SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
Commission File Number 0-7619
POWERSOFT TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 93-063633
(State or other jurisdiction of (I.R.S. Employer
corporation or organization) Identification No.)
650 West Georgia Street, Suite 1088, Vancouver, British Columbia Canada V6B 4N8
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (604) 685-8318
Heng Fai China Industries, Inc.
(Former name, former address and former fiscal year,
if changed since last report.
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__
15,559,542 shares of common stock, $.01 par value, were issued and outstanding
as of March 31, 1998.
<PAGE>
POWERSOFT TECHNOLOGIES, INC.
FORM 10-Q
FOR THE
QUARTER ENDED MARCH 31, 1998
INDEX
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements ............................................. 1
Condensed Consolidated Balance Sheets as at
March 31, 1998 and December 31, 1997 ............................. 2
Condensed Consolidated Statements of Operations for the
three months ended March 31, 1998 and 1997 ....................... 3
Condensed Consolidated Statements of Cash Flows for the
three months ended March 31, 1998 and 1997 ....................... 4
Condensed Consolidated Statement of Shareholders' Equity for
the three months ended March 31, 1998 and 1997 ................... 5
Notes to the Condensed Consolidated Financial Statements ......... 6
Item 2. Management Discussion and Analysis of Financial
Condition and Results of Operations .............................. 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ................................................ 14
Item 2. Changes in Securities ............................................ 14
Item 3. Defaults Upon Senior Securities .................................. 14
Item 4. Submission of Matters to a Vote of Security Holders .............. 14
Item 5. Other Information ................................................ 14
Item 6. Exhibits and Reports on Form 8-K ................................. 14
Signature Page............................................................. 15
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<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The following financial statements of Heng Fai China Industries, Inc.
(the "Company") are provided herewith:
(a) Condensed Consolidated Balance Sheets as at March 31, 1998 and
December 31, 1997;
(b) Condensed Consolidated Statements of Operations for the three
months ended March 31, 1998 and 1997;
(c) Condensed Consolidated Statements of Cash Flows for the three
months ended March 31, 1998 and 1997;
(d) Condensed Consolidated Statement of Stockholders' Equity for the
three months March 31, 1998 and 1997; and
(e) Notes to the Condensed Consolidated Financial Statements.
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<PAGE>
Powersoft Technologies, Inc.
formerly Heng Fai China Industries, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(United States Dollars
ASSETS
March 31, March 31,
1998 1997
--------- ---------
Current assets:
Cash and cash equivalents $ 37,066 $ 36,173
Available-for-sale securities (Note 3) 1,277,656 1,507,345
Accounts receivable, trade, less
allowance for doubtful
accounts of $nil 28,852 7,521
Prepaid and other current assets 23,444 32,153
Amounts receivable from related parties 385,900 18,950
----------- -----------
Total current assets 1,752,918 1,602,142
Property, plant and equipment, net 775,268 785,920
----------- -----------
$ 2,528,186 $ 2,388,062
=========== ===========
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Current portion of mortgage
loans payable $ 117,743 $ 115,251
Accounts payable 113,329 148,948
Margin loan payable (Note 3) 3,121,769 3,058,295
Interest payable 37,219 43,319
Security deposits payable 12,119 11,190
Amounts payable to related parties 1,462,904 904,756
----------- -----------
Total current liabilities 4,864,993 4,281,759
----------- -----------
Long-term liabilities:
Mortgage loans payable (Note 4) 830,239 837,966
----------- -----------
Total long-term liabilities 830,239 837,966
----------- -----------
Commitments and contingencies
Shareholders' (deficit) equity:
Preferred stock, $5 par value, 25,000,000
shares authorized, unissued
Common stock, $.01 par value, 30,000,000
shares authorized; issued and
outstanding 1998 and 1997: 15,559,542
shares 155,595 155,595
Contributed surplus 5,385,296 5,385,296
Unrealized loss on available-
for-sale securities (Note 3) (2,533,522) (2,307,267)
Cumulative exchange adjustments (2,774) 1,516
Accumulated deficit (6,171,611) (5,904,303)
----------- -----------
(3,167,046) (2,669,163)
Common stock issued for consulting
services to be received (62,500)
----------- -----------
Total shareholders'(deficit) equity (3,167,046) (2,731,663)
----------- -----------
Total liabilities and shareholders'
(deficit) equity $ 2,528,186 $ 2,388,062
=========== ===========
See the accompanying notes to the Condensed Consolidated Financial Statements.
