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 June 30, 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: August 7, 1996 - 6,960,346
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Greater China Corporation (formerly Brighton Information
Systems Corporation) and Subsidiaries
FORM 10-Q SB
FOR THE QUARTER ENDED June 30, 1996
INDEX Page #
Part I Financial Information
Item 1.
Financial Statements 3
Consolidated Balance Sheet at June 30, 1996
and Consolidated Balance Sheet at
September 30, 1995 4
Consolidated Statements of Operations for
the Period from October 1, 1995 through
June 30, 1996 and from October 1, 1994
through June 30, 1995 6
Consolidated Statements of Operations for
the Period from April 1, 1996 through
June 30, 1996 and from April 1, 1995
through June 30, 1995 7
Consolidated Statements of Cash Flows for
the Period from October 1, 1995 through June
30,1996 and from October 1, 1994
through June 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 Securities-----------------12
Item 4: Submission of Matters to a Vote of
Securities Holders----------------------------12
Item 5: Other Information-------------------------------13
Signature Page----------------------------------------------------14
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<TABLE>
GREATER CHINA CORPORATION
(f / k / a Brighton Information Systems Corporation)
(formerly Brighton Information Systems Corporation) and Subsidiaries
Unaudited Consolidated Balance Sheet at June 30, 1996 and
Consolidated Balance Sheet at September 30, 1995
(Unaudited)
<CAPTION>
June 30, 1996 September 30, 1995
ASSETS (Unaudited) (Audited)
<S> <C> <C>
Current Assets:
Cash $ 492 $267,680
Compensating balances
Receivables
Trade 141,838 227,300
Other receivables 136,206 133,909
Inventories 297,705 348,577
Prepaid expenses and
other current assets 299,214 183,031
---------- --------
Total Current Assets 875,455 1,160,497
Fixed assets, net 141,478 165,019
Due from related parties 228,987 68,916
---------- ----------
Total Assets $1,245,920 $1,394,432
<FN>
See accompanying notes to unaudited consolidated financial
statements.
</TABLE>
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<TABLE>
Greater China Corporation
(formerly Brighton Information Systems Corporation) and
Subsidiaries
Unaudited Consolidated Balance Sheet at June 30, 1996
and
Consolidated Balance Sheet at September 30, 1995
<CAPTION>
June 30, 1996 September 30, 1995
LIABILITIES AND (Unaudited) (Audited)
STOCKHOLDERS' EQUITY
(Net Capital Deficiency)
<S> <C> <C>
Current Liabilities:
Notes payable $220,563 $25,000
Short term debt
Trade accounts payable 596,823 723,100
Other payables 55,688
Accrued expenses 336,311 503,921
Deferred revenue
Customer deposits 24,748 13,741
Due to related parties 1,230,080 1,036,806
--------- ----------
Total Current Liabilities 2,464,213 2,302,568
Provision for income tax
Liability for issuance of
common stock 8% Subordinated
Convertible Debentures,
Due December 1, 1997 125,000
Total Liabilities 2,589,213 2,302,568
-------------- -----------
Stockholders' Equity:
Capital stock 129,117 108,549
Additional paid-in capital 6,368,111 5,803,680
Foreign currency translation
adjustment (5,334) (3,951)
Accumulated deficit (7,796,832) (6,778,059)
Treasury stock (38,355) (38,355)
--------- -------------
Total Stockholders' Equity (1,343,293) (908,136)
Total Liabilities and Stockholders $1,245,920 $1,394,432
Equity
<FN>
See Accompanying Notes to Unaudited Consolidated Financial Statements
</TABLE>
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<TABLE>
Greater China Corporation
(formerly Brighton Information Systems Corporation) and
Subsidiaries
Unaudited Consolidated Statements of Operations for
the period October 1, 1995 to June 30, 1996 and
October 1, 1995 to June 30, 1995
<CAPTION>
1996 1995
----- ------
<S> <C> <C>
Revenues, net $670,369 $2,461,410
Cost of Sales 238,627 1,178,061
-------- ----------
