As filed with the SEC on October 13, 2000 SEC Registration No. __________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10SB
GENERAL FORM FOR REGISTRATION OF SECURITIES Pursuant to
Section 12(b) or (g) of the Securities Exchange Act of
1934
China Dalian Shipping Group
(Exact name of registrant as specified in its charter)
Florida Applied For
(State or other jurisdiction of (I.R.S. Employer Identi-
incorporation or organization) fication No.)
2503 W. Gardner Ct., Tampa, FL. 33611
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (813) 831-9348
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which to be so
registered each class is to be registered
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of class)
Preferred Stock
(Title of class)
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Information Required in Registration Statement
Item 1. Business.
PROPOSED BUSINESS
History and Organization
We were organized under the laws of the State of Florida in October 2000.
Since inception, our primary activity has been directed to organizational
efforts. We were formed as a vehicle to acquire a private company desiring to
become an SEC reporting company in order thereafter to secure a listing on the
over the counter bulletin board. This type of acquisition is sometimes referred
to as a reverse merger.
We have elected to file this Form 10 on a voluntary basis because we believe
that a private company desiring to become an SEC reporting company in order
thereafter to secure a listing on the over the counter bulletin board will be
more receptive to an acquisition by an SEC reporting company. We will
voluntarily file periodic reports in the event our obligation to file such
reports is suspended under the Exchange Act.
Operations
We were organized for the purposes of creating a corporate vehicle to seek,
investigate and, if such investigation warrants, engage in business combinations
presented to us by persons or firms who or which desire to become an SEC
reporting company. We will not restrict our search to any specific business or
industry, but will limit ourselves to acquisitions which are located in China
presented to us by our management.
We do not currently engage in any business activities that provide any cash
flow. The costs of identifying, investigating, and analyzing business
combinations will be paid with money in our treasury or loaned by management or
shareholders. This is based on an oral agreement between management and us. This
loan will not be repaid either by us or by the company we acquire either before
or after the merger. In addition, we have no preliminary agreements or
understandings with any other person or entity concerning loan agreements.
We may seek a business combination in the form of firms which:
o Have recently commenced operations
o Are developing companies in need of additional funds for expansion into new
products or markets
o Are seeking to develop a new product or service
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o Are established businesses which may be experiencing financial or operating
difficulties and are in need of additional capital
A business combination will involve the acquisition of, or merger with, a
company which does not need substantial additional capital but which desires to
establish a public trading market for our shares, while avoiding what they may
deem to be adverse consequences of undertaking a public offering itself, such
as:
o Time delays
o Significant expense
o Loss of voting control
o Compliance with various federal and state securities laws
Based upon the probable desire on the part of the owners of acquisition
candidates to assume voting control over us in order to avoid tax consequences
or to have complete authority to manage the business, we will combine with just
one acquisition candidate.
Upon closing of a business combination, there will be a change in control
which will result in the resignation of our present officer and director.
There are no financial requirements for an acquisition candidate, except to
have qualified audited financial statements and the funds to make payments to
us. Accordingly, any acquisition candidate that is selected may be a financially
unstable company or an entity in our early stage of development or growth,
including entities without established records of sales or earnings.
Accordingly, we may become subjected to numerous risks inherent in the business
and operations of financially unstable and early stage or potential emerging
growth companies. In addition, we may effect a business combination with an
entity in an industry characterized by a high level of risk.
We anticipate that the selection of a business combination will be complex
and extremely risky. Management believes that there are numerous firms seeking
the benefit of a publicly traded corporation because of:
o General economic conditions
o Rapid technological advances being made in some industries
o Shortages of available capital
Such perceived benefit of a publicly traded corporation may include:
o Facilitating or improving the terms on which additional equity financing
may be sought
o Providing liquidity for the principals of a business
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o Creating a means for providing incentive stock options or similar benefit
to key employees
o Providing liquidity, subject to restrictions of applicable statutes, for
all shareholders
Potentially available business combinations may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex.
Evaluation of Business Combinations
The analysis of business combinations will be undertaken by or under the
supervision of our officer and director who is not a professional business
analyst. Management intends to concentrate on identifying preliminary
prospective business combinations which may be brought to our attention through
present associations. There is only one characteristic necessary for a
prospective business combination: The acquisition candidate must agree in the
merger agreement and have the ability to pay a merger fee to us equal to the
amount we currently owe our management for unpaid salary.
