<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
Amendment No. 1 to
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
March 14, 2000
MAIL.COM, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 7310 13-3787073
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(State of other jurisdiction (Commission File Number) (I.R.S.
jurisdiction of Employer Identification
incorporation or organization) No.)
11 BROADWAY, 6TH FLOOR
NEW YORK, NEW YORK 10004
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(Address of principal executive offices)
Registrant's telephone number, including area code (212) 425-4200
N/A
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Former Name or Former Address, if Changed Since Last Report
<PAGE> 2
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of the Current Report on Form 8-K,
originally filed by the registrant with the Securities and Exchange Commission
on March 28, 2000, as set forth in the pages attached hereto:
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired and Mail.com, Inc. Pro Forma
Condensed Combined Financial Information
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Asia.com, Inc.
Independent Auditors' Report 2
Consolidated Balance Sheet as of December 31, 1999 3
Consolidated Statement of Operations for the period from May 17, 1999
(date of inception) to December 31, 1999 4
Consolidated Statement of Stockholders' Equity for the
period from May 17, 1999 (date of inception) to December 31, 1999 5
Consolidated Statement of Cash Flows for the period from May 17, 1999
(date of inception) to December 31, 1999 6
Notes to Consolidated Financial Statements 7
Pro Forma Condensed Combined Financial Information 26
Unaudited Pro Forma Condensed Combined Statement of Operations
for the period from May 17, 1999 (date of inception)
to December 31, 1999 27
Notes to the Unaudited Pro Forma Condensed Combined
Financial Information 29
</TABLE>
1
<PAGE> 3
Independent Auditors' Report to
The Board of Directors
Asia.com, Inc. (formerly eLong.com, Inc.)
We have audited the accompanying consolidated balance sheet of Asia.com, Inc. (a
development stage enterprise) and its subsidiary as of December 31, 1999, and
the related consolidated statement of operations, stockholders' equity and cash
flows for the period from May 17, 1999 (date of inception) to December 31, 1999.
These consolidated financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform 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 basis for our opinion.
As discussed in note 6 to the consolidated financial statements, the group's
operations are subject to extensive regulation and supervision by the People's
Republic of China ("PRC") government. The laws and regulations pertaining to
internet content provider businesses in the PRC are evolving and may be subject
to change.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Asia.com, Inc. and its subsidiary as of December 31, 1999, and the consolidated
results of their operations and their cash flows for the period from May 17,
1999 (date of inception) to December 31, 1999 in conformity with accounting
principles generally accepted in the United States of America.
As described in note 9 to the financial statements, Mail.com, Inc. completed its
acquisition of the company on March 14, 2000.
/S/- KPMG
Hong Kong
May 24, 2000
2
<PAGE> 4
Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1999
(Expressed in United States Dollars, except share amounts)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 332,700
Other receivables and prepaid expenses 50,378
-----------
TOTAL CURRENT ASSETS 383,078
Fixed assets, net of accumulated depreciation if $16,048 248,895
-----------
TOTAL ASSETS $ 631,973
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 21,016
Accrued expenses 32,918
-----------
TOTAL CURRENT LIABILITIES, BEING TOTAL LIABILITIES 53,934
-----------
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value
Authorized - 8,975,000 shares; (See note 4(b)); 2,050
2,050,000 shares issued and outstanding
Preferred Series A stock, $0.001 par value
Authorized - 1,025,000 shares (See note 4(b)); 1,025
1,025,000 shares issued and outstanding
Additional paid-in capital 1,024,988
Deficit accumulated during the development
stage (450,024)
-----------
TOTAL STOCKHOLDERS' EQUITY 578,039
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 631,973
===========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 5
Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD FROM MAY 17, 1999 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
(Expressed in United States Dollars except share and per share amounts)
<TABLE>
<CAPTION>
<S> <C>
REVENUES $ --
OPERATING EXPENSES:
Cost of operations (142,436)
Sales and marketing (175,845)
General and administrative (131,099)
-----------
LOSS FROM OPERATIONS (449,380)
-----------
OTHER INCOME/(EXPENSE)
Interest income 74
Finance charges (718)
-----------
Total other expense, net (644)
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NET LOSS FOR THE PERIOD $ (450,024)
===========
BASIC AND DILUTED NET LOSS PER COMMON SHARE $ (0.22)
===========
WEIGHTED AVERAGE SHARES OUTSTANDING USED IN
COMPUTING BASIC AND DILUTED NET LOSS PER SHARE 2,050,000
===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 6
Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM MAY 17, 1999 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
(Expressed in United States Dollars, except share amounts)
<TABLE>
<CAPTION>
Deficit
accumulated
Additional during the Total
paid-in development stock-holders'
Common stock Preferred Stock capital stage equity
------------ --------------- ------- ----- ------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of 2,000,000 shares
of common stock for
non-cash consideration on 2,000,000 2,000 -- -- -- -- 2,000
May 17, 1999
Issuance of 1,025,000 shares
of "A" preferred stock for
cash from June 15, 1999 to -- -- 1,025,000 1,025 1,023,975 -- 1,025,000
July 30, 1999
Effect of share split
(note 4(b)) 50,000 50 -- -- (50) -- --
Stock compensation costs -- -- -- -- 1,063 -- 1,063
Net loss for the period -- -- -- -- -- (450,024) (450,024)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance at December 31, 1999 2,050,000 $ 2,050 1,025,000 $ 1,025 $ 1,024,988 $ (450,024) $ 578,039
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 7
Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
CASH FLOWS FROM OPERATING ACTIVITIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM MAY 17, 1999 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
<S> <C>
Net loss for the period $ (450,024)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation 16,048
Stock compensation costs 1,063
Common stock issued as non-cash consideration
for organizational activities 2,000
Increase in other receivables and prepaid expenses (50,378)
Increase in accounts payable 21,016
Increase in accrued expenses 32,918
-----------
Net cash used in operating activities (427,357)
-----------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of fixed assets (264,943)
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NET CASH USED IN INVESTING ACTIVITIES (264,943)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of preferred stock 1,025,000
-----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,025,000
-----------
NET INCREASE IN CASH AND CASH EQUIVALENTS AND
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 332,700
===========
SUPPLEMENTAL NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Common stock issued as non-cash consideration
for organizational activities $ 2,000
===========
</TABLE>
See accompanying notes to consolidated financial statements.
