UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 18, 2000
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. Employer
of incorporation) File Number) Identification No.)
A301, East-2, SEG Science & Industry Park, Huaqian Road North,
Shenzhen, Guangdong Province, China
(Address of principal executive offices)
Registrant's telephone number, including area code: 00867553763137
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not applicable.
ITEM 2. ACQUISITION AND DISPOSITION OF ASSETS.
Not applicable.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 5. OTHER EVENT.
Not applicable.
ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS.
Not applicable.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Financial Statements: By Current Report on Form 8-K filed February 18, 2000, the
Registrant reported a business combination and indicated that the required
financial statements would be forthcoming within 60 days thereof. The following
financial statements and notes thereto are filed herewith beginning on page F-1.
ITEM 8. CHANGE IN FISCAL YEAR
On February 25, 2000, through a formal corporate resolution, the corporation
changed its fiscal year from March 31st to December 31st.
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SIGNATURES
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 hereunto duly authorized.
Date: April 18, 2000
Bluepoint Linux Software Corp.
By:/s/Yu Deng
-------------
Yu Deng
President, Chairman of the Board
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Shenzhen Sinx Software Co., Ltd.
Report of Independent Auditors
and Financial Statements
For the period from inception to December 31,1999
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Shenzhen Sinx Software Co., Ltd.
Index To Financial Statemats
Pages
-----
Report of Independent Auditors 1
balance Sheet 2
Statement of Operations 3
Statement of Owners' Equity 4
Statement of Cash Flows 5
Notes to Financial Statements 6 - 9
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(SHENZHEN SINX SOFTWARE CO., LTD. LETTERHEAD)
Report of Independent Auditors
To the Board of Directors of
Shenzhen Sinx Software Co., Ltd.
We have audited the accompanying balance sheet of Shenzhen Sinx Software Co.
Ltd. as of December 31, 1999, and the related statements of operations, owners'
equity and cash flows for the period from September 3, 1999 (date of inception)
to December 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards in the United States of America. Those standards require that we plan
and perfom the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable base for our opinion.
In our opinion. the financial statements referred to above present fairly, in
all material respects, the financial position of Shenzhen Sinx Software Co.,
Ltd. as of December 31, 1999 and the results of its operations and casb flows
for the period from September 3, 1999 (date of inception) to December 31, 1999,
in conformity with generally accepted accounting principles in the United States
of America.
By:/s/BDO International
- -----------------------
BDO International
Hong Kong.
March 21, 2OOO
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Shenzhen Sinx Software Co., Ltd.
Balance Sheet
(Expressed in US Dollars)
December 31,
1999
---------------
ASSETS
Current assets
Cash and cash equivalents $ 6,863
Accounts receivable 12,560
Other receivables, deposits and prepayments 1,510
inventories (Note 3) 2,276
---------------
Total current assets 23,209
Equipment, net (Note 4) 3,969
---------------
Total assets $ 27,178
===============
LIABILITIES AND OWNERS' EQUITY
Current liabilities
Other payables and accrued expenses $ 1,330
Other taxes payable (Note 5) 678
---------------
Total current liabilities 2,008
---------------
Commitments snd contingencies (Note 6)
Owners' equity
Registered share capital 24.155
Retained profits 1,015
---------------
Total owners' equity 25,170
---------------
Total liabilities and owners' equity $ 27,178
===============
See accompanying notes to financial statements.
2
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Shenzhen Sinx Software Co., Ltd.
Statment of Operations
(Expressed in US Dollars)
From
inception to
December 31,
1999
---------------
Net sales $ 23,027
Cost of Sales (3,491)
---------------
Gross profit 19,536
Selling expenses (1,690)
General and administrative expenses (16,861)
---------------
Operating income
985
Interest income 30
---------------
Income before income tax 1,015
Provision for income tax (Note 7) _
---------------
Net income $ 1,015
===============
See accompanying notes to financial statements
3
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Shenzhen Sinx Software Co., Ltd.
Statement of Owers' Equity
(Expressed in US Dollars)
Total
Retained Owners'
Amount Profits Equity
------ ------- ------
Balance, September 3, 1999 $ - $ - $ -
Capital contribution 24,155 - 24,155
Net income - 1,015 1,015
--------- ------- ----------
Balance, December 31, 1999 $ 24,155 $ 1,015 $ 25,170
========= ======= ==========
See accompanying notes to financial statements
4
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Shenzhen Sinx Software Co., Ltd.
Statement of Cash Flows
lncrease/(Decrease) in Cash and Cash Equivalents
(Expressed in US Dollars)
From inception to
December 31,
1999
Cash flows from operating activities
Net income $ 1,015
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation 188
Changes in;
Accounts receivable (12,560)
Other receivables, deposits and prepayments (1,510)
Inventories (2,276)
Other payables and accrued expenses 1,330
Other taxes payable 678
-------------
Net cash used in operating activities (13,135)
-------------
Cash flows from investing activities
Acquisition of equipment (4,157)
-------------
Net cash used in investing activities (4,157)
-------------
Cash flows from financing activities
Proceeds from registered capital 24,155
-------------
Net cash provided by financing activities 24,155
-------------
Net increase in cash and cash equivalents
and at end of period $ 6,863
=============
See accompanying notes to financial statements.
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Shenzhen Sinx Software Co., Ltd.
Notes To Financial Statements
(Expressed in US Dollars)
NOTE 1- ORGANIZATION AND DESCRIPTION OF BUSINESS
Shenzhen Sinx Software Co., Ltd. ("the Company") was established in the People's
Republic of China (the "PRC") on September 3, 1999 as a limited liability
company. The Company is owned by four individual PRC citizens, namely Yi Huo Ye,
Yu Deng, Sheng Miao Liao and ZhE Kang.
