U.S. Securities and Exchange Commission
Washington, DC 20549
Form 10-Q SB
(Mark One)
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
For the transition period from__________ to __________
Commission File Number 0-15937
GREATER CHINA CORPORATION
(f / k / a Brighton Information Systems Corporation)
_____________________________________________________
(Exact name of small business issuer as specified in its Charter)
Delaware 22-3057451
-------------- ---------------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
27 East 61st Street New York, New York 10021
(Address of principal executive offices)
(212) 935-0561
-----------------
(Issuer's telephone number)
____________________________________________________________
(Former name, former address and former fiscal year, if
changed since last report)
Check whether the issuer (1) filed all reports required to
filed by Section 13 or 15(d) of the Exchange Act during the
past 12 months ( or for such shorter period that the
registrant was required to file such report), and (2) has
been subject to such filing requirements for the past 90
days. Yes.....X..... No..........
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15 (d) of the
Exchange Act after the distribution of securities under a
plan confirmed by a court. Yes.......... No..........
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest
practicable date: May 15, 1996 - 5,975,640
<PAGE>
Greater China Corporation (formerly Brighton Information
Systems Corporation) and Subsidiaries
FORM 10-Q SB
FOR THE QUARTER ENDED March 31, 1996
INDEX Page #
Part I Financial Information
Item 1.
Financial Statements 3
Consolidated Balance Sheet at March 31, 1996
and Consolidated Balance Sheet at
September 30, 1995 4
Consolidated Statements of Operations for
the Period from October 1, 1995 through
March 31, 1996 and from October 1, 1994
through March 31, 1995 6
Consolidated Statements of Operations for
the Period from January 1, 1996 through
March 31, 1996 and from January 1, 1995
through March 31, 1995 7
Consolidated Statements of Cash Flows for
the Period from October 1, 1995 through March
31,1996 and from October 1, 1994
through March 31, 1995 8
Notes to Consolidated Financial Statements 9
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Part II - Other Information
Item 1: Legal Proceedings------------------------------ 12
Item 2: Changes in Securities---------------------------12
Item 3: Defaults upon Senior Securites------------------12
Item 4: Submission of Matters to a Vote of
Securities Holders----------------------------12
Item 5: Other Information-------------------------------12
Signature Page----------------------------------------------------13
<PAGE>
<TABLE>
GREATER CHINA CORPORATION
(f / k / a Brighton Information Systems Corporation)
(formerly Brighton Information Systems Corporation) and Subsidiaries
Unaudited Consolidated Balance Sheet at March 31, 1996 and
Consolidated Balance Sheet at September 30, 1995
(Unaudited)
<CAPTION>
March 31, 1996 September 30, 1995
ASSETS (Unaudited) (Audited)
<S> <C> <C>
Current Assets:
Cash $73,304 $267,680
Compensating balances
Receivables
Trade 161,841 227,300
Other receivables 136,206 133,909
Inventories 297,705 348,577
Prepaid expenses and
other current assets 282,962 183,031
---------- ---------
Total Current Assets 952,017 1,160,497
Fixed assets, net 149,460 165,019
Due from related parties 278,401 68,916
---------- ----------
Total Assets $1,379,877 $1,394,432
<FN>
See accompanying notes to unaudited consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
Greater China Corporation
(formerly Brighton Information Systems Corporation) and
Subsidiaries
Unaudited Consolidated Balance Sheet at March 31, 1996
and
Consolidated Balance Sheet at September 30, 1995
<CAPTION>
March 31, 1996 September 30, 1995
LIABILITIES AND (Unaudited) (Audited)
STOCKHOLDERS' EQUITY
(Net Capital Deficiency)
<S> <C> <C>
Current Liabilities:
Notes payable $175,000 $25,000
Short term debt
Trade accounts payable 668,411 723,100
Other payables 55,688
Accrued expenses 341,168 503,921
Deferred revenue
Customer deposits 24,748 13,741
Due to related parties 1,265,543 1,036,806
--------- ----------
Total Current Liabilities 2,530,558 2,302,568
Provision for income tax
Liability for issuance of
common stock 8% Subordinated
Convertible Debentures,
Due December 1, 1997 500,000
Total Liabilities 3,030,558 2,302,568
-------------- ------------
Stockholders' Equity:
Capital stock 113,700 108,549
Additional paid-in capital 6,008,528 5,803,680
Foreign currency translation
adjustment (5,334) (3,951)
Accumulated deficit (7,729,220) (6,778,059)
Treasury stock (38,355) (38,355)
--------- --------------
Total Stockholders' Equity (1,650,681) (908,136)
Total Liabilities and Stockholders $1,379,877 $1,394,432
Equity
<FN>
See Accompanying Notes to Unaudited Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
Greater China Corporation
(formerly Brighton Information Systems Corporation) and
Subsidiaries
Unaudited Consolidated Statements of Operations for
the period October 1, 1995 to March 31, 1996 and
October 1, 1995 to March 31, 1995
<CAPTION>
1996 1995
----- ------
<S> <C> <C>
Revenues, net $670,369 $1,931,705
Cost of Sales 238,627 915,179
-------- ----------