6
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Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD FROM MAY 17, 1999 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
(Expressed in United States Dollars, except share amounts)
1 ORGANIZATION AND NATURE OF OPERATIONS
(a) ORGANIZATION
Asia.com, Inc. (formerly eLong.com, Inc) ("the company") was incorporated in
Delaware USA on May 17, 1999 with authorized common stock of 9,000,000 shares of
$0.001 par value and authorized preferred stock of 1,000,000 shares of $0.001
par value (See note 4 (b)).
The company does not have substantive operations of its own and substantially
all of its primary business operations are conducted through its subsidiary,
eLong Net Information Technology Co., Limited a wholly-owned foreign enterprise
which was incorporated during the period and received a license to undertake
business in the People's Republic of China ("the PRC") effective from August 17,
1999. Together the company and its subsidiary are referred to as "the group".
(b) NATURE OF OPERATIONS
The group provides local information on eight major PRC cities to Chinese
language Internet users via its website www.eLong.com. Information is focused on
entertainment, community activities, weather, shopping, sports, businesses and
news, and is used to drive traffic to its site so that banner advertisements can
be bartered or sold on the website. The group also currently provides free
website development services to third-party businesses within its markets and
believes that future revenues may be earned from these activities through
services including website design and maintenance arrangements, and advertising
revenues. Additionally, in the future, the group may provide e-commerce,
business-to-consumer and business-to-business services including product sales,
on-line transaction services, payment processing and fulfilment services for the
group's own websites and for third-party websites.
Since its inception, the group has been in the development stage. The group is
in the process of establishing its products and its markets. Through December
31, 1999, the group had no revenues from operations. The group's ability to
emerge from development stage is ultimately dependent upon the successful
start-up of operations, including attracting advertising revenues from its
website and developing sufficient markets for its web-solutions businesses.
While the group had cash of $332,700 at December 31, 1999, it is not currently
generating significant cash flows from operations. Management believes that the
group will be able to attract additional working capital to fund its
requirements throughout the development stage, including funds committed from
Mail.com, Inc., the group's ultimate parent company following the acquisition
effective March 14, 2000 (See note 9). There
7
<PAGE> 9
Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
can be no assurance, however, that the group's business, once started will be
successful or that the group will emerge from the development stage. (See note 6
for the risks related to the group's ICP operations in the PRC).
8
<PAGE> 10
Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) ACCOUNTING STANDARDS
The accompanying consolidated financial statements have been prepared on a
historical cost basis to reflect the financial position and results of
operations of the group in accordance with accounting principles generally
accepted in the United States of America ("U.S. GAAP"). The consolidated
financial statements are stated in U.S. dollars, the reporting currency of
the company.
(b) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the financial statements of
the company and its subsidiary, a wholly-owned foreign enterprise
incorporated in the PRC. All companies in which the company has a
controlling financial interest through direct or indirect ownership of a
majority voting interest are consolidated. All significant intercompany
balances and transactions have been eliminated in consolidation.
(c) USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
(d) CASH AND CASH EQUIVALENTS
The company considers all highly liquid investments with original
maturities of three months or less when purchased to be cash equivalents.
Cash equivalents are composed primarily of investments in money market
accounts stated at cost, which approximates fair value.
(e) FIXED ASSETS
Fixed assets are stated at cost, net of accumulated depreciation.
Depreciation is calculated using the straight line basis over the
estimated useful lives of the assets generally as follows:
<TABLE>
<S> <C>
Computer equipment and system software 3 years
Furniture, fixtures and office equipment 5 years
</TABLE>
Leasehold improvements are depreciated over the shorter of the estimated
useful lives of the assets or the remaining lease term. Depreciation
expense for the period was $16,048.
9
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Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f) IMPAIRMENT OF LONG-LIVED ASSETS
The company accounts for long-lived assets in accordance with the
provisions of Statement of Financial Accounting Standards ("SFAS") No.
121, "Accounting for the Impairment of Long-lived Assets and for
Long-lived Assets to Be Disposed Of". This statement requires that
long-lived assets and certain identifiable intangibles be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of
assets to be held and used is measured by a comparison of the carrying
amount of an asset to future net cash flows expected to be generated by
the asset. If such assets are considered to be impaired, the impairment to
be recognized is measured by the amount by which the carrying amount of
the assets exceeds the fair value of the assets. Assets to be disposed of
are reported at the lower of the carrying amount or the fair value less
costs to sell.
(g) WEBSITE DEVELOPMENT COSTS
In March 2000, the Emerging Issues Task Force ("EITF") of the Financial
Accounting Standards Board ("FASB") reached a consensus on Issue No. 00-2,
"Accounting for Web Site Development Costs" which provides guidance on
when to capitalize versus expense costs incurred to develop a web site.
