|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previous: COPPER VALLEY MINERALS LTD, 10QSB, EX-27, 2000-12-15 |
Next: STARBRIDGE GLOBAL INC, 10QSB, EX-27, 2000-12-15 |
U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(As last amended in Release No. 33-7505, effective January 1, 1999, 63 F.R. 9632)
A. Form 10-QSB
(Mark One)
| /x/ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended OCTOBER 31, 2000
or
| / / | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 000-28645
STARBRIDGE GLOBAL INC.
(Exact small business issuer as specified in its charter)
| Nevada (State or other jurisdiction of incorporation or organization) |
94-3346241 (IRS Employer Identification No.) |
Suite 2, 25 Prospect Street, Box Hill, VIC 3128, Australia
(Address of principal executive offices)
011 612 9999 3884
(Issuer's telephone number)
Southland Financial, Inc.
(Former name, former address and former fiscal year, if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /x/ No / /
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by court. Yes / / No / /
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 25,059,569
Transitional Small Business Disclosure Format (check one): Yes / / No /x/
| |
|
Page |
||
|---|---|---|---|---|
| Part I. |
|
Financial Information |
|
3 |
| Item 1. |
|
Financial Statements |
|
3 |
| |
|
Balance Sheet |
|
3 |
| |
|
Statement of Operations |
|
4 |
| |
|
Statement of Cash Flows |
|
5 |
| Item 2. |
|
Plan of Operations |
|
9 |
| Part II. |
|
Other Information |
|
11 |
| |
|
|
|
|
2
STARBRIDGE GLOBAL INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED CONDENSED BALANCE SHEETS
OCTOBER 31, 2000 AND JANUARY 31, 2000
| |
October 31, 2000 |
January 31, 2000 |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| |
(Unaudited) |
|
||||||||
| ASSETS | ||||||||||
| CURRENT ASSETS |
|
|
|
|
|
|
|
|||
| Cash and equivalents | 3,925 | $ | 110,168 | |||||||
| Accounts receivable—affiliate | 9,113 | 151,995 | ||||||||
| Total current assets | 13,038 | 262,163 | ||||||||
| EQUITY INVESTMENT IN JOINT VENTURE, net |
|
|
3,686,099 |
|
|
— |
|
|||
| TOTAL ASSETS | $ | 3,699,137 | $ | 262,163 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY IN ASSETS) |
|
|||||||||
| CURRENT LIABILITIES |
|
|
|
|
|
|
|
|||
| Accounts payable and accrued expenses |
|
$ |
122,507 |
|
$ |
5,684 |
|
|||
| Salary payable | 475,000 | — | ||||||||
| Due to stockholders | 115,000 | — | ||||||||
| Directors' fees payable | 186,073 | — | ||||||||
| Directors' advances | 226,208 | — | ||||||||
| Total current liabilities | 1,124,788 | 5,684 | ||||||||
| LONG TERM DEBT |
|
|
|
|
|
|
|
|||
| Salary payable | — | 250,000 | ||||||||
| Notes payable—directors | — | 200,647 | ||||||||
| Total long-term debt | — | 450,647 | ||||||||
| TOTAL LIABILITIES | 1,124,788 | 456,331 | ||||||||
| STOCKHOLDERS' EQUITY (DEFICIENCY IN ASSETS) |
|
|
|
|
|
|
|
|||
| Common stock, par value $.001 per share; 100,000,000 shares authorized; 25,059,569 and 15,489,569 issued and outstanding |
25,060 | 15,490 | ||||||||
| Additional paid in capital | 8,585,140 | 2,793,510 | ||||||||
| Stock subscription receivable | (290,000 | ) | (290,000 | ) | ||||||
| Deficit accumulated during the development stage | (5,745,851 | ) | (2,713,168 | ) | ||||||
| Total stockholders' equity (deficiency in assets) | 2,574,349 | (194,168 | ) | |||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY IN ASSETS) |
|
$ |
3,699,137 |
|
$ |
262,163 |
|
|||
See accompanying notes—unaudited
3
STARBRIDGE GLOBAL INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTH AND NINE MONTH PERIODS ENDED OCTOBER 31, 2000
AND THE PERIOD FROM INCEPTION (JANUARY 14, 1998) TO OCTOBER 31, 2000
| |
For the three months ended October 31, 2000 |
For the nine months ended October 31, 2000 |
Inception (January 14, 1998) to October 31, 2000 |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
(Unaudited) |
(Unaudited) |
(Unaudited) |
||||||||||
| NET EQUITY IN EARNINGS OF JOINT VENTURE | $ | 214,082 | $ | 221,099 | $ | 221,099 | |||||||
| OPERATING EXPENSES | |||||||||||||
| Consulting | 36,200 | 159,372 | 1,860,213 | ||||||||||
| Directors fees | 686,073 | 2,382,948 | 2,382,948 | ||||||||||
| Licensing fees | — | 81,082 | 81,082 | ||||||||||
