<PAGE> 1
As filed with the Securities and Exchange Commission on June 19, 2000
SEC File No.
-------------------
==============================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
VERDLAND BIO-HIGH TECH INVESTMENT CO., INC.
----------------------------------------------
(Name of Small Business Issuer in its Charter)
Nevada 87-0377162
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Unit 904, Sino Plaza, 255 Gloucester Road, Causeway Bay
Hong Kong, SAR, China N/A
-------------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (852) 2834-9800
---------------
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
N/A N/A
--- ---
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $0.001 per share
------------------------------------------
(Title of Class)
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<PAGE>
<PAGE> 2
Verdland Bio-High Tech Investment Co., Inc.
FORM 10-SB
TABLE OF CONTENTS
PART 1 Page
Item 1. Description of Business ..................................... 3
Item 2. Management's Discussion and Analysis or Plan of Operation ... 9
Item 3. Description of Property...................................... 10
Item 4. Security Ownership of Certain Beneficial Owners
and Management.............................................. 11
Item 5. Directors, Executive Officers, Promoters
and Control Persons......................................... 12
Item 6. Executive Compensation....................................... 13
Item 7. Certain Relationships and Related Transactions............... 14
Item 8. Description of Securities.................................... 14
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters................. 15
Item 2. Legal Proceedings............................................ 17
Item 3. Changes in and Disagreements with Accountants................ 17
Item 4. Recent Sales of Unregistered Securities...................... 17
Item 5. Indemnification of Directors and Officers.................... 18
PART F/S
Financial Statements......................................... 19
PART III
Item 1. Signatures................................................... 27
<PAGE>
<PAGE> 3
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Corporate History - Past Activities
--------------------------------------------
Verdland Bio-High Tech Investment Co., Inc.(hereinafter the "Registrant" or
the "Company"), was incorporated in the state of Utah on March 26, 1982, under
the name Video America, Inc., for the purpose of operating a video store. The
Company had operations until 1992 when it filed bankruptcy. The Company
emerged from bankruptcy in August 1994, has had no operations since that date,
and is considered a "development stage". In January 1998, the Company merged
with a Nevada subsidiary solely for the purpose of changing domicile from Utah
to Nevada.
In September 1998, former officers, directors, and principal shareholders
agreed to sell 8,000,000 shares of the 10,000,000 shares issued and
outstanding to Mr. Guo JianXi (a.k.a. Jimmy Guo) and other associates of Mr.
Guo. Mr. Guo, acquired control of the Company for the purpose of transferring
certain patent and other rights to a agri-biological product known as SLAM.
SLAM is a tall leafy vegetable that can be grown in a very large range of geo-
physical locations. In connection with the sale of the 8,000,000 shares, a
the Company's board of directors and a majority of its shareholders agreed to
change the name of the Company to Verdland Bio-High Tech Investment Co., Inc.
Articles of Amendment to the Company's Articles of Incorporation effecting the
name change were filed with the state of Nevada on September 18, 1998. On
September 25, 1998, issued a press release announcing the name change and that
it had entered into negotiations with China Modern Farming and Animal
Husbandry (Holding) Company Limited, a Hong Kong corporation ("China Modern"),
to acquire all of the ownership interest held by the China Modern
Stockholders. A transaction with China Modern was never consummated.
Current Business Activities
----------------------------
The Company should be considered a "shell" company and its current business
purpose is to locate and consummated a merger or acquisition with a private
entity. The purposed business activities described herein classify the Company
as a "blank check" company. Therefore, the Company faces all the risks
interest in any new business, together with those risks specifically inherent
in the search for an acquisition of business opportunities. The Company does
not propose to restrict its search for a business opportunity to any
particular industry or geographical area and may, therefore, engage in
essentially any business in any industry. The Company has unrestricted
discretion in seeking and participating in a business opportunity, subject to
the availability of such opportunities, economic conditions, and other
factors.
The selection of a business opportunity in which to participate is complex and
risky. Additionally, as the Company has only limited resources, it may be
difficult to find good opportunities. There can be no assurance that the
Company will be able to identify and acquire any business opportunity which
will ultimately prove to be beneficial to the Company and its shareholders.
The Company will select any potential business opportunity based on
management's business judgment.
The activities of the Company are subject to several significant risks which
arise primarily as a result of the fact that the Company has no specific
business and may acquire or participate in a business opportunity based on the
decision of management which potentially could act without the consent, vote,
<PAGE> 4
or approval of the Company's shareholders. The risks faced by the Company are
further increased as a result of its lack of resources and its inability to
provide a prospective business opportunity with significant capital.
Because of the Company's current status having no assets and no recent
operating history, in the event the Company does successfully acquire or merge
with an operating business opportunity, it is likely that the Company's
present shareholders will experience substantial dilution and there will be a
probable change in control of the Company.
The Company is voluntarily filing its registration statement on Form 10SB in
order to make information concerning itself more readily available to the
public. Management believes that being a reporting company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), could
provide a prospective merger or acquisition candidate with additional
information concerning the Company. In addition, management believes that
this might make the Company more attractive to an operating business
opportunity as a potential business combination candidate. As a result of
filing its registration statement, the Company is obligated to file with the
Securities and Exchange Commission certain interim and periodic reports
including an annual report containing audited financial statements. The
Company intends to continue to voluntarily file these periodic reports under
the Exchange Act even if its obligation to file such reports is suspended
under applicable provisions of the Exchange Act.
Any target acquisition or merger candidate of the Company will become subject
to the same reporting requirements as the Company upon consummation of any
such business combination. Thus, in the event that the Company successfully
completes an acquisition or merger with another operating business, the
resulting combined business must provide audited financial statements for at
least the two most recent fiscal years or, in the event that the combined
operating business has been in business less than two years, audited financial
statements will be required from the period of inception of the target
acquisition or merger candidate.
Sources of Business Opportunities
---------------------------------
The Company intends to use various sources in its search for potential
business opportunities including its officers and directors, consultants,
special advisors, securities broker-dealers, venture capitalists, members of
the financial community and others who may present management with unsolicited
proposals. Because of the Company's lack of capital, it may not be able to
retain on a fee basis professional firms specializing in business acquisitions
and reorganizations. Rather, the Company will most likely have to rely on
outside sources, not otherwise associated with the Company, that will accept
their compensation only after the Company has finalized a successful
acquisition or merger. To date, the Company has not engaged nor entered into
any discussions, negotiations, agreements nor understandings regarding
retention of any consultant to assist the Company in its search for business
opportunities, nor is management presently in a position to actively seek or
retain any prospective consultants for these purposes.