The consensus is effective for web site development costs in quarters
beginning after June 30, 2000. For the year ended December 31, 1999, the
group has accounted for these costs in accordance with EITF No. 00-2.
The group capitalizes costs associated with internal processes and
purchased elements for the development of and enhancement to the
functionality of its website. Capitalized costs include (i) external
direct costs of materials and services used in developing the site and
(ii) payroll and payroll-related expenses for employees who are directly
associated with and devote time to the project. Capitalization of such
costs begins when the preliminary project stage is complete and ceases no
later than the point at which the website or separately identifiable
enhancement thereto is substantially complete and ready to be uploaded to
the Internet. During the period ended December 31, 1999 costs meeting the
criteria for capitalization were insignificant.
Capitalized costs, if any, are amortized on a project-by-project basis
over the estimated useful life of each significant enhancement to the
website. On average, the group estimates that significant improvements to
the functionality of the website will have a useful life of three years.
The carrying amount of the capitalized costs will be regularly reviewed
and a loss will be recognized if the amount of estimated undiscounted cash
flow benefits related to the asset fall below the unamortized cost.
(h) FINANCIAL INSTRUMENTS
10
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Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
The group's financial instruments principally consist of cash and accounts
payable. The carrying amounts approximate fair value because of the short
maturities of these instruments.
11
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Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i) INCOME TAXES
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss and tax credit carry forwards. Deferred tax
assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date. A valuation allowance is
recognized to reduce the deferred tax assets if it is more likely than not
that all or some portion of the deferred tax assets will not be realized.
(j) TRANSLATION OF FOREIGN CURRENCIES
The functional currency of the company's subsidiary located in the PRC is
the local currency, the Renminbi ("Rmb"). In accordance with SFAS No. 52,
"Foreign Currency Translation", all assets and liabilities have been
translated to United States dollars using the current exchange rates at
the applicable balance sheet date. As of December 31, 1999 no gains or
losses resulted from the translation of the foreign subsidiary's financial
statements. Gains and losses resulting from the translation of the foreign
subsidiary's financial statements denominated in a functional currency
other than the reporting currency are reported as a separate component of
stockholders' equity. The net gain from foreign exchange transactions
amounted to $9,699 during the period and has been included in the
respective line items of the operating expenses on which such gains and
losses arose.
(k) REVENUE RECOGNITION
The group expects to generate revenues from two primary sources,
advertising services and web-solutions (comprising principally fees earned
from businesses and consumers for website development, and maintenance
services). The group did not recognize any revenues pursuant to the above
transactions during the period from May 17, 1999 (date of inception) to
December 31, 1999. The company has begun to recognize revenue in the first
quarter of 2000.
Revenues from banner advertisements pursuant to short-term contracts will
be recognized ratably over the period in which the advertisement is
displayed on the group's website. Where advertising is carried out on a
barter basis with other counterparties, revenue and the related costs will
not be recognized until the fair value of the advertising surrendered in
the transaction is determinable based on the group's own historical
practice of receiving cash or other readily convertible consideration for
similar advertising from buyers unrelated to the counterparty in the
barter transaction.
Other fees earned for providing web-solutions will be recognized on a
straight-line basis over the expected period during which the services are
performed, unless evidence suggests that the revenue is earned or
obligation is fulfilled in a different pattern, such as over the
contractual term of the arrangement, whichever is longer.
12
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Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l) ADVERTISING
Advertising costs are expensed as incurred and amounted to $37,900 for the
period from May 17, 1999 (date of inception) to December 31, 1999.
(m) START-UP AND PRE-OPERATING COSTS
Start-up and pre-operating costs are expensed as incurred.
(n) COMMITMENTS AND CONTINGENCIES
Liabilities for loss contingencies arising from claims, assessments,
litigation, fines and penalties, and other sources are recorded when it is
probable that a liability will be incurred and the amount can be
reasonably estimated.
(o) LOSS PER SHARE
Basic loss per share is computed using the weighted average number of
common shares outstanding during the period. Diluted loss per share is
computed using the weighted average number of common and dilutive common
equivalent shares outstanding during the period. Common equivalent shares
consist of the incremental common shares issuable upon the exercise of
stock options and warrants (using the treasury stock method) and the
incremental common shares issuable upon the conversion of the convertible
preferred stock (using the if-converted method). Basic and diluted loss
per share were the same for the period from May 17, 1999 (date of
inception) to December 31, 1999 since the effect of all potential dilutive
common equivalent shares was antidilutive.
Diluted net loss per common share does not include the effects of employee
options to purchase 160,750 shares of common stock.
(p) STOCK-BASED COMPENSATION
The company accounts for the grant of employee options to purchase common
stock in accordance with SFAS No. 123, "Accounting for Stock-Based
Compensation". SFAS No. 123 gives companies the option to adopt the fair
value method for expense recognition of employee stock options or to
continue to account for stock options and stock-based awards using the
intrinsic value method, as outlined under Accounting Principles Board
Opinion ("APB") No. 25, "Accounting for Stock Issued to Employees" and to
make pro forma disclosures of net loss as if the fair value method had
been applied. Under APB No. 25, stock-based compensation expense, if any,
is recognized as the difference between the exercise price and the
estimated fair value of the common stock on the measurement date, which is
typically the date of grant, and is recognized over the service period,
which is typically the vesting period. The company elected to apply APB
No. 25 to account for stock options, and Note 7 to these financial
statements sets forth the pro forma net loss as if the fair value method
had been applied.
