<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [Fee Required] For the fiscal year ended
DECEMBER 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
For the transition period from _________
_________________ to ___________________
Commission file number 0-27735
ASIA4SALE.COM INC.
------------------
(Name of small business issuer in its charter)
NEVADA 77-0438927
- ------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2465 WEST 12TH STREET, SUITE 2 85281-6935
- ------------------------------ ----------
TEMPE, AZ (Zip Code)
- ---------
(Address of principal executive offices)
Issuer's tel. number: (480) 505-0070
--------------
Securities registered under Section 12(b) of the Exchange Act:
Title of each class: Name of each exchange on which registered:
n/a n/a
Securities registered under Section 12(g) of the Exchange Act:
Common Equity, Par Value $.001
(Title of Class)
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 twelve (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 ninety (90) days.
Yes [ X ] No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is met contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. ( )
State issuer's revenues for its most recent fiscal year. $70,024
The aggregate market value of the voting stock held by non-affiliates of the
Registrant is $106,650,000 computed by reference to the closing bid price of the
stock at March 30, 2000. This computation is based on the number of issued and
outstanding shares held by persons other than directors and officers of the
Registrant.
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
COMMON STOCK OUTSTANDING AT DEC. 31, 1999
------------ ----------------------------
Par Value $0.001 Per Share 10,000,000
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
None.
Transitional Small Business Disclosure Format
(Check One) Yes [ ] No [ X ]
<PAGE>
ASIA 4 SALE, INC.
FORM 10-KSB
FISCAL YEAR ENDED DECEMBER 31, 1999
TABLE OF CONTENTS
PART I
<TABLE>
<S> <C> <C>
ITEM 1. DESCRIPTION OF BUSINESS..........................................4
ITEM 2. DESCRIPTION OF PROPERTY..........................................8
ITEM 3. LEGAL PROCEEDINGS................................................8
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS.................................................8
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS..............................................9
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS....................9
ITEM 7. FINANCIAL STATEMENTS............................................11
ITEM 8. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURES.........................14
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION
16(a) OF THE EXCHANGE ACT.......................................14
ITEM 10. EXECUTIVE COMPENSATION..........................................15
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT...........................................15
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................16
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K................................16
SIGNATURES......................................................16
</TABLE>
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
The Registrant (sometimes alternatively referred to in this report as the
"Company" or "Asia4Sale") is a corporation, organized and existing under the
laws of the State of Nevada, having been incorporated in September, 1996. The
Registrant was formerly known as H&L Investments, Inc. The name of the
corporation was amended on December 22, 1999 and a Certificate of Amendment of
Articles of Incorporation duly filed with the Office of the Secretary of State
for the State of Nevada on December 29, 1999.
Subsequent to these events Asia4Sale.com Inc. acquired Asia4Sale.com Ltd, a
Hong Kong registered company incorporated in Hong Kong in March, 1999.
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.
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 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.
Asia4Sale.com Ltd. is the parent of Asia Sales Phils. Inc., a trading and
investment company with operations in Subic Bay, Philippines. Asia Sales Phils.
Inc. invests primarily in physical auctions, thus complementing and augmenting
the Internet-based operations of AuctionAsia.
PRODUCT SOURCING
Initial product sourcing was conducted in Hong Kong. Many initial suppliers were
Hong Kong companies manufacturing in the Pearl Delta region; others were
manufacturers in China with representative offices in Hong Kong.
Asia4Sale is now broadening its product sourcing to other Asian regions.
Products from the Philippines were brought on-line in early 2000. Over 300
suppliers from Hong Kong, China and the Philippines are now providing over 5000
products. A Taiwan office will open during the middle of 2000, and another 5000
products are expected from Taiwan.
Negotiations are currently underway for an Australian and Japanese presence, and
South Korea is under investigation. Asia4Sale also intends to expand into
Thailand, Malaysia, Singapore, Indonesia, and India.
To accomplish this, Asia4Sale is establishing a network of additional collection
and distribution points in different Asian countries. Each office will be
responsible for sourcing products from that country and arranging for the
collection from the manufacturer, and subsequent delivery to the consumer.