Because we will be subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, we will be required to furnish certain information about
significant acquisitions, including audited financial statements for the
business acquired, covering one, two or three years depending upon the relative
size of the acquisition. Consequently, acquisition prospects that do not have or
are unable to obtain the required audited statements may not be appropriate for
acquisition.
Any business combination will present certain risks. Many of these risks
cannot be adequately identified prior to selection. In the case of some of the
potential combinations available to us, it is possible that the promoters of an
acquisition candidate have been unable to develop a going concern or that such
business is in our development stage in that it has not generated significant
revenues from its principal business activity prior to our merger or
acquisition. There is a risk, even after the closing of a business combination
and the related expenditure of our funds, that the combined enterprises will
still be unable to become a going concern or advance beyond the development
stage. The combination may involve new and untested products, processes, or
market strategies which may not succeed. Such risks will be assumed by us and,
therefore, our shareholders.
Business Combination
In implementing a structure for a particular business acquisition, we may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. We may also purchase
stock or assets of an existing business. The manner of the business combination
will depend on:
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o The nature of the acquisition candidate o The respective needs and desires of
us and other parties o The management of the acquisition candidate opportunity o
The relative negotiating strength of us and such other management
On the closing of a business combination, the acquisition candidate will
have significantly more assets than us; therefore, management plans to offer a
controlling interest in us to the acquisition candidate. Although the actual
terms of a transaction to which we may be a party cannot be predicted, we may be
expected that the parties to the business transaction will find we desirable to
avoid the creation of a taxable event and thereby structure the acquisition in a
so-called tax-free reorganization under Sections 368(a)(1) or 351 of the
Internal Revenue Code of 1954. In order to obtain tax-free treatment under the
code, it may be necessary for the owners of the acquired business to own 80% or
more of the voting stock of the surviving entity. In such event, our
shareholders would retain less than 20% of the issued and outstanding shares of
the surviving entity, which would be likely to result in significant dilution in
the equity of such shareholders. In addition, our director and officer will, as
part of the terms of the acquisition transaction, resign as director and
officer.
We anticipate that we will agree to register securities issued in the
acquisition transaction either at the time the transaction is closed, under
certain conditions, or at specified times thereafter. The issuance of
substantial additional securities and their potential sale into any trading
market which may develop in our common stock may have a depressive effect on
such market.
If at any time we enter negotiations with a possible merger candidate and
such a transaction becomes probable, then we will file all required information
on Form 8-K. As of the date of this filing, although we have held discussions
with an acquisition candidate, Dailan Marine Shipping Group, the candidate is
not willing to enter into an oral or written commitment to be acquired until
this Form 10 has been filed. It is anticipated that an agreement will be signed
shortly after this Form 10 is filed.
We have adopted certain acquisition policies, as follows. Management is
unaware of any circumstances under which such policy through their own
initiative may be changed. Although the following policies are based on an oral
agreement between management and us by execution of this Form 10, management
agrees to be bound by and under no circumstances change these policies.
o We may not borrow funds and use the proceeds therefrom to make payments to
any officer, director, promoter or affiliate or associate of us.
o We will not enter into a business combination with any company which is in
any way wholly or partially beneficially owned by any officer, director,
promoter or affiliate or associate of us.
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o We have adopted a policy that we will not pay a finder's fee to any member of
management for locating a merger or acquisition candidate. No member of
management intends to or may seek and negotiate for the payment of finder's
fees.
o No finder's fee or similar fee may be paid by us to our management.
o We will not sell any securities prior to the location of an acquisition or
merger candidate.
o The only pecuniary benefit to be received by management is the retention of a
to-be-agreed percent of stock after the acquisition closes.
We will remain an insignificant player among the firms that engage in
business combinations. There are many established venture capital and financial
concerns which have significantly greater financial and personnel resources and
technical expertise than us. In view of our combined limited financial resources
and limited management availability, we will continue to be at a significant
competitive disadvantage compared to our competitors. Also, we will be competing
with a large number of other similar small public companies located throughout
the United States.
We do not intend to advertise or promote ourselves. Instead, our management
will actively search for potential acquisition candidates. In the event
management decides to advertise in the form of an ad in a legal publication to
attract an acquisition candidate, the cost of such advertising will be assumed
by management.
