DUE TO HOLDING COMPANY
The long term liability balance, which is used to finance the Group's
capital investment, is unsecured and interest-free. The holding company
has agreed that it will not demand payment of the amount prior to
October 1, 2001.
6. CONTRIBUTED SURPLUS
The amount represents a net compensation of HK$1,530 (US$198) from a
minority shareholder, which was accounted for as a capital transaction
in 1998, and stock compensation expenses of HK$1,184 (US$153), HK$939
(US$121) and HK$624 (US$80) recognized for the years ended March 31,
1998, 1999 and 2000 respectively. And, HK$396 (US$51) recognized as
stock compensation for the six months ended September 30, 2000.
7. CORPORATE PROMOTION EXPENSES
The Company became a listed company on Nasdaq in April 1997. An amount
of approximately HK$300(US$38) has been incurred and expended during
the six months period to September 30, 2000 for corporate expenses
incurred in relation to various expenses associated with reporting,
communicating to shareholders and investors and the maintenance costs
associated with the various compliance filings as required by various
authorities.
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DF CHINA TECHNOLOGY INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Six Months ended September 30, 2000
(Amounts in thousands, unless otherwise stated and
except number of shares and per share data)
8. LOSS PER SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earnings Per Share" In accordance with this
statement, the Company changed the method previously used to computed
net income/loss per share and restated all prior periods presented.
Basic net income/loss per share is computed using the weighted average
number of common shares outstanding during the periods. Diluted net
income/loss per share is computed using the weighted average number of
common and potentially dilutive common shares during the periods,
except those that are antidilutive.
The basic net loss per share for the six months ended September 30,
1999 and 2000 were computed by dividing net loss applicable to common
stock, by the weighted average number of 15,585,000 and 19,916,218
shares of common stock, respectively, which were outstanding during the
two years on the assumption that the 9.3 million shares of common stock
issued to DHL upon the effectiveness of the merger had existed at April
1, 1996.
The effect of employee stock options, warrants and the preferred stock
outstanding during the two periods is anti-dilutive.
9. FINANCIAL INSTRUMENTS
The carrying amount of the Company's cash and bank balances approximate
their fair value because of the short maturity of those instruments.
The carrying amount of the Company's borrowing approximate their fair
value based on the borrowing rates currently available for borrowings
with similar terms and average maturities, except for the loans from
holding company, which, due to their nature, the fair value is not
determinable.
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DF CHINA TECHNOLOGY INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Six Months ended September 30, 2000
(Amounts in thousands, unless otherwise stated and
except number of shares and per share data)
10. CONCENTRATION OF RISK
Concentration of credit risk :
The Group's principal activities are distribution of fine paper and
paper handkerchiefs. The Group has long standing relationships with
most of its customers. The Group performs ongoing credit evaluation of
its customers' financial conditions and, generally does not require
collateral.
The allowance for doubtful accounts the Group maintains is based upon
the expected collectibility of all accounts receivable.
Current vulnerability due to certain concentrations:
The Group has investments in the PRC. The value of the Group's
investment may be adversely affected by significant political, economic
and social uncertainties in the PRC. Although the PRC government has
been pursuing economic reform policies for the past 18 years, no
assurance can be given that the PRC government will continue to pursue
such policies or that such policies may not be significantly altered,
especially in the event of a change in leadership, social or political
disruption or unforeseen circumstances affecting the PRC's political,
economic and social life. There is also no guarantee that the PRC
government's pursuit of economic reforms will be consistent or
effective.
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