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<PAGE>
Powersoft Technologies, Inc.
formerly Heng Fai China Industries, Inc.
Condensed Consolidated Statement of Operations
(Unaudited)
(United States Dollars
Three months ended
---------------------------
March 31, March 31,
1998 1997
--------- ---------
Revenues:
Rental income $ 87,555 $ 84,739
Investment income 2,610 78,081
Other Income -- 1,827
---------- ----------
Total revenues 90,165 164,647
---------- ----------
Expenses:
Depreciation 10,209 8,196
Legal and professional fees 1,168 9,547
Consulting fees 62,500 88,000
Consulting fees paid to a
related company 125,000 125,000
Interest expense 88,881 30,350
Foreign exchange (gain)
loss -- (7,950)
Land lease 19,208 20,080
Rental real estate
management fees 5,204 4,089
Salaries -- 4,527
Other operating and
administrative fees 45,303 153,525
---------- ----------
Total expenses 357,473 435,364
---------- ----------
Net loss from continuing
operations (267,308) (270,717)
---------- ----------
Discontinued operations
Cangzhou cement 32,559
Wuhan container 86,011
----------
Net income (loss) from discontinued operations 118,570
----------
Net loss before minority
interest (267,308) (389,287)
Minority interest from
discontinued operations 33,132
---------- ----------
Net loss (267,308) (356,155)
========== ==========
Earnings (loss) per share (basic):
From continuing operations $ (0.017) $ (0.020)
Effect of discontinued
operations (0.017) (0.007)
---------- ----------
Net loss per share $ (0.034) $ (0.027)
========== ==========
Weighted average number
of shares of common stock
outstanding 15,559,542 13,120,147
========== ==========
See the accompanying notes to the Condensed Consolidated Financial Statements.
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<PAGE>
Powersoft Technologies, Inc.
formerly Heng Fai China Industries, Inc.
Condensed Consolidated Statement of Cash Flows
(Unaudited)
(United States Dollars
Three months ended
-------------------------
March 31, March 31,
1998 1997
--------- ---------
Cash flows from operating activities
Net loss $(267,308) $ (356,155)
Adjustments to reconcile net loss
to net cash used in operating activities:
Minority interest -- (33,132)
Depreciation and amortization 10,209 40,372
Consulting fee paid in common stock 62,500 88,000
Changes in working capital components:
Accounts receivable (21,331) (2,291,372)
Inventories -- 1,900,859
Prepaid and other current assets 8,709 (59,154)
Amounts receivable from related parties (366,950) (94,921)
Value added taxes recoverable (198,132)
Prepaid rental 7,229
Accounts payable and accrued expenses (35,709) 125,982
Bills payable (80,723)
Accrued interest (6,100) 3,123
Security deposits payable 929 25,167
Amounts due to related parties 558,148 (809)
Exchange difference (443) (554,764)
--------- ------------
Net cash used in operating activities (57,346) (1,478,430)
--------- ------------
Cash flows from investing activities:
Purchase of available-for-sale securities (2,710,936)
Proceeds from sale of available-for-sale
securities 1,291,805
Purchases of property, plant and
equipment 6,211
--------- ------------
Net cash used in investing activities (1,425,342)
--------- ------------
Cash flow from financing activities:
Common stock issued for cash 1,020,000
Increase in short-term borrowings 659,341
Increase in margin loan payable 63,474 11,842,704
Margin loan repaid (10,591,959)
Mortgage loan repaid (5,235) (4,947)
--------- ------------
Net cash provided by (used in) financing
activities 58,239 2,925,139
--------- ------------
Net increase in cash and
cash equivalents 893 21,367
Cash and cash equivalents, beginning of
the period 36,173 170,259
--------- ------------
Cash and cash equivalents, end of the period $ 37,066 $ 191,626
========= ============
Analysis of the balance of cash and
cash equivalents
Bank balances and cash $ 37,066 $ 191,626
========= ============
See the accompanying notes to the Condensed Consolidated Financial Statements.
