Florida
(State
or other jurisdiction of
incorporation
or organization)
|
33-0961490
(I.R.S.
Employer
Identification
No.)
|
100
Wall Street - 15th
Floor
New
York, NY
(Address
of principal executive offices)
|
10005
(Zip
Code)
|
Registrant's
telephone number, including area code (212)
232-0120
|
|
(Former
name or former address, if changed since last
report.)
|
Large
accelerated filer [
]
|
Accelerated
filer [
]
|
Non-accelerated
filer [
X
]
|
PART
I
|
||
ITEM
1
|
FINANCIAL
STATEMENTS
|
1
|
ITEM
2
|
MANAGEMENTS
DISCUSSION AND ANALYSIS OR FINANCIAL CONDITION AND RESULTS
OF
OPERATIONS.
|
10
|
ITEM
3
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
15
|
ITEM
4
|
CONTROLS
AND PROCEDURES
|
16
|
PART
II
|
||
ITEM
1
|
LEGAL
PROCEEDINGS
|
17
|
ITEM
1A
|
RISK
FACTORS
|
17
|
ITEM
2
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
21
|
ITEM
3
|
DEFAULTS
UPON SENIOR SECURITIES
|
21
|
ITEM
4
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
21
|
ITEM
5
|
OTHER
INFORMATION
|
22
|
ITEM
6
|
EXHIBITS
AND REPORTS ON FORM 8-K
|
23
|
|
|||||||
JUNE
30,
2006
|
SEPTEMBER
30,
2005
|
||||||
(Unaudited)
|
(Audited)
|
||||||
ASSETS
|
|||||||
CURRENT
ASSETS:
|
|||||||
Cash
and cash equivalents
|
$
|
195,703
|
$
|
77,250
|
|||
Accounts
receivable
|
4,337,858
|
-
|
|||||
Inventories
|
1,884,721
|
125,567
|
|||||
Prepaid
taxes
|
257,511
|
42,398
|
|||||
Other
current assets
|
15,353
|
7,493
|
|||||
TOTAL
CURRENT ASSETS
|
6,691,146
|
252,708
|
|||||
PROPERTY
AND EQUIPMENT, NET OF
|
|||||||
ACCUMULATED
DEPRECIATION
|
6,268,715
|
5,761,865
|
|||||
TOTAL
ASSETS
|
$
|
12,959,861
|
$
|
6,014,573
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
CURRENT
LIABILITIES:
|
|||||||
Accounts
payable
|
$
|
5,418,261
|
$
|
1,121,271
|
|||
Due
to affiliated company
|
1,289,904
|
1,380,153
|
|||||
Accrued
expenses and sundry current liabilities
|
531,704
|
2,654
|
|||||
TOTAL
CURRENT LIABILITIES
|
7,239,869
|
2,504,078
|
|||||
LONG-TERM
DEBT
|
319,741
|
311,066
|
|||||
STOCKHOLDERS’
EQUITY
|
5,400,251
|
3,199,429
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
12,959,861
|
$
|
6,014,573
|
|
|
|
|
|
THREE
MONTHS ENDED JUNE 30,
|
NINE
MONTHS ENDED JUNE 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
SALES
|
$
|
4,094,201
|
$
|
-
|
$
|
9,908,385
|
$
|
-
|
|||||
COSTS
AND EXPENSES:
|
|||||||||||||
Cost
of sales
|
2,934,109
|
-
|
7,259,998
|
-
|
|||||||||
General
and administrative expenses
|
373,586
|
72,953
|
631,884
|
208,344
|
|||||||||
TOTAL
COSTS AND EXPENSES
|
3,307,695
|
72,953
|
7,891,882
|
208,344
|
|||||||||
NET
INCOME (LOSS)
|
$
|
786,506
|
$
|
(72,953
|
)
|
$
|
2,016,503
|
$
|
(208,344
|
)
|
|||
EARNINGS
PER SHARE
|
$
|
0.04
|
N/A
|
$
|
0.10
|
N/A
|
|||||||
COMMON
STOCK
|
ADDITIONAL
PAID-IN
CAPITAL
|
(ACCUMULATED
DEFICIT)
RETAINED
EARNINGS
|
OTHER
COMPREHENSIVE
INCOME
|