COMPETITION
SHOPPINGASIA
The competition may be divided into four broad categories:
1. Traditional retailers. These compete with all e-commerce sites for actual
purchases. The rapid rise of e-commerce is well documented though, and
there is no doubt that the e-commerce share of the market is expanding
exponentially. Asia4Sale's task is to achieve a significant slice of the
e-commerce market, and does not traditional retailers as significant
competitors.
<PAGE>
2. Established e-retailers. These conventional e-commerce sites have the
advantage of being well established and having existing customer and
product bases. It is easy though, for them to become victims of their own
size: the sheer volume of products available inevitably makes shopping
cumbersome and makes targeted marketing difficult. Asia4Sale believes that
smaller, specialized stores, managed by individuals who are familiar with
the products they are selling and often selling to their own associates,
will quickly erode the market share of the e-commerce giants. An additional
competitive advantage of Asia4Sale is that products are sourced directly
from manufacturers, eliminating intermediary costs and enabling Asia4Sale
to offer highly competitive prices while retaining solid margins.
3. Internet affiliate marketing operators. Affiliate marketing has become a
popular concept, and a number of companies, from established giants like
Yahoo! and Amazon.com to new entries like Affinia, are competing for the
attention of commerce-oriented web users. Asia4Sale's system offers
distinct advantages over any other affiliate marketing system. Asia4Sale
believes that it provides the best affiliate marketing opportunity on the
Internet, with a combination that will achieve sustained growth in both
number of stores and per store sales.
4. E-commerce ASPs. At this time, Asia4Sale is not aware of any other
Application Service Provider that offers a similar e-commerce back-end
solution to retailers moving onto the web. Competitors will unquestionably
emerge. The niche is enormous though, and Asia4Sale will have the advantage
of being among the first to offer this service.
AUCTIONASIA
Existing web auction businesses are almost exclusively devoted to the high
profile direct-to-consumer market. Business-to-business auctions have enjoyed
some success in the U.S. market, but have yet to penetrate the Asian market.
AuctionAsia feels that this is a niche with enormous growth potential: U.S.
businesses, which 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. Asian businesses participating in the regional infrastructure boom are also
natural customers for auctions of industrial equipment. In both cases,
AuctionAsia is moving into these potentially profitable regional niches where
little or no competition exists.
BARTERASIA
Like AuctionAsia, BarterAsia is moving into an area where no significant
competition exists. In effect, BarterAsia is creating the business. Expansion is
expected to follow the e-commerce adoption curve, increasing slowly at first,
and then more rapidly as Internet-based commerce gains acceptance in the region.
Analysts believe that Asian e-commerce will be primarily driven by
business-to-business and supply-chain needs, both of which are ideally suited to
barter transactions. It is expected that competition will emerge as the market
niche grows, but BarterAsia will have 'first mover' advantage and the ability to
refine its operating systems as the market grows.
<PAGE>
OUTLOOK
SHOPPINGASIA
Asia4Sale aims to bring products into the market at a total price lower
(inclusive of shipping costs) than similar products found in stores in Western
countries.
ShoppingAsia's operating strategy revolves around developing the largest
possible number of basic/free stores as quickly as possible, providing a
continuously expanding range of products for them to sell, and providing the
store operators with fast and efficient back-end services. These basic/free
stores will be profitable, but margins are expected to be small. The basic/free
storeowners though, are expected to become fertile recruiting grounds for the
upgraded stores. Conversion of effective basic operations to higher-margin
upgraded stores is an integral part of the ShoppingAsia strategy.
Advanced upgraded stores, with services aimed primarily at business users, will
be promoted separately, with sales efforts initially focusing on Asian producers
who need to move to the Internet but do not have the technical resources to do
so. ShoppingAsia will use target-specific advertising and direct approaches to
potential clients to develop an advanced-upgrade customer base.
Asia4Sale opened a new office in Tempe, Arizona in the United States in May
2000. This office will act as a center of operations for Asia4Sale's worldwide
marketing effort. From this new office, as well as its established offices in
Asia, Asia4Sale will conduct direct marketing, e-mail, telephone, post and fax
country campaigns aimed at dramatically increasing the number of basic/free
stores opened each month, and at encouraging key markets around the world to
purchase and successfully operate premium Asia4Sale on-line stores.