The Company does not intend to restrict its search to any specific kind of
industry or business. The Company may investigate and ultimately acquire a
venture that is in its preliminary or development stage, is already in
operation, or in various stages of its corporate existence and development.
Management cannot predict at this time the status or nature of any venture in
which the Company may participate.
<PAGE> 5
A potential venture might need additional capital or merely desire to have its
shares publicly traded. The most likely scenario for a possible business
arrangement would involve the acquisition of, or merger with, an operating
business that does not need additional capital, but which merely desires to
establish a public trading market for its shares. Management believes that the
Company could provide a potential public vehicle for a private entity
interested in becoming a publicly held corporation without the time and
expense typically associated with an initial public offering.
Evaluation
----------
Once the Company has identified a particular entity as a potential acquisition
or merger candidate, management will seek to determine whether acquisition or
merger is warranted or whether further investigation is necessary. Such
determination will generally be based on management's knowledge and
experience, or with the assistance of outside advisors and consultants
evaluating the preliminary information available to them. Management may elect
to engage outside independent consultants to perform preliminary analysis of
potential business opportunities. However, because of the Company's lack of
capital it may not have the necessary funds for a complete and exhaustive
investigation of any particular opportunity.
In evaluating such potential business opportunities, the Company will
consider, to the extent relevant to the specific opportunity, several factors
including potential benefits to the Company and its shareholders; working
capital, financial requirements and availability of additional financing;
history of operation, if any; nature of present and expected competition;
quality and experience of management; need for further research, development
or exploration; potential for growth and expansion; potential for profits; and
other factors deemed relevant to the specific opportunity.
Because the Company has not located or identified any specific business
opportunity as of the date hereof, there are certain unidentified risks that
cannot be adequately expressed prior to the identification of a specific
business opportunity. There can be no assurance following consummation of any
acquisition or merger that the business venture will develop into a going
concern or, if the business is already operating, that it will continue to
operate successfully. Many of the potential business opportunities available
to the Company may involve new and untested products, processes or market
strategies which may not ultimately prove successful.
Form of Potential Acquisition or Merger
---------------------------------------
Presently, the Company cannot predict the manner in which it might participate
in a prospective business opportunity. Each separate potential opportunity
will be reviewed and, upon the basis of that review, a suitable legal
structure or method of participation will be chosen. The particular manner in
which the Company participates in a specific business opportunity will depend
upon the nature of that opportunity, the respective needs and desires of the
Company and management of the opportunity, and the relative negotiating
strength of the parties involved. Actual participation in a business venture
may take the form of an asset purchase, lease, joint venture, license,
partnership, stock purchase, reorganization, merger or consolidation. The
Company may act directly or indirectly through an interest in a partnership,
corporation, or other form of organization, however, the Company does not
intend to participate in opportunities through the purchase of minority stock
positions.
<PAGE> 6
Because of the Company's inactive status and its concomitant lack of assets or
relevant operating history, it is likely that any potential merger or
acquisition with another operating business will require substantial dilution
of the Company's existing shareholders. There will probably be a change in
control of the Company, with the incoming owners of the targeted merger or
acquisition candidate taking over control of the Company. Management has not
established any guidelines as to the amount of control it will offer to
prospective business opportunity candidates, since this issue will depend to a
large degree on the economic strength and desirability of each candidate, and
corresponding relative bargaining power of the parties. However, management
will endeavor to negotiate the best possible terms for the benefit of the
Company's shareholders as the case arises.
Management does not have any plans to borrow funds to compensate any persons,
consultants, promoters, or affiliates in conjunction with its efforts to find
and acquire or merge with another business opportunity. Management does not
have any plans to borrow funds to pay compensation to any prospective business
opportunity, or shareholders, management, creditors, or other potential
parties to the acquisition or merger. In either case, it is unlikely that the
Company would be able to borrow significant funds for such purposes from any
conventional lending sources. In all probability, a public sale of the
Company's securities would also be unfeasible, and management does not
contemplate any form of new public offering at this time.
There are no arrangements, agreements or understandings between nonmanagement
shareholders and management under which nonmanagement shareholders may
directly or indirectly participate in or influence the management of the
Company's affairs. There are no arrangements, agreements or understandings
under which nonmanagement shareholders will exercise their voting rights to
continue to elect the current directors to the Company's Board of Directors.
In the event that the Company does need to raise additional capital, it would
most likely have to rely on the private sale of its securities or loans from
its other officers and directors. There are no preliminary agreements or
understandings between the Company and its officers and directors or
affiliates or lending institutions with respect to any such loan agreements,
nor has the Company identified the criteria that it may use in determining
whether to seek such loans. Any funds borrowed by the Company through any
loan source would not be utilized by the Company to make payments to the
Company's promoters, management, or their affiliates or associates, except for
the reimbursement of expenses paid on behalf of the Company, upon presentation
to the company of appropriate invoices or other documentation evidencing such
payments.
Any private sale of securities would be limited to persons exempt under the
Commission's Regulation D or other rule or provision for exemption, if any
applies. However, no private sales are contemplated by the Company's
management at this time, and, there are no plans, proposals, arrangements or
understandings with respect to the sale or issuances of additional securities
by the Company prior to the location of an acquisition or merger candidate.
If a private sale of the Company's securities is deemed appropriate in the
future, management will endeavor to acquire funds on the best terms available
to the Company. However, there can be no assurance that the Company will be
able to obtain additional funding when and if needed, or that such funding, if
available, can be obtained on terms reasonable or acceptable to the Company.
Although not presently anticipated by management, there is a remote
possibility that the Company might sell its securities to its management or
affiliates.
<PAGE> 7
In the event of a successful acquisition or merger, a finder's fee, in the
form of cash or securities of the Company, may be paid to persons instrumental
in facilitating the transaction. The Company has not established any criteria
or limits for the determination of a finder's fee, although most likely an
appropriate finder's fee will be negotiated between the parties, including the
potential business opportunity candidate, based upon economic considerations
and reasonable value as estimated and mutually agreed at that time. A
finder's fee would only be payable upon completion of the proposed acquisition
or merger in the normal case, and management does not contemplate any other
arrangement at this time. Management has not actively undertaken a search
for, nor retention of, any finder's fee arrangement with any person. It is
possible that a potential merger or acquisition candidate would have its own
finder's fee arrangement, or other similar business brokerage or investment
banking arrangement, whereupon the terms may be governed by a preexisting
contract; in such case, the Company may be limited in its ability to affect
the terms of compensation, but most likely the terms would be disclosed and
subject to approval pursuant to submission of the proposed transaction to a
vote of the Company's shareholders. Management cannot predict any other terms
of a finder's fee arrangement at this time. It would be unlikely that a
finder's fee payable to an affiliate of the Company would be proposed because
of the potential conflict of interest issues. If such a fee arrangement was
proposed, independent management and directors would negotiate the best terms
available to the Company so as not to compromise the fiduciary duties of the
affiliate in the proposed transaction, and the Company would require that the
proposed arrangement would be submitted to the shareholders for prior
ratification in an appropriate manner.
