[X]
|
ANNUAL
REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
[ ]
|
TRANSITION
REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Florida
(State
or other jurisdiction
of
incorporation
or
organization)
|
33-0961490
(I.R.S.
Employer
Identification
No.)
|
101
Xinanyao Street, Jinzhou District
Dalian,
Liaoning Province
(Address
of principal executive
offices)
|
PRC
116100
(Zip
Code)
|
Title
of each class
|
Name
of each exchange on which registered
|
|
None
|
None
|
Large
accelerated filer [ ]
|
Accelerated
filer [ ]
|
Non-accelerated
filer [ X
]
|
PART
I
|
4
|
|
ITEM
1
|
BUSINESS
|
4
|
ITEM
1A
|
RISK
FACTORS
|
6
|
ITEM
1B
|
UNRESOLVED
STAFF COMMENTS
|
8
|
ITEM
2
|
PROPERTIES
|
14
|
ITEM
3
|
LEGAL
PROCEEDINGS
|
14
|
ITEM
4
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
14
|
PART
II
|
15
|
|
ITEM
5
|
MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
|
15
|
ITEM
6
|
SELECTED
FINANCIAL DATA MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
|
15
|
ITEM
7
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
15
|
ITEM
7A
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
16
|
ITEM
8
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
|
21
|
ITEM
9
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
21
|
ITEM
9A
|
CONTROLS
AND PROCEDURES
|
21
|
ITEM
9A (T)
|
CONTROLS
AND PROCEDURES
|
21
|
ITEM
9B
|
OTHER
INFORMATION
|
22
|
PART
III
|
23
|
|
ITEM
10
|
DIRECTORS
AND EXECUTIVE OFFICERS OF THE REGISTRANT
|
23
|
ITEM
11
|
EXECUTIVE
COMPENSATION
|
24
|
ITEM
12
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
|
25
|
ITEM
13
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
|
25
|
ITEM
14
|
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
|
26
|
PART
IV
|
28
|
|
ITEM
15
|
EXHIBITS,
FINANCIAL STATEMENTS SCHEDULES
|
28
|
Fiscal
Year
Ended
September
30,
|
Bid
Prices
|
|||||
Period
|
High
|
Low
|
||||
2005
|
First
Quarter
|
N/A
|
N/A
|
|||
Second
Quarter
|
N/A
|
N/A
|
||||
Third
Quarter
|
N/A
|
N/A
|
||||
Fourth
Quarter
|
$ -
|
$ -
|
||||
2006
|
First
Quarter
|
N/A
|
N/A
|
|||
Second
Quarter
|
N/A
|
N/A
|
||||
Third
Quarter
|
$2.30
|
$0.50
|
||||
Fourth
Quarter
|
$1.75
|
$1.05
|
||||
2007
|
First
Quarter
|
$1.40
|
$1.10
|
|||
Second
Quarter
|
$1.18
|
$0.55
|
||||
Third
Quarter
|
$0.60
|
$0.28
|
||||
Fourth
Quarter
|
$0.31
|
$0.06
|
||||
2008
|
First
Quarter
|
$0.20
|
$0.05
|
|||
Second
Quarter (through January 11, 2008)
|
$0.07
|
$0.06
|
China
Agro Sciences Corp. (1)
|
For
the Years Ended September 30,
|
||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
|||||||
Statement
of Operations Data:
|
|||||||||||
Total
revenues
|
$
|
-
|
12,749,788
|
-
|
-
|
-
|
|||||
Net
income (loss)
|
(2,146,721)
|
1,931,558
|
(287,204)
|
-
|
-
|
||||||
Balance
Sheet Data:
|
|||||||||||
Current
assets
|
$
|
819,465
|
2,537,925
|
252,708
|
-
|
-
|
|||||
Total
assets
|
4,820,815
|
7,843,728
|
6,014,573
|
-
|
-
|
||||||
Current
liabilities
|
1,029,962
|
2,159,855
|
2,504,078
|
-
|
-
|
||||||
Total
liabilities
|
1,371,466
|
2,483,218
|
2,815,144
|
-
|
-
|
||||||
Total
stockholders’ equity
|
3,449,349
|
5,360,510
|
3,199,429
|
-
|
-
|
||||||
Total
dividends per common share
|
-0-
|
-
0
-
|
-
0
-
|
-
|
-
|
(1)
|
The
selected financial data included in this Section is the financial
data for
Ye Shun International, which, with its subsidiary, Runze, contains
all the
operations of the merged company, Dalian Holding Corp. (now China
Agro
Sciences Corp.).
