<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to ___________
Commission file number: 33-7945 D
CENTURY MILESTONE S&T CO., LTD.
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(Exact name of small business issuer as specified in it charter)
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<S> <C>
COLORADO 84-1032191
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(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
NO. 803, JINYU PLAZA, 100#WEST SANHUAN NORTH ROAD, HAIDIAN DISTRICT, BEIJING, PRC 100037
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(Address of principal executive offices)
011-8610-68731188
---------------------------
(issuer's telephone number)
HAAS NEUVEUX & COMPANY, 94 RUE DE LAUSANNE, CH1202, GENEVA, SWITZERLAND
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(Former name, former address and former fiscal year, if changed since last report)
</TABLE>
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the issuer filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: AS OF AUGUST 15, 2000, THE ISSUER HAD
29,990,210 SHARES OF COMMON STOCK, $.0001 PAR VALUE, OUTSTANDING.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
<PAGE> 2
INDEX
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PAGE
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Century Milestone S&T Co., Ltd.
June 30, 2000 and 1999 F-1
Consolidated Balance Sheets F-2
Consolidated Statements of Operations F-3
Consolidated Statements of Cash Flows F-4
Notes to Consolidated Financial Statements F-5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATIONS 2
PART II - OTHER INFORMATION 4
SIGNATURES 6
</TABLE>
1
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
CENTURY MILESTONE S&T CO., LTD.
FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2000 AND 1999
F-1
<PAGE> 4
CENTURY MILESTONE S&T CO., LTD.
(a development stage company)
CONSOLIDATED BALANCE SHEETS
(Expressed in US Dollars)
<TABLE>
<CAPTION>
JUNE 30, 2000 DECEMBER 31, 1999
------------- -----------------
(UNAUDITED) (AUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 37,592 $ 42,881
Accounts receivable 27,496 --
Other receivables, deposits and prepayments 178,642 5,613
Amounts due from related companies (Note 4) 239,600 80,918
Amount due from former owner of BCM (Note 5) -- 9,291
Inventories (Note 6) 470,168 --
Other tax recoverable (Note 7) 10,436 22
----------- -----------
963,934 138,725
OFFICE EQUIPMENT, NET (Note 8) 48,362 14,525
----------- -----------
Total assets $ 1,012,296 $ 153,250
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 88,650 $ --
Other payables and accrued expenses 172,112 461
Amounts due to directors (Note 9) 209,206 --
Amounts due to shareholders (Note 10) 602,409 --
Amounts due to related companies (Note 11) 247,373 --
----------- -----------
Total current liabilities 1,319,750 461
----------- -----------
COMMITMENTS AND CONTINGENCIES
LONG TERM LIABILITIES
Loans from former owners of BCM (Note 12) -- 120,773
----------- -----------
Total long term liabilities -- 120,773
----------- -----------
STOCKHOLDERS' EQUITY
Preferred stock, par value $0.001 per share;
10,000,000 shares authorised, none issued
Common stock, par value $0.0001 per share;
100,000,000 share authorised,
29,990,210 issued and outstanding 2,999 --
Additional paid-in capital -- 120,773
Accumulated losses (310,453) (88,757)
----------- -----------
Total stockholders' equity/(deficit) (307,454) 32,016
----------- -----------
Total liabilities and stockholders' equity $ 1,012,296 $ 153,250
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated condensed financial statements.
F-2
<PAGE> 5
CENTURY MILESTONE S&T CO., LTD.
(a development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in US Dollars)
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<CAPTION>
FROM FROM
MAY 20, 1999 MAY 20, 1999
THREE (DATE OF SIX (DATE OF
MONTHS INCEPTION) MONTHS INCEPTION)
ENDED TO ENDED TO
JUNE 30, 2000 JUNE 30, 1999 JUNE 30, 2000 JUNE 30, 1999
------------- ------------- ------------- -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
NET SALES $ 402,109 $ -- $ 402,109 $ --
COST OF SALES (301,599) -- (301,599) --
------------- -------- -------------- --------
GROSS PROFIT 100,510 -- 100,510 --
SELLING EXPENSES (48,234) -- (48,234) --
GENERAL AND
ADMINISTRATIVE EXPENSES (66,732) -- (125,914) --
------------- -------- -------------- --------
OPERATING INCOME/(LOSS) (14,456) -- (73,638) --
INTEREST INCOME 83 -- 344 --
------------- -------- -------------- --------
INCOME/(LOSS) BEFORE
INCOME TAX (14,373) -- (73,294) --
PROVISION FOR INCOME TAX
(NOTE 13) -- -- -- --
------------- -------- -------------- --------
NET INCOME/(LOSS) $ (14,373) -- $ (73,294) --
============= ======== ============== ========
EARNINGS PER SHARE
- BASIC AND DILUTED $ -- $ -- $ -- $ --
============= ======== ============== ========
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING
- BASIC AND DILUTED 29,990,210 -- 29,990,210 --
============= ======== ============== ========
</TABLE>
See accompanying notes to unaudited consolidated condensed financial statements.
