U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q-SB
General Form for Registration of Securities
of Small Business Issuers
Under Section 12(b) or (g) of
the Securities Exchange Act of 1934
Bluepoint Linux Software Corp.
------------------------------
(Exact name of Registrant as specified in charter)
Indiana 0-25797 35-2070348
(State or other jurisdiction (Commission (I.R.S. Employee
of incorporation) File Number) Identification No.)
1406 Building A, Electronics, Science and Technology Building,
2070 Shennan Zhong Road
Shenzhen, Zhonghi Province, China
(Address of principal executive offices)
Registrant's telephone number, including area code: 011867553783102
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding as of September 30, 2000
$0.001 Par Value Class A Common Stock 20,000,000 Shares
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TABLE OF CONTENTS
PART 1 PAGE
ITEM 1. Financial Statements 3
ITEM 2. Management's Discussion And Analysis Or Plan Of Operation 9
ITEM 3. Events Subsequent To The Second Quarter 11
ITEM 4. Results Of Operations 11
PART II
ITEM 6. Exhibits And Reports On Form 8-K 11
Signatures 12
Index To Exhibits
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PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements.
The accompanying unaudited financial statements, set forth herein under
Part II as an Exhibit, have been prepared by management in accordance with the
instructions to Form 10-Q and, therefore, do not include all information and
footnotes necessary for a complete presentation of financial position, results
of operations, cash flows and stockholders' equity in conformity with generally
accepted accounting principles. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a normal
recurring nature. Operating results for the quarter ended September 30, 2000,
are not necessarily indicative of the results that can be expected for the
year ending December 31, 2000.
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Bluepoint Linux Software Corp.
Unaudited Consolidated Financial Statements
For the three months ended September 30, 2000
Bluepoint Linux Software Corp.
Index To Unaudited Consolidated Financial Statements
PAGES
Consolidated Balance Sheet F-1
Consolidated Statement of Operations F-2
Consolidated Statement of Cash Flows F-3
Notes to Consolidated Financial Statements F-4
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<TABLE>
<CAPTION>
Bluepoint Linux Software Corp.
Consolidated Balance Sheet
(Expressed in US Dollars)
September 30, March 31,
2000 2000
<S> <C> <C>
Assets (Unaudited) (Audited)
--------------- -----------
Current Assets
Cash and cash equivalents $ 348,106 $ 640,908
Accounts receivable 55,839 24,338
Other receivables, deposits and prepayments 42,169 16,640
Amounts due from directors 31,978 4,420
Inventories 757 8,110
Total current assets 478,849 694,416
Office Equipment, Net 64,530 30,745
Total Assets $ 543,379 $ 725,161
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Accounts payable $ 3,406 $ 3,937
Other payables and accrued expenses 739,399 704,774
Other taxes payable 4,261 560
Total current liabilities 747,066 709,271
Commitments And Contingencies
Stockholders' Equity
Preferred stock, par value $0.001 per share;
20,000,000 shares authorized; none issued or outstanding
Common stock, par value $0.001 per share;
80,000,000 shares authorized;
20,000,000 shares issued and outstanding 20,000 20,000
Additional paid-in capital 4,186 4,186
Accumulated losses (227,873) (8,296)
(203,687) 15,890
Total Liabilities And Stockholders' Equity $ 543,379 $ 725,161
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
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<CAPTION>
Bluepoint Linux Software Corp.
Consolidated Statement Of Operations
(Expressed in US Dollars)
Three From SIX From
Months Ended September 3, Months Ended September 3,
September 30, 1999 (Date of September 30, 1999 (date of
2000 Inception) to 2000 Inception) to
September 30, September 30,
1999 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C>
Net sales
$ 158,766 $ - $ 292,618 $ -
Cost Of Sales (65,333) - (74,736) -
Gross Profit 93,433 - 217,882 -
Selling Expenses (90,712) - (218,904) -
General And
Administrative Expenses (142,633) (3,307) (223,773) (3,307)
Operating Loss (139,912) (3,307) (224,795) (3,307)
Interest Income 3,294 - 5,218 -
Loss Before Income Tax (136,618) (3,307) (219,577) (3,307)
Provision For Income Tax - - - -
Net Loss $(136,618) $ (3,307) $(219,577) (3,307)
Earnings Per Share
- Basic And Diluted $ - $ - $ - $ -
Weighted Average
Common Shares
Outstanding
- Basic And Diluted 20,100,000 20,100,000 20,100,000 20,000,000
</TABLE>
See Accompanying Notes To Unaudited Consolidated Financial Statements.