Management does not contemplate that the Company would acquire or merge with a
business entity in which any affiliates of the Company have an interest and no
present potential for such a merger or acquisition exists. Any such related
party transaction, however remote, would be submitted for approval by an
independent quorum of the Board of Directors and the proposed transaction
would be submitted to the shareholders for prior ratification in an
appropriate manner. If such an opportunity arose, however, the Company would
not seek to obtain an independent appraisal of the value of the business or
company with which the related party transaction was contemplated. In that
circumstance, management's ability to effectively evaluate such a non-arms
length transaction might be compromised, and any remedy available to
dissenting shareholders in such a transaction would most likely be
prohibitively expensive and time consuming. None of the Company's managers,
directors, or other affiliated parties have had any contact, discussions, or
other understandings regarding any particular business opportunity at this
time, regardless of any potential conflict of interest issues. Accordingly,
the potential conflict of interest is merely a remote theoretical possibility
at this time.
Rights of Shareholders
----------------------
It is presently anticipated by management that prior to consummating a
possible acquisition or merger, the Company will seek to have the
transaction ratified by shareholders in the appropriate manner. Most likely,
this would require a general or special shareholder's meeting called for such
purpose. Section 16-10a-704 of the Utah Revised Business Corporation Act
provides that any action which may be taken at any annual or special meeting
of the shareholders, may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action
so taken, shall be signed by the holder of the outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon
were present and voted.
<PAGE> 8
However, a shareholder's meeting is normally the most expeditious procedure,
wherein all shareholder's would be entitled to vote in person or by proxy.
Because following the effective date of this registration statement the
Company will be subject to Section 14 of the Exchange Act, the Company intends
to send notice to the shareholders requesting their approval of the terms of
the proposed transaction. In the notice of such a shareholder's meeting and
related information or proxy statement, the Company will provide shareholders
disclosure documentation concerning the potential acquisition of merger
candidate, including financial statements and business information about the
target as required under Section 14.
As of the date of this filing, the Company's officers, directors and
promoters, their affiliates or associates have represented that they have not
had any preliminary contact or discussions with any representatives of the
owners of any business or company, and there are no present plans, proposals,
arrangements or understandings with any representatives of the owners of any
business or company regarding the possibility of an acquisition or merger.
Competition
-----------
Because the Company has not identified any potential acquisition or merger
candidate, it is unable to evaluate the type and extent of its likely
competition. The Company is aware that there are several other public
companies with only nominal assets that are also searching for operating
businesses and other business opportunities as potential acquisition or merger
candidates. The Company will be in direct competition with these other public
companies in its search for business opportunities and, due to the Company's
lack of funds, it may be difficult to successfully compete with these other
companies.
Employees
---------
As of the date hereof, the Company does not have any employees and has no
plans for retaining employees until such time as the Company's business
warrants the expense, or until the Company successfully acquires or merges
with an operating business. The Company may find it necessary to hire
part-time clerical help on an as-needed basis.
Facilities
----------
The Company is currently using as its principal place of business the
business office its President and Director located in Hong Kong. The cost of
the utilization of the office space is provided free of charge to the Company.
Although the Company has no written agreement and pays no rent for the use of
this facility, it is contemplated that at such future time as an acquisition
or merger transaction may be completed, the Company will secure commercial
office space from which it will conduct its business. Until such an
acquisition or merger, the Company lacks any basis for determining the kinds
of office space or other facilities necessary for its future business. The
Company has no current plans to secure such commercial office space. It is
also possible that a merger or acquisition candidate would have adequate
existing facilities upon completion of such a transaction, and the Company's
principal offices may be transferred to such existing facilities.
<PAGE> 9
Item 2. Management's Discussion and Analysis or Plan of Operation
Overview
--------
The Company is considered a development stage company with no assets or
capital and with no operations or income since approximately August 1994. The
costs and expenses associated with the preparation and filing of this
registration statement and other operations of the Company have been provided
free of charge by a director and affiliate of a principal shareholder,
specifically Jimmy Guo (see Item 4, Security Ownership of Certain Beneficial
Owners and Management). It is anticipated that the Company will require only
nominal capital to maintain the corporate viability of the Company and
necessary funds will most likely be provided by the Company's existing
shareholders or its officers and directors in the immediate future.
Other than loans from its officers and directors the Company has no other
financing means in place and unless the Company is able to facilitate an
acquisition of or merger with an operating business or is able to obtain
significant outside financing, there is substantial doubt about the Company's
ability to continue as a going concern.
In the opinion of management, inflation has not and will not have a material
effect on the operations of the Company until such time as the Company
successfully completes an acquisition or merger. At that time, management will
evaluate the possible effects of inflation on the Company as it relates to its
business and operations following a successful acquisition or merger.
Forward-Looking Statements
--------------------------
This Form 10-SB includes "forward-looking statements". All statements, other
than statements of historical facts, included or incorporated by reference in
this Form 10-SB which address activities, events or developments which the
Company expects or anticipates will or may occur in the future, including such
things as future capital expenditures (including the amount and nature
thereof), business strategy, expansion and growth of the Company's business
and operations, and other such matters are forward-looking statements. These
statements are based on certain assumptions and analyses made by the Company
in light of its experience and its perception of historical trends, current
conditions and expected future developments as well as other factors it
believes are appropriate in the circumstances. However, whether actual
results or developments will conform with the Company's expectations and
predictions is subject to a number of risks and uncertainties, general
economic market and business conditions; the business opportunities (or lack
thereof) that may be presented to and pursued by the Company; changes in laws
or regulation; and other factors, most of which are beyond the control of the
Company. Consequently, all of the forward-looking statements made in this
Form 10-SB are qualified by these cautionary statements and there can be no
assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequence to or effects on the Company or its business or
operations.