Employees
We presently have no employees. Our officer and director is engaged in business
activities outside of us, and the aggregate amount of time he will devote to our
business and the business of all other blank check companies with which is
associated will only be no more than five hours per week until a successful
business opportunities have been acquired by all such companies.
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Item 2. Financial Information.
SELECTED FINANCIAL DATA
The following information concerning our financial position and operations is as
of and for the two days ended October 3, 2000.
Total assets $ 0
Total liabilities 0
Equity 0
Sales 0
Net loss 79
Net loss per share 0.00
MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
We are a development stage entity, and have neither engaged in any
operations nor generated any revenues to date. We have no assets. Our expenses
to date, all funded by a loan from management, are $79. We will also owe $75,000
in legal fees. The acquisition candidate must agree in the merger agreement and
have the ability to pay a merger fee to us equal to the amount we currently owe
our attorneys for unpaid fees.
Substantially all of our expenses that must be funded by management or
shareholders will be from our efforts to identify a suitable acquisition
candidate and close the acquisition. Management and shareholders have orally
agreed to fund our cash requirements until an acquisition is closed. So long as
they do so, we will have sufficient funds to satisfy our cash requirements.
This is primarily because we anticipate incurring no significant expenditures.
Before the conclusion of an acquisition, we anticipate our expenses to be
limited to accounting fees, legal fees, telephone, mailing, filing fees,
occupational license fees, and transfer agent fees.
We do not intend to seek additional financing. At this time we believe that
the funds to be provided by management and shareholders will be sufficient for
funding our operations until we find an acquisition and therefore do not expect
to issue any additional securities before the closing of a business combination.
Item 3. Properties.
We are presently using the office of Michael T. Williams, 2503 W. Gardner
Ct., Tampa FL, at no cost as our office. Such arrangement is expected to
continue only until a business combination is closed, although there is
currently no such agreement between us and Mr. Williams. We at present own no
equipment, and do not intend to own any.
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Item 4. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth information about our current shareholder. The
person named below has sole voting and investment power with respect to the
shares. The numbers in the table reflect shares of common stock held as of the
date of this Form 10:
Shares Owned Percentage
-------------------------------------------------------------------------------
Michael T. 400,000 20%
Williams
2503 W. Gardner Ct.
Tampa FL 33611
Roy Toulan, Jr. 400,000 20%
Stibel & Toulan LLP
183 State Street
Boston, MA 02109
Mr. Yale Yu 1,200,000 60%
All directors and 1,200,000 60%
officers as a
group -
1 persons
-------------------------------------------------------------------------------
Mr. Williams and Mr. Yu may be deemed our founders or promoters, as that
term is defined under the Securities Act of 1933.
Item 5. Directors and Executive Officers.
The following table and subsequent discussion sets forth information about our
director and executive officer, who will resign upon the closing of the
acquisition transaction. Our director and executive officer was elected to his
position in June, 1999.
Name Age Title
Mr. Yale Yu 53 President, Treasurer and Director
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Mr. Yale Yu is President and Chief Executive Officer of Info Tech Group Inc, a
California corporation from March 1994 to date. Mr. Yale Yu is Vice President
and Chief Information Officer of RichAve Software LLP, a California LLP from Feb
2000 to date. In Feb 1992, Mr. Yale Yu received an M.B.A. degree from California
Coast University in California, United States. In 1982 Mr. Yale Yu received an
B.S. of Electrical Engineering Degree from Jiao Tong University Shanghai, China.
Item 6. Executive Compensation.
Mr. Yu will not receive a salary. He will retain a number of shares as agreed
upon with the merger candidate after the merger. We anticipate that we will
agree to a split of our stock before the merger closes in order to accomplish
this objective.
Except as described above, we will not pay any of the following types of
compensation or other financial benefit to our management:
o Consulting Fees
o Finders' Fees
o Any other methods of payments by which management or current
shareholders receive funds, stock, other assets or anything of value
whether tangible or intangible
These provisions are the subject of an oral agreement between management and us.
Management is not aware of any circumstances under which this policy, through
their own initiative, may be changed.
Item 7. Certain Relationships and Related Transactions.
None of the related party transactions described below were the result of arm's
length negotiations. Accordingly, there is a potential that management's
fiduciary duties may be compromised as a result of any of these transactions.
Any remedy available under state corporate law, if management's fiduciary duties
are compromised, will most likely be prohibitively expensive and time consuming.