| Management fees | — | — | 299,500 | ||||||||||
| Meals and entertainment | — | 1,110 | 3,196 | ||||||||||
| Other expenses | 2,054 | 17,869 | 74,571 | ||||||||||
| Organizational expense | — | — | 150,000 | ||||||||||
| Printing/office expense | 1,475 | 11,412 | 11,412 | ||||||||||
| Professional fees | 60,895 | 236,863 | 305,135 | ||||||||||
| Public relations and advertising | — | 8,000 | 61,736 | ||||||||||
| Salaries and wages | 75,000 | 225,000 | 475,000 | ||||||||||
| Stock related fees | 1,831 | 3,636 | 43,150 | ||||||||||
| Travel | 54,579 | 128,606 | 221,748 | ||||||||||
| Total operating expenses | 918,107 | 3,255,898 | 5,969,691 | ||||||||||
| LOSS FROM OPERATIONS |
|
|
(704,025 |
) |
|
(3,034,799 |
) |
|
(5,748,592 |
) |
|||
| OTHER INCOME | 10 | 2,116 | 2,740 | ||||||||||
| NET LOSS | $ | (704,015 | ) | $ | (3,032,683 | ) | $ | (5,745,852 | ) | ||||
| Weighted Average Number of Common Shares Outstanding | 20,265,577 | 17,921,254 | 12,088,157 | ||||||||||
| Net loss per share—basic and diluted | $ | (0.03 | ) | $ | (0.17 | ) | $ | (0.48 | ) | ||||
See accompanying notes—unaudited
4
STARBRIDGE GLOBAL INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED OCTOBER 31, 2000 AND THE PERIOD
FROM INCEPTION (JANUARY 14, 1998) TO OCTOBER 31, 2000
| |
Nine months ended October 31, 2000 |
Inception (January 14, 1998) to October 31, 2000 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| |
(Unaudited) |
(Unaudited) |
|||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net loss | $ | (3,032,683 | ) | $ | (5,745,852 | ) | |||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Amortization of excess purchase price over net assets acquired in joint venture | 79,400 | 79,400 | |||||||||
| Equity in earnings of joint venture | (300,499 | ) | (300,499 | ) | |||||||
| Stock issued for services | 2,336,201 | 4,130,201 | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable | 142,882 | (9,113 | ) | ||||||||
| Accounts payable | 116,823 | 122,507 | |||||||||
| Salary payable | 225,000 | 475,000 | |||||||||
| Directors' fees payable | 186,073 | 186,073 | |||||||||
| Total adjustments | 2,785,880 | 4,683,569 | |||||||||
| Net cash used in operating activities | (246,803 | ) | (1,062,283 | ) | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
||||
| Net proceeds from issuance of common stock | — | 725,000 | |||||||||
| Net borrowings from stockholders | 115,000 | 115,000 | |||||||||
| Net borrowings from directors | 25,560 | 226,208 | |||||||||
| Net cash provided by financing activities | 140,560 | 1,066,208 | |||||||||
| NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS |
|
|
(106,243 |
) |
|
3,925 |
|
||||
| CASH AND EQUIVALENTS—BEGINNING |
|
|
110,168 |
|
|
— |
|
||||
| CASH AND EQUIVALENTS—ENDING | $ | 3,925 | $ | 3,925 | |||||||
See accompanying notes—unaudited
5
STARBRIDGE GLOBAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements include the accounts of StarBridge Global Inc. (formerly Southland Financial Inc.), and its wholly owned subsidiary Cactus Multimedia Inc., (the Company), and have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. Results for the three month and nine month periods ended October 31, 2000 are not necessarily indicative of the results that may be expected for the year ending January 31, 2001.
The financial data at January 31, 2000 is derived from audited financial statements which are included in the Company's Form 8-K/A dated April 3, 2000 and should be read in conjunction with the audited financial statements and the notes thereto. Information relating to inception (January 14, 1998) to October 31, 2000 included in the consolidated condensed statements of operations and cash flows have not been reviewed by independent accountants.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 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.
Net Loss Per Share
The Company applies Statement of Financial Accounting Standards No. 128, "Earnings Per Share" (FAS 128). Net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the reported periods after giving effect to a one-for-239 share reverse stock split in January 1998. Outstanding stock equivalents were not considered in the calculation as their effect would have been anti-dilutive.