Gross Profit 431,742 1,016,526
Selling, general and 1,387,221 1,169,846
administrative expenses
Depreciation and
amortization 14,523 46,730
--------- ---------
Loss from operations (970,001) (200,050)
Other income (expense):
Other income 24,714 49,381
Gain/(Loss) on sale of 112,330
investments
Interest expense (3,874)
Other expense (4,680)
-------- --------
Income before income taxes (949,968) (42,213)
Income taxes 1,194 (555)
--------- ---------
Net loss (951,161) (41,658)
Income/(Loss) per share ($0.18) ($0.01)
<FN>
See Accompanying Notes to Unaudited Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
Greater China Corporation
(formerly Brighton Information Systems Corporation) and Subsidiaries
Unaudited Consolidated Statements of Operations for
the Period from January 1, 1996 to March 31, 1996
and From January 1, 1995 to March 31, 1995
<CAPTION>
1996 1995
------ -------
<S> <C> <C>
Revenues, net $302,903 $1,418,624
Cost of Sales 105,872 867,600
-------- -----------
Gross Profit 197,031 551,024
Selling, general and
administrative expenses 674,284 596,507
Depreciation and amortization 5,551 26,291
------- --------
Income (Loss) from operations (482,804) (71,774)
Other income (expense):
Other income 38,786 18,096
Gain / (Loss) on sale of
investments
Interest expense
Other expense (1,599)
-------- --------
Income (Loss) before income taxes (445,618) (53,678)
Income taxes 779 427
------ --------
Net loss ($446,396) ($54,105)
----------- ---------
Income (Loss) per share ($0.08) ($0.01)
<FN>
See Accompanying Notes to Unaudited Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
Greater China Corporation
(formerly Brighton Information Systems Corporation) and Subsidiaries
Unaudited Consolidated Statements of Cash flows for
the Period from October 1, 1995 to March 31, 1996
and From October 1, 1994 to March 31, 1995
<CAPTION>
1996 1995
------ -------
<S> <C> <C>
Cash flows from Operating
Activities:
Net Income / (Loss) ($951,161) ($41,658)
---------- ---------
Adjustments to reconcile net
(Loss) to net cash provided by
(used in) operating
activities:
Depreciation and amortization 14,523 46,730
Loss on disposal of fixed
assets
Change in foreign currency
translation adjustment (1,383)
Shares issued as Compensation 103,108
(Increase) Decrease in assets:
Trade receivables 65,459 133,807
Other receivables (2,297)
Due from related parties (209,485) (6,828)
Inventories 50,872 13,091
Prepaid expenses and other (99,931) 266,271
assets
Increase (Decrease) in liabilities:
Trade payables (54,689) (353,763)
Accrued expenses (162,753) (237,259)
Due to related parties 228,737 (77,758)
Other current liabilities 66,695 (291,338)
---------- ----------
Net Cash provided by (used in) (1,055,413) (445,597)
Operating Activities: ------------ -----------
Cash flows from Investing
Activities:
Disposal of fixed assets 2,171 62,928
Purchase of fixed assets (1,134)
------- --------
Net Cash provided (used) by 1,037 62,928
Investing Activities -------- ---------
Cash flows From Financing
Activities
Proceeds/repayment of overdraft (611,779)
borrowing
Short term debt 150,000 125,000
8% Convertible subordinated 500,000
debentures
Sale of common stock 210,000
--------- ------------
Cash Provided by (used in) 860,000 (486,779)
Financing Activities ---------- ------------
Net Increase (Decrease) in Cash (194,376) (869,448)
Cash, at Beginning of Period 267,680 1,132,448
----------- ------------
Cash at end of Period $73,304 $263,000
<FN>
See Accompanying Notes to Unaudited Consolidted Financial Statements.
</TABLE>
<PAGE>
Greater China Corporation
(formerly Brighton Information Systems Corporation) and
Subsidiaries
March 31, 1996
Notes to Consolidated Financial Statements
NOTE 1 -- BASIS OF PRESENTATION
The unaudited interim consolidated financial statements of
Brighton Information systems corporation and its
subsidiaries (the Company) have been prepared pursuant to
the rules and regulations of the Securities and Exchange
Commission. Accordingly, certain information and footnote
disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These interim
consolidated financial statements should be read in
conjunction with the Company's 1995 audited financial
statements.
In the opinion of management, the interim consolidated
financial statements reflect all adjustments necessary for
fair presentation of the interim periods. The results of
operations for the interim period are not indicative of
results of operations to be expected for the full year.
NOTE 2 -- CONTINGENCIES
The company is engaged in various legal proceedings
incidental to its normal business activities. See Part II,
Item 1, "Legal Proceedings".
<PAGE>
GREATER CHINA CORPORATION (FORMERLY BRIGHTON INFORMATION
SYSTEMS CORPORATION) AND SUBSIDIARIES
March 31, 1996
FORM 10Q-SB
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Revenues and Cost of Revenues:
For the second quarter of FY96, ended March 31, 1996, the
Company's revenues were $670,369 as compared to $1,931,705
for the comparable period of FY95, a decrease of 65%. Cost
of sales for the second quarter of FY 96 were $238,627 as
compared to $915,179 for FY 1995, a decrease of 74%. Gross
Profit for the first quarter of FY96 was $431,742 compared
to $1,016,526 for the FY 1995 period, a decrease of 57% .