|
September
30, 2007
|
September
30, 2006
|
Percentage
Change
|
|||||
Revenue
|
$
|
-
|
$
|
12,749,788
|
N/A
|
||
Cost
of Sales
|
-
|
9,837,089
|
N/A
|
||||
General
and Administrative Expenses
|
1,042,946
|
981,141
|
6%
|
||||
Impairment
Loss
|
1,103,775
|
-
|
N/A
|
||||
Net
Income (Loss)
|
$
|
(2,146,721)
|
$
|
1,931,558
|
N/A
|
September
30, 2007
|
September
30, 2006
|
Increase
(Decrease)
|
||||||
Cash
|
$
|
114,271
|
$
|
103,817
|
10,454
|
|||
Total
Current Assets
|
819,465
|
2,537,925
|
(1,718,460)
|
|||||
Total
Assets
|
4,820,815
|
7,843,728
|
(3,022,913)
|
|||||
Total
Current Liabilities
|
1,029,962
|
2,159,855
|
(1,129,893)
|
|||||
Total
Liabilities
|
$
|
1,371,466
|
$
|
2,483,218
|
(1,111,752)
|
Payments
due by period (in U.S.
Dollars)
|
|||||||||
Obligations
|
Total
|
1
Year
|
1-3
Years
|
3-5
Years
|
5
Years
|
||||
Long-Term
Debt
Obligations
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
||||
Capital
Lease
Obligations
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
||||
Operating
Lease
Obligations
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
||||
Purchase
Obligations
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
||||
Other
Long-Term
Liabilities
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
||||
Total
Contractual
Obligations
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
Index
to Financial Statements
|
|
Report
of Independent Certified Public Accountants
|
|
Consolidated
Balance Sheet as of September 30, 2007
|
F-1
|
Consolidated
Statement of Operations for the years ended September 30, 2007
and
2006
|
F-2
|
Statement
of Changes in Stockholders’ Equity
|
F-3
|
Consolidated
Statements of Cash Flows for the years ended September 30, 2007
and
2006
|
F-4
|
Notes
to Financial Statements
|
F-5
|
ASSETS
|
||
CURRENT
ASSETS:
|
||
Cash
|
$ 114,271
|
|
Prepaid
financial
consulting expenses
|
405,271
|
|
Due
from affiliated
company
|
291,345
|
|
Other
current
assets
|
8,578
|
|
TOTAL
CURRENT ASSETS
|
819,465
|
|
Property
and equipment, net of
accumulated depreciation
|
4,001,350
|
|
TOTAL
ASSETS
|
$4,820,815
|
|
LIABILITIES
AND OWNERS’EQUITY
|
||
CURRENT
LIABILITIES:
|
||
Accounts
payable
|
$ 996,894
|
|
Accrued
expenses
|
33,068
|
|
TOTAL
CURRENT LIABILITIES
|
1,029,962
|
|
LONG-TERM
DEBT
|
341,504
|
|
OWNERS’EQUITY:
|
||
Common
stock, $0.001
par
value
|
||
100,000,000
shares authorized
|
||
20,000,000
shares issued and outstanding
|
20,000
|
|
Additional
paid-in
capital
|
3,738,900
|
|
Accumulated
deficit
|
(774,060)
|
|
Accumulated
other
comprehensive income
|
464,509
|
|
TOTAL
OWNERS’EQUITY
|
3,449,349
|
|
TOTAL
LIABILITIES AND OWNERS’EQUITY
|
$4,820.815
|
|
YEAR
ENDED SEPTEMBER
30,
|
||||||
2007
|
2006
|
|||||
SALES
|
$ -
|
$12,749,788
|
||||
COST
OF SALES (Note
8)
|
-
|
9,837,089
|
||||
GROSS
PROFIT
|
-
|
2,912,699
|
||||
COSTS
AND EXPENSES:
|
||||||
General
and administrative expenses
|
1,042,946
|
914,385
|