The Company commenced operations in October 1999 and is engaged in the licensing
of its software, "Bluepoint Linux" to PRC original equipment manufacturers of
personal computers and the sale of "Bluepoint Linux" software packages to
software retailers in the PRC. The Company has been grantcd a ten years
operation period which can be extended with approvals from relevant PRC
authorities.
NOTE 1- SUMMARY OF IMPORTANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements are prepared in accordance with generally accepted
accounting principles in the United States of America.
Foreign Currency Translation and Transactions
The functional currency of the Company is Renminbi (RMB) and the financial
records are maintained and the financial statements are prepared in RMB.
Foreign currency transactions during the period are translated into RMB at the
exchange rates ruling at the transaction dates. Gain and loss resulting from
foreign currency transactions are included in the statement of operations. When
assets, liabilities and equity denominated in RMB are translated into United
States Dollars, translation adjustments are included as a component of owners'
equity.
For the purpose of preparing these financial statements, the financial
statements in RMB have been translated into United Stares Dollars at US$1.00 =
RMB8.30.
Revenue Recognition
Revenue from software sales is recognized when all shipment obligations have
been met, fees are fixed and determinable, collection of sales proceeds is
deemed probable, and persuasive evidence of an agreement exists.
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Shenzhen Sinx Software Co., Ltd.
Notes To Financial Statements
(Expressed in US Dollars)
NOTE 2 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES - Continued
Inventories
Inventory is accounted for on the first in first out basis and is stated at the
lower or cost or market. Market value is determined by reference to the sales
proceeds of items sold in the ordinary course of business after the balance
sheet date or to agreement estimates based on prevailing market conditions.
Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid investments with an original
maturity of three months or less.
Equipment and Depreciation
Equipment is stated at cost. Depreciation is computed using the straight-line
method to allocate the cost of depreciable assets over the estimated useful
lives of the assets as follows:
Estiamted useful life (in years)
--------------------------------
Computer equipment 5
Office equipment 5
Maintenance. Repairs and minor renewals are charged directly to the statement of
operations as incurred. Additions and betterments to plant and equipment are
capitalized. When assets are disposed of, the related cost and accumulated
depreciation thereon are removed from the accounts and any resulting gain or
loss is included in the statement of operations.
Long-lived Assets
The Company periodically reviews their long-lived assets for impairment based
upon the estimated undiscounted future cash flows expected to result from the
use of the asset and its eventual disposition. When events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable, the asset is written down to its net realizable value.
Income Taxes
The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 109. Under SFAS No. 109. deferred tax
liabilities or assests at the end of each period are determined using the tax
rate expected to be in effect when taxes are actually paid or recovered.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amount expected to be realized.
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Shenzhen Sinx Software Co., Ltd.
Notes To Financial Statements
(Expressed in US Dollars)
NOTE 2 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES - Continued
Fair Value of Financial Instruments
The carrying amounts of certain financial instruments approximate their fair
values as of December 31, 1999 because of the relatively short-term maturity of
these instruments.
Use of Estimates
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
New Accountiutg Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS No. 133"), Accounting for
Derivative Instruments and Hedging Activities. SFAS No. 132 requires companies
to recognize all derivative contracts as either assets or liabilities in the
balance sheet and to measure them at fair value. If certain conditions are met.
a derivative may be specifically designated as a hedge, the objective of which
is to match the timing of gain or loss recognition on the hedging derivative
with the recognition of (i) the cbanges in the fair value of the hedged asset or
liability that are attributable to the hedged risk or (ii) the earnings effect
of the hedged forecasted transaction. For a derivative not designated as a
hedging instrument, the gain or loss is recognized as income in the period of
change. SFAS No. 133 as amended by SFAS No. 137 is effective for all fiscal
quarters of fiscal years beginning after June 15, 2000. Based on its current and
planned future activities relative to derivative instruments, the Company
believes that the adoption of SFAS No. 133 will not have a significant effect on
its financial statements.
NOTE 3 - INVENTORIES
December 31,
1999
------------
Finished goods - software packages $ 2,276
============
8
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Shenzhen Sinx Software Co., Ltd.
Notes To Financial Statements
(Expressed in US Dollars)
NOTE 4 - EQUIPMENT, NET
December 31,
1999
Computer equipment $ 3,988
Office equiptment 169
---------------
Less: Accumulated depreciation 188
---------------
$ 3,969
===============
NOTE 5 - OTHER TAXES PAYABLE
Other taxes payable comprise mainly Valued-Added Tax ("VAT") and Business Tax
("BT"). VAT is charged at a rate of 4% on the selling price of the Company's
products. BT is charged at a rate of 5% on the revenue from software licensing.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
Operating Lease Commitment
During the period ended December 31, 1999, the Company incurred lease expenses
amounting to $906. As of December 31, 1999, the Company had commitments under a
non-cancellable operating lease expiring within one year amounting to $302.
NOTE 7 . INCOME TAX
Pursuant to an approval document dated March 21, 2000 issued by the Shenzhen Tax
Bureau, the Company, being a "computer software developer", is eligible to full
exemption from PRC Corporate Income Tax for one year starting from the first
profit making year followed by a 50% reduction in the tax payable in the
following two years.
Accordingly, no provision for income tax has been made for the period.
No provision for deferred taxation has been made as there is no material
temporary difference at the balance sheet date.
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