We have established the a policy that prohibits transactions with or payment of
anything of value to any present officers, director, promoter or affiliate or
associate or any company that is in any way or in any amount beneficially owned
by any of our officers, director, promoter or affiliate or associate, except as
follows:
o We will owe law firms associated with two of our shareholders, Michael T.
Williams and Roy Toulan, Jr., $75,000 in total in legal fees. The
acquisition candidate must agree in the merger agreement and have the
ability to pay a merger fee to us equal to the amount we currently owe for
legal fees.
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o Messrs. Williams, Toulan, Jr. and Yu will retained an amount of stock
after the merger as agreed the acquisition candidate.
Our director and officer is or may become, in his individual capacity, an
officer, director, controlling shareholder and/or partner of other entities
engaged in a variety of businesses. Michael T. Williams is engaged in business
activities outside of us, and the aggregate amount of time he will devote to our
business and the business of all other blank check companies with which is
associated will be no more than five hours per week until a successful business
opportunities have been acquired by all such companies. There exists potential
conflicts of interest including allocation of time between us and such other
business entities.
Conflicts with other blank check companies with which members of management are
currently and may become affiliated in the future will arise in the pursuit of
business combinations. Mr. Yu is a shareholder of Brilliant Sun Industry Co.,
which has agreed to acquire Yi Wan Group, Inc. Mr. Yu may form similar companies
in the future. None of these entities has or will engage in any public offering
of its securities prior to entering into a business combination agreement.
To aid the resolution of these conflicts, he and we have agreed that if there
exists more than one acquisition company formed by Mr. Yu which has not agreed
to an acquisition, all existing acquisition companies will be presented to the
acquisition candidate and the candidate can decide by which company they desire
to be acquires.
Item 8. Legal Proceedings.
We not a party to or aware of any pending or threatened lawsuits or other
legal actions.
Item 9. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters.
Prior to the date hereof, there has been no trading market for our common
stock. The outstanding common stock was sold in reliance upon an exemption from
registration contained in Section 4(2) of the Securities Act. Management and our
two other principal shareholders owns 100% of our stock. As a result, there is
no likelihood of an active public trading market, as that term is commonly
understood, developing for the shares. There can be no assurance that a trading
market will develop upon the closing of a business combination. To date, neither
we nor anyone acting on our behalf has taken any affirmative steps to retain or
encourage any broker dealer to act as a market maker for our common stock.
Further, there have been no discussions or understandings, preliminary or
otherwise, between us or anyone acting on our behalf and any market maker
regarding the participation of any such market maker in the future trading
market, if any, for our common stock. Present management does not anticipate
that any such negotiations, discussions or understandings shall take place prior
to the execution of an acquisition agreement. Management expects that
discussions in this area will ultimately be initiated us.
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There are no outstanding options or warrants to purchase, or securities
convertible into, our common equity. The 2,000,000 shares of our common stock
currently outstanding are restricted securities as that term is defined in the
Securities Act. Any shares retained by Mr. Williams, Mr. Toulan, Jr. or Mr.
Yu must either be registered for sale or may only be sold subject to Rule 144.
Item 10. Recent Sales of Unregistered Securities.
None, except the 400,000 shares issued to Mr. Williams, 400,000 shares
issued to Mr. Toulan, Jr. and 1,200,000 shares issued to Mr. Yu for upon
formation of the company in reliance upon Section 4(2) of the Securities Act.
The shares were issued to these individuals for services as founders of our
business.
Item 11. Description of Registrant's Securities to be Registered.
DESCRIPTION OF CAPITAL STOCK
----------------------------------------------------------------------------
Authorized Capital Stock Under Our Shares Of Capital Stock Outstanding
Articles Of Incorporation
----------------------------------------------------------------------------
50,000,000 shares of common stock 2,000,000 shares of common
----------------------------------------------------------------------------
20,000,000 shares of preferred stock No shares of preferred stock
----------------------------------------------------------------------------
All significant provisions of our capital stock are summarized in this Form
10. However, the following description isn't complete and is governed by
applicable Florida law and our articles of incorporation and bylaws. We have
filed copies of these documents as exhibits to this Form 10.
Common Stock
You have voting rights for your shares.
You and all other common stockholders may cast one vote for each share held
of record on all matters submitted to a vote. You have no cumulative voting
rights in the election of directors This means, for example, that if there are
three directors up for election, you cannot cast 3 votes for one director and
none for the other two directors.