||||
Impairment
loss
|
1,103,775
|
-
|
||||
Government
grant
|
-
|
66,756
|
||||
TOTAL
COSTS AND EXPENSES
|
2,146,721
|
981,141
|
||||
NET
INCOME (LOSS)
|
$(2,146,721)
|
$1,931,558
|
||||
BASIC
AND DILUTED EARNINGS
|
||||||
(LOSS)
PER COMMON SHARE
|
(0.11)
|
$ 0.10
|
||||
WEIGHTED
AVERAGE NUMBER OF COMMON
|
||||||
SHARES
OUTSTANDING
|
20,000,000
|
20,000,000
|
||||
--------COMMON
STOCK--------
SHARES AMOUNT
(See
Note 6)
|
ADDITIONAL
PAID-IN
CAPITAL
|
RETAINED
EARNINGS
(DEFICIT)
|
OTHER
COMPREHENSIVE
INCOME
|
TOTAL
|
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
|
20,000,000
|
20,000
|
-
|
-
|
-
|
20,000
|
|||||
Effect
of stock splits and return of shares
|
(3,738,900)
|
3,738,900
|
-
|
-
|
-
|
||||||
Foreign
currency translation adjustment
|
-
|
-
|
-
|
-
|
209,523
|
209,523
|
|||||
Net
income
|
-
|
-
|
-
|
1,931,558
|
-
|
1,931,558
|
|||||
BALANCE
– SEPTEMBER 30, 2006
|
20,000,000
|
20,000
|
3,738,900
|
1,372,662
|
228,948
|
5,360,510
|
|||||
Foreign
currency translation adjustment
|
-
|
-
|
-
|
-
|
235,561
|
235,561
|
|||||
Net
income (loss)
|
-
|
-
|
-
|
(2,146,722)
|
-
|
(2,146,722)
|
|||||
BALANCE
– SEPTEMBER 30, 2007
|
20,000,000
|
$20,000
|
$3,738,900
|
$ (774,060)
|
$464,509
|
$3,449,349
|
|||||
YEAR
ENDED SEPTEMBER
30,
|
||||||||
2007
|
2006
|
|||||||
OPERATING
ACTIVITIES:
|
||||||||
Net
income (loss)
|
$(2,146,721)
|
$ 1,931,558
|
||||||
Adjustments
to reconcile net income (loss)
|
||||||||
to
net cash provided by operating activities:
|
||||||||
Depreciation
|
462,749
|
420,667
|
||||||
Impairment
loss
|
1,103,757
|
|||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
2,121,681
|
(2,013,529)
|
||||||
Inventories
|
-
|
(274,069)
|
||||||
Prepaid
expenses
|
(405,271)
|
35,560
|
||||||
Other
current assets
|
13,490
|
(6,036)
|
||||||
Accounts
payable
|
(495,251)
|
691,793
|
||||||
Accrued
expenses
|
33,067
|
-
|
||||||
NET
CASH PROVIDED BY OPERATING ACTIVITIES
|
687,519
|
785,944
|
||||||
INVESTING
ACTIVITIES:
|
||||||||
Government
grant for purchase of property and equipment
|
-
|
349,888
|
||||||
Acquisition
of property and equipment
|
-
|
(317,958)
|
||||||
NET
CASH USED IN INVESTING ACTIVITIES
|
-
|
31,930
|
||||||
FINANCING
ACTIVITIES:
|
||||||||
Loans
from affiliated company
|
(653,965)
|
(1,036,017)
|
||||||
NET
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
(653,965)
|
(1,036,017)
|
||||||
EFFECT
OF EXCHANGE RATE ON CASH
|
(23,100)
|
244,710
|
||||||
INCREASE
IN CASH
|
10,454
|
26,567
|
||||||
CASH –
BEGINNING OF YEAR
|
103,817
|
77,250
|
||||||
CASH –
END OF YEAR
|
$ 114,271
|
$ 103,817
|
||||||
Supplemental
disclosures of cash flow information:
|
||||||||
Cash
paid during the year
for:
|
||||||||
Interest
|
$ 3,911
|
$ 66,707
|
||||||
Non-cash
operating
activities:
|
||||||||
Repayment
of accounts payable by inventory
|
$ 421,101
|
$ -
|
||||||
Maintenance,
repairs and minor renewals are charged to expense when incurred.