Plan of Operation
-----------------
During the next twelve months, the Company's officers and directors will
contact business brokers, consultants, and other business professionals in an
effort to actively seek out and investigate possible business opportunities
with the intent to acquire or merge with one or more business ventures. In its
search for business opportunities, management will follow the procedures
<PAGE> 10
outlined in Item 1 above. Because the Company lacks funds, it may be
necessary for the officers and directors to either advance funds to the
Company or to accrue expenses until such time as a successful business
consolidation can be made. Management intends to hold expenses to a minimum
and to obtain services on a contingency basis when possible. The Company's
directors will not receive compensation for services provided to the Company
until such time as an acquisition or merger can be accomplished. However, if
the Company engages outside advisors or consultants in its search for business
opportunities, it may be necessary for the Company to attempt to raise
additional funds. As of the date hereof, the Company has not made any
arrangements or definitive agreements to use outside advisors or consultants
or to raise any capital.
In the event the Company does need to raise capital most likely the only
method available to the Company would be the private sale of its securities.
It is unlikely that it could make a public sale of securities or be able to
borrow any significant sum from either a commercial or private lender. There
can be no assurance that the Company will be able to obtain additional funding
when and if needed, or that such funding, if available, can be obtained on
terms acceptable to the Company.
The Company does not intend to use any employees, with the possible exception
of part-time clerical assistance on an as-needed basis. Outside advisors or
consultants will be used only if they can be obtained for minimal cost or on a
deferred payment basis. Management is confident that it will be able to
operate in this manner and to continue its search for business opportunities
during the next twelve months.
ITEM 3. Description of Property
The Company does not own or control any material property.
<PAGE>
<PAGE> 11
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables sets forth the number of shares of the Company's Common
Stock, par value $0.001, held by each person who is believed to be the
beneficial owner of 5% or more of the 10,000,000 shares of the Company's
common stock outstanding at June 15, 2000, and the names and number of shares
held by each of the Company's officers and directors and by all officers and
directors as a group.
Title of Name and Address Amount and Nature of Percent
Class Of Beneficial Owner Beneficial Ownership(1) of Class
-------- ------------------- --------------------- --------
Common Guo JianXin 5,670,000 Direct 56.70
Unit 904, Sino Plaza
255 Gloucester Rd, Causeway Bay
Hong Kong SAR, China
Common Guo LiXin 800,000 Direct 8.00
Senefelderstr 78A
70176 Stuttgart, Germany
Common Wang Hui 1,000,000 Direct 10.00
No. 71, Building,
Xibahe Dongli, Chaoyang District
Beijing, PRC 100028
Officers, Directors and Nominees
--------------------------------
Common Guo JianXin, President
and Director 5,670,000 Direct 56.70
Common Yingrid Y. Y. Ho
Secretary and Director --- ---
---------- ------
All Officers, Directors, and
Nominees as a Group (2 Persons) 5,670,000 Direct 56.70
========== ======
(1) Unless otherwise indicated each person has sole investment and sole voting
power over the listed shares.
<PAGE>
<PAGE> 12
ITEM 5. Directors, Executive Officers, Promoters and Control Persons
The names of the Company's executive officers and directors and the positions
held by each of them are set forth below:
Name Position Since
---- -------- -----
Guo JianXi President and Director August 1998
Yingrid Y.Y. Ho Secretary and Director February 2000
The term of office of each director is one year and until his successor is
elected at the Company's annual shareholders' meeting and is qualified,
subject to removal by the shareholders. The term of office for each officer
is for one year and until a successor is elected at the annual meeting of the
board of directors and is qualified, subject to removal by the board of
directors.
There are no agreements or understandings for any officer or director to
resign at the request of another person and none of the officers and directors
are acting on behalf of or will act at the direction of another person. The
officers and directors of the Company are considered to be the only promoters
of the Company.
Biographical Information
------------------------
Set forth below is certain biographical information with respect to each of
the Company's officers and directors.
Mr. Guo JianXi, age 34, has been the chairman of Verdland Bio-high Tech
Investment Co., Ltd. (Verdland-China), Beijing, PRC since 1994. Since 1998,
Verdland-China has utilized a high-tech biological methodology to grow a gene
modified food product known as SLAM. Prior to 1994 Mr. Guo served as Chairman
of the Tian Hong International Investment Company, a company engaged in
biological technology. Mr. Guo helped establish one of the first private
foreign ventures in Heilongjiang, PRC, the "Heilongjiang-Sidney Australian
Union Plastic Limited," focusing on trading and material processing with
Russia. Mr. Guo received his bachelor degrees with honors, majoring in
Mechanical Engineering and Business Administration. Mr. Guo JianXi has
maintained very good relationships with both central government and
Heilongjiang provincial government.
Yingrid Y.Y. Ho, aged 26, has been since 1999 the secretary of Verdland-China.
In 1997, Ms. Ho obtained a Bachelor degree in Political Science from York
University, Canada. From June 1997 to April 1998, she worked as an executive
secretary in Korean-based Bookook Securities Co., Ltd. From May 1998 to April
1999 she worked as a legal secretary/translator in New York-based Debevoise &
Plimpton.
<PAGE>
<PAGE> 13
ITEM 6. EXECUTIVE COMPENSATION
The Company has not had a bonus, profit sharing, or deferred compensation plan
for the benefit of its employees, officers or directors. Except as noted
below, the Company has not paid any salaries or other compensation to its
officers or directors during the years ended March 31, 2000, 1999, and 1998.
Further, the Company has not entered into an employment agreement with any of
its officers, directors or any other persons and no such agreements are
anticipated in the immediate future. It is intended that the Company's current
directors will not be compensated for services provided to the Company until
such time as an acquisition or merger can be accomplished. As of the date
hereof, no person has accrued any compensation from the Company, other than
converting funds advanced to the Company into shares of Common Stock of the
Company or accepting shares of the Common Stock of the Company as
reimbursement for funds advanced or expenses paid on behalf of the Company.
The payment of compensation to officers and directors and/or the repayment of
loans to officers, directors, affiliates or lending institutions will not be a
condition that any target company must agree to as a terms for completing an
acquisition or merger.