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<PAGE>
Powersoft Technologies, Inc.
formerly Heng Fai China Industries, Inc.
Condensed Consolidated Statement of Shareholders' Equity
(Unaudited)
(United States Dollars
Three months ended
---------------------------
March 31, March 31,
1998 1997
----------- ----------
Balance, January 1 $(2,731,663) $ 3,370
----------- ----------
Comprehensive income (loss):
Net loss (267,308) (356,155)
Reversal of expense for common stock issued
for services 62,500 88,000
Change in cummulative exchange
adjustment (4,290) --
Change in net unrealized loss (226,285) (112,111)
----------- ----------
Comprehensive income (loss) (435,383) (380,266)
----------- ----------
Proceeds from private placement 1,020,000
----------- ----------
Balance, June 30, 1998 $(3,167,046) $ 643,104
=========== ==========
See the accompanying notes to the Condensed Consolidated Financial Statements.
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<PAGE>
Powersoft Technologies, Inc.
formerly Heng Fai China Industries, Inc.
Notes to Condensed Consolidated Financial StatementsMarch 31, 1998
(Unaudited)
1. BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. The condensed consolidated financial
statements included herein have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the information
presented not misleading. The condensed consolidated financial statements and
the notes thereto should be read in conjunction with the consolidated financial
statements included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1997. In the opinion of the management of the Company, the
accompanying condensed consolidated financial statements contain all necessary
adjustments to present fairly the financial position, the results of operations
and cash flows for the periods reported. All adjustments are a normal recurring
nature.
The results of operations for the three-month periods ended March 31, 1998 and
March 31, 1997, are not necessarily indicative of the results to be expected for
the full year.
The condensed statements of operations for the three-month period ended March
31, 1997, have been reclassified to conform to the 1998 presentation.
2. CONTINUING OPERATIONS
These condensed consolidated financial statements have been prepared on the
going concern basis of accounting which assumes the Company will realize its
assets and discharge its liabilities in the normal course of business. The
Company is currently operating at a loss and has minimal in net tangible assets.
Should the Company be unable to continue as a going concern it may be required
to realize its assets and settle its liabilities at amounts substantially
different from the current carrying values.
The Company's ability to continue as a going concern is dependent on continued
financial support from its principal shareholder, Fai H. Chan, who has signed a
letter of financial support to the Company.
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<PAGE>
Powersoft Technologies, Inc.
formerly Heng Fai China Industries, Inc.
Notes to Condensed Consolidated Financial StatementsMarch 31, 1998
(Unaudited)
3. AVAILABLE-FOR-SALE SECURITIES
The cost and approximate market value of investment securities were as follows:
March 31, December 31,
1998 1997
--------- ------------
Corporate equity securities (a):
Cost $ 3,811,208 $ 3,814,612
Less gross unrealized losses (2,533,552) (2,307,267)
----------- -----------
Estimated fair value $ 1,277,656 $ 1,507,345
=========== ===========
Carrying value (c) $ 1,277,656 $ 1,507,345
=========== ===========
Margin loan payable (b) $ 3,121,769 $ 3,058,295
=========== ===========
(a) Included in the above securities are 48,535,276 shares at March 31,
1998, and December 31, 1997, representing 3.9 percent of the outstanding
common stock of Heng Fung Holdings Company Limited ("Heng Fung"). These
securities were acquired in 1997 at a cost of $3,811,208 and had a
carrying value of $1,277,656 at March 31, 1998, and $1,507,345 at
December 31, 1997. Fai H. Chan and Robert Trapp, directors of Heng Fung,
are also officers, directors and/or shareholders of the Company.