TOTAL
STOCKHOLDERS’
EQUITY
|
COMPREHENSIVE
INCOME
|
||||||||||||||
BALANCE-SEPTEMBER
30, 2005
|
3,738,900
|
$
|
-
|
$
|
(558,896
|
)
|
$
|
19,425
|
$
|
3,199,429
|
$
|
-
|
|||||||
Common
Stock, $0.001 par value,
100,000,000
shares authorized,
20,000,000
shares issued and outstanding
|
20,000
|
-
|
-
|
-
|
20,000
|
-
|
|||||||||||||
Preferred
Stock, $0.001 par value,
5,000,000
shares authorized,
0
shares issued and outstanding
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||
Effect
of stock splits and return of shares
|
(3,738,900
|
)
|
3,738,900
|
-
|
-
|
-
|
-
|
||||||||||||
Translation
adjustment
|
-
|
-
|
-
|
164,319
|
164,319
|
164,319
|
|||||||||||||
Net
income
|
-
|
-
|
2,016,503
|
-
|
2,016,503
|
2,016,503
|
|||||||||||||
Comprehensive
income
|
-
|
-
|
-
|
-
|
-
|
$
|
2,180,822
|
||||||||||||
BALANCE-JUNE
30, 2006
|
20,000
|
$
|
3,738,900
|
$
|
1,457,607
|
$
|
183,744
|
$
|
5,400,251
|
NINE
MONTHS ENDED JUNE 30,
|
|||||||
2006
|
2005
|
||||||
OPERATING
ACTIVITIES:
|
|||||||
Net
income (loss)
|
$
|
2,016,503
|
$
|
(208,344
|
)
|
||
Adjustments
to reconcile net income (loss) to
net
cash provided by operating activities
|
|||||||
Depreciation
|
409,552
|
159,699
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable
|
(4,337,858
|
)
|
(29
|
)
|
|||
Inventories
|
(1,755,652
|
)
|
126,293
|
||||
Prepaid
taxes
|
(213,931
|
)
|
(9,592
|
)
|
|||
Other
current assets
|
(7,651
|
)
|
1,271
|
||||
Accounts
payable
|
4,265,721
|
602,342
|
|||||
Accrued
expenses and other current liabilities
|
528,150
|
203,292
|
|||||
NET
CASH PROVIDED BY OPERATING ACTIVITIES
|
904,834
|
874,932
|
|||||
INVESTING
ACTIVITIES:
|
|||||||
Acquisition
of property and equipment
|
(755,722
|
)
|
(540,380
|
)
|
|||
NET
CASH USED IN INVESTING ACTIVITIES
|
(755,722
|
)
|
(540,380
|
)
|
|||
FINANCING
ACTIVITIES:
|
|||||||
Short-term
bank loan
|
-
|
(363,000
|
)
|
||||
Loan
from affiliated company
|
(128,737
|
)
|
63,451
|
||||
NET
CASH USED IN FINANCING ACTIVITIES
|
(128,737
|
)
|
(299,549
|
)
|
|||
EFFECT
OF EXCHANGE RATE ON CASH
|
21,787
|
-
|
|||||
INCREASE
IN CASH AND CASH EQUIVALENTS
|
42,162
|
35,003
|
|||||
CASH
AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
153,541
|
18,276
|
|||||
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
$
|
195,703
|
$
|
53,279
|
|||
2.
|
PROPERTY
AND EQUIPMENT
|
Amount
|
||||||||||
June
30, 2006
|
September
30, 2005
|
Life
|
||||||||
Machinery
and equipment
|
$
|
2,439,399
|
$
|
2,373,149
|
5-10
years
|
|||||
Furniture,
fixtures and office equipment
|
17,083
|
16,621
|
5-7
years
|
|||||||
Building
and building improvements
|
4,662,885
|
3,798,732
|
40
years
|
|||||||
Automobile
|
13,712
|
13,340
|
5
years
|
|||||||
7,133,079
|
6,201,842
|
|||||||||
864,364
|
439,977
|
|||||||||
Accumulated
depreciation
|
$
|
6,268,715
|
$
|
5,761,865
|
4.
