UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 2000
COMMISSION FILE NUMBER: 0-27735
ASIA4SALE.COM INCORPORATED
(Exact name of registrant as specified in its charter)
STATE OF INCORPORATION OR ORGANIZATION:
NEVADA
I.R.S. EMPLOYER IDENTIFICATION NO: 77-0438927
ADDRESS OF PRINCIPAL EXECUTIVE OFFICES:
2465 West 12th Street, Suite 2
Tempe AZ 85281-6935
REGISTRANT'S TELEPHONE NUMBER:
(480) 505-0070
FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
REPORT:
INDICATE BY CHECK MARK WHETHER THE REGISTRANT HAS FILED ALL REPORTS TO BE FILED
BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE
PROCEEDING 12 MONTHS:
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LAST PRACTICABLE DATE:
10,800,000 shares of common stock, par value of $.001 per share, were
outstanding as of June 30, 2000.
<PAGE>
ASIA4SALE.COM INC.
FORM 10Q
INDEX
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PART 1. FINANCIAL STATEMENTS
-------------------------------
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Consolidated balance sheets for December 31, 1999 and June 30, 2000 (attached).
Consolidated statements of income for six months ended June 30, 2000 (attached).
Consolidated statements of cash flow for six months ended June 30, 2000
(attached).
Notes to Consolidated Financial Statements
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
PART II. OTHER INFORMATION
-----------------------------
ITEM 1. LEGAL PROCEEDINGS
ITEM 2. CHANGES IN SECURITIES
ITEM 3. DEFAULTS IN SECURITIES
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBIT 27 TABLE
SIGNATURES
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<TABLE>
<CAPTION>
ASIA4SALE.COM INC.
Consolidated Balance Sheet
As of June 30, 2000
ASSETS
CURRENT ASSETS JUNE 30, 2000 DEC 31, 1999
--------------- -------------
<S> <C> <C>
Cash or Cash Equivalents $ 1,430,149 16,893
Accounts Receivable 57,472 69,588
Inventory 275,029 0
--------------- -------------
Total Current Assets 1,762,651 86,481
FIXED ASSETS
Computer Equipment 15,627 5,486
Office Furniture 5,685 0
Accumulated Depreciation (2,131) (115)
--------------- -------------
Total Fixed (Net) Assets 19,181 5,371
OTHER ASSETS
Investments 0 100,000
Notes Receivable 27,500 0
Refundable Deposits 7,850 0
Prepaid Insurance 1,845 0
Cash Advances 5,500 0
Goodwill (see NOTE 2.) 0 5,000,000
Accum. Amortization 0 (5,000,000)
--------------- -------------
Total Other Assets 42,694 100,000
TOTAL ASSETS $ 1,824,526 191,852
=============== =============
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts Payable $ 31,054 8,086
Accrued Expenses 25,000 0
Commissions Payable 27,188 40,752
Notes Payable 75,000 150,000
--------------- -------------
Total Current Liabilities 158,241 198,838
STOCKHOLDER'S EQUITY
Common Stock: 100,000,000 shares authorized at par value of $.001
per share, 10,800,000 shares issued and outstanding. 10,800 10,000
Paid-In Capital in Excess of Par Value - Common 6,989,200 4,990,000
Accumulated Deficit (5,333,715) (5,006,986)
--------------- -------------
Total Stockholder's Equity 1,666,285 (6,986)
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 1,824,526 191,852
=============== =============
</TABLE>
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<TABLE>
<CAPTION>
ASIA4SALE.COM INC.
Consolidated Statements of Income
THREE MONTHS ENDING SIX MONTHS ENDING
JUNE 30 JUNE 30
2000 1999 2000 1999
------------ ---------- ----------- ----------
<S> <C> <C> <C> <C>
REVENUES $ 49,432 0 109,878 0
Less Cost of Sales 1,763 0 6,670 0
------------ ---------- ----------- ----------
Gross Profit 47,669 0 103,208 0
OPERATING EXPENSES
Depreciation and Amortization 0 0 2,017 0
General & Administrative Expense 251,901 19,353 447,712 19,353
------------ ---------- ----------- ----------
Total Operating Expenses 251,901 19,353 449,728 19,353
INCOME <LOSS> FROM OPERATIONS (204,232) (19,353) (346,520) (19,353)
------------ ---------- ----------- ----------
OTHER INCOME
Interest Income 17,041 336 19,791 336
------------ ---------- ----------- ----------
Total Other Income 17,041 336 19,791 336
NET INCOME $ (187,191) (19,017) (326,729) (19,017)
------------ ---------- ----------- ----------
NET INCOME (LOSS) PER SHARE $ (0.017) (0.019) (0.030) (0.019)
------------ ---------- ----------- ----------
WEIGHTED AVERAGE SHARES OUTSTANDING 10,800,000 1,000,000 10,800,000 1,000,000
============ ========== =========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ASIA4SALE.COM INC.