The investment securities held by the Company are not subject to any
contractual or statutory resale restrictions and any portion of these
securities can be reasonably expected to qualify for sale within one
year.
(b) All investments are pledged to secure the Company's margin loan
payable. The loan is payable on demand and bears interest at Hong Kong
best lending rate (10% at March 31, 1998) plus 3.5% per annum.
(c) At October 31, 1998, the market value of the available-or-sale
securities held by the Company at the balance sheet date amounted to
approximately $450,000.
4. MORTGAGE LOANS PAYABLE:
The mortgage loan which matured and became payable June 15, 1998, has been
extended for an additional five year period.
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<PAGE>
Powersoft Technologies, Inc.
formerly Heng Fai China Industries, inc.
March 31, 1998
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion should be read in conjunction with the Condensed
Consolidated Financial Statements of the Company and the related notes thereto,
and other financial information that is included elsewhere herein or
incorporated by reference.
Introduction
The Company was originally incorporated in 1958 and until June 1994 had been
engaged in business other than those it presently operates.
The Company owns an apartment building in North Vancouver, British Columbia, and
until June 1995 the Company's operations were comprised of that single segment.
In 1995 and 1996, the Company, through various subsidiaries, acquired certain
interests in the People's republic of China ("PRC"), including (i) Min You,
which has an option to lease a production line in Cangzhou Factory for cement
manufacturing; (ii) a 70% interest in Wuhan, a PRC container manufacturer; (iii)
an interest in the duck contract pursuant to which the Company operated a duck
farm in PRC; and (iv) an option to form Heng Li in order to develop a commercial
building in Zhangjiagang PRC.
During the fourth quarter of 1997, the Company determined that it would
discontinue substantially all of its operations in PRC. The divestiture included
(i) the transfer of 81% of the Company's interest in Min You; (ii) effecting an
agreement to reverse the acquisition of a 70% interest in Wuhan; (iii) the
termination of the duck contract; and (iv) the termination of the option to form
Heng Li and cancel the respective joint venture agreement.
Presently the Company retains a 19% interest in Min You, with a full provision
for the permanent dimunition in value, its sole PRC operation, and 100% of the
outstanding stock of Vancouver Hong Kong.
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<PAGE>
Results of Continuing Operations
The three months ended March 31, 1998 as compared to the three months ended
March 31, 1997
There were no significant changes in the revenues and expenses attributable to
the operation of Vancouver Hong Kong's real estate between the first quarter of
fiscal 1998 and the first quarter of fiscal 1997.
Investment income decreased from $78,081 in 1997 to $2,610 in 1998. The Company
has not engaged in investment activity during the quarter ended March 31, 1998.
This is because of the uncertainty related to the international securities
markets. Investment income in 1998 consists of interest income.
Consulting expense decreased from an aggregate of $213,000 in 1997 to $187,500
in 1998. This is due to the Company's reduced use of consulting services.
Interest expense increased from $30,350 for the three months ended March 31,
1997 to $89,032 for the same period in 1998. This is due to the increase in
margin loans payable. The outstanding balance of margin loans payable amounted
to $3,121,769 and $1,739,938 at March 31, 1998, and March 31, 1997,
respectively. Other expenses decreased from $153,525 in 1997 to $45,303 in 1998.
The decrease is due to reduced professional fees and financial, travel and
miscellaneous expenses. The Company experienced no foreign exchange loss for the
three months ended March 31, 1998 as compared to a foreign exchange gain of
$7,950 for the three months ended March 31, 1997.
The Company's net loss from continuing operations for the period ended March 31,
1998 was $267,308, a change of $3,409 compared to a net loss of $270,717 for the
corresponding period in 1997. The net decrease in the net loss was the net
result of (i) a reduction in investment income; (ii) reduced expenses for
overhead and consultants; (iii) an decrease in professional fees included in
other operating and administrative expenses; and (iv) increased interest
expense.
Results of Continuing Operations
The three months ended March 31, 1997 as compared to the three months ended
March 31, 1996
There were no significant changes in the revenues and expenses attributable to
the operation of Vancouver Hong Kong's real estate between the first quarter of
fiscal 1997 and fiscal 1996.