The following tables set forth certain summary information concerning the
compensation paid or accrued for each of the Company's last three completed
fiscal years to the Company's principal executive officer(s) and any other
executive officers that received compensation in excess of $100,000 during
such period (as determined at March 31, 2000, the end of the Company's last
completed fiscal year):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
Other Restricted
Name and Annual Stock Options LTIP All other
Principal Position Year Salary Bonus($) Compensation Awards /SARs Payout Compensation
------------------ ---- ------ -------- ------------ ------ ------- ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Guo, JianXi 2000 $ -0- -0- -0- -0- -0- -0- -0-
President 1999 $ -0- -0- -0- -0- -0- -0- -0-
1998 $ -0- -0- -0- -0- -0- -0- -0-
Michael Labertew 1998 $ -0- -0- -0- -0- -0- -0- -0-
President
</TABLE>
Options/SAR Grants in Last Fiscal Year
--------------------------------------
None.
Bonuses and Deferred Compensation
---------------------------------
None.
Compensation Pursuant to Plans
------------------------------
None.
Pension Table
-------------
Not Applicable.
<PAGE> 14
Other Compensation
------------------
None.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company will be heavily dependent on its officers and directors for the
successful implementation of its business plan which is to seek out
acquisition candidates. Officers and directors are not required to devote any
specified amount or percentage of their business time to the Company's
affairs, and to the extent that they spend time, it will be only a minimum
amount seeking out acquisition candidates and performing necessary
administrational paperwork. Management anticipates that should an acceptable
acquisition be completed, present management will resign and new management
will assume control.
ITEM 8. DESCRIPTION OF SECURITIES
General
-------
The authorized capital of the Company consists of the following stock:
--Fifty Million (50,000,000) shares of common stock, par value $0.001 per
share (the "Common Stock"). There are 10,000,000 shares of Common Stock issued
and outstanding as of June 15, 2000. The holders of Common Stock are entitled
to one vote per share on each matter submitted to a vote at any meeting of
shareholders. Shares of Common Stock do not carry cumulative voting rights
and, therefore, a majority of the shares of outstanding Common Stock will be
able to elect the entire board of directors and, if they do so, minority
shareholders would not be able to elect any persons to the board of directors.
The Company's bylaws provide that a majority of the issued and outstanding
shares of the Company constitutes a quorum for shareholders' meetings, except
with respect to certain matters for which a greater percentage quorum is
required by statute or the bylaws. Shareholders of the Company have no
preemptive rights to acquire additional shares of Common Stock or other
securities. The Common Stock is not subject to redemption, call or
assessment, and carries no subscription or conversion rights. In the event of
liquidation of the Company, the shares of Common Stock are entitled to share
equally in corporate assets after satisfaction of all liabilities. Holders of
Common Stock are entitled to receive such dividends as the board of directors
may from time to time declare out of funds legally available for the payment
of dividends. The Company seeks growth and expansion of its business through
the reinvestment of profits, if any, and does not anticipate that it will pay
dividends in the foreseeable future.
--Fifty Million (50,000,000) shares of Class A Preferred Stock, par value
$0.001 per share (the "Class A Preferred Stock"). There are no shares of the
Class A Preferred Stock issued and outstanding as of June 15, 2000.
--Fifty Million (50,000,000) shares of Class B Preferred Stock, par value
$0.001 per share (the "Class A Preferred Stock"). There are no shares of the
Class B Preferred Stock issued and outstanding as of June 15, 2000.
--Fifty Million (50,000,000) shares of Class C Preferred Stock, par value
$0.001 per share (the "Class A Preferred Stock"). There are no shares of the
Class C Preferred Stock issued and outstanding as of June 15, 2000.
<PAGE> 15
Penny Stock
-----------
The Company's common stock is considered a "penny stock." The Securities and
Exchange Commission regulations generally define a penny stock to be an equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions. Such exceptions include any equity security listed on
NASDAQ or national securities exchange and any equity security issued by an
issuer that has (i) net tangible assets of at least $2,000,000, if such issuer
has been in continuous operation for three years, (ii) net tangible assets of
at least $5,000,000, if such issuer has been in continuous operation for less
than three years, or (iii) average annual revenue of at least $6,000,000, if
such issuer has been in continuous operation for less than three years.
Unless an exception is available, the regulations require the delivery, prior
to any transaction involving a penny stock, of a disclosure schedule
explaining the penny stock market and the risks associated therewith. The
impact of the regulations applicable to penny stocks on the Company's
securities is to reduce the market liquidity of the Company's securities by
limiting the ability of broker/dealers to trade the Company's securities and
the ability of purchasers of the Company's securities to sell their securities
in the secondary market. The low price of the Company's Common Stock also has
a negative effect on the amount and percentage of transaction costs paid by
individual shareholders and the potential ability of the Company to raise
additional capital by issuing additional shares. The primary reasons for
these effects include the internal policies of certain institutional investors
that prohibit the purchase of low-priced stocks, the fact that many brokerage
houses do not permit low-priced stocks to be used as collateral for margin
accounts or to be purchased on margin and certain brokerage house policies and
practices that tend to discourage individual brokers from dealing in low-
priced stocks.
In addition, since broker's commissions on low-priced stocks represent a
higher percentage of the stock price than commissions on higher pried stocks,
the current low share price of the Common Stock results in individual
shareholders paying transaction costs that are a higher percentage of their
total share value than would be the case if the Company's share price were
substantially higher.
PART II
ITEM 1. Market Price of and Dividends on the Company's Common Equity and
Other Shareholder Matters
Market Price of the Company's Common Stock and Dividends
--------------------------------------------------------
The following table sets forth, for the respective periods indicated, the
prices of the Company's Common Stock in the over the counter market as
reported by a market maker on the NASD'S OTC Bulletin Board. Such over the
counter market quotations are based on inter-dealer bid prices, without
markup, markdown or commission, and may not necessarily represent actual
transactions.
Bid Quotation
-------------
Fiscal Year 2000 High Bid Low Bid
---------------- -------- -------
Quarter ended 3/31/00 $1.0625 $0.75
Quarter ended 12/31/99 $1.0625 $0.75
Quarter ended 9/30/99 $1.0625 $0.75
Quarter ended 6/30/99 $1.0625 $0.75
<PAGE> 16
Fiscal Year 1999 High Bid Low Bid
---------------- -------- -------
Quarter ended 3/31/99 $1.0625 $0.75
Quarter ended 12/31/98 $1.0625 $0.75
Quarter ended 9/30/98 $1.0625 $0.25
Quarter ended 6/30/98 $0.25 $0.10
To the best knowledge of the Company there has been limited, if any, trading
activity of the Company's common stock on the OTC Bulletin Board. The last
reported trade of any shares was in February 1999. The number of shareholders
of record of the Company's Common Stock as of June 15, 2000, was 467.