13
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Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(q) STATUTORY RESERVES
In accordance with the Regulations on Enterprises with Foreign Investment
of China, the PRC subsidiary of the company, being a
"wholly-owned-foreign-enterprise" under PRC law, is required to provide
for certain statutory reserves namely general reserve, enterprise
expansion fund and staff welfare and bonus fund which are appropriated
from net profits as reported in its PRC statutory accounts. The
subsidiaries are required to allocate at least 10% of their after-tax
profits to the general reserve. A subsidiary has the right to discontinue
allocations to the general reserve if such reserve has reached 50% of its
registered capital. For US GAAP accounting purposes, any such allocations,
while not an obligation, result in a restriction on the company's working
capital. Appropriations to the enterprise expansion fund and staff welfare
and bonus fund of each subsidiary are at the discretion of the board of
directors of the subsidiary. These reserves can only be used for specific
purposes and are not distributable as cash dividends. During the period
ended December 31, 1999 appropriations to statutory reserves (the welfare
and bonus reserves) amounting to US$ 8,459 have been made at the
discretion of the board of directors of the PRC subsidiary and an
unutilized balance of US$ 6,639 is included in accounts payable at
December 31, 1999. The total registered capital of the PRC subsidiary at
December 31, 1999 was US$ 400,000.
(r) SEGMENT REPORTING
The company has applied SFAS No. 131 "Disclosure About Segments of an
Enterprise and Related Information" for the period ended December 31,
1999. This statement establishes standards for the way companies report
information about operating segments in annual financial statements. The
group has determined that it operates in a single reportable business and
geographical segment.
(s) COMPREHENSIVE INCOME
The company has applied SFAS No. 130, "Reporting Comprehensive Income",
for the period ended December 31, 1999. Comprehensive income is defined as
the change in equity of a company during a period from transactions and
other events and circumstances excluding transactions resulting from
investments from owners and distributions to owners. For the company,
items included in comprehensive income represent foreign currency
translation adjustments on the translation of the financial statements of
the PRC subsidiary which are denominated in a functional currency
different from the reporting currency. As there were no translation
adjustments for the period ended December 31, 1999, comprehensive loss did
not differ from net loss.
14
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Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(t) RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 established accounting
and reporting standards for derivative instruments, including derivative
instruments embedded in other contracts, and for hedging activities.
During June 1999, SFAS No. 137 was issued which delayed the effective date
of SFAS No. 133. SFAS No. 137 is effective for all fiscal quarters of
fiscal years beginning after June 15, 2000. The company does not expect
this statement to affect its financial results, as it does not have any
derivative instruments or hedging activities.
In December 1999, the Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin No. 101, "Revenue Recognition In
Financial Statements" ("SAB No. 101") which summarizes certain of the SEC
staff's views in applying generally accepted accounting principles to
revenue recognition in financial statements. The company will be required
to adopt the accounting provisions of SAB No. 101, no later than the
second quarter of 2000. The company does not believe that the
implementation of SAB No. 101 will have a significant effect on its
results of operations.
In March 2000, the FASB issued Interpretation No. 44, "Accounting For
Certain Transactions Involving Stock Compensation" ("FIN No. 44") which
provides guidance for applying APB Opinion No. 25, "Accounting For Stock
Issued To Employees." With certain exceptions, FIN No. 44 applies
prospectively to new awards, exchanges of awards in a business
combination, modifications to outstanding awards and changes in grantee
status on or after July 1, 2000. The company does not believe that the
implementation of FIN No. 44 will have significant effect on its results
of operations.
15
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Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
3 FIXED ASSETS
Details of the group's fixed assets are as follows:
<TABLE>
<CAPTION>
December 31,
1999
<S> <C>
Computer equipment and system software $ 197,157
Furniture, fixtures and office
equipment 38,644
Leasehold improvements 29,142
----------
264,943
Less accumulated depreciation (16,048)
----------
$ 248,895
=========
</TABLE>
4 CAPITAL STOCK
a) ISSUANCE OF COMMON SHARES FOR ORGANIZATIONAL COSTS
On May 17, 1999, 2,000,000 shares of common stock were issued to the three
founders of the company for services rendered in connection with
organizational activities at a deemed fair value of $2,000 ($0.001 per
share). The corresponding $2,000 organizational expense is recognized as a
general and administrative expense in the statement of operations for the
period.
b) ISSUANCE OF SERIES A CONVERTIBLE PREFERRED SHARES
Under subscription and stockholders' agreements dated June 9, 1999,
1,025,000 shares of Series A preferred stock were issued at $1.00 per
share between June 15, 1999 and July 30, 1999.
Each holder of Series A preferred stock has the right at the holder's
option, at any time and from time to time, to convert any of such shares
into an equal number of common shares. The preferred shares carry equal
voting rights per share to common stock.
Upon a liquidation of the company the holder of each share of preferred
stock is entitled to $1.00 and any declared but unpaid dividends due,
which is payable out of the remaining assets available for distribution
after payment or provision for the debts and liabilities of the company.
If the remaining assets are insufficient, each holder shares pro rata
based on the number of Series A Preferred Stock held.
Subsequent to December 31, 1999, the authorized common stock of the
company was reduced to 8,975,000 shares and the authorized Series A
preferred stock was increased to 1,025,000 to accord with the total number
of Series A preferred shares actually issued and paid up during the period
from May 17, 1999 to December 31, 1999.
16
<PAGE> 18
Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
4 CAPITAL STOCK (CONTINUED)
Also subsequent to December 31, 1999 the common stock of the company was
split in the form of a stock dividend on a 1.025:1 basis to maintain the
ratio between common stockholders and preferred stockholders set out in
the subscription and stockholders' agreements dated June 9, 1999. The
effect of this stock split has been retroactively reflected in the
accounts for the period presented including in the loss per share
calculation.