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<TABLE>
<CAPTION>
Bluepoint Linux Software Corp.
Consolidated Statement Of Cash Flows
(Decrease)/Increase In Cash And Cash Equivalents
(Expressed In Us Dollars)
From September 3,
Six 1999 (Date Of
Months Ended Inception) To September 30,
September 30, 2000 1999
-------------------- -----------------------------
<S> <C> <C>
(Unaudited) (Unaudited)
-------------------- -----------------------------
Cash Flows From Operating Activities
Net Loss $ (219,577) $ (3,307)
Adjustments To Reconcile Net Loss
To Net Cash Used In Operating Activities
Depreciation Of Office Equipment 3,946 -
Changes In:
Accounts Receivable (31,501) -
Other Receivables, Deposits And Prepayments (25,529) (1,046)
Amount Due From Directors (27,558) -
Inventories 7,353 (816)
Accounts Payable (531) -
Other Payables And Accrued Expenses 34,625 966
Other Taxes Payable 3,701 -
Net Cash Used In Operating Activities (255,071) (4,203)
Cash Flows From Investing Activities
Acquisition Of Equipment (37,731) (3,988)
Net cash used in investing activities
(37,731) (3,988)
Cash flows from financing activities
Capital Contribution From Stockholders - 24,155
Net cash provided by financing activities
- 24,155
Net (Decrease)/Increase In Cash And Cash Equivalents (292,802) 15,964
Cash and cash equivalents at beginning of period
640,908 -
Cash And Cash Equivalents At End Of Period $ 348,106 $ 15,964
</TABLE>
see accompanying notes to unaudited consolidated financial statements.
<PAGE>
Bluepoint Linux Software Corp.
Notes To Consolidated Financial Statements
(Expressed In Us Dollars)
Note 1 - Basis Of Presentation
The accompanying financial statements as of September 30, 2000 and for the six
months ended September 30, 2000, 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. However, the company believes that the disclosures are adequate to
make the information presented not misleading. These financial statements
should be read in conjunction with the financial statements and the notes
thereto included in the company audited annual financial statements for the
period ended March 31, 2000.
The preparation of financial statements in conformity with general accepted
accounting principles requires management to make estimates that affect the
reported amounts of assets, liabilities, revenues and expenses and the
disclosure of contingent assets and liabilities. Actual results could differ
from these estimates.
In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows as of September 30, 2000 and for the six
months ended September 30, 2000, have been made. The results of operations for
the six months ended September 30, 2000 are not necessarily indicative of the
operating results for the full year.
Note 2 Going Concern
As of September 30, 2000, the company has suffered accumulated losses of
$227,873. Historically, the company major stockholders provided the company with
financing sources. While there is no assurance that funding will be available,
the company is continuing to actively seek funding to operate as a going concern
through equity and/or debt financing. There is an uncertainty that management
fund raising exercise will be successful. The accompanying financial statements
do not include any provisions or adjustments, which might result from the
outcome of the uncertainty discussed above.
Note 3 Commitments And Contingencies
Operating Lease Commitment
As of September 30, 2000, the company had commitments under non-cancellable
operating leases expiring in excess of one year amounting to $55,077. Rental
payments for each of the succeeding periods are:
October 1, 2000 To September 30, 2001 $ 48,520
October 1, 2001 To September 30, 2002 6,557
$ 55,077
<PAGE>
Item 2.Management Discussion And Analysis Of Results Of Operations And
Financial Conditions
The following discussion and analysis should be read in conjunction with
the company financial statements and notes thereto included elsewhere in this
Form 10-QSB. Except for the historical information contained herein, the
discussion in this form 10-qsb contains certain forward looking statements that
involve risks and uncertainties, such as statements of the company plans,
objectives, expectations and intentions. The cautionary statements made in this
Form 10-QSB should be read as being applicable to all related forward statements
wherever they appear in this form 10-QSB. The company actual results could
differ materially from those discussed here.
The company is not aware of any circumstances or trends which would have a
negative impact upon future sales or earnings. There have been no material
fluctuations in the standard seasonal variations of the company business. The
companying financial statements include all adjustments, which in the opinion
of management are necessary in order to make the financial statements not
misleading.
As discussed in the company annual report filed on form 10-KSB on July 13,
2000, on Jnuary 7, 2000, Bluepoint (formerly known as Sinx) entered into a plan
of agreement and reorganization (the agreement with Mas Acquisition XI Corp.