|
LONG-TERM
DEBT
|
5.
|
RISK
FACTORS
|
Three
Months
Ended
June
30,
2006
|
Three
Months Ended
June
30,
2005
|
||||||
Revenues
|
$
|
4,094,201
|
$
|
-
|
|||
Cost
of revenue
|
2,934,109
|
-
|
|||||
General
and Administrative Expenses
|
373,586
|
72,953
|
|||||
Operating
income (loss)
|
$
|
786,506
|
$
|
(72,953
|
)
|
Nine
Months Ended
June
30,
2006
|
Nine
Months Ended
June
30,
2005
|
||||||
Revenues
|
$
|
9,908,385
|
$
|
-
|
|||
Cost
of revenue
|
7,259,998
|
-
|
|||||
General
and Administrative Expenses
|
631,884
|
208,344
|
|||||
Operating
income (loss)
|
$
|
2,016,503
|
$
|
(208,344
|
)
|
As
of
June
30, 2006
|
As
of
September
30, 2005
|
Change
|
|
||||||||||
Cash
and cash equivalents
|
$
|
195,703
|
$
|
77,250 |
$
|
118,453
|
|||||||
Accounts
receivable
|
4,337,858
|
- | 4,337,858 | ||||||||||
Inventories
|
1,884,721
|
125,567 | 1,759,154 | ||||||||||
Accounts
payable
|
5,418,261
|
1,121,271 | 4,296,990 | ||||||||||
Accrued
expenses and sundry current liabilities
|
1,821,608
|
1,382,807 | 438,801 | ||||||||||
Total
current liabilities
|
$
|
7,239,869
|
$
|
2,504,078 |
$
|
4,735,791 |
Director
|
Votes
For
|
Votes
Against
|
Votes
Withheld
|
Abstentions
|
Broker
Non-Votes
|
Zhengquan
Wang
|
6,000,000
|
-0-
|
-0-
|
-0-
|
-0-
|
John
C. Leo
|
6,000,000
|
-0-
|
-0-
|
-0-
|
-0-
|
Votes
For
|
Votes
Against
|
Votes
Withheld
|
Abstentions
|
Broker
Non-Votes
|
6,000,000
|
-0-
|
-0-
|
-0-
|
-0-
|
Votes
For
|
Votes
Against
|
Votes
Withheld
|
Abstentions
|
Broker
Non-Votes
|
6,000,000
|
-0-
|
-0-
|
-0-
|
-0-
|
3.1
(1)
|
Articles
of Incorporation of China Agro Sciences Corp.
|
|
3.2
(1)
|
Bylaws
of China Agro Sciences Corp.
|
|
3.3
(2)
|
Articles
of Amendment to Articles of Incorporation Changing Name to China
Agro
Sciences Corp.
|
|
3.4
(2)
|
Articles
of Merger Merging DaLian Acquisition Corp. into China Agro Sciences
Corp.
|
|
10.1
(3)
|
Agreement
and Plan of Merger dated March 15, 2006
|
|
10.2
(2)
|
Extension
of Closing Date
|
|
10.3
(2)
|
Agreement
to Terminate Warrants dated April 28, 2006 by and between Clark Johnson
and M-GAB Development Corporation
|
|
10.4
(2)
|
Agreement
to Terminate Warrants dated April 28, 2006 by and between AMRES Holding,
LLC and M-GAB Development Corporation
|
|
10.5
(2)
|
Agreement
to Terminate Options dated April 28, 2006 by and between Kevin Gadawski
and M-GAB Development Corporation
|
|
10.6
(2)
|
Agreement
to Terminate Options dated April 28, 2006 by and between Mark Stewart
and
M-GAB Development Corporation
|
|
10.7
(2)
|
Form
N-54C
|
|
31.1
|
||
31.2
|
||
32.1
|
||
32.2
|
China
Agro Sciences Corp.
|
||
|
|
|
Date: August 21, 2006 | By: | /s/ Zhengquan Wang |
Zhengquan
Wang
|
||
President,
Director,
|
||
Chief
Executive Officer,
|
||
Chief
Financial Officer
|