You have dividend rights for your shares.
You and all other common stockholders are entitled to receive dividends and
other distributions when declared by our board of directors out of the assets
and funds available, based upon your percentage ownership of us. Florida law
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prohibits the payment of any dividends where, after payment of the dividend, we
would be unable to pay our debts as they come due in the usual course of
business or our total assets would be less than the sum of our total liabilities
plus any amounts the law requires to be set aside. We will not pay dividends.
You should not expect to receive any dividends on shares in the near future,
even after a merger. This investment is inappropriate for you if you need
dividend income from an investment in shares.
You have rights if we go out of business forever.
If we go out of business forever, you and all other common stockholders
will be entitled to share in the distribution of assets remaining after payment
of all money we owe to others and any priority payment required to be made to
our preferred stockholders. Our directors, at their discretion, may borrow funds
without your prior approval, which potentially further reduces the amount you
would receive if we go out of business forever.
You have no right to acquire shares of stock based upon your percentage
ownership of our shares when we sell more shares of our stock to other people.
We do not provide our stockholders with preemptive rights to subscribe for
or to purchase any additional shares offered by us in the future. The absence of
these rights could, upon our sale of additional shares of common or preferred
stock, result in a decrease in the percentage ownership that you hold or
percentage of total votes you may cast.
Preferred Stock
Our board of directors can issue preferred stock at any time with any
legally-permitted rights and preferences without your approval.
Our board of directors, without your approval, is authorized to issue
preferred stock. They can issue different classes of preferred stock, with some
or all of the following rights or any other rights they think are appropriate
and that are legal:
o Voting
o Dividend
o Required or optional repurchase by us
o Conversion into common stock, with or without additional payment
o Payments preferred stockholders will receive before common stockholders
if we go out of business forever
The issuance of preferred stock could provide us with flexibility for
possible acquisitions and other corporate purposes. But it also could render
meaningless your right to vote your stock on a matter that you are entitled to
vote on because preferred stockholders could own shares with a majority of the
votes required on any issue. Someone interested in buying our company may not
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follow through with their plans because they could find it more difficult to
acquire, or be discouraged from acquiring, a majority of our outstanding stock
because we issue preferred stock.
We may issue class A preferred stock in a merger.
This preferred stock could entitle persons owning common stock of the
acquisition candidate to convert into more shares of our stock after the merger
based upon the following formula:
----------------------------------------------------------------
1 - the fraction [Average of Bid and Ask Price for the first 20
days the common stock trades upon any established securities
market/a specific dollar value to be determined in the merger
agreement]
divided by
{the fraction [Average of Bid and Ask Price for the first 20 days
the common stock trades upon any established securities market/ the
same dollar value]}
The company being acquired will tell us what they want the specific
dollar value to be.
----------------------------------------------------------------
Here's how the formula would work. Assume the average bid/ask for the 20-day
period was $2.00 and the specific dollar value was $3.00. When we plug these
numbers into the formula, we get the following calculation:
----------------------------------------------------------------
1 - the fraction [Average of Bid and Ask Price for the first
20 days the common stock trades upon any established securities
market [This number is 2]/a specific dollar value to be determined
in the merger agreement[This number is 3]][This number is then
calculated: 1-2/3=1/3.]
divided by
{the fraction[Average of Bid and Ask Price for the first 20 days
the common stock trades upon any established securities market
[This number is 2]/a specific dollare value to be determined in
the merger[This number is 3]]} [This number is then calculated; 2/3]
To finish our computation, we do the following:1/3 divided by 2/3=.5
This means that, in this example, .5 additional share of our
stock for each share of common stock issued to shareholders in
the company acquired in the merger would be issued upon
conversion of this preferred stock. The actual number of
shares issued could vary.
----------------------------------------------------------------
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Dissenters' Rights
Section 607.1303 of Florida Statutes provides the following procedure for
exercise of dissenters' rights.-- Under the act, shareholders may perfect
dissenters' rights with regard to corporate actions involving certain mergers,
consolidations, sale, lease or merger of substantially all the assets of the
corporation, under limited circumstances,, or elimination of cumulative voting.
A shareholder wishing to assert dissenters' rights under the act must follow the
specified procedures which include:
o delivering, before the vote is taken on the matter, written notice of the
holder's intent to demand payment for his shares if the matter is approved
o not voting his shares in favor of the matter proposed.