(mas), an Indiana corporation. Prior to the agreement, on January 5, 2000, mas
cancelled 8,203,133 shares of its common stock. The agreement called for mas to
effectuate a 15 for 1 forward stock split. As consideration for the acquisition
of Sinx, the company issued 15,500,000 restricted shares of the company par
value $0.001 common stock to the original owners of Sinx, leaving a total of
20,000,000 shares of common stock issued and outstanding. As result of the
agreement between the company and Bluepoint, Bluepoint became and operates as, a
wholly owned subsidiary of mas. The company formally changed its name to
Bluepoint Linux Software Corp. on February 17, 2000 to reflect the fact that
Sinx is best known for its Bluepoint Linux operating system. Bluepoint is a
leading provider of Chinese Linux Operating System, embedded system and Linux
Solutions in China.
Results of operations (expressed in us dollars).
Three months ended September 30, 2000 compared to three months ended
September 30, 1999, and six months ended September 30, 2000 compared to six
months ended September 30, 2000.
Three Months Ended Six Months Ended
September September September September
30, 2000 30, 1999 30, 2000 30, 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
$ - $ - $ - $ -
Net Sales 158,766 292,618
Net sales were derived principally from Bluepoint Linux Software packages
sales, licensing Bluepoint Linux to PRC original equipment manufacturers of
personal computers and providing Linux application solution to enterprise
customers.
Cost and operating expenses were consisted principally of the cost of
software packages sold, salary for program engineers, cost of promotion and
advertisement, rental expenses for office, depreciation and other
miscellaneous expenses.
The increase of costs in comparison with last three months was principally
attributable to expenditures incurred to support the increase in net sales and
technical development, including an increase in staff headcount from 24 as of
July 1, 2000 to 35 as of September 30, 2000.
In order to recruit experienced computer engineers, the company has to
increase the staff salary to a competitive market level.
liquidity and capital resource
During the second quarter ended September 30, 2000, the net decrease in
cash and cash equivalent was $162,296. In order to cope with business growth,
the net cash used in operating activities was $133,781.
In order for the company to meet its continuing cash requirements and to
successfully implement its growth strategy, the company will need to rely on
increased future revenue and/or will require additional financing. In the event
additional financing is required, no assurances can be given that such financing
will be available in the amount required or, if available, that it can be on
terms satisfactory to the company.
Business risks
Due to the infant stage of its operations, the company is facing two risks,
namely, market risk and technical risk. If the company cannot get sufficient
funding, the company cannot quickly capture large market share in Linux
operating system market and embedded Linux market in china and in the world
market.
Competition
the company has a leading position in the Chinese Linux operating system
market and embedded Linux market. However, the company is facing competition
from both Chinese companies and other companies.
Management of growth
If the company is successful in implementing its growth strategy, the
Company believes it can undergo a period of rapid growth. Besides its Linux
Operating system and Linux solution business, the company is making significant
Progress in its embedded Linux business. The company is developing an embedded
Linux intelligent housing system for a real estate company. The company also
Signed letters of intent to develop embedded system for set-top box with bridge
Group and t&w electronics (Shenzhen) co., ltd. The company believes that
Revenue from set-top box and intelligent housing system will be generated in the
First quarter of 2001.
To further that end, Bluepoint entered into the following agreements: on
July 7, 2000, Bluepoint signed a cooperation agreement with Beijing Globel
Sunsea Company. The two parties will cooperate on the Linux embedded system
Development and will further sign new development agreement; on July 28, 2000,
Bluepoint signed an agreement with Core Pacific-Yamaichi international (H.K.)
Limited (herinafter CPYI )to appoint CPYI as the underwriter and financial
Consultant; on July 28, 2000, Bluepoint signed an agreement with the Debole
Electronic Development, limited to cooperate on the development of the e-home
Project; on September 11, 2000 Bluepoint signed a cooperation research and
Development agreement with Net-Tech Linux (bv1) limited, for the cooperation on
Developing Net-Tech Linux server application service (e-office of the Linux
Embedded software) and, on September 30, 2000, Bluepoint signed a cooperation
Agreement with the Shenzhen career technology school to set up the southern
China Linux training center.
Part II Other Information
Item 1. Legal Proceedings
None.
Item 2. Changes In Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission Of Matters To A Vote Of Securities Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits And Reports On Form 8-K
Exhibit 27 Financial Data Schedule. (Filed Herewith.)
<PAGE>
Signatures
In accordance with the requirements of the Exchange Act, the company caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BLUEPOINT LINUX SOFTWARE CORP.
BY:/S/YU DENG
BY:/S_______________________________________________________
YU DENG, PRESIDENT, CHAIRMAN OF THE BOARD & DIRECTOR
DATE: AUGUST 14, 2000