Investment income increased to $78,081 in 1997. There was no investment in
income for the same period in 1996.
The consulting arrangements that caused an expense of $845,051 in the three
months ended March 31, 1996 did not recur in 1997. Consulting fees declined from
$845,051 to $213,000 in 1997. Other operating and administrative expenses
increased in the three months ended March 31, 1997 to $142,340 from $53,166 in
the same period of 1996. The increase is due primarily to increased professional
fees.
-9-
<PAGE>
Interest expense amounted to $30,350 and $21,998 for the three months ended
March 31, 1997 and 1996, respectfully.
The Company's net loss from continuing operations for the period ended March 31,
1997 was $270,717, a change of $619,281 compared to a net loss of $889,998 for
the corresponding period in 1996. The decrease in the net loss was the net
result of (i) an increase in investment income; (ii) a reduction in expenses for
overhead and consultants; (iii) an increase in professional fees included in
other operating and administrative expenses; and (iv) increased interest
expense.
Results of Discontinued Operations
Inflation
The general inflation rate in China was approximately 15%, 8% and 3%per annum in
1995, 1996 and 1997, respectively. In recent years, the PRC Government has taken
steps to control inflation by means of credit restrictions, increase in interest
rates and open market operations, which in turn, lead to a slowdown of the
Chinese economy. The austerity measures implemented by the PRC Government have
continued to affect the operations of Min You and Wuhan Container. Although
there was a sign of easing in such austerity measures, both turnover and profit
margin of Min You and Wuhan Container were still severely affected.
The three months ended March 31, 1998 as compared to the three months ended
March 31, 1997
There has been no activity in the discontinued operations in 1998.
The three months ended March 31, 1997 as compared to the three months ended
March 31, 1996
The cement operation of Min You Cement Company Limited commenced in the second
half of 1995. Cement sales decreased from US$84,158 in 1996 to US$42,163 in
1997. At the same time the cost of cement sales decreased from US$76,531 to
$42,163 in 1997.
Wuhan container experienced a sales of $2,037,158 and cost of sales of
$1,736,449 for the three months ended March 31, 1998. There was no activity for
the corresponding period in 1997.
Both operations operated at less than full capacity because of the impacts of
the austerity measures noted above.
Liquidity and Capital Resources
The net cash used in operating activities cash flows for the three months period
ended March 31, 1998 amounted to $57,346. This is primarily due to the operating
losses experienced. The Company met its working capital requirements from the
proceeds of margin loans, described below and the collection of amounts from
related parties.
During the three months ended March 31, 1998, the Company did not make
additional cash investments in securities or facilities.
-10-
<PAGE>
The net cash provided by financing activities amounted to $58,239 for the three
months ended March 31, 1998. This is due primarily to the increases in margin
loans.
The net cash used in operating activities for the three months period ended
March 31, 1997 amounted to $1,478,430. This was primarily due to the operating
losses experienced, increases in receivables from the container segment and the
payment of amounts that were payable to related parties. The Company met its
working capital requirements from the proceeds of bank borrowings and the
issuance of common shares.
The net cash used in investing activities amounted to US$1,425,342 for the three
months ended March 31, 1997. This is primarily due to the use of cash to pay for
the purchase of investments.
The net cash provided by financing activities amounted to US$2,925,139 for the
three months ended March 31, 1997. This is due to the increases in short term
borrowings and margin loans and the issuance of common shares.
As discussed in the 1997 annual report at Note 2 of the Notes to the
Consolidated Financial Statements, the Company's recurring losses from
operations and minimal net tangible assets raise substantial doubts as to its
ability to continue as a going concern. However, the principal shareholder has
committed to continue providing financial support.
-11-
<PAGE>
Exchange Rate Risk
At present, the Company's revenues and expenses are denominated in U.S. dollars
and Hong Kong dollars and Canadian dollars. In view of the exchange rate pegged
between Hong Kong dollars and U.S. dollars, the Company's Hong Kong operations
are not subject to any direct exposure from the fluctuation of U.S. dollars.