Investments
Investments in joint ventures, owned more than 20% but not in excess of 50%, are recorded on the equity method.
NOTE 3. GOING CONCERN
The Company has sustained substantial losses and negative cash flows since inception. In the absence of achieving profitable operations and positive cash flows from operations or obtaining additional debt or equity financing, the Company may have difficulty meeting current obligations.
Management believes that actions presently being taken, including efforts to sell common stock and secure debt financing, provide the opportunity for the Company to continue as a going concern. In addition, the stockholders and directors have agreed to not pursue collection of amounts due until such
6
time as the Company achieves profitable operations and/or it is deemed by the directors that the Company has sufficient working capital.
NOTE 4. ACQUISITION
On April 3, 2000, StarBridge Global Inc. (formerly Southland Financial, Inc.) a Nevada corporation, acquired all the outstanding shares of common stock of Cactus Multimedia I, Inc. (CMI), a Nevada corporation, in consideration for 500,000 shares of the Company's common stock. In connection with this acquisition the Company entered into a consulting agreement with the former majority shareholder of CMI for one year and paid the former shareholder of CMI $100,000. As a result, Cactus became a wholly owned subsidiary of the Company. At the time of the acquisition, CMI had no operations and nominal net assets. The acquisition is intended to qualify as a reorganization within the meaning of Section 368 (a)(2)(B) of the Internal Revenue Code of 1986, as amended. Upon effectiveness of the acquisition StarBridge Global Inc. became the successor issuer to Cactus for reporting purposes, under the Securities Exchange Act of 1934.
NOTE 5. CHINA CHANGFENG STARBRIDGE HENGXIN CORPORATION LTD.—JOINT VENTURE
During March 2000, the Company entered into a contract with China Changfeng StarBridge Computer Technology Ltd. (CCF), a Chinese corporation to form a Sino-foreign Joint Venture to develop Internet, Intranet and e-commerce businesses in China. Under the contract, CCF would retain a 55% ownership interest and the Company would acquire a 45% ownership interest in CCF StarBridge Hengxin Corporation Ltd, a systems integrator holding an ISP license in China. Effective July 24, 2000, upon final approval of the agreement by the Ministry of Trade and Economic Cooperation, (MOFTEC), the Company acquired its minority equity position in the Joint Venture, in exchange for two million common stock shares of the Company.
In addition, the Company issued one million shares of common stock to a third party who provided consultations, introductions, and intermediary services in connection with this transaction.
The joint venture's unaudited summary of financial information is as follows:
Condensed Statement of Earnings for the period from January 1, 2000 to October 31, 2000
| Joint Venture |
|
||||
|---|---|---|---|---|---|
| Net sales | $ | 13,768,000 | |||
| Gross profit | 5,130,000 | ||||
| Income before income taxes | 1,816,000 | ||||
| Net income | 1,544,000 | ||||
| StarBridge Global's Equity in Earnings |
|
|
|
|
|
| StarBridge Global's equity in income for the period from July 24 to October 31, 2000 | 300,499 | ||||
| Amortization expense for the excess of cost over the underlying net assets of the joint venture | (79,400 | ) | |||
| Net equity in earnings of the joint venture | $ | 221,099 | |||
7
The Company's investment in joint venture includes the unamortized excess of the company's investment over its equity in the joint venture's net assets. This excess was $2,837,352 at October 31, 2000, and is being amortized on a straight-line basis over an estimated economic useful life of 10 years.
Condensed balance sheet information for the joint venture at October 31, 2000 was:
| |
|
||
|---|---|---|---|
| Condensed Balance Sheet | |||
| Current assets | $ | 589,000 | |
| Non-current assets | 1,413,000 | ||
| Current liabilities | 146,000 | ||
| Shareholders' equity | 1,856,000 | ||
NOTE 6. COMMITMENTS
Future annual minimum payments under an employment agreement with a key executive are as follows:
| |
|
|||
|---|---|---|---|---|
| Year ended January 31, | ||||
| 2001 | $ | 300,000 | ||
| 2002 | 350,000 | |||
| $ | 650,000 | |||
NOTE 7. SUBSEQUENT EVENTS
On November 13, 2000, the Company acquired all of the outstanding shares of Gold Phoenix Associates Limited ("Gold Phoenix") common stock from the shareholders in exchange for an aggregate of 13,800,000 shares of common stock of the Company. As a result, Gold Phoenix became a wholly owned subsidiary of the Company on this date.