The Company's revenues, cost of sales and gross profit were
all substantially less for the current quarter. This
decrease in operating results is in accordance with the
planned winding down of unprofitable lines of business due
to the highly competitive and low margin nature of computer
hardware and software sales in Hong Kong and China at this
time.
Selling, General and Administrative
For the first quarter of FY96, ended March 31, 1996,
selling, general and administrative expenses were
$1,387,221, an 18% increase over the $1,169,846 amount for
the comparable period of FY95. This increase in expenses is
due primarily to restructuring costs incurred preparing the
Company for future business opportunities in the information
processing and distribution field in China. These costs
include legal, accounting, auditing, investor and public
relations and accrued management expenses.
Operating and Net Income
As a result of the increase of expenses and lower sales
revenues, the operating loss for the quarter ended March 31,
1996 was $970,001 as compared to $200,050 for the comparable
FY95 period. Net Income (loss) for the same period was
($951,161) and ($41,658) respectively.
Liquidity and Capital Reserves
The Company's source of funds is from operations, external
debt and equity financings, and funding from related
parties. As of March 31, 1996, the Company's consolidated
net working capital was a negative $1,578,541 as compared
to a negative consolidated net working capital at September
<PAGE>
GREATER CHINA CORPORATION (FORMERLY BRIGHTON INFORMATION
SYSTEMS CORPORATION) AND SUBSIDIARIES
March 31, 1996
FORM 10Q-SB
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
30, 1995 of $1,142,071. During the period ended March 31,
1996,the Company's operations used cash in the amount of
$1,055,413 as compared to the use of $445,597 of cash for
the period ending March 31, 1995.
Cash flow from financing activities for the period ending
March 31, 1996 was $860,000. Financings consisted of
$710,000 of 8% Subordinated Convertible Debentures due
December 31, 1997 and a short term note for $150,000 due on
June 6, 1996. The $150,000 short term note bears an
interest rate of 12% per annum. The lender also retains,
under certain circumstances, warrants to purchase up to
600,000 shares of the Company's common stock at varying
prices. During the period ending, March 31, 1996, the face
value of the 8% Convertible Debentures was decreased to
$500,000 due to the conversion of $210,000 of those notes
into shares of the Company's common stock.
Net cash available to the company was $73,304 on March 31,
1996 as compared to $267,680 on September 30, 1995 and
$263,000 on March 31, 1995. This decrease in net cash was
due to losses from operations, and net adjustments in
receivables, payables, borrowings and investments.
<PAGE>
GREATER CHINA CORPORATION (FORMERLY BRIGHTON INFORMATION
SYSTEMS CORPORATION) AND SUBSIDIARIES
March 31, 1996
FORM 10Q-SB
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
A former provider of services to the Company has asserted
breach of contract and other claims against the Company in
the amount of $87,201.60 as well as failure to issue 87,500
share of the Company's Common Stock. Additionally, a claim
has been made for anticipatory breach of contract in the
amount of $180,000. In the event that the issues cannot be
resolved without litigation, the Company intends to
vigorously defend itself against these claims. The Company
believes that it has valid defenses against these claims as
well as affirmative claims for relief against the claimant.
However, at this early stage, there can be no assurances as
to the resolution or outcome of this matter.
Item 2. Changes in Securities. N/A
Item 3. Defaults Upon Senior Securities. N/A
Item 4. Submissions of matter to a Vote of Security
holders.
As of November 13, 1995, the Company's stockholders
adopted the following resolutions by written consent by
a vote of 2,809,917 shares in favor and none opposed or
abstaining, adopted and approved a Certificate of
Amendment to the Certificate of Incorporation of the
Company, which generally had the effect of (a) changing
the Company's name from ``Brighton Information Systems
Corporation'' to " Greater China Corporation", and (b)
completing a recapitalization of the Company's
securities to decrease the authorized number of shares
of Common Stock of the Company from 100,000,000 shares,
par value $0.02 per share, to 25,000,000 shares, par
value $0.02 per share.
Item 5. Other Information.
On December 1, 1995, the Company issued two 8%
convertible debentures in the amount of $500,000 and
$210,000 respectively, due on December 1, 1997.
Interest is due in quarterly installments commencing on
June 1, 1996. These debentures are convertible into
shares of common stock of the Company at a conversion
price equal to sixty-five percent (65%) of the average
market price of the common stock for a predetermined
period prior to conversion.
<PAGE>
GREATER CHINA CORPORATION (FORMERLY BRIGHTON INFORMATION
SYSTEMS CORPORATION) AND SUBSIDIARIES
March 31, 1996
FORM 10Q-SB
SIGNATURE
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.
GREATER CHINA CORPORATION
---------------------------
Registrant
June 1, 1996 /s PETER R. BARKER
-------------- ----------------------
DATE By: Peter R. Barker
Treasurer