5 INCOME TAXES
Income is subject to taxation in the countries outlined below. For the
period from the inception of the company to December 31, 1999, the
components of income tax benefit were based on the following sources of
loss before income taxes:
<TABLE>
<S> <C>
PRC $ (280,234)
United States (169,790)
-----------
Total $ (450,024)
=========
</TABLE>
A reconciliation of the expected income tax expense/(benefit) at the PRC
statutory rate of 15% applicable to high technology companies to the
actual income tax benefit for the period ended December 31, 1999 is as
follows:
<TABLE>
<S> <C>
Income tax benefits at statutory tax rate $ (67,504)
Difference between the PRC statutory tax
rates and the U.S. federal statutory tax
rate of 34% (32,260)
Change in valuation allowance 99,764
Non-deductible expenses -
---------
Income tax expense $ -
=========
</TABLE>
17
<PAGE> 19
Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
5 INCOME TAXES (CONTINUED)
The components of the net deferred tax assets at December 31, 1999 are as
follows:
<TABLE>
<S> <C>
UNITED STATES:
Deferred income tax assets:
Expenses not currently deductible $ 57,367
Other temporary differences 362
--------
57,729
Less valuation allowance (57,729)
--------
Net deferred income tax assets $ --
========
PRC:
Deferred income tax assets:
Net operating loss carryforwards $ 37,462
Other temporary differences 4,573
--------
42,035
Less valuation allowance (42,035)
--------
Net deferred income tax assets $ --
========
</TABLE>
The company's PRC subsidiary had approximately $250,000 of net operating
loss carryforwards as of December 31, 1999, the tax effect of which was
approximately $37,000 as of December 31, 1999. The carryforwards will
begin expiring in 2004.
In assessing the realizability of net deferred tax assets, management
considers whether it is more likely than not that some portion or all of
the net deferred tax assets will not be realized. The ultimate realization
of net deferred tax assets is dependant upon the generation of future
taxable income during the periods in which temporary differences
representing net future deductible amounts become deductible. Management
has established a full valuation allowance against the net deferred tax
assets as of December 31, 1999, since the realization of these assets in
future periods is uncertain.
18
<PAGE> 20
Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
6 CERTAIN RISKS AND CONCENTRATIONS
(a) CONCENTRATION OF CREDIT RISK
The group is engaged in web-solutions including website development, and
maintenance, and Internet advertising to businesses in the PRC. The
company does not expect to require collateral for accounts receivable.
Financial instruments that potentially subject the group to significant
concentrations of credit risk primarily consist of cash and cash
equivalents and accounts receivable. The group limits its exposure to
credit loss by depositing its cash and cash equivalents with financial
institutions in the United States of America and the PRC which management
believes are of high credit quality.
(b) RISK RELATED TO THE GROUP'S ICP OPERATIONS IN THE PRC
The group's operations may be adversely affected by significant political,
economic, and social uncertainties in the PRC. Although the PRC government
has been pursuing economic reform policies, no assurance can be given that
the PRC government will continue to pursue such policies or that such
policies may not be significantly altered, especially in the event of a
change in leadership, social, or political disruption or unforeseen
circumstances affecting the PRC's political, economic and social
conditions. There is also no guarantee that the PRC government's pursuit
of economic reforms will be consistent or effective.
The group's PRC legal counsel has advised management that senior officials
of the Ministry of Information Industry of the PRC ("MII") have stated
that a company with foreign investment may not be allowed to conduct ICP
business in the PRC. Such comments of the MII officials may be understood
as PRC government policy with respect to foreign investment in an ICP
business, however, the extent that such statements reflect actual laws and
regulations is currently unclear. The group's PRC legal counsel has
advised management that to the best of its knowledge, there is no explicit
rule under PRC law prohibiting a foreign-invested enterprise from engaging
in the ICP business in the PRC. The timing or extent of any potential
clarification of laws and regulations surrounding foreign ownership and
operation of an ICP business in the PRC, and therefore, the ultimate
impact on the carrying amounts of the group's PRC assets and the future
operations of the group's ICP business in the PRC is unknown.
19
<PAGE> 21
Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
6 CERTAIN RISKS AND CONCENTRATIONS (CONTINUED)
(c) CONCENTRATION OF CURRENCY RISK
Substantially all of the revenue-generating operations of the group are
transacted in Renminbi (Rmb), which is not freely convertible into foreign
currencies. On January 1, 1994, the PRC government abolished the dual rate
system and introduced a single rate of exchange as quoted by the People's
Bank of China. However, the unification of the exchange rate does not
imply convertibility of Renminbi into United States dollars or other
foreign currencies.
(d) CONCENTRATION OF INDUSTRY RISKS
The group operates in a business segment which is characterized by rapid
technological advances, changes in customer requirements and evolving
regulatory requirements and industry standards. Any failure by the group
to anticipate or respond adequately to technological changes, changes in
customer requirements or changes in regulatory requirements or industry
standards could have a material adverse effect on the group's business and
operating results.
The group relies on a number of third party suppliers for various
services, including banner advertising, delivery software and Internet
traffic measurement software.
7 STOCK OPTIONS
Pursuant to a consent of the directors on July 31, 1999, 307,500 shares of
the company's common stock have been reserved for issuance to employees of
the group under an employee stock option plan.