Asia4Sale will also attract new storeowners and expand its network of worldwide
stores by advertising extensively in key traditional print media, through
on-line media, on selected radio stations in target markets, and through the use
of infomercials.
AUCTIONASIA
AuctionAsia will 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
plowed back into developing the capacity to hold direct Internet auctions of
Asian-made components, raw materials, and export-oriented finished goods. Again,
this service will rely on targeted advertising and direct approaches to
potential clients to develop a customer base.
BARTERASIA
<PAGE>
BarterAsia occupies a niche in two businesses that are relatively new to Asia:
barter and e-commerce. Its growth rate, therefore, will be heavily dependent on
the adoption curves for these businesses, and is expected to be relatively slow
over the next year. BarterAsia's strategy will focus on gradual expansion,
attracting clients that are likely to be long-term members of the barter network
and developing positive publicity that will draw attention to the advantages of
web-based barter. Web-based barter is ideally suited to the Asian business
scene, and effective positioning now to take advantage of its eventual expansion
is more important than immediate growth.
EMPLOYEES
As of March 31, 2000 the Company and its subsidiaries employed 8 full-time
employees, including four managers, two sales and marketing and two
administrative-support personnel. None of the Company's employees is subject to
a collective bargaining agreement. The Company believes its relations with its
employees are good. Presently, customer service, website hosting and website
development are being outsourced to non-affiliated companies in Hong Kong, the
Philippines and the United States. At the time of writing, there are plans to
add an additional 5-7 employees to staff the Company's US sales operation in
Tempe, Arizona.
ITEM 2. DESCRIPTION OF PROPERTY
The Company conducts operations from its leased premises located at 2465 West
12th Street, Suite 2 in Tempe, Arizona. The leased property consists of
approximately 1,700 square feet, which includes 700 square feet of warehousing
space. Annual lease payments for this facility are $17,748, escalating to
$24,072 by the third and final year of the lease.
The Company shares office space at 12A First Pacific Bank Centre, 56 Gloucester
Road, Wanchai, Hong Kong with Momentum Internet Inc. Annual rental payments for
this facility are HK $60,000 (or approx. US $7,722) per year. This facility
contains the offices of the President, Chief Financial Officer, Marketing
Manager and administrative support staff.
The Company also also rents facilities at Building 8480, Subic Bay Freeport
Zone, Subic Bay, Philippines 2200. Annual payments for this facility are $4,680
per year. This facility houses the operations of Asia Sales Philippines, Inc., a
wholly owned subsidiary.
The Company believes that the facilities described above are adequate for both
its current and foreseeable needs.
ITEM 3. LEGAL PROCEEDINGS
There is no information relevant to the Registrant which must be disclosed under
Item 3.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the fiscal year
ended December 31, 1999.
<PAGE>
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Registrant's common stock is traded on the NASD OTC BB under the trading
symbol AFSI.
MARKET INFORMATION
STOCK PRICE
The table below presents the high and low bid prices of the Registrant's common
stock at two-week intervals since the inception of trading on February 18, 2000.
No market data for periods prior to this date are presented.
<TABLE>
<CAPTION>
DATE HIGH PRICE LOW PRICE
<S> <C> <C>
Feb 18, 2000 10.000 9.375
Mar 01, 2000 10.000 10.000
Mar 15, 2000 10.500 10.500
Mar 30, 2000 10.375 9.875
Apr 14, 2000 10.500 8.000
Apr 28, 2000 9.5000 9.000
May 16, 2000 8.875 8.875
</TABLE>
HOLDERS
As of December 31, 1999, there were approximately 125 shareholders of record.
DIVIDENDS
To date, the Company has not declared or paid any cash dividends with respect
to its Common Stock, and the current policy of the Board of Directors is to
retain earnings, if any, to provide for expansion and development.
Consequently, no cash dividends are expected to be paid on the Common Stock in
the foreseeable future. Further, there can be no assurance that the future
operations of the Company will generate the revenues and cash flow needed to
declare a cash dividend or that the Company will have legally available funds
to pay dividends.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
<PAGE>
Revenues for the fiscal year ended December 31, 1999 were $70,024. Comparison
with the corresponding period in 1998 is not possible as no operating activity
was reported for this period. The increase in revenues is wholly attributable
to the acquisition of Asia4Sale.com Ltd and its wholly owned subsidiary Asia
Sales Philippines, Inc. The financial results of both companies are combined
here for the purposes of comparison (see NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS, NOTE 2.).