Gross Profit 431,742 1,283,349
Selling, general and 1,446,851 1,665,781
administrative expenses
Depreciation and
amortization 22,504 68,046
--------- ---------
Loss from operations (1,037,613) (450,478)
Other income (expense):
Other income 19,918 82,943
Gain/(Loss) on sale of (231) 112,330
investments
Interest expense 346 (3,874)
-------- --------
Income before income taxes (1,017,580) (259,079)
Income taxes 1,193 (133)
--------- ---------
Net loss (1,018,773) (258,946)
Income/(Loss) per share ($0.18) ($0.05)
<FN>
See Accompanying Notes to Unaudited Consolidated Financial Statements
</TABLE>
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<TABLE>
Greater China Corporation
(formerly Brighton Information Systems Corporation) and Subsidiaries
Unaudited Consolidated Statements of Operations for
the Period from April 1, 1996 to June 30, 1996
and From April 1, 1995 to June 31, 1995
<CAPTION>
1996 1995
------ -------
<S> <C> <C>
Revenues, net $ -0- $ 529,705
Cost of Sales -0- 262,882
-------- -----------
Gross Profit -0- 266,823
Selling, general and
administrative expenses 59,630 495,935
Depreciation and amortization 7,981 21,316
------- --------
Income (Loss) from operations (67,611) (250,428)
Other income (expense):
Other income ( 116) 33,562
Gain / (Loss) on sale of ( 231)
investments
Interest expense
Other expense 346
-------- --------
Income (Loss) before income taxes (67,612) (216,866)
Income taxes 422
------ --------
Net loss ($ 67,612) ($217,288)
----------- ---------
Income (Loss) per share ($0.01) ($0.04)
<FN>
See Accompanying Notes to Unaudited Consolidated Financial Statements.
</TABLE>
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<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) ($1,018,773) ($258,946)
---------- ---------
Adjustments to reconcile net
(Loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 22,504 68,046
Loss on disposal of fixed
assets
Change in foreign currency
translation adjustment
Shares issued as Compensation 95,608
(Increase) Decrease in assets:
Trade receivables 85,462 240,614
Other receivables (2,297)
Due from related parties (160,071) (6,755)
Inventories 50,872 26,825
Prepaid expenses and other (116,183) 40,069
assets
Increase (Decrease) in liabilities:
Trade payables (126,277) (449,897)
Accrued expenses (167,610) (223,651)
Due to related parties 193,274 214,014
Other current liabilities 55,688 (216,205)
Customer Deposits 11,007
---------- ----------
Net Cash provided by (used in) (1,172,404) (470,248)
Operating Activities: ------------ -----------
Cash flows from Investing
Activities:
Disposal of fixed assets 2,171
Purchase of fixed assets (1,134) (35,180)
Investment and Other (1,384) 133,243
Adjustments ------- --------
Net Cash provided (used) by ( 347) 98,063
Investing Activities -------- ---------
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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
(continued)
Cash flows From Financing
Activities
Proceeds/repayment of overdraft (611,779)
borrowing
Short term debt 195,563 125,000
8% Convertible subordinated 125,000
debentures
Sale of common stock 585,000
--------- ------------
Cash Provided by (used in) 905,563 (486,779)
Financing Activities ---------- ------------
Net Increase (Decrease) in Cash (267,188) (858,994)
Cash, at Beginning of Period 267,680 1,132,448
----------- ------------
Cash at end of Period $73,304 $273,454
<FN>
See Accompanying Notes to Unaudited Consolidated Financial Statements.
</TABLE>
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Greater China Corporation
(formerly Brighton Information Systems Corporation) and
Subsidiaries
June 30, 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 as the Company is in the process of a merger.
See Part II, Item 6, "Subsequent Events".
NOTE 2 -- CONTINGENCIES
The company is engaged in various legal proceedings inciden-
tal to its normal business activities. See Part II,
Item 1, "Legal Proceedings".