Also, the Company's disposal of its operations in PRC in 1997 nearly eliminates
its exposure to exchange rate risk with the PRC Renminbi. The Renminbi is the
currency of the PRC. The Company is exposed to exchange rate risk in its real
estate operations in Canada. The Company's real estate activity transactions,
including long-term debt are payable in Canadian dollars. The Canadian dollar
has declined in its relation to the U.S. dollar to $1.42 from approximately
$1.36 in 1996.
The Company is not involved in any hedging activities in foreign currencies.
New accounting standards not yet adopted
In February 1998, the FASB issued SFAS No. 132, Employers' Disclosures about
Pensions and Other Postretirement Benefits, which amends the disclosure
requirements for pensions and other postretirement benefits. Adoption of the
standard will not significantly change the Company's financial statement
disclosures.
During April 1998, the AICPA Accounting Standards Executive Committee issued
Statement of Position 98-5, "Reporting on the Costs of Start-up Activities".
Generally the Statement requires that the costs of start-up activities shall be
expensed as incurred, and that upon initial adoption an adjustment to reflect
the cumulative effect of a change in accounting principle shall be recorded.
This statement will be effective for periods beginning after December 15, 1998,
with earlier application permitted.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards 133, "Accounting for Derivative Instruments and
Hedging Activities." This statement establishes accounting and reporting
standards for derivative instruments. It requires an entity to recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. This statement is
effective for fiscal years beginning after June 15, 1999, although early
adoption is permitted.
The Company believes that the effects of adopting these standards will not be
material to the Company's financial position or results of operations.
-12-
<PAGE>
Regional economic developments
Several countries in Asia have recently experienced significant adverse economic
developments including substantial exchange rate fluctuations, inflation, social
unrest, increased interest rates, reduced economic growth rates, corporate
bankruptcies, declines in the market value of shares listed on stock exchanges,
emergency loan agreements with the International Monetary Fund and
government-imposed austerity measures. To date, neither the PRC nor Hong Kong
has experienced these developments to the same extent as many other major Asian
countries. However, there can be no assurance that these economic developments
in other countries will not adversely affect the economy of the PRC or Hong
Kong, or that similar adverse economic developments will not occur in the PRC or
Hong Kong in the future, which could have a material adverse effect on a
Company's financial condition or results of operations.
The year 2000
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. Computer programs
that have sensitive software may recognize a date using "00" as the year 1900
rather than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices or engage
in similar normal business activities. Based on a recent internal assessment,
the Company does not anticipate that the cost of any needed modifications will
have a material effect on results of operations.
There can be no assurance, however, that should the Year 2000 Issue become a
problem, that such problem will be resolved successfully and in a timely fashion
or that any failure or delay by the Company or any third parties which interact
with the Company in achieving Year 2000 compliance will not have an adverse
effect on its operations.
-13-
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults in Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
On March 23, 1998, a majority of the Company's shareholders voted by
written unanimous consent to change the name of the Company from Heng Fai China
Industries, Inc. to Powersoft Technologies, Inc.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
-14-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
POWERSOFT TECHNOLOGIES, INC.
Dated: January 29, 1999 By: /s/Robert H. Trapp
-------------------------
Robert H. Trapp
Secretary and Treasurer
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 37,066
<SECURITIES> 1,277,656
<RECEIVABLES> 414,752
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,752,918
<PP&E> 775,268
<DEPRECIATION> 10,209
<TOTAL-ASSETS> 2,528,186
<CURRENT-LIABILITIES> 4,864,993
<BONDS> 0
0
0
<COMMON> 155,595
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,528,186
<SALES> 0
<TOTAL-REVENUES> 90,165
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 357,473
<LOSS-PROVISION> (267,308)
<INTEREST-EXPENSE> 88,881
<INCOME-PRETAX> (267,308)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> (267,308)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (267,308)
<EPS-PRIMARY> (.034)
<EPS-DILUTED> (.034)
</TABLE>