Gross profit for the period was $68,812 or 98% of net revenues. These high
gross margins can be expected to approximate industry norms as more 'lower
margin' online stores and services are added and the current composition of
revenues changes.
Total Operating Expenses for the period were $5,078,025. This is largely
attributable to the acquisition of Asia4Sale.com Ltd. and the one-time
amortization of intangible assets (goodwill) related to the acquisition. (see
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, NOTE 2.).
Income (Loss) from Operations for the period was $(5,009,213) and the Net Loss
for the period was $5,006,986 or $0.50 per common share outstanding. As noted
above, this is largely attributable to the one-time amortization of intangible
assets acquired in the Asia4Sale.com acquisition. Substantial improvement is
anticipated in the next fiscal year with the full-year operation of
Asia4Sale.com Ltd. and its subsidiary, the introduction of two new fee-based
'premium' store services and the addition of approximately 12,000 new 'free'
stores.
FINANCIAL CONDITION, CAPITAL RESOURCES AND LIQUIDITY
Net cash flows from operating activities contributed to a small net improvement
in cash position for the period ending December 31, 1999. 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.
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 future expansion, planned capital and
operating expenditures and other financial contingencies. As of March 31, 2000
the Company had working capital of approximately $1.8 million.
Based on current capitalization, 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
<PAGE>
This Form 10-KSB 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-KSB 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.
ITEM 7. FINANCIAL STATEMENTS
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Asia4Sale.com, Inc. and Subsidiary
Hong Kong
We have audited the accompanying consolidated balance sheet of Asia4Sale.com
Inc. and subsidiary as of December 31, 1999 and the related consolidated
statements of income, stockholders' equity and cash flows for the years ended
December 31, 1999 and 1998. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Asia4Sale.com, Inc.
and subsidiaries as of December 31, 1999 and the results of their operations and
their cash flows for the years ended December 31, 1999 and 1998, in conformity
with generally accepted accounting principles.
Jones, Jensen & Company
Salt Lake City, Utah
April 28, 2000
The Company's Financial Statements are filed and included elsewhere herein as
part of this Annual Report on Form 10-KSB.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. Summary of significant accounting policies:
Principles of consolidation
On February 7, 2000, the Company acquired Asia4Sale.com Ltd. (see NOTE 2.).
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. All significant intercompany accounts and transactions have been
eliminated.
Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has adopted a December 31st fiscal year-end.
Use of Estimates
<PAGE>
ITEM 7. FINANCIAL STATEMENTS
ASIA4SALE.COM INC. AND SUBSIDIARY
Consolidated Balance Sheet
As of December 31, 1999
ASSETS
<TABLE>
<CAPTION>
DEC 31, DEC 31,
CURRENT ------- -------
ASSETS 1999 1998
---- ----
<S> <C> <C>
Cash or Cash
Equivalents $ 16,893 0
Accounts
Receivable 69,588 0
--------------------------------
Total Current
Assets 86,481 0
FIXED ASSETS
Computer
Equipment 5,486 0
Accumulated
Depreciation (115) 0
--------------------------------
Total Fixed (Net)
Assets 5,371 0
OTHER ASSETS
Note Receivable 100,000 0
Goodwill (see
NOTE 2.) 5,000,000 0
Accum
Amortization (5,000,000)
--------------------------------
Total Other
Assets 100,000 0
TOTAL ASSETS $ 191,852 0
================================
<CAPTION>
LIABILITIES AND STOCKHOLDER'S EQUITY
<S> <C> <C>
CURRENT
LIABILITIES