Within 10 days after the shareholders have authorized the matter, the
corporation must give written notice of the authorization to each shareholder
who delivered written notice of his intent to demand payment and who did not
vote for the proposed action. Within 20 days after the corporation has provided
this notice, the shareholder must file with the corporation a notice of his
election to dissent and must simultaneously surrender certificates representing
his shares. The notice of election must be in the form specified under the act.
We will provide you with complete disclosure documentation, including audited
financial statements, concerning a target company and its business prior to any
merger or acquisition.
Item 12. Indemnification of Directors and Officers.
Our director is bound by the general standards for directors provisions in
Florida law. These provisions allow him in making decisions to consider any
factors as he deems relevant, including our long-term prospects and interests
and the social, economic, legal or other effects of any proposed action on the
employees, suppliers or our customers, the community in which the we operate
and the economy. Florida law limits our director's liability.
We have agreed to indemnify our director, meaning that we will pay for
damages they incur for properly acting as director. The SEC believes that this
indemnification may not be given for violations of the Securities Act of 1933
that governs the distribution of our securities.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the registrant
under the foregoing provisions, the registrant has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against the public policy as expressed in the securities Act and is therefore,
unenforceable.
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Item 13. Financial Statements and Supplementary Data.
FINANCIAL STATEMENTS
CHINA DALIAN SHIPPING GROUP, INC.
(A Development Stage Enterprise)
TABLE OF CONTENTS
--------------------------------------------------------------------------------
Independent Auditors' Report F-2
Financial Statements as of and for the period October 2, 2000
(date of incorporation) to October 3, 2000
Balance Sheet F-3
Statement of Operations F-4
Statement of Stockholders' Deficit F-5
Statement of Cash Flows F-6
Notes to Financial Statements F-7
-------------------------------------------------------------------------------
F-1
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors of China Dalian Shipping Group, Inc.:
We have audited the accompanying balance sheet of China Dalian Shipping Group,
Inc. Inc. (the "Company"), a development stage enterprise, as of October 3, 2000
and the related statements of operations, stockholder's deficit and cash flows
for the period October 2, 2000 (date of incorporation) to October 3, 2000. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and the disclosures in the financial statements. An audit also
includes assessing the accounting principles used and the significant estimates
made by management, as well as the overall financial statement presentation. We
believe our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of October 3,
2000 and the results of its operations and its cash flows for the period October
2, 2000 (date of incorporation) to October 3, 2000 in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Notes A and B to the
financial statements, the Company is in the development stage and will require a
significant amount of capital to commence its planned principal operations and
proceed with its business plan. As of the date of these financial statements, an
insignificant amount of capital has been raised, and as such there is no
assurance that the Company will be successful in its efforts to raise the
necessary capital to commence its planned principal operations and/or implement
its business plan. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to this
matter are described in Note B. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Kingery, Crouse & Hohl P.A.
October 10, 2000
Tampa, FL
F-2
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China Dalian Shipping Group, Inc.
(A Development Stage Enterprise)
BALANCE SHEET AS OF OCTOBER 3, 2000
--------------------------------------------------------------------------------
ASSETS
TOTAL ASSETS $ -
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT:
Preferred stock - no par value: 20,000,000 shares
authorized; zero shares issued and outstanding -
Common stock - no par value: 50,000,000 shares
authorized; 2,000,000 shares issued and outstanding 79
Deficit accumulated during the development stage (79)
------------
Total stockholders' deficit -
------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ -
============
--------------------------------------------------------------------------------
See notes to financial statements
F-3
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China Dalian Shipping Group, Inc.