Consolidated Statements of Cash Flow
SIX MONTHS ENDING
JUNE 2000 JUNE 1999
----------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ (326,729) (19,017)
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Depreciation Expense 2,017 0
Accounts Receivable 57,472 0
Inventory (275,029) 0
Accounts Payable 31,054 0
Accrued Expenses 25,000 0
Commission Payable 27,188 0
----------- ----------
Net Cash Flow Used by Operations (132,299) 0
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Computer Equipment 15,627 0
Office Furniture 5,685 0
Note Receivable 27,500 0
----------- ----------
Net Cash Used In Investing 64,975 0
=========== ==========
CASH FLOWS FROM FINANCING ACTIVITIES
Common Stock Issued For Cash $2,000,000 0
----------- ----------
Net Cash Used In Financing 2,000,000 0
----------- ----------
NET INCREASE <DECREASE> IN CASH 1,932,676 0
=========== ==========
Cash at Beginning of Period 16,893 0
----------- ----------
Cash at End of Period 1,430,149 0
----------- ----------
SUPPLEMENTAL CASH FLOW INFORMATION
Cash Paid For:
Interest 0 0
----------- ----------
Income Taxes 0 0
----------- ----------
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. Basis of Presentation
The consolidated balance sheet as of June 30, 2000, the consolidated statements
of income for the period ended June 30, 2000, and the consolidated statements of
cash flows for the period ended June 30, 2000 have been prepared by the Company
without audit. The consolidated balance sheet as of December 31, 1999 was
derived from audited consolidated financial statements. In the opinion of
management, all adjustments (which include only normally recurring adjustments)
necessary to present fairly the financial position, changes in income, results
of operations and cash flows at June 30, 2000 (and for all periods presented)
have been made.
Certain information and footnote disclosures, normally included in financial
statements prepared in accordance with generally accepted accounting principles,
have been condensed or omitted. It is suggested that these consolidated
financial statements be read in conjunction with the financial statements and
notes thereto included in the fiscal 1999 Annual Report on Form 10-K. The
results of operations for the periods ended June 30, 2000 and June 30, 1999 (see
NOTE 2.) are not indicative of the operating results for the respective full
years.
NOTE 2. Principles of consolidation
The condensed consolidated financial statements include the accounts of
Asia4Sale.Com Inc., Asia4Sale.Com Ltd. and its wholly-owned subsidiary Asia
Sales Phils. It should be noted that Asia4Sale.Com Ltd. was incorporated in Hong
Kong under the Companies Ordinance on March 24, 1999. Aside from the statutory
provision of authorized capital, as detailed in the company's Articles of
Incorporation, there was no significant business activity conducted between the
date of Incorporation and March 31, 1999.
NOTE 3. Acquisitions
On February 7, 2000, the Company acquired Asia4Sale.Com Ltd. in exchange for
9,000,000 restricted common shares of Asia4Sale Com. Inc. Asia4Sale.Com Ltd. is
headquartered in Hong Kong and was registered and incorporated under the
Companies Ordinance of Hong Kong on March 24, 1999. Accordingly, all financial
information included herein has been restated to reflect the combined operations
of Asia4Sale.Com Inc., the acquired company Asia4Sale.Com Ltd and its
wholly-owned Philippines subsidiary, Asia Sales Phils. Inc.
NOTE 4. Current Assets
As of June 30, 2000, current assets consist of $1,430,149 in cash, $57,472 in
accounts receivable and $275,029 in inventory. Inventory is stated at cost and
is comprised of 1) items acquired for resale by auction and valued at $265,129
and 2) undistributed promotional items valued at $9,900.
<PAGE>
NOTE 5. Property, Plant and Equipment
Property, plant and equipment are carried at historical cost. Accumulated
depreciation is calculated by the straight-line method.