Accounts Payable $ 8,086 0
Commissions
Payable 40,752 0
Notes Payable 150,000 0
--------------------------------
<PAGE>
Total Current
Liabilities 198,838 0
STOCKHOLDER'S
EQUITY
COMMON STOCK:
100,000,000
SHARES AUTHORIZED
AT PAR VALUE OF
$.001
PER SHARE,
10,000,000 SHARES
ISSUED AND
OUTSTANDING. 10,000 0
Paid-In Capital in
Excess of Par
Value 4,990,000 0
Accumulated
Deficit (5,006,986) 0
--------------------------------
Total
Stockholder's
Equity (6,986) 0
TOTAL
LIABILITIES AND
STOCKHOLDER'S
EQUITY $ 191,852 0
================================
</TABLE>
ASIA4SALE.COM INC. AND SUBSIDIARY
Consolidated Statements of Operations
<TABLE>
<CAPTION>
FOR YEARS ENDED
DEC. 31 DEC. 31
1999 1998
--------------------------------
<S> <C> <C>
REVENUES $ 70,024 0
Less Cost of Sales 1,212 0
--------------------------------
Gross Profit 68,812 0
OPERATING
EXPENSES
Depreciation and
Amortization
Expense 5,000,115 0
General &
Administrative
Expense 77,910 0
--------------------------------
<PAGE>
Total Operating Expenses 5,078,025 0
INCOME (LOSS)
FROM
OPERATIONS (5,009,213) 0
--------------------------------
OTHER INCOME
Interest Income 2,227 0
--------------------------------
Total Other
Income 2,227 0
NET INCOME $(5,006,986) 0
--------------------------------
NET INCOME
(LOSS) PER
SHARE $ (0.50) 0
--------------------------------
WEIGHTED
AVERAGE
SHARES
OUTSTANDING 10,000,000 1,000,000
================================
</TABLE>
ASIA4SALE.COM INC. AND SUBSIDIARY
Consolidated Statements of Cash Flow
<TABLE>
<CAPTION>
FOR THE YEARS
ENDED
DEC. 31 DEC. 31
1999 1998
<S> <C> <C>
CASH FLOWS FROM
OPERATING
ACTIVITIES
Net Loss $(5,006,986) 0
ADJUSTMENTS TO
RECONCILE NET
INCOME TO NET
CASH
PROVIDED BY
OPERATING
ACTIVITIES
Depreciation &
Amortization (see
NOTE 2.) 5,000,115 0
Accounts
Receivable (69,588) 0
Accounts Payable 8,086 0
<PAGE>
Commissions
Payable 40,752
Notes Payable 150,000 0
--------------------------------
Net Cash Flow
Used by Operating
Activities 122,379 0
================================
CASH FLOWS FROM
INVESTING
ACTIVITIES
Acquisition of
subsidiary (5,000,000)
Computer
Equipment (5,486)
Note Receivable (100,000) 0
================================
Net Cash Used In
Investing (5,105,486) 0
================================
CASH FLOWS FROM
FINANCING
ACTIVITIES
Additional Paid-in
Capital 5,000,000
--------------------------------
Net Cash Used In
Financing 5,000,000 0
--------------------------------
NET INCREASE
(DECREASE) IN
CASH 16,893 0
================================
Cash at Beginning
of Year 0 0
================================
Cash at End of
Year $ 16,893 0
================================
SUPPLEMENTAL
CASH FLOW
INFORMATION
Cash Paid For:
Interest $ 0 0
Income Taxes $ 0 0
</TABLE>
ASIA4SALE.COM INC. AND SUBSIDIARY
Consolidated Statements of Shareholder's Equity
<PAGE>
<TABLE>
<CAPTION>
Common Stock Additional
------------ Paid-in Accumulated Total
Shares Amount Capital Deficit S/E
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE, DEC. 31, 1997 1,000,000 $1,000 $0 $0 $1,000
Net Income for Year
-----------------------------------------------------------------------------------
BALANCE, DEC. 31, 1998 1,000,000 $1,000 $0 $0 $1,000
Net Income for Year
Common Shares issued 9,000,000 $9,000 $4,990,000
Re: Acquisition
BALANCE, DEC. 31 1999 10,000,000 $10,000 $4,990,000 ($5,006,986) ($6,986)
Net Loss for Year
</TABLE>
The preparation of financial statements in conformity with generally accepted
accounting principles requires that management make estimates and assumptions
that may 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.
Accordingly, actual results could differ from these estimates.
Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
Property, Plant and Equipment
Property, plant and equipment are carried at historical cost. Accumulated
depreciation is calculated by the straight-line method.