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS FOR THE PERIOD OCTOBER 2, 2000
(DATE OF INCORPORATION) TO OCTOBER 3, 2000
-----------------------------------------------------------------------------
EXPENSES - Organizational costs $ 79
-----------
NET LOSS $ 79
===========
BASIC AND DILUTED NET LOSS PER SHARE $ 0.00
===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 2,000,000
===========
--------------------------------------------------------------------------------
See notes to financial statements
F-4
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China Dalian Shipping Group, Inc.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' DEFICIT FOR THE PERIOD OCTOBER 2, 2000
(DATE OF INCORPORATION) TO OCTOBER 3, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Par Value Capital Stage Total
-------- --------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Balances, October 2,
2000 (date of
incorporation) - $ - $ - $ - $ -
Issuance of common 2,000,000 79 - - 79
stock
Net loss for the
October 2, 2000
(date of
to October 3, 2000 - - - (79) (79)
----------- --------- ----------- ----------- ----------
Balances, October 3,
2000 2,000,000 $ 79 $ - $ (79) $ -
=========== ========== =========== =========== ===========
</TABLE>
See notes to financial statements
F-5
19
<PAGE>
China Dalian Shipping Group, Inc.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS FOR THE PERIOD OCTOBER 2, 2000
(DATE OF INCORPORATION) TO OCTOBER 3, 2000
--------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ 79
------------
NET CASH USED IN OPERATING ACTIVITIES (79)
------------
CASH FLOWS FROM FINANCING ACTIVITIES -
Proceeds from issuance of common stock 79
------------
CASH PROVIDED BY FINANCING ACTIVITIES 79
------------
NET INCREASE IN CASH AND CASH EQUIVALENTS -
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD -
------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ -
============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
TAXES PAID $ -
============
INTEREST PAID $ -
============
--------------------------------------------------------------------------------
See notes to financial statements
F-6
20
<PAGE>
China Dalian Shipping Group, Inc.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE A - FORMATION AND OPERATIONS OF THE COMPANY
China Dalian Shipping Group, Inc. ("we, us, our") was incorporated under the
laws of the state of Florida on October 2, 2000. We are considered to be in the
development stage as defined in Financial Accounting Standards Board Statement
No 7, and intend to seek, investigate and, if such investigation warrants,
engage in business combinations presented to us by persons or firms who or which
desire to become a Securities and Exchange Commission (the "SEC") reporting
company. Our planned principal operations have not commenced, therefore
accounting policies and procedures have not yet been established. Our fiscal
year end is December 31.
NOTE B - GOING CONCERN
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company will require a
significant amount of capital to commence its planned principal operations and
proceed with its business plan. Accordingly, the Company's ability to continue
as a going concern is dependent upon its ability to secure an adequate amount of
capital to finance its planned principal operations and/or implement its
business plan. The Company's plans include borrowings from management and
negotiating fees with an acquisition candidate, however there is no assurance
that they will be successful in their efforts to raise capital. This factor,
among others, may indicate that the Company will be unable to continue as a
going concern for a reasonable period of time.
NOTE C - INCOME TAXES
During the period October 2, 2000 (date of incorporation) to October 3, 2000, we
recognized losses for both financial and tax reporting purposes. Accordingly, no
deferred taxes have been provided for in the accompanying statement of
operations.
F-7
21
<PAGE>
NOTE D - RELATED PARTY TRANSACTIONS
No amounts have been ascribed to services provided by the Company's officers in
the accompanying statement of operations as management believes that the value
of services provided by its officers was not significant during the period
October 2, 2000 (date of incorporation) to October 3,2000
NOTE E - LOSS PER SHARE
We compute net loss per share in accordance with SFAS No. 128 "Earnings per
Share" ("SFAS No. 128") and SEC Staff Accounting Bulletin No. 98 ("SAB 98").
Under the provisions of SFAS No. 128 and SAB 98, basic net loss per share is
computed by dividing the net loss available to common stockholders for the
period by the weighted average number of common shares outstanding during the
period. Diluted net loss per share is computed by dividing the net loss for the
period by the number of common and common equivalent shares outstanding during
the period. There were no common equivalent shares outstanding as of December
31, 1999.
-------------------------------------------------------------------------------
F-8
22
<PAGE>
INDEX TO EXHIBITS
-----------------------------------------------------------------------
SEC REFERENCE TITLE OF DOCUMENT LOCATION
NUMBER
-----------------------------------------------------------------------
3.1 Articles of Incorporation Page 26
-----------------------------------------------------------------------
3.2 Bylaws Page 38
-----------------------------------------------------------------------
23.1 Consent of Beard, Nertney, Page 43
Kingery, Crouse & Hohl, P.A.
-----------------------------------------------------------------------
23
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
China Dalian Shipping Group
Date: October 13, 2000_____
By:_____/s/ Yale Yu________
Yale Yu, President
24
<PAGE>
Date Filed: October 13, 2000 SEC File No._______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
REGISTRATION STATEMENT
ON FORM 10
UNDER
THE SECURITIES ACT OF 1934
China Dalian Shipping Group
(Consecutively numbered pages 26 through 44 of this Registration Statement)
---- ----
25
<PAGE>
