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 Corporation
(Exact name of Registrant as specified in its 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,
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 June 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 June 30, 2000
$0.001 Par Value 20,000,000
Class A Common Stock
Shares
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TABLE OF CONTENTS
PART 1
ITEM 1. FINANCIAL STATEMENTS 3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 8
ITEM 3. EVENTS SUBSEQUENT TO THE SECOND QUARTER 8
ITEM 4. RESULTS OF OPERATIONS 9
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
SIGNATURES 11
INDEX TO EXHIBITS 11
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 June 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 June 30, 2000
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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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<CAPTION>
Bluepoint Linux Software Corp.
Consolidated Balance Sheet
(Expressed in US Dollars)
June 30, March 31,
2000 2000
ASSETS (Unaudited) (Audited)
<S> <C> <C>
Current assets
Cash and cash equivalents $ 510,402 $ 640,908
Accounts receivable 48,320 24,338
Other receivables, deposits and prepayments 22,778 16,640
Amounts due from directors 32,769 4,420
Inventories 558 8,110
Total current assets 614,827 694,416
Office equipment, net 38,278 30,745
Total assets $ 653,105 $ 725,161
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities
Accounts payable $ 362 $ 3,937
Other payables and accrued expenses 717,980 704,774
Other taxes payable 1,832 560
Total current liabilities 720,174 709,271
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 (91,255) (8,296)
(67,069) 15,890
Total liabilities and stockholders' equity $ 653,105 $ 725,161
See accompanying notes to unaudited consolidated financial statements.
F-1
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<CAPTION>
Bluepoint Linux Software Corp.
Consolidated Statement of Operations
(Expressed in US Dollars)
Three
Months Ended
June 30, 2000
<S> <C>
Net sales $ 133,852
Cost of sales (9,403)
Gross profit 124,449
Selling expenses (128,192)
General and administrative expenses (81,140)
Operating loss (84,883)
Interest income 1,924
Loss before income tax 82,959)
Provision for income tax -
Net loss $ (82,959)
Loss per share basic and diluted $ -
Weighted average common shares outstanding - basic and diluted 20,000,000
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See accompanying notes to unaudited consolidated financial statements.
F-2
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<CAPTION>
Bluepoint Linux Software Corp.
Consolidated Statement of Cash Flows
Decrease in Cash and Cash Equivalents
(Expressed in US Dollars)
Three
Months Ended
June 30, 2000
<S> <C>
Cash flows from operating activities
Net loss $ (82,959)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation of office equipment 1,683
Changes in:
Accounts receivable (23,982)
Other receivables, deposits and prepayments (6,138)
Amount due from directors (28,349)
Inventories 7,552
Accounts payable (3,575)
Other payables and accrued expenses 13,206
Other taxes payable 1,272
Net cash used in operating activities (121,290)
Cash flows from investing activities
Acquisition of equipment (9,216)
Net cash used in investing activities (9,216)
Net decrease in cash and cash equivalents (130,506)
Cash and cash equivalents at beginning of period 640,908
Cash and cash equivalents at end of period $ 510,402
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See accompanying notes to unaudited consolidated financial statements.
F-3
- -
BLUEPOINT LINUX SOFTWARE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in US Dollars)
NOTE 1 - Basis of Presentation
The accompanying financial statements as of June 30, 2000 and for the three
months ended June 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 June 30, 2000 and for the three
months ended June 30, 2000, have been made. The results of operations for the
three months ended June 30, 2000 are not necessarily indicative of the operating
results for the full year.
NOTE 2 COMMITMENTS AND CONTINGENCIES
Operating lease commitment
As of June 30, 2000, the Company had commitments under non-cancellable
operating lease expiring within one year amounting to $8,534.
Item 2. Managements Discussion and Analysis of Results of Operations and
Financial Conditions.
The following discussion and analysis should be read in conjunction with
the Company's 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's 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's 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's business. The
accompanying 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 January 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.
F-4
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Item 3. Events Subsequent to the Second Quarter
None.
Item 4. Results of Operations
For the three month period ended June 30, 2000 net sales were (Unaudited) =
$133,852. Net sales were derived principally from Bluepoint Linux software
packages sales, licensing Bluepoint Linux to PRC original equipment manufacturer
of personal computers and provision of relative services and web advertisement
in Bluepoint Linux distributions.
Cost consisted primarily of salary for program engineers, cost of promotion,
rental expenses for office, production cost of software packages, depreciation
and other miscellaneous expenses. The increase of costs in comparison with the
period ended three months was primarily attributable to expenditures to support
the increase in net sales and the technical development, including an increase
in staff headcount from 11 as of March 1, 2000, to 24 as of June 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 first quarter ended June 30, 2000, the net decrease in cash and
cash equivalent was $130,506. In order to cope with business growth, the net
cash used in operating activities was $121,290.In order for the Company to meet
its continuing cash requirements and to successfully implement its
growthstrategy, 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 outside of the Peoples' Republic
of China.
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 a Letter of Intent to develop embedded system for set-top box for Bridge
Group in China.
Year 2000 Issue.
The Company experienced no material failures as a result of the Year 2000
Issue and our financial condition and results of operations at and for the
period ended June 30, 2000 were not materially effected by the Year 2000 Issue.
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
(a) Exhibits:
Exhibit Number and Brief Description
Exhibit 27 Financial Data Schedule. (Filed herewith.)
(b) Reports on Form 8-K
1. On April 18, 2000, the Company filed a current report on Form 8-K/A to
provide the required financial statements in connection with the acquisition of
BluePoint Linux Software Corp. (Formally known as, Shenzhen Sinx Software Co.,
Ltd.), which had been reported on a current report on Form 8-K, filed February
18, 2000
2. On June 20 , 2000, the Company filed a current report on Form 8-K to report
that it had changed its independent accountants from Tubbs & Bartnick, P.A. to
BDO International.
3. July 18, 2000, the Company filed a current report on Form 8-K/A to amend the
current report on Form 8-K filed on June 20, 2000.
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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