8
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
General
Management's discussion and analysis contains various "forward-looking statements" within the meaning of the Securities and Exchange Act of 1934. Such statements consist of any statement other than a recitation of historical fact and can be identified by the use of forward-looking terminology such as "may," "expect," "anticipate," "estimate" or "continue" or use of negative or other variations or comparable terminology.
The Company cautions that these statements are further qualified by important factors that could cause actual results to differ materially from those contained in the forward-looking statements, that these forward-looking statements are necessarily speculative, and there are certain risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements.
Management believes comparison of the results of operations for the nine month period ended October 31, 2000 to the nine month period ended October 31, 1999 would not be meaningful as the Company is a developmental company, has sustained substantial operating losses and has sustained negative cash flows since inception.
On April 3, 2000, the Company acquired all the outstanding shares of common stock of Cactus Multimedia I, Inc. in consideration for 500,000 shares of the Company's common stock. This transaction was reported on Form 8-K on April 3, 2000 and on Form 8-K/A on April 18, 2000.
Plan of Operations
Since the inception the Company has sustained a net loss of $5,745,852. The net loss for the nine months ended October 31, 2000 was $3,032,683. Operating expenses have been principally attributable to consulting expenses, professional fees and directors fees, a substantial portion of which has been paid in the Company's common stock. The Company will need to raise funds through the sale of its securities, loan or other financing alternatives. The Company anticipates finalizing a financing alternative within the next fiscal quarter. The Company does not anticipate any expenses for research and development. The Company expects to purchase computer equipment within the next 12 months. The Company anticipates an increase in the number of employees in the next fiscal quarter of approximately 20 people due to the acquisition of Gold Phoenix Associates Limited on November 13, 2000.
The Company intends to generate revenues and earnings through several projects in the Peoples Republic of China, one of which was in operation during the period.
For the nine months ended October 31, 2000 the Company recorded net equity in earnings from a joint venture in the amount of $221,099. These earnings are from China Changfeng StarBridge Hengxin Corporation Limited ("CCF StarBridge"), a Sino-foreign joint venture between the Company and China Changfeng StarBridge Computer Technology Ltd. (CCSC), a Chinese company. This joint venture commenced on July 24, 2000, after final approval was granted by the Chinese Ministry of Foreign Trade and Economic Cooperation (MOFTEC). The CCF StarBridge joint venture is a network systems integration and applications development business and also the holder of a national ISP license in the Peoples Republic of China. The Company owns 45% of this joint venture.
On November 13, 2000, the Company acquired all of the outstanding shares of Gold Phoenix Associates Limited ("Gold Phoenix") common stock from the shareholders in exchange for an aggregate of 13,800,000 shares of common stock of the Company. As a result, Gold Phoenix became a wholly owned subsidiary of the Company on this date.
9
The sole material asset of Gold Phoenix is a joint venture interest in Ai Wei, a sino-foreign joint venture company in the People's Republic of China ("PRC") which is owned sixty percent (60%) by Gold Phoenix and forty percent (40%) by China Changfeng Aerospace Science & Technology Industry (Group) Corporation, one of the research institutes of the China National Space Administration which is under the control of the State Council of the PRC. Ai Wei was formed to develop a health card registration and management system ("HCRM System") in the PRC for those individuals working in the food industry. The HCRM System is designed to provide a computerized system for the registration and data storage process regarding hygiene standard inspections and other information relating to workers in the food industry utilizing a smart card system consisting of a credit-card size plastic card with an imbedded computer chip.
The Company intends to enter into other projects in the People's Republic of China, including the development of Internet cafes and Internet portals for hotels.
Liquidity and Capital Resources
The Company, since its inception, has experienced severe negative cash flows and has met its cash requirements by issuing its common stock. Additional funds were generated by borrowings of approximately $340,000 from stockholders and directors. The Company is seeking additional funding to facilitate its business plan which Management anticipates finalizing in the next fiscal quarter. Note 3 of the Consolidated Condensed Financial Statements states that the Company may have difficulty in continuing as a going concern if equity and debt financing is not secured.
The Company has never paid cash dividends on its Common Stock. The Company presently intends to retain future earnings, if any, to finance the expansion of its business and does not anticipate that any cash dividends will be paid in the foreseeable future. The future dividend policy will depend on the Company's earnings, capital requirements, expansion plans, financial condition and other relevant factors.
10
ITEM 1. Legal Proceedings
None.
ITEM 2. Changes in Securities and Use of Proceeds
None.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
None
None.
11
In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| STARBRIDGE GLOBAL INC. | ||||
| Date: December 14, 2000 |
|
By: |
|
/s/ DAVID TURIK David Turik Director and President |
12
|
|