The Company has not paid any cash dividends to date and does not anticipate
paying dividends in the foreseeable future. No member of management or any
other shareholder of the Company has executed or provided the Company with any
type of "lock-up" letter relating to or restricting their ability to sell
their shares prior to such time as the Company has successfully consummated a
merger or acquisition and the Company is no longer considered to be a "blank
check" company.
OTCBB Eligibility Rules
-----------------------
The Company's common stock is quoted on the NASD's OTC Bulletin Board under
the symbol "VLND". Effective July 1, 1999, all companies that began quotation
on the OTCBB prior to January 4, 1999 are being reviewed to determine
compliance status with respect to the OTCBB's eligibility rules. The
Company's proposed phase in date as published under the NASD's Phase-in
schedule is November 1999. The NASD will begin its evaluation 60 calendar
days prior to the Company's scheduled phase-in date. To be compliant with the
NASD's eligibility rule, a company must be (1) registered with the SEC under
section 13 or 15(d) of the Exchange Act, and current in its required filings.
To be current, a company must have filed its latest required annual filing and
any subsequent quarterly filings. In the alternative, a company may be deemed
compliant, if it has filed a Form 10 or Form 10SB and has cleared all comments
by the SEC.
Companies that have filed with the SEC are given a grace period of 30
calendars. The grace period begins on the date the symbol change notification
appears on the OTCBB Daily List. The NASD has no information that the company
is compliant, it will append the company's symbol with a fifth character "E".
Symbol changes will appear on the OTCBB Daily List and will be reflected in
the company's trading symbol four (4) days from the date the notice appears on
the OTCBB Daily List. As of the date of this filing the symbol change
notification has not been published on the OTCBB Daily List.
For those companies that file with the SEC and are non-compliant with the
filing requirement, symbol changes will appear on the OTCBB Daily List 30
calendar days prior to the company's scheduled phase-in date. Once the NASD
has received notification that a delinquent issuer is compliant with the
filing requirements, the fifth character "E" will be removed from the
companies symbol. The symbol change will be completed two business days
following publication on the OTCBB Daily List.
If the NASD has no information that the company is compliant, upon expiration
of the grace period (i.e., on the scheduled phase-in date), the company's
security will be removed from the OTCBB. Deletions will appear on the OTCBB
Daily List and will become effective 2 days from the date the notice appears
on the OTCBB Daily List.
<PAGE> 17
The Company does not know whether or not its registration statement on Form
10SB has been filed with the SEC in sufficient time avoid possible delisting
from the OTCBB, however, no assurance can be given that the Company can meet
the OTCBB eligibility requirements prior to the Company's phase-in date or the
expiration of the 30-day grace period immediately thereafter.
Blue Sky Considerations
-----------------------
Any future transfer or resale of the Company's common stock in secondary
markets will be subject, in addition to Federal securities laws, to the "Blue
Sky" laws of each state in which such transfer or resale occurs. Because the
Company's business activities are considered to be those of a "blank check,
blind pool", "dormant" or "shell" company, it is possible that shareholders of
the Company residing in states the limit or prohibit the use of exemptions for
resale of securities of "blank check, blind pool", "dormant" or "shell"
companies may not be able to resell their shares of the Company's common stock
until such time as the Company has completed a merger or acquisition and/or
the appropriate resale exemption becomes available. Certain states, including
Connecticut, Idaho, Washington, Indiana, Minnesota, Oregon, South Dakota, and
Utah limit or prohibit the use of their transactional exemption to "blind-
pool, blank check", "dormant" or "shell" companies. Therefore shareholders of
the Company residing in those states will be prohibited from reselling their
shares until such time as an exemption for resale is available or the
shareholder is no longer subject to the laws of the applicable jurisdiction.
The Company's transfer agent has been instructed to reject any transfers from
those states, until the transfer agent has been provided with an opinion of
counsel that the shares have been registered or that an appropriate exemption
is available.
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings and no such action
by or against it, to the best of its knowledge, has been threatened.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Not applicable.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
During the fiscal year ended March 31, 1999, the Company issued and aggregate
of 8,297,643 shares of its restricted common stock for cash of $23,837. The
securities issued in the foregoing transaction were issued in reliance on the
exemption from registration and prospectus delivery requirements of the Act
set forth in Section 3(b) and/or Section 4(2) of the Securities Act and the
regulations promulgated thereunder. (See Notes 4 and 5 to the Financial
Statements.)
During the fiscal year ended March 31, 1998, the Company issued an aggregate
of 1,660,058 shares of its restricted common stock for cash, services, and the
conversion. The securities issued in the foregoing transaction were issued in
reliance on the exemption from registration and prospectus delivery
requirements of the Act set forth in Section 3(b) and/or Section 4(2) of the
Securities Act and the regulations promulgated thereunder. (See Notes 4 and 5
to the Financial Statements).
<PAGE>
<PAGE> 18
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 78.751 of the Nevada Revised Statutes confers on a director or officer
an absolute right to indemnification for expenses, including attorneys' fees,
actually and reasonably incurred by him to the extent he is successful on the
merits or otherwise in defense of any action, suit, or proceeding. This
section also entitles a director or officer to partial indemnification against
expenses to the extent that he has been successful in defending any claim,
issue, or matter asserted in such proceeding. The Nevada indemnification
section further permits the corporation to indemnify officers and directors in
circumstances where indemnification is not mandated by the statute and certain
statutory standards are satisfied. The Nevada statute expressly makes
indemnification contingent upon a determination that indemnification is proper
in the circumstances. Such determination must be made by the board of
directors, the shareholders, or independent legal counsel. Nevada law also
permits a corporation, in its articles of incorporation, bylaws, or an
agreement, to pay attorneys' fees and other litigation expenses on behalf of a
corporate official in advance of the final disposition of the action upon
receipt of an undertaking by or on behalf of the corporate official to repay
such expenses to the corporation if it is ultimately determined that he is not
entitled to be indemnified by the corporation. The corporation may also
purchase and maintain insurance to provide indemnification. The Nevada
statute also provides that indemnification authorized by the statute is not
exclusive of, but is in addition to, indemnification rights granted under a
corporation's articles of incorporation, an agreement, or pursuant to a vote
of shareholders or disinterested directors. The foregoing discussion of
indemnification merely summarizes certain aspects of indemnification
provisions and is limited by reference to Section 78.751 of the Nevada Revised
Statues.