Replacements and major renewals are capitalized.
|
|
Impairment
of long-lived assets
|
2
|
PROPERTY
AND EQUIPMENT
|
AMOUNT | LIFE | |
Furniture,
fixtures and office equipment
|
$ 21,082
|
5-7 years |
Building
and building improvements
|
4,247,499
|
40 years |
Automobile
|
28,420
|
5 years |
4,297,001
|
||
Accumulated
depreciation
|
295,651
|
|
$4,001,350
|
8
|
RISK
FACTORS
|
-------------------------------------QUARTER-----------------------------------
|
|||||
First
|
Second
|
Third
|
Fourth
|
TOTAL
|
Revenue
|
$ -
|
$ -
|
$ -
|
$ -
|
$ -
|
||||
Operating
loss
|
(208,644)
|
(218,490)
|
(187,153)
|
(1,532,434)
|
(2,146,721)
|
||||
Net
loss
|
(208,644)
|
(218,490)
|
(187,153)
|
(1,532,434)
|
(2,146,721)
|
||||
Basic
and diluted earnings per
common
share
|
(0.01)
|
(0.01)
|
(0.01)
|
(0.08)
|
|||||
-------------------------------------QUARTER-----------------------------------
|
|||||
First
|
Second
|
Third
|
Fourth
|
TOTAL
|
Revenue
|
$986,894
|
$4,827,290
|
$4,094,201
|
$2,841,403
|
$12,749.788
|
||||
Operating
income (loss)
|
169,038
|
1,060,959
|
786,506
|
(84,945)
|
1,931,558
|
||||
Net
income (loss)
|
169,038
|
1,060,959
|
786,506
|
(84,945)
|
1,931,558
|
||||
Basic
and diluted earnings per
common
share
|
N/A
|
N/A
|
0.039
|
0.004
|
ASSETS
|
||
INVESTMENT
IN SUBSIDIARIES
|
$3,449,349
|
|
TOTAL
ASSETS
|
$3,449,349
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||
STOCKHOLDERS’
EQUITY
|
$3,449,349
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$3,449,349
|
|
LOSS
FROM EARNINGS OF SUBSIDIARIES
|
$(2,146,721)
|
NET
INCOME BEFORE INCOME TAXES
|
$(2,146,721)
|
OPERATING
ACTIVITIES:
|
|
Net
loss
|
$(2,146,721)
|
Adjustments
to reconcile net income to net
|
|
cash
provided by operating activities:
|
|
Loss
from earnings of subsidiaries
|
(2,146,721)
|
NET
CASH PROVIDED BY OPERATING ACTIVITIES
|
-
|
CASH
– BEGINNING OF PERIOD
|
-
|
CASH
– END OF PERIOD
|
$ -
|
Name
|
Age
|
Position(s)
|
||
Zhengquan
Wang
|
63
|
Chief
Executive Officer, Chief Financial Officer, Secretary, and Director
(2006)
|
Annual
Compensation
|
Long
Term Compensation
|
|||||||||
Awards
|
Payouts
|
|||||||||
Name
and
Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Other
Annual
Compensation
($)
|
Restricted
Stock
Awards
($)
|
Securities
Underlying Options SARs
(#)
|
LTIP
Payouts
($)
|
All
Other
Compensation
($)
|
||
Zhengquan
Wang
|
2007
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
||
Chief
Executive Officer, Chief Financial Officer, Secretary, and
Director
|
2006
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
||
John
C. Leo
|
2006
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
||
Ex-Secretary,
Ex- Director
|
||||||||||
Carl
M. Berg
|
2006
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
||
Ex-Chairman,
Ex-President, Ex-Secretary, Ex-Treasurer
|
2005
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
||
Kevin
J. Gadawski
|
2006
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
||
Ex-Director
|
2005
|
-0-
|
-0-
|
5,000
|
-0-
|
-0-
|
-0-
|
-0-
|
||
Mark
Stewart
|
2006