On August 1, 1999 the company granted options to an employee of the
company to acquire 3,000 ordinary shares of the company's common stock at
an exercise price of $1.00 per share. On August 20, 1999 the company
granted options to a different employee of the company to acquire 153,750
ordinary shares of the company's common stock at an exercise price of
$1.00 per share. The options have a term of 10 years and vested
immediately on the date of grant. The deemed fair values of the shares as
of the dates of grant were $1.00 and accordingly no related compensation
expense was recorded in the statement of operations for the period.
Pursuant to the Merger Agreement, these options were converted to options
to purchase shares of Mail.com common stock (see note 9).
On November 12, 1999 the company granted options to an employee of the
company to acquire 4,000 ordinary shares of the company's common stock for
an exercise price of $1.50 per share. The options have a term of 10 years
and vest over 4 years from the grant date, 12.5% after six months from the
date of the grant and a further 6.25% every three months thereafter. The
deemed fair value of the shares at the date of grant was $9.98 and the
related compensation expense for the period was $1,063. Pursuant to the
Merger Agreement, these options were converted to options to purchase
shares of Mail.com common stock (see note 9).
20
<PAGE> 22
Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
7 STOCK OPTIONS (CONTINUED)
The following table summarizes information about stock options outstanding
at December 31, 1999:
<TABLE>
<CAPTION>
OPTIONS GRANTED OPTIONS EXERCISABLE
------------------------------------------------------ --------------------------------
WEIGHTED AVERAGE WEIGHTED AVERAGE
REMAINING FAIR VALUE AS WEIGHTED AVERAGE
EXERCISE NUMBER CONTRACTUAL OF THE NUMBER EXERCISE
PRICE OUTSTANDING LIFE (YEARS) DATE OF GRANT OUTSTANDING PRICE
----- ----------- ------------ ------------- ----------- -----
<S> <C> <C> <C> <C> <C>
$1.00 .... 156,750 9.6 $0.65 156,750 $1.00
$1.50 .... 4,000 9.9 $9.06 - -
----- --- ----- ------- -----
160,750 9.6 $0.86 156,750 $1.00
======= === ===== ======= =====
</TABLE>
The company applies APB No. 25 and related interpretations in accounting
for its stock option plan. Had compensation cost been recognized pursuant
to SFAS No. 123, the group's net loss for the period from May 17, 1999
(date of inception) to December 31, 1999 would have been increased to the
pro forma amounts indicated below:
<TABLE>
<CAPTION>
From May 17, 1999 (date of
inception) to December 31, 1999
<S> <C>
Net loss
As reported $(450,024)
Proforma $(552,681)
Net loss per share, basic and diluted
As reported $(0.22)
Proforma $(0.27)
</TABLE>
The fair values of options granted were estimated on the date of grant
using the Black Scholes method option-pricing model with the following
assumptions used: risk-free interest rate of 5.94%; expected life of 5
years; 75% expected volatility; and a dividend yield rate of 0.0%.
21
<PAGE> 23
Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
7 STOCK OPTIONS (CONTINUED)
A summary of the group's stock option plan is presented below:
<TABLE>
<CAPTION>
From May 17, 1999
(date of
inception) to
December 31, 1999
Weighted
Number average
of exercise
options price
------- -----
<S> <C> <C>
Outstanding as of May 17, 1999 -- --
Options granted 160,750 $1.04
Options exercised -- --
Options forfeited -- --
------- -----
Outstanding as of December 31, 1999 160,750 $1.04
======= =====
Weighted-average fair value of
options granted during the period $0.86
=====
</TABLE>
As of December 31, 1999 the weighted-average remaining contractual life of
outstanding options was 9.6 years.
22
<PAGE> 24
Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
8 COMMITMENTS AND CONTINGENCIES
The group leases office premises under operating lease agreements that
expire between 2000 and 2002.
Rent expense for the operating leases for the period from May 17, 1999
(date of inception) to December 31, 1999 was $27,846.
Future minimum lease payments under operating leases as of December 31,
1999 were:
<TABLE>
<CAPTION>
<S> <C>
Years ending December 31,
2000 $ 155,841
2001 104,800
2002 9,185
---------
$ 269,826
========
</TABLE>
There were no capital leases as of December 31, 1999.
9 SUBSEQUENT EVENTS
Between January 12, 2000 and March 6, 2000 the company issued 21,200
options to 17 employees who had worked for the group for over six months
to purchase the company's common stock for an exercise price of $1.50 per
share. The options have a term of 10 years and vest over 4 years from the
grant date, 12.5% after six months from the date of the grant and a
further 6.25% every three months thereafter. Pursuant to the Merger
Agreement (defined below), these options were converted to options to
purchase shares of Mail.com common stock.
On March 7, 2000 the company issued a further 63,800 options to certain
employees to purchase the company's common stock for an exercise price of
$2.50 per share. The options have a term of 10 years and vest over 4 years
from the grant date, 12.5% after six months from the date of the grant and
a further 6.25% every three months thereafter. Pursuant to the Merger
Agreement (defined below), these options were converted to options to
purchase shares of Mail.com common stock.