Other Assets
Other Assets consists of a short-term loan for $100,000 plus 10% interest due
and payable within 12 months. The loan has a maturity value of $110,000.
Short-Term Debt
As of December 31, 1999 short-term debt consists of two promissory notes
($100,000 and $50,000 respectively) each of which is due and payable within 12
months. The Company has no other significant current liabilities.
<PAGE>
Long-Term Debt
As of December 31, 1999 the Company has no long-term debt.
Revenue Recognition
Revenues are primarily derived from two sources: Asia4Sale.Com Ltd. and its
subsidiary Asia Sales Phils. Inc.
Asia4Sale.com Ltd operates a network of approximately 1,000 Internet-based
storefronts, each of which functions as an Asia4Sale sales agency. Revenues from
these stores consists entirely of the supplier's commissions on goods sold. All
product procurement costs, shipping costs, and sales commissions are deducted
from revenues for the purposes of calculating Gross Profit.
Asia Sales Phils. Inc. is incorporated as a trading and investment company and
its revenues for the fiscal period ended December 31, 1999 are solely derived
from its investments in Auction Asia International Inc., Subic Bay, Philippines.
These are reported as revenues in the Consolidated Statements of Income for the
period ending December, 31 1999.
Net Income (Loss) Per Share
Net Income (Loss) per Common Share is based on the weighted average number of
shares of Common Stock outstanding during the period of the financial
statements.
Provision for Taxes
At December 31, 1999 the Company had net operating loss carryforwards of
approximately $5,000,000 that may be offset against future taxable income
through the year 2019. No tax benefit has been reported in the financial
statements, because the potential tax benefits of the net operating loss
carryforwards are offset by a valuation allowance equal to the same amount.
NOTE 2. Acquisitions
On December 31, 1999 Internet Ventures Ltd., a non-US corporation, acquired the
outstanding common stock of Asia4Sale.com Ltd in exchange for US $5,000,000.
Subsequently, on February 7, 2000, Asia4Sale.com Ltd. was merged with
Asia4Sale.com Inc. (formerly H&L Investments Inc.) in exchange for 9,000,000
shares of its common stock. Accordingly, the assets transferred to the acquiring
company, Asia4Sale.com Inc. and valued at $5,000,000, have been recorded for
accounting purposes as 'goodwill' and fully amortized in the fiscal period
ending December 31, 1999.
As noted above, all financial information included herein has been restated to
reflect the combined operations of Asia4Sale.Com Inc. (formerly H&L Investments
Inc.), the acquired company Asia4Sale.Com Ltd and its wholly owned Philippines
subsidiary, Asia Sales Phils. Inc.
<PAGE>
ITEM 8. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES
There is no information relevant to the Registrant which must be disclosed under
Item 8.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT
The following table contains the name and position with the Company of each
director and executive officer appointed on February 10, 2000. Directors are
elected to a one year term, to serve until the next annual meeting of
shareholders and until their successors are duly elected and qualified or until
their earlier resignation, removal from office, or death. The respective
background of each director and executive officer is described following the
table.
<TABLE>
<S> <C> <C>
Brian J. Hodgson President and Director Appointed February 2000
James Emberton CFO and Director Appointed February 2000
Gregory F. Hunter VP - Operations and Director Appointed February 2000
Adrian Wiest VP - Auctions Appointed February 2000
Eric Montandon Director Appointed February 2000
</TABLE>
BRIAN HODGSON, PRESIDENT
Mr. Hodgson has 15 years experience in advertising sales. In Asia he was the
Sales Director for Forbes (Chinese edition) and Travel News Asia. Before that he
worked for News Ltd. in Sydney and for The Guardian in London. In 1997 Mr.
Hodgson founded Pacific Barter, and Asian barter exchange company. Pacific
Barter was acquired by ZiaSun Technologies Inc. in March 1999, and is now
BarterAsia, a part of Asia4Sale. Mr. Hodgson holds a Diploma in Marketing from
the Institute of Marketing (UK) and a Business Studies (Marketing) qualification
from Northumbria University (UK).