The Company's articles of incorporation and bylaws do not contain specific
provisions relating to indemnification of directors, officers, employees,
and/or agents of the Company. However, it is anticipated that the Company
will indemnify its officers and directors to the full extent permitted by the
above referenced statute. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers, and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the small business issuer of expenses
incurred or paid by a director, officer or controlling person in connection
with the securities being registered), the small business issuer will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by the Company is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
PART F/S
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's balance sheet as of March 31, 2000 and the related statements of
operations, stockholders' equity (deficit), and cash flows for the years ended
March 31, 2000 and 1999, have been examined to the extent indicated in their
report by Crouch, Bierwolf & Chisholm, certified public accountants, and have
been prepared in accordance with generally accepted accounting principles and
pursuant to Regulation S-B as promulgated by the Securities and Exchange
Commission and are included herein.
<PAGE> 19
CROUCH, BIERWOLF & CHISHOLM
Certified Public Accountants
50 West Broadway, Suite 1130
Salt Lake City, Utah 84101
Telephone (801) 363-1175
Facsimile (801) 363-0615
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
Verdland Bio-High Tech Investment Co., Inc.
We have audited the accompanying balance sheet of Verdland Bio-High Tech
Investment Co., Inc. (a Nevada corporation)(a development stage company) as of
March 31, 2000, and the related statements of operations, stockholders' equity
(deficit), and cash flows for the years ended March 31, 2000 and 1999, and for
the period from August 24, 1994 (beginning of development stage) to March 31,
2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit 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 consolidated
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Verdland Bio-High Tech
Investment Co., Inc. as of March 31, 2000, and the results of its operations
and its cash flows and for the years ended March 31, 2000 and 1999, and for
the period from August 24, 1994 (beginning of development stage)to March 31,
2000 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 6 to the financial
statements, the Company's significant losses raise substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note 6. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/S/Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
May 2, 2000
<PAGE>
<PAGE> 20
Verdland Bio-High Tech Investment Co., Inc.
(A Development Stage Company)
Balance Sheet
ASSETS
------
March 31,
2000
----------
CURRENT ASSETS
Cash $ 30
----------
Total Current Assets 30
----------
TOTAL ASSETS $ 30
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - related party (Note 2) $ 160
----------
Total Current Liabilities 160
----------
STOCKHOLDERS' EQUITY
Preferred stock, authorized 1,000 shares of
Class A Preferred, $.001 par value -
Preferred stock, authorized 1,000 shares of
Class B Preferred, $.001 par value -
Preferred stock, authorized 1,000 shares of
Class C Preferred, $.001 par value -
Common stock, authorized 50,000,000
shares at $.001 par value; 10,000,000
issued and outstanding 10,000
Capital in excess of par value 16,140
Retained deficit (accumulated during
the development stage) (Note 5) (26,270)
----------
Total Stockholders' Equity (130)
----------
$ 30
==========
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> 21
Verdland Bio-Tech Investment Co., Inc.
(A Development Stage Company)
Statements of Operations
For the Periods Ended
For the
Period from
August 24, 1994
(beginning of
For the Years Ended development
March 31, stage)
------------------------ to March 31,
REVENUE 2000 1999 2000
----------- ----------- ------------
Interest income $ - $ 1,500 $ 4,679
----------- ----------- ------------
Total Revenue - 1,500 4,679
----------- ----------- ------------
EXPENSES
General and Administrative
Expense 160 15,131 30,549
----------- ----------- ------------
Total Expenses 160 15,131 30,549
----------- ----------- ------------
Net (loss) before provision for taxes (160) (13,581) (25,870)
----------- ----------- ------------
Provision for Taxes (Note 1) - - 400
----------- ----------- ------------
Net income (loss) $ (160) (13,581) (26,270)
=========== =========== ============
Loss Per Share (Note 1) $ - $ -
=========== ===========
Average shares outstanding 10,000,000 7,900,786
=========== ===========
See Accountants' Report and Notes to Financial Statements
<PAGE>
<PAGE> 22
Verdland Bio-Tech Investment Co., Inc.
(A Development Stage Company)
Statements of Stockholders' Equity
<TABLE>
<CAPTION>
Retained
(Deficit)
Accumulated
Common Stock Capital During the
--------------------------- Excess of Developmental
Shares Amount Par Value Stage
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Balance, August 24, 1994 42,299 $ 43 $ (627) $ -
Net (loss) for the period - - - (121)
------------ ------------ ----------- -----------
Balance, March 31, 1995 42,299 43 (627) (121)
Net loss for the year ended March 31, 1996 - - - (152)
------------ ------------ ----------- -----------
Balance March 31, 1996 42,299 43 (627) (273)
Net loss for the year ended March 31, 1997 - - (143)
------------ ------------ ----------- -----------
Balance March 31, 1997 42,299 43 (627) (416)
Issuance of 60,000 shares at
$1 per share (Note 4) 60,000 60 53,750 -
Issuance of 1,000,000 shares
at $.0065 per share (Note 5) 1,000,000 1,000 5,500 -
Issuance of 300,000 shares
for conversion of debt
at $.0033 (Note 5) 300,000 300 700 -
Issuance of 300,000 shares
for services rendered
at $.0033 (Note 5) 300,000 300 700 -
Capital Contributed by Stockholder
for expenses - - 2,600 -
Rounding from stock split 58 - - -
(12,113)
Net loss for the year ended March 31, 1998 ----------- ----------- ----------- ----------
Balance March 31, 1998 1,702,357 1,703 62,623 (12,529)
Cancellation of Subscriptions
receivable (Note 4) - - (53,489) -
Issuance of 8,000,000 for cash
at $.001 per share 8,000,000 8,000 - -
Issuance of stock for cash at
$.017 per share 297,643 297 4,703 -
Net loss for the year ended March 31, 1999 - - - (13,581)
----------- ----------- ----------- -----------
Balance March 31, 1999 10,000,000 10,000 13,837 (26,110)
Expenses paid by shareholder - - 2,303 -
Net loss for the year ended March 31, 2000 - - - (160)
------------ ------------ ------------ ------------
Balance March 31, 2000 10,000,000 $ 10,000 $ 16,140 $ (26,270)
============ ============ ============ ===========
</TABLE>
See Accountants' Report and Notes to Financial Statements
<PAGE> 23
Verdland Bio-Tech Investment Co., Inc.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
For the Period
August 24, 1994
(beginning of
For the Years Ended Development
March 31, Stage) to
------------------------ March 31,
2000 1999 2000
----------- ----------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (160) $ (13,581) $ (26,270)
Items not requiring cash flow:
Increase in accrued expenses and
accounts payable (2,303) 1,954 1,529
Decrease in interest receivable - (1,550) (4,679)
Issuance of stock for services - - 1,000
Expenses Paid by Stockholder 2,303 - 2,600
----------- ----------- -----------
Net Cash (Used) by
Operating Activities - (13,177) (25,820)
------------ ----------- -----------
CASH FLOWS FROM
INVESTING ACTIVITIES
Net cash (used) by - - -
Investing Activities ----------- ------------ -----------
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of common stock - 13,000 24,500
Loans from related parties - 90 1,160
----------- ----------- ------------
Net Cash provided by
Financing Activities - 13,090 25,660
----------- ----------- ------------
NET INCREASE
(DECREASE) IN CASH (160) (87) (160)
CASH AT BEGINNING OF
PERIOD 190 277 190
----------- ----------- ------------
CASH AT END OF PERIOD $ 30 $ 190 $ 30
=========== =========== ============
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for:
Interest $ - $ - $ -
Taxes - - 400
Non Cash Flow Information
Stock issued for:
Note receivable $ - $ - $ -
Services $ - $ - 1,000
Conversion of Debt $ - $ - $ 1,000
</TABLE>
See Accountant's Report and Notes to Financial Statements
<PAGE> 24
Verdland Bio-High Tech Investment Co., Inc.