23
<PAGE> 25
Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
9 SUBSEQUENT EVENTS (CONTINUED)
On March 14, 2000, Mail.com, Inc. ("Mail.com") acquired the company
pursuant to an Agreement and Plan of Merger dated as of March 14, 2000
(the "Merger Agreement"), by and among Mail.com, a special purpose
acquisition subsidiary of Mail.com ("Acquisition Sub"), the company and
the stockholders of the company. Concurrently with the merger, eLong.com
changed its name to Asia.com, Inc. ("Asia.com"). In the merger, Mail.com
issued to the former stockholders of eLong.com an aggregate of 3,599,491
shares of Mail.com Class A common stock valued at approximately $57.2
million. All outstanding options to purchase eLong.com common stock were
converted into options to purchase an aggregate of 279,289 shares of
Mail.com Class A common stock. The value of the options was approximately
$4.4 million. In addition, Mail.com is obligated to issue up to an
additional 719,899 shares of Mail.com Class A common stock in the
aggregate to the former stockholders of eLong.com if Mail.com or Asia.com
acquires less than $50.0 million in value of businesses engaged in
developing, marketing or providing consumer or business internet portals
and related services focused on the Asian market or a portion thereof, or
businesses in furtherance of such a business, prior to March 14, 2001. The
actual amount of shares issued will be based upon the amount of any
shortfall in acquisitions below the $50.0 million target amount.
In the merger, certain former stockholders of eLong.com retained shares of
Class A common stock of Asia.com representing approximately 4.0% of the
outstanding common stock of Asia.com. Under a Contribution Agreement with
Asia.com these stockholders contributed an aggregate of $2.0 million in
cash to Asia.com in exchange for an additional 792,079 shares of Class A
common stock of Asia.com, representing approximately 1.9% of the
outstanding common stock of Asia.com. Pursuant to the Contribution
Agreement, Mail.com (1) contributed to Asia.com the domain names Asia.com
and Singapore.com and $10.0 million in cash and (2) agreed to contribute
to Asia.com up to an additional $10.0 million in cash over the next 12
months and to issue, at the request of Asia.com, up to an aggregate of
242,424 shares of Mail.com Class A common stock. Asia.com granted to
management employees of Asia.com options to purchase Class A common stock
of Asia.com representing 10% of the outstanding shares of common stock
after giving effect to the exercise of such options.
On May 12, 2000, the company completed a stock purchase agreement and an
assets purchase agreement to purchase 100% of Beijing Bai-Deh-Chin Travel
Management Consulting Company ("Lohoo"), a travel agency. Total merger
consideration recorded by the company amounted to $1,158,899 or Rmb 12
million. $403,261 was paid in cash and the remainder in 109,991 shares of
Mail.com common stock. If Lohoo achieves certain performance milestones,
the former shareholder of Lohoo will be entitled to receive additional
shares of Mail.com stock on December 31, 2000 with a value amounting to
Rmb 3 million.
24
<PAGE> 26
Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
Item 7 Financial Statements and Pro Forma Financial Information
(b) PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
On March 14, 2000, Mail.com, Inc. acquired eLong.com, Inc., a Delaware
corporation ("eLong.com") for approximately $61.9 million, including
acquisition costs. Concurrently with the merger, eLong.com changed its
name to Asia.com, Inc. ("Asia.com"). Pursuant to the merger, Asia.com
stockholders received 1.24940488 shares (the exchange ratio) of Mail.com
Class A common stock and Asia.com preferred stockholders received
1.01288878 shares of Mail.com Class A common stock. As a result, Mail.com
issued, to the former stockholders of Asia.com, an aggregate of 3,599,491
shares of Mail.com Class A common stock.
The consideration paid by Mail.com in connection with the acquisition
approximates $61.9 million consisting of the following:
- 3,599,491 shares of Mail.com Class A common stock valued at
approximately $57.2 million;
- The assumption by Mail.com of options to purchase shares of
Asia.com's stock, par value of $.001 per share, to be exchanged for
options to purchase 279,289 shares of Mail.com Class A common stock.
The options were valued at approximately $4.4 million; and
- Acquisition costs of approximately $365,000.
In addition, Mail.com is obligated to issue up to an additional 719,899
shares of Mail.com Class A common stock in the aggregate to the former
stockholders of Asia.com if Mail.com or Asia.com acquires less than $50.0
million in value of businesses engaged in developing, marketing or
providing consumer or business internet portals and related services
focused on the Asian market or a portion thereof, or businesses in
furtherance of such a business, prior to March 14, 2001. The actual amount
of shares issued will be based upon the amount of any shortfall in
acquisitions below the $50.0 million target amount.
Pursuant to the merger, certain former stockholders of Asia.com retained
shares of Class A common stock of Asia.com representing approximately 4.0%
of the outstanding common stock of Asia.com. Under a separate Contribution
Agreement with Asia.com, these stockholders contributed an aggregate of
$2.0 million in cash to Asia.com in exchange for an additional 792,079
shares of Class A common stock of Asia.com, representing approximately
1.9% of the outstanding common stock of Asia.com. Pursuant to the
Contribution Agreement, Mail.com (1) contributed to Asia.com the domain
names Asia.com and Singapore.com and $10.0 million in cash and (2) agreed
to contribute to Asia.com up to an additional $10.0 million in cash over
the next 12 months and to issue, at the request of Asia.com, up to an
aggregate of 242,424 shares of Mail.com Class A common stock for future
acquisitions. As a result of the transactions effected pursuant to the
Merger Agreement and the Contribution Agreement, Mail.com owns shares of
Class B common stock of Asia.com representing approximately 94.1% of the
outstanding common stock of Asia.com.
The acquisition has been accounted for using the purchase method of
accounting. Mail.com has allocated a portion of the purchase price to the
fair market value of the acquired assets and assumed liabilities of
Asia.com as of the date of the date of closing (March 14, 2000). The
excess of the purchase price over the fair market value of the acquired
assets and assumed liabilities of Asia.com has been allocated to goodwill
($61.9 million). Goodwill is being amortized over a period of three years,
the expected estimated period of benefit.