NOTE 6. Other Assets
Other Assets consist of 1) short-term loan in the amount of $27,500 plus 10%
interest due and payable within 12 months and 2) refundable deposits, prepaid
insurance payments and travel advances totaling $15,185.
NOTE 7. Current Liabilities
As of June 30, 2000, current liabilities consist of $31,054 in accounts
payable, $25,000 in accrued operating expenses, $27,188 in commissions and
$75,000 in short-term debt. As of the end of the preceding fiscal period
short-term debt consisted of two promissory notes in the amounts of $100,000 and
$50,000 respectively, each due and payable within 12 months. The first debt was
partially discharged ($25,000) and the second fully discharged ($50,000) in
April, 2000.
NOTE 8. Long-Term Debt
As of June 30, 2000 the Company has no long-term debt.
NOTE 9. Shareholder's Equity
Between February 7 and March 31, 2000 the Company issued 800,000 new restricted
shares of its Common Stock at an offering price of $2.50 per share. The proceeds
of this offering are to be used to fund capital and operating expenditures,
future expansion and other financial contingencies.
NOTE 10. Revenue recognition
Revenues for the period were primarily derived from two sources: Asia4Sale.Com
Ltd. and its subsidiary Asia Sales Phils. Inc.
Asia4Sale.Com Ltd operates a network of approximately 1,200 Internet-based
storefronts, each of which functions as an Asia4Sale sales agency. Asia4Sale's
share of revenues from these stores consists entirely of manufacturer's
commissions on goods sold. All product procurement costs, shipping costs, and
sales commissions are deducted from total revenues for the purposes of
calculating Gross Profit.
Asia Sales Phils. Inc. is a wholly-owned subsidiary of Asia4Sale.com, Ltd. and
is incorporated in the Philippines as a trading and investment company. As of
June 30, 2000, the company's revenues have been derived from two sources: 1) an
investment in Auction Asia International Inc., Subic Bay, Philippines and 2)
the acquisition and subsequent re-sale by auction of heavy equipment.
<PAGE>
NOTE 11. Basic (Loss) Per Share
Basic (Loss) per Common Share is based on the weighted average number of shares
of Common Stock outstanding as of the respective dates: 10,275,556 as of June
30, 2000 and 1,000,000 as of June 30, 1999.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
------------------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATION
---------------------------------------------
The Company
------------
Asia4Sale.Com Inc. is the US-registered parent of Asia4Sale.com Ltd, a Hong Kong
registered company acquired in February, 2000. Asia4Sale.com Ltd. was founded as
a joint marketing venture between ZiaSun Technologies Inc., a publicly held U.S.
Internet holding company and Cable & Wireless HKT, Hong Kong's primary
full-service communications provider and owner/operator of Asia's largest
commercial teleport.
Asia4Sale is the first major e-commerce venture to specialize in linking Asia's
producers of high quality, high value goods and services with buyers and markets
around the world. With e-commerce offerings to date dominated by U.S.
companies, the Asian emphasis allows Asia4Sale to offer highly competitive
prices for Asian products with strong brand recognition. Asia4Sale's three-part
structure allows the company to exploit both the business-to-consumer and
business-to-business markets. Asia4Sale derives its revenues from three
principal sources:
ShoppingAsia (www.asia4sale.com) is an e-commerce home shopping portal offering
-----------------
a variety of affiliate marketing services. ShoppingAsia makes Asian products
directly available to consumers worldwide. Any web user can open a store,
stocked with products sourced by Asia4Sale, at no cost to the store operator.
Asia4Sale's revenues from these stores consist entirely of commissions on goods
sold. ShoppingAsia is currently in the process of introducing two new fee-based
premium versions of this service which are expected to generate substantial
additional revenues. The first of these 'premium' services will be introduced in
August, 2000.
AuctionAsia (www.auctionasia.net) provides Internet-based auction services to
-------------------
businesses and consumers in the Asia region. Asia4Sale has also invested in
physical auction companies and sites around Asia, combining this profitable
business with its Internet auction business. Having established a base in the
Asian industrial auction market, AuctionAsia is expanding to exploit the huge
potential market offered by the sale of industrial-sized lots of Asian-made
components and products. AuctionAsia feels that this is a niche with enormous
growth potential: U.S. businesses, who are among the largest consumers of
Asian-made components and raw materials, are familiar with the web auction
process and will be natural customers for Asian businesses that wish to sell in
this efficient and practical way. AuctionAsia will also continue its current
strategy of investing in and providing Internet support for physical auctions of
industrial equipment throughout Asia. This business is currently yielding solid
revenues and earnings, which will be reinvested so as to develop the capacity to
hold direct Internet auctions of Asian-made components, raw materials, and
finished goods.