(a development stage company)
Notes to the Financial Statements
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated in the State of Utah on March 26, 1982 for the
primary purpose of operating a video store. The Company was operational until
1992 when the Company filed bankruptcy. The Company emerged from bankruptcy
on August 24, 1994 with no assets or liabilities other than state income
taxes. The Company has had no operations since that date and is classified as
a development stage company.
The Company created and then merged with a Nevada subsidiary on January 17,
1998. The Company is now a Nevada corporation.
Loss Per Share
--------------
The computations of loss per share of common stock are based on the weighted
average number of shares outstanding at the date of the financial statements.
Provision for Income Taxes
--------------------------
The Company adopted Statement of Financial Standards No. 109 "Accounting for
Income taxes" in the fiscal year ended March 31, 1995.
Statement of Financial Accounting Standards No. 109 " Accounting for Income
Taxes" requires an asset and liability approach for financial accounting and
reporting for income tax purposes. This statement recognizes (a) the amount
of taxes payable or refundable for the current year and (b) deferred tax
liabilities and assets for future tax consequences of events that have been
recognized in the financial statements or tax returns.
Deferred income taxes result from temporary differences in the recognition of
accounting transactions for tax and financial reporting purposes. There were
no temporary differences at March 31, 2000 and earlier years; accordingly, no
deferred tax liabilities have been recognized for all years.
The Company has cumulative net operating loss carryforwards of approximately
$98,000 at March 31, 2000. No effect has been shown in the financial
statements for the net operating loss carryforwards as the likelihood of
future tax benefit from such net operating loss carryforwards is not presently
determinable. Accordingly, the potential tax benefits of the net operating
loss carryforwards, estimated based upon current tax rates of $33,000 at March
31, 2000 have been offset by valuation reserves of the same amount.
The Company has available $98,000 in net operating loss carryforwards that
will begin to expire in the year 2002.
Cash and Cash Equivalents
-------------------------
For the purposes of the statements of cash flows, cash and cash equivalents
are defined as demand deposits at banks and certificates of deposits with
maturities less than three months.
<PAGE>
<PAGE> 25
Verdland Bio-High Tech Investment Co., Inc.
(a development stage company)
Notes to the Financial Statements
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Development Stage Company
-------------------------
The Company has yet to fully develop any material income from its stated
primary objective and it is classified as a development stage company. All
income, expenses, cash flows and stock transactions are reported since the
beginning of development stage. (August 24, 1994@.
NOTE 2 - RELATED PARTY TRANSACTIONS
During year 1998, a shareholder provided loans for the Company. Total loans
made to the Company during 1998 was $160.
NOTE 3 - USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. In these financial
statements, assets, liabilities and earnings involve extensive reliance on
management's estimates. Actual results could differ from those estimates.
NOTE 4 - SALE OF COMMON STOCK
On September 17, 1997, the Board of directors approved the sale of 6,000,000
shares (pre-reverse split - 60,000 shares post reverse split) for $.0l per
share ($1 post reverse split) or $60,000. $5,000 was paid in cash and a note
for $55,000 was signed. The terms of the note are due on demand, 0% interest
rate, until demand is made then 12% thereafter. The note has been discounted
at 12% for one year for a total carrying value of $48,810.
In June, 1998, the Company canceled the subscriptions receivable due to the
large reverse split enacted in October 1997.
NOTE 5 - SHAREHOLDER ACTIONS
On October 20, 1997, the shareholders of the corporation approved several
changes to the corporation that affected the financial statements:
Voted to approve a 1 for 100 reverse stock split of all outstanding shares.
The change has been made retroactive to August 24, 1994, the beginning of the
development stage.
Voted to change the par value of common stock from $.Ol to $.001. This change
has been made retroactive to August 24, 1994.
Voted to cancel 1,556,579 of treasury shares held in the name of the company
effective August 24, 1994.
<PAGE>
<PAGE> 26
Verdland Bio-High Tech Investment Co., Inc.
(a development stage company)
Notes to the Financial Statements
NOTE 5 - SHAREHOLDER ACTIONS (continued)
Approved a quasi-reorganization of the capital structure of the company by
restating retained earnings to zero. The charge was made to additional paid
in capital. This was also effective the date of the bankruptcy, August 24,
1994.
--Voted to issue 1,000,000 post reverse split shares for $.0065 per share
($6500).
--Voted to issue 300,000 shares to a director for legal services rendered.
--Voted to issue 300,000 shares to convert a $1,000 loan.
NOTE 6 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has negative working
capital and has had recurring operating losses and is dependent upon financing
to continue operations. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Management intends find a merger candidate with which to acquire or merge.
<PAGE>
<PAGE> 27
PART III
ITEM 1. INDEX TO EXHIBITS
Copies of the following documents are included as exhibits to this Form 10SB
pursuant to Item 601 of Regulation SB.
Exhibit No. SEC Ref. No. Title of Document
----------- ------------ -----------------
3(i) 3.01 Articles of Incorporation and Amendments thereto
3(ii) 3.02 Bylaws
4 4.01 Specimen Stock Certificate
27 27 Financial Data Schedule
ITEM 2. SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VERDLAND BIO-HIGH TECH INVESTMENT CO. INC.
Dated: June 16, 2000 By: Guo JianXi, President and Director
