SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15 (d) of
Securities Exchange Act of 1934
For Period ended September 30, 2000
Commission File Number 0-26813
HUADING FINANCIAL NETWORK INC.
------------------------------
(Exact name of registrant as specified in its charter)
NEVADA 91-1932118
------ ----------
(State of Incorporation) (I.R.S. Employer Identification No.)
#908 - HSBC Building
885 West Georgia Street
Vancouver, B.C. Canada V6C 3E8
-------------------------------
(Address of Principal Executive Offices) (Zip Code)
(604) 687-2298
--------------
(Registrant's telephone number, including area code)
Former name, former address, and former fiscal year if changes since last
report: N/A
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 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 No X *
----- -----
* The Company has been delayed in its filing of this 10-QSB due to the
untimely preparation of its financial statements as a result of its recent
merger. In addition, the Company has also not been timely in the filing of
its amended 8-K to reflect the audited statements of the Company subsequent
to the merger.
Indicate the number of shares outstanding of each of the issuer's classes
of common stock at the latest practicable date.
As of September 30, 2000, the registrant had 13,200,000 shares of common
stock, $.001 par value, issued and outstanding.
<PAGE>
HUADING FINANCIAL NETWORK INC.
FORM 10-QSB
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements - Unaudited
Balance Sheets as of September 30, 1999 and September 30, 2000.
Income Statements for the three months ended September 30, 1999
and September 30, 2000, and for the period from Inception
(October 20, 1998) through September 30, 2000.
Statements of Cash Flows for the three months ended September
30, 1999 and September 30, 2000, and for the period from
Inception (October 20, 1998) through September 30, 2000.
Notes to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Changes in Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibit and Reports on Form 8-K
Exhibit
Reports on Form 8-K
SIGNATURES
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Huading Financial Network Inc.
Unaudited Balance Sheets
As of September 30, 1999 and September 30, 2000
September 30, September 30,
1999 2000
Current ------------ -----------
Cash $ 0 $ 136,533
------------ -----------
0 136,533
------------ -----------
Investments - 22,011,301
Start-up Costs - 515,251
------------ -----------
Total Assets 0 22,663,085
LIABILITIES
Current
Accounts payable and accrued
liabilities $ - $ 1,045,856
------------ -----------
- 1,045,856
------------ -----------
SHAREHOLDERS' EQUITY
Share Capital (Note 3) 5,000 21,923,949
Deficit (5,000) (306,720)
------------ -----------
Total Stockholders' Equity $ 0 $ 21,617,229
------------ -----------
Total Liabilities and Stockholders'
Equity $ 0 $ 22,663,085
============ ===========
Approved on behalf of the Board:
/s/ David Yue
--------------
David Yue, Director
<PAGE>
Huading Financial Network Inc.
Unaudited Income Statements
For the Three Months Ended September 30, 1999 and
September 30, 2000 and for the Period
From Inception (October 20, 1998) through September 30, 2000
Three Months Three Months Inception
Ended Ended Through
September 30, September 30, September 30,
1999 2000 2000
------------ ------------ -----------
Operating Revenues $ 0 $ 0 $ 0
Operating Expenses 0 192,060 307,720
------------ ------------ -----------
Net Income (Loss) $ 0 $ (192,060) $(307,720)
============ ============ ===========
Per Share Information:
Basic and Diluted (Loss)
per Common Share $ (0.00) $ (0.01) $ (0.03)
Weighted Average Shares
Outstanding (1) 8,000,000 13,200,000 8,714,041
(1) These figures have been adjusted to reflect the effect of the 2 1/2
to one forward stock split, effective January 10, 2000, increasing the
then number of issued and outstanding shares from 3.2 million to 8.0
million.
<PAGE>
Huading Financial Network Inc.
Statements of Cash Flows
For the Three Months Ended September 30, 1999 and
September 30, 2000 and for the Period
From Inception (October 20, 1998) through September 30, 2000
Three Months Three Months Inception
Ended Ended Through
September 30, September 30, September 30,
1999 2000 2000
------------ ------------ ------------
Cash Provided From (Used In)
Operating Activities 0 $ (197,060) $ (306,720)
Change in Other Non-Cash
Working Capital Items:
- Accounts Receivable 0 2,438,347 0
- Marketable Securities 0 2,924,049 0
- Accounts Payable 0 188,520 1,045,856
------------ ------------ ------------
0 5,550,916 1,045,856
------------ ------------ ------------
Cash Provided By (Used For)
Investing Activities
- Investment in China 0 (5,722,519) 0
- Start-Up Costs 0 (3,314) (515,251)
------------ ------------ ------------
0 (5,725,833) (515,251)
------------ ------------ ------------
Cash Flows From (Used In)
Financing Activities:
Common Stock Sold for Cash 0 0 206,000
Other Cash Flows:
As a Result of Merger (net) 0 0 (293,352)
Decrease in Capital Assets 0 282,995 0
------------ ------------- -------------
Net Increase (Decrease)
in Cash 0 (88,982) 136,533
Cash at Beginning of Period 0 225,515 0
------------- ------------- -------------
Cash at End of Period $ 0 $ 136,533 $ 136,533
============= ============= =============
<PAGE>
Huading Financial Network, Inc.