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
||
Ex-Director
|
2005
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
OPTION/SAR
GRANTS IN LAST FISCAL YEAR
(Individual
Grants)
|
||||
Name
|
Number
of Securities
Underlying
Options/SARs
Granted
(#)
|
Percent
of Total
Options/SARs
Granted
to
Employees In Fiscal
Year
|
Exercise
or Base Price
($/Sh)
|
Expiration
Date
|
Zhengquan
Wang
|
-0-
|
N/A
|
N/A
|
N/A
|
AGGREGATED
OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND
FY-END OPTION/SAR VALUES
|
||||
Name
|
Shares
Acquired On
Exercise
(#)
|
Value
Realized
($)
|
Number
of Unexercised
Securities
Underlying
Options/SARs
at FY-End
(#)
Exercisable/Unexercisable
|
Value
of Unexercised
In-The-Money
Option/SARs
at
FY-End
($)
Exercisable/Unexercisable
|
Zhengquan
Wang
|
N/A
|
N/A
|
N/A
|
N/A
|
Common
Stock
|
|||
Title
of Class
|
Name
and Address
of
Beneficial Owner
|
Amount
and Nature of
Beneficial
Ownership
|
Percent
of
Class (1)
|
Common
Stock
|
Zhengquan
Wang (2)(3)
|
16,000,000
(4)
|
80.0%
(4)
|
Common
Stock
|
All
Directors and
Officers
As
a Group (2
persons)
|
16,000,000
(4)
|
80.0%
(4)
|
|
(1)
|
Unless
otherwise indicated, based on 20,000,000 shares of common stock issued
and
outstanding following the Merger. Shares of common stock subject
to
options or warrants currently exercisable, or exercisable within
60 days,
are deemed outstanding for purposes of computing the percentage of
the
person holding such options or warrants, but are not deemed outstanding
for the purposes of computing the percentage of any other person.
|
|
(2)
|
Indicates
one of our officers or directors.
|
|
(3)
|
Unless
indicated otherwise, the address of the shareholder is 101 Xinanyao
Street, Jinzhou District, Dalian, Liaoning Province, PRC 116100.
|
|
(4)
|
Includes
3,000,000 shares held by Xiufen Bi, 3,000,000 shares held by Qiming
Wang,
2,000,000 shares held by Yinghua Wang, and 2,000,000 shares held
by Feng
Yang, Mr. Wang’s spouse, son, daughter, and son-in-law, respectively.
|
Report
of Independent Certified Public Accountants
|
|
Consolidated
Balance Sheet as of September 30, 2007 and 2006
|
F-1
|
Consolidated
Statement of Operations for the years ended September 30, 2007 and
2006
|
F-2
|
Statement
of Changes in Stockholders’ Equity
|
F-3
|
Consolidated
Statements of Cash Flows for the years ended September 30, 2007 and
2006
|
F-4
|
Notes
to Financial Statements
|
F-5
|
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
|
Rule
13a-14(a)/15d-14(a)
Certification of Chief Executive Officer
|
|
31.2
|
Rule
13a-14(a)/15d-14(a)
Certification of Chief Financial Officer
|
|
32.1
|
Chief
Executive Officer Certification Pursuant to 18 USC, Section 1350,
as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
32.2
|
Chief
Financial Officer Certification Pursuant to 18 USC, Section 1350,
as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
China
Agro Sciences
Corp.
|
|
Dated:
January 15,
2008
|
/s/ Zhengquan Wang |
By:
Zhengquan Wang
|
|
Its:
President, Director,
|
|
Chief
Executive
Officer,
Chief
Financial
Officer
|