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GREATER CHINA CORPORATION (FORMERLY BRIGHTON INFORMATION
SYSTEMS CORPORATION) AND SUBSIDIARIES
June 30, 1996
FORM 10Q-SB
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Revenues and Cost of Revenues:
During early 1996,Senior Management met with its Advisory
Board to determine how best to proceed to reach its goals.
After weighing a number of alternatives, management deter-
mined that it was advisable to wind down all unprofitable
operations and focus on new revenue generating
opportunities.
As a result during the third quarter of FY96, ended
June 30, 1996, the Company's unprofitable revenue areas
were wound down and revenues decreased dramatically.
Selling, General and Administrative
Concomitant with the wind down of unprofitable areas of
the Company's operations, selling, general and
administrative expenses during the quarter ended June 30,
1996 were cut substantially to $59,630 as compared to
$495,935 for the comparable period in FY 1995.
Operating and Net Income
As a result of the decrease in revenues and expenses,
the operating loss for the quarter ended June 30, 1996
was $67,612 as compared to $217,288 for the comparable
FY95 period. Year to date net income fell to ($1,018,773)
as compared to $259,079) year to date for FY 1995.
Management plans to write-down a substantial amount of
related party payables during the fourth quarter ending
September 30, 1996. The end result should be a sub-
stantial improvement in year end operating results.
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 June 30, 1996, the
Company's consolidated net working capital was a
negative $1,588,758 as compared to a negative
consolidated net working capital at September 30, 1995
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GREATER CHINA CORPORATION (FORMERLY BRIGHTON INFORMATION
SYSTEMS CORPORATION) AND SUBSIDIARIES
June 30, 1996
FORM 10Q-SB
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
of $1,142,071. For the period ended March 31,1996, the
Company's operations used cash in the amount of
$1,172,404 as compared to the use of $470,278 of cash
for the period ending June 30, 1995.
Cash flow from financing activities for the period
ending June 20, 1996 was $905,563. 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, June 30, 1996, the face value of the 8%
Convertible Debentures was decreased to $125,000 due to
the conversion of $585,000 of those notes into shares of
the Company's common stock.
Net cash available to the company was $ 492 on June 30,
1996 as compared to $267,680 on September 30, 1995 and
$273,454 on June 30, 1995. This decrease in net cash
was due to losses from operations, and net
adjustments in receivables, payables, borrowings and
investments. Since the close of the quarter ended June
30, 1996, management has augmented its cash position
though the sale of restricted shares of the Company's
common stock. (See Part II, Item 6, "Subsequent Events".
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GREATER CHINA CORPORATION (FORMERLY BRIGHTON INFORMATION
SYSTEMS CORPORATION) AND SUBSIDIARIES
June 30, 1996
FORM 10Q-SB
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
A former provider of services to the Company has sued the
Company for breach of contract and other claims in the
amount of $43,701.60 as well as failure to issue 65,750
shares of the Company's Common Stock. The Company intends to
vigorously defend itself against these claims. The Company
believes that it has valid defenses as well as
affirmative claims for relief against the claimant.
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. As of August 15, 1996, all
the outstanding debentures were retired through conver-
sion into Common shares of the Company's stock and all
interest was paid.
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GREATER CHINA CORPORATION (FORMERLY BRIGHTON INFORMATION
SYSTEMS CORPORATION) AND SUBSIDIARIES
June 30, 1996
FORM 10Q-SB
PART II. OTHER INFORMATION (CONTINUED)
Item 6. Subsequent Events
During August 1996, the Company augmented its Cash position
by Raising $100,000 through the sale or restricted shares of
the Company's Common stock.
On August 21st, 1996, the Company announced its intention to
merge with Newsdata Network Systems, Ltd. a Company located
in Beijing, China. Newsdata Network Systems is one of the
foremost information service companies in China. The merger
is expected to be completed on September 15, 1996.
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GREATER CHINA CORPORATION (FORMERLY BRIGHTON INFORMATION
SYSTEMS CORPORATION) AND SUBSIDIARIES
June 30, 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
August 23, 1996 /s PETER R. BARKER
-------------- ----------------------
DATE By: Peter R. Barker
Treasurer<PAGE>
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