25
<PAGE> 27
Asia.com, Inc. (formerly eLong.com, Inc.) (a development stage enterprise)
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The acquisition of Asia.com occurred during the first quarter of 2000 and,
accordingly, the Asia.com acquisition is reflected in Mail.com's
historical consolidated balance sheet as of March 31, 2000. The
accompanying unaudited pro forma condensed combined Statement of
Operations (the "Pro Forma Statement of Operations") for the year ended
December 31, 1999 gives effect to the Asia.com acquisition as if it had
occurred on May 17, 1999 (date of inception of Asia.com). The Pro Forma
Statement of Operations is based on historical results of operations of
Mail.com for the year ended December 31, 1999 and of Asia.com for the
period from May 17, 1999 (date of inception) to December 31, 1999.
The Pro Forma Financial Information is intended for information purposes
only and is not necessarily indicative of the future results of operations
of Mail.com after the acquisition of Asia.com, or of the results of
operations of Mail.com that would have actually occurred had the
acquisition of Asia.com been effected on May 17, 1999 (date of inception).
MAIL.COM, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE INFORMATION)
<TABLE>
<CAPTION>
MAIL.COM, INC. ASIA.COM (1) ADJUSTMENTS PRO FORMA
-------------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
Revenues:
Messaging $ 12,709 $ -- $ -- $ 12,709
Domain development -- -- -- --
------------ ------------ ------------ ------------
12,709 -- -- 12,709
Operating expenses:
Cost of revenues:
Messaging 13,778 -- -- 13,778
Domain development -- 142 -- 142
------------ ------------ ------------ ------------
13,778 142 -- 13,920
Sales and marketing 29,542 176 -- 29,718
General and administrative 12,136 131 -- 12,267
Product development 7,017 -- -- 7,017
</TABLE>
26
<PAGE> 28
<TABLE>
<S> <C> <C> <C> <C>
Amortization of goodwill and
other intangible assets 2,979 -- 12,896(a) 15,875
Write-off of acquired in-
process technology 900 -- -- 900
------------ ------------ ------------ ------------
Total operating expenses 66,352 449 12,896 79,697
------------ ------------ ------------ ------------
Loss from operations (53,643) (449) (12,896) (66,988)
------------ ------------ ------------ ------------
Other income (expense)
Gain on sale of investments. net 5,494 -- -- 5,494
Other income 1,885 -- -- 1,885
Interest expense (751) (1) -- (752)
------------ ------------ ------------ ------------
Total other income
(expense) 6,628 (1) -- 6,627
Net loss (47,015) (450) (12,896) (60,361)
------------ ------------ ------------ ------------
Cumulative dividends on
settlement of contingent
obligations to preferred
stockholders (14,556) -- -- (14,556)
------------ ------------ ------------ ------------
Net loss attributable to
common stockholders $ (61,571) $ (450) $ (12,896) $ (74,917)
============ ============ ============ ============
Basic and diluted net loss
per common share $ (1.96) $ (2.14)(b)
============ ============
Weighted-average basic and
diluted shares outstanding 31,373,645 3,599,491(b) 34,973,136 (b)
============ ============ ============
</TABLE>
(1) Represents Asia.com, Inc. from May 17, 1999 (inception) to
December 31, 1999.
See accompanying notes to Unaudited Pro Forma Condensed Combined
Financial Information.
27
<PAGE> 29
NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL INFORMATION
(1) PRO FORMA ADJUSTMENTS AND ASSUMPTIONS
(a) The pro forma adjustment reflects amortization expense from May 17, 1999
(date of inception of Asia.com) to December 31, 1999 assuming the
transaction had occurred as of Asia.com's date of inception. The
allocation of the $61.9 million purchase price over the historical value
of the acquired assets and assumed liabilities has been allocated to
goodwill. The Company's net assets as of March 14, 2000 (date of
acquisition) were less than $10,000. Accordingly, the goodwill balance
approximates the purchase price. Goodwill is being amortized over a period
of 3 years, the expected estimated period of benefit.
(B) The pro forma basic and diluted net loss per common share is computed by
dividing the net loss attributable to common stockholders by the weighted
average number of common shares outstanding. The calculation of the
weighted average number of shares outstanding assumes that 3,599,491
shares of Mail.com's common stock issued in connection with its
acquisition of Asia.com were outstanding for the entire period. Diluted
net loss per share equals basic net loss per share, as common stock
equivalents are anti-dilutive for all pro forma periods presented.
28
<PAGE> 30
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf of the undersigned
hereunto duly authorized.
May 26, 2000
Mail.com,Inc.
By: /s/ Debra McClister
Debra McClister
Executive Vice President and Chief Financial Officer
29
<PAGE> 31
Exhibits
23 Consent of KPMG LLP
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Asia.com, Inc. (formerly eLong.com, Inc.)
We consent to the incorporation by reference in the registration statement (No.
333-31356) on Form S-8 of Mail.com, Inc. of our report dated May 24, 2000, with
respect to the consolidated balance sheet of Asia.com, Inc. (formerly eLong.com,
Inc.) (a development stage enterprise) and its subsidiary as of December 31,
1999, and the related consolidated statement of operations, stockholders'
equity, and cash flows for the period from May 17, 1999 (date of inception) to
December 31, 1999, which report appears in the Form 8-K/A of Mail.com, Inc.
dated May 26, 2000.
Our report dated May 24, 2000, contains an emphasis paragraph that states the
group's operations are subject to extensive regulation and supervision by the
People's Republic of China ("PRC") government. The laws and regulations
pertaining to internet content provider businesses in the PRC are evolving and
may be subject to change.
/s/KPMG
Hong Kong
May 26, 2000