Notes to Consolidated Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated under the laws of the State of Nevada on
October 20, 1998, formerly as Centrock Incorporated.
The Company uses the accrual method of accounting.
Preliminary expenses represent costs incurred in the formation of the
Company and are written off in this period.
2. INVESTMENTS
Investment in a wholly foreign owned enterprise in the People's
Republic of China is stated at cost.
4. SHARE CAPITAL
Authorized:
75,000,000 common shares without par value.
Common Shares Subscribed: # $
------------ ------------
At inception 2,000,000 -
November 1998 issued at $0.005 1,000,000 5,000
July 1999 issued at $0.005 200,000 1,000
2 1/2 to 1 forward split 4,800,000 -
Cancelled (5,000,000) -
Exchange of HFN shares 10,000,000 21,717,949
Private Placement February 2000 200,000 200,000
------------ ------------
Balance March 26, 2000 13,200,000 21,923,949
============ ============
4. ADMINISTRATIVE AND OPERATING EXPENSES
Communication Fees $ 16,540
Consulting 9,700
Employment Training 1,805
Entertainment Expense 15,237
Filing Fees 8,000
Leasing Fees 28,932
Legal 3,000
Listing Fees 10,000
Office and Misc. Expense 65,379
Salaries and Benefits 93,833
Shareholders Information 13,000
Travel Expenses 36,294
--------
$ 301,720
========
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
PLAN OF OPERATIONS
During the quarter ended September 30, 2000, the Company continued to focus
its attention on the continued development and expansion of its financial
website, "chinahd.com", and on the search for additional capital to fund its
continued operations and the further development and expansion of their
financial information systems.
THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES SUCH AS THE DEPENDENCE OF THE COMPANY ON AND THE ADEQUACY OF
CASH FLOWS. THESE FORWARD-LOOKING STATEMENTS AND OTHER STATEMENTS MADE
ELSEWHERE IN THIS REPORT ARE MADE IN RELIANCE ON THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995.
Plan of Operations
The Company's continued plan of operations continue to evolve around their
further development and operation of their financial website, "chinahd.com,"
which provides online assessments of Mainland China's stock market, financial
news, securities laws, and regulation information.
Results of Operations
As the Company was not operating during the fiscal quarter ended September
30, 1999, a comparable analysis of the two periods is not considered
meaningful.
Total operating expenses of $197,060 for the three months ended September 30,
2000 resulted primarily from a variety of expenses in setting up the
Company's North American headquarters in Vancouver, B.C. Canada and the
administration of the Company's website.
Huading's online trading began, on a pilot basis, at the beginning of the
year. The Company has been pleased with the results to date. At present,
close to thirty different securities firms are online. This number is
growing. It is the Company's policy to provide this service to the
securities firms for approximately the first six months for free. This period
is provided to allow time for them to integrate their systems, to help train
their own staff, and educate their clientele to use the online system. Once
this time is up, the revenues generated from the transactions are to be split
between the securities firms and the Company. The Company expects to be
generating revenues by the end of this year.
The Company expects to continue to explore opportunities for strategic
alliances and expects to be able to announce more specific developments
over the next two quarters.
Liquidity and Capital Resources
The Company remains disappointed to not have been able to close on certain
planned financing sources during the previous quarter ended, as those
negotiations did not progress as planned. The Company continues to pursue
other major funding sources expects to be able to announce more specific
developments within the next two quarters.
Management continues to manage cash flow to conserve cash resources until it
can raise new investment capital to resume and maintain normal operations.
Management continues to believe that its current cash balances will be
sufficient to carry the Company for the next couple of quarters, albeit on a
tight budget. The Company feels that this time frame will allow sufficient
time to raise the necessary additional capital. Should the Company be unable
to raise the planned additional capital by the end of the first quarter of
next year, it will have a material negative impact on the continued
operations of the Company's business.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
Not applicable.
ITEM 2. Changes in Securities and Use of Proceeds.
Not applicable.
ITEM 3. Defaults Upon Senior Securities
Not applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders
Not applicable.
ITEM 5. Information required in lieu of Form 8-K: None
ITEM 6. Exhibits and Reports on 8-K:
a) Exhibit #27.1, "Financial Data Schedule"
b) The Company filed a report on Form 8-K on May 24,
2000, related to the merger between Huading and
Centrock Inc.
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.
HUADING FINANCIAL NETWORK INC.
Dated: January 8, 2001 /s/ David Yue
----------------------
David Yue
Director