JAMES EMBERTON, CHIEF FINANCIAL OFFICER
Mr. Emberton was formerly the Financial Planning Officer for Canadian National
Railways, and was responsible for developing and monitoring an operating budget
of $160 million annually, evaluating and forecasting weekly, monthly and annual
performance, and identifying budget variances. He subsequently served as
Financial Planning officer for SR Telecom, Inc., managing accounting systems in
Beijing, Shanghai, Bangkok, and Manila and designing and documenting all
accounting and financial reporting procedures. Mr. Emberton holds an Economics
degree from York University.
GREGORY HUNTER, VICE PRESIDENT FOR OPERATIONS
<PAGE>
Mr. Hunter has extensive business experience in Japan and in the rest of Asia,
and is fluent in Japanese. He has served as a Supervisor in the International
Business Training Group of Sharp Corporation's Human Resources Development
Center in Nara, Japan, establishing management development programs for overseas
subsidiaries throughout Asia. He later worked for Morgan Stanley Japan, and was
Vice President and General Manager of a Manila-based telecommunications firm.
Mr. Hunter holds a Master in International Management degree with an emphasis in
international finance from Thunderbird - The American Graduate School of
International Management. He also holds a Bachelor of Science degree in Business
Administration with a major in marketing from Arizona State University.
ADRIAN WIEST, VICE PRESIDENT FOR AUCTION OPERATIONS
Mr. Wiest has spent the last 5 years as Territory Manager for the Asian hub of
the world's largest industrial auction firm, and before that was Equipment
Superintendent for a construction firm with operations throughout Asia. He is
intimately acquainted with both buy-side and sell-side industrial equipment
markets throughout Asia, and with the industrial auction process
ITEM 10. EXECUTIVE COMPENSATION
No aggregate compensation in excess of $100,000 was paid, in cash or in kind, to
any of the named individuals for services rendered in all capacities to the
Company and its subsidiaries for the fiscal year ended December 31, 1999 or
during the fiscal quarter ended March 31, 2000.
Directors Compensation
The Directors of the Company received no cash compensation for serving on the
Board of Directors. Directors are reimbursed for any reasonable expenses
incurred while attending these meetings.
Stock Option Plan
As of December 31, 1999 The Company has not introduced an executive Stock Option
Plan. Pending the approval of the directors and shareholders, such a plan will
be implemented during the fiscal quarter ending June 30, 2000 and details of the
plan will be disclosed in the Form 10Q for the same period.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as to the shares of common
stock owned as of March 31, 2000:
I. Each person who beneficially owns so far as the Registrant has been
able to ascertain, more than 5% of the 10,800,000 outstanding shares of the
Registrant.
II. Each director.
III. Each of the officers named in the summary compensation table.
<PAGE>
IV. All the directors and officers as a group unless otherwise
indicated in the footnotes below on the table is subject to
community property laws where applicable, the persons as to whom
the information is given has sole investment power over the shares
of common stock.
<TABLE>
<CAPTION>
NAME NO. SHARES PERCENT
---- ---------- -------
<S> <C> <C>
1. Brian J. Hodgson -0- 0%
2. James Emberton -0- 0%
3. Gregory F. Hunter -0- 0%
4. Adrian Wiest -0- 0%
5. Eric Montandon -0- 0%
6. Zia Sun Technologies, Inc. 2,700,000 25%
</TABLE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is no information relevant to the Registrant which must be disclosed under
Item 12.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
None
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
/s/ James Emberton
- --------------------------------------
For: ASIA4SALE.COM INC.
(Registrant)
DATE: May 19, 2000
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 16,893
<SECURITIES> 0
<RECEIVABLES> 69,588
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 86,481
<PP&E> 5,486
<DEPRECIATION> 115
<TOTAL-ASSETS> 191,852
<CURRENT-LIABILITIES> 198,838
<BONDS> 0
0
0
<COMMON> 10,000
<OTHER-SE> (16,986)
<TOTAL-LIABILITY-AND-EQUITY> 191,852
<SALES> 70,024
<TOTAL-REVENUES> 70,024
<CGS> 1,212
<TOTAL-COSTS> 5,078,025
<OTHER-EXPENSES> (2,227)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,006,986)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,006,986)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,006,986)
<EPS-BASIC> (0.50)
<EPS-DILUTED> (0.50)
</TABLE>