<PAGE>
BarterAsia (www.barterasia.net) was organized to develop and exploit the barter
------------------
potential of Asian economies. It functions as a third party record keeper for a
group of businesses that trade goods and services instead of paying cash.
Barter allows them to buy what they need and pay for it with otherwise unsold
products and services, reducing cash outflow and converting unused assets to
productive use. BarterAsia maintains an intricate barter system, achieving the
same flexibility in barter trades that is offered through traditional cash
transactions. Barterasia has recently concluded an agreement with the World
Chinese Merchant Mutual Aid Union Association, a 200,000 member, Taiwan-based
business association with a large and growing membership in the People's
Republic of China. The association has pledged to work closely with BarterAsia
and actively promote its barter exchange services. A formal joint-venture with
the association is expected to be announced in the third quarter. To facilitate
this arrangement, BarterAsia has undertaken to expand and strengthen its
services by making them available in both simplified and traditional Chinese.
The new Chinese language website is expected to be launched in August.
Results of Operations
-----------------------
Revenues for the six months ended June 30, 2000 were $109,878. No comparison
with the corresponding period in 1999 is possible since there are no revenues
reported for this period. The revenues, were derived in large part from the
disposal of auction inventory. Revenues were approximately $11,000 less in the
current three-month period than were reported in the preceding fiscal period but
the company currently carries a large inventory of unsold industrial equipment
that is expected to produce substantial revenues in the next fiscal quarter.
Gross profit for the period was $103,208 or 93% of net revenues. These high
gross margins are expected to approximate industry norms as ShoppingAsia begins
to contribute a larger portion of overall revenues.
Total Operating Expenses for the period were $447.712. There were no significant
operating expenses reported for the comparable period in 1999. Operating
expenses were approximately $56,000 higher in the current three-month period
than were reported in the preceding fiscal period. This increase can be
attributed to the opening of the new US sales office in Tempe, Arizona, the
addition of new clerical support staff in Hong Kong and the outsourcing of some
customer service functions.
<PAGE>
The operating loss for the period was $346,520, or approximately $63,000 higher
in the current period than was reported in the preceding fiscal period. The net
loss for the period was $326,729 or $.030 per common share outstanding. The
operating loss was partially offset by a substantial increase in interest
income, from approximately $3,000 in the preceding period to approximately
$20,000 in the most recent period. Income from operations are expected to
improve as ShoppingAsia and BarterAsia both begin to contribute a greater share
of revenues and the new fee-based 'premium' stores are introduced in August.
Financial Condition, Capital Resources and Liquidity
---------------------------------------------------------
As of June 30, 2000 the Company had working capital of approximately $1.7
million. This compares with working capital of approximately $1.8 million at the
end of the preceding fiscal period. Liquidity in future periods will be
contingent upon internally generated cash flows, the ability to obtain adequate
financing for capital expenditures and financing when needed, and the amount of
increased working capital necessary to support expected growth. Based on current
capitalization, and given the very favourable current ratio, it is believed that
future cash flows from operations and the availability of alternative sources of
external financing is sufficient to meet all anticipated requirements for
planned operating and capital expenditures and should provide adequate liquidity
for the foreseeable future.
Forward Looking Statements
----------------------------
This Form 10-Q contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which are intended to be covered by the safe harbors created
thereby. Investors are cautioned that all forward-looking statements involve
risks and uncertainty, including without limitation, the ability of the Company
to develop its products, as well as general market conditions, competition and
pricing. Although the Company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and therefore, there can be no assurance that
the forward-looking statements included in this Form 10-Q will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the Company will be achieved.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not party to any legal proceedings.
<PAGE>
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults in Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule.
b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended June 30, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
James Emberton
Chief Financial Officer
--------------------------------------
For: ASIA4SALE.COM INC.
(Registrant)
DATE: 5 August, 2000
<PAGE>