F-3
<PAGE> 6
CENTURY MILESTONE S&T CO., LTD.
(a development stage company)
STATEMENTS OF CASH FLOWS
Increase/(decrease) in Cash and Cash Equivalents
(Expressed in US Dollars)
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<CAPTION>
FROM
MAY 20, 1999
SIX (DATE OF
MONTHS INCEPTION)
ENDED TO
JUNE 30, 2000 JUNE 30, 1999
------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(221,437) $ --
Adjustments to reconcile net loss
to net cash provided by operating activities
Depreciation 2,372 --
Changes in:
Accounts receivable (27,496) --
Other receivable, deposits and prepayments (173,029) --
Amount due from former owner of BCM 9,291 --
Inventories (470,168) --
Other tax recoverable (10,414) --
Accounts payable 88,650 --
Other payables and accrued expenses 24,792 --
Amounts due to related companies 247,373 --
--------- -------
NET CASH USED IN OPERATING ACTIVITIES (381,923) --
--------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of office equipment (36,209) --
Amounts due from related companies (158,682) --
--------- -------
NET CASH USED IN INVESTING ACTIVITIES (194,891) --
--------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in amounts due to shareholders 362,319 --
Amounts due to directors 209,206 --
--------- -------
NET CASH PROVIDED BY FINANCING ACTIVITIES 571,525 --
--------- -------
NET DECREASE IN CASH AND CASH EQUIVALENTS (5,289) --
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 42,881 --
--------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 37,592 $ --
========= =======
</TABLE>
See accompanying notes to unaudited consolidated condensed financial statements.
F-4
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CENTURY MILESTONE S&T CO., LTD.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Beijing Century Milestone S&T Co., Ltd. ("BCM") was established in the People's
Republic of China (the "PRC") on May 20, 1999 as a limited liability company.
BCM was formerly owned by three individual PRC citizens, namely Gang Xiao, Yun
Luo and Ji Ming Feng.
BCM commenced operations in August 1999 and is engaged in the development and
sale of video transmission software, video transmitter hardwares and hard disk
recording system software and digital recorder hardware equipment. BCM has been
granted a ten years operation period which can be extended with approvals from
relevant PRC authorities.
In accordance with relevant business registration documents, BCM's registered
share capital is RMB5,000,000. As at December 31,1999, RMB1,000,000 was fully
paid up. In February 2000, the remaining RMB4,000,000 has been fully paid up.
On April 26, 2000, Haas Neuveux & Company (the "Company") executed a Preliminary
Plan of Reorganization with BCM and owners of BCM pursuant to which 100% of the
registered share capital of BCM was acquired by the Company, in exchange of
20,000,000 shares of the Company's $0.0001 par value common stock. These
20,000,000 shares were issued after the effectiveness of a 10 for 1 reverse
share split as mentioned below.
On July 21, 2000, the Company effected a 10 for 1 reverse share split. After
issuing 20,000,000 shares of the common stock to the original owners of BCM, the
Company has a total of 29,990,210 shares of common stock issued and outstanding.
For accounting purposes, the acquisition has been treated as the acquisition of
the Company by BCM with BCM as the acquirer (reverse acquisition). The
historical financial statements prior to April 26, 2000 are those of BCM. All
shares and per share data prior to the acquisition have been restated to reflect
the stock issuance as a recapitalization of BCM.
The Company was initially incorporated in the State of Colorado on May 23, 1986.
On July 21, 2000, the Company changed its name to Century Milestone S&T Co.,
Ltd.
Previously, the Company was considered a development stage enterprise. Since
April 26, 2000, the Company has emerged from that status.
NOTE 2 - BASIS OF PRESENTATION, ACCOUNTING AND PRINCIPLES OF
CONSOLIDATION
The consolidated financial statements as of June 30, 2000 and for the three and
six months ended June 30, 2000 and 1999, have been prepared by the Company,
without audit, in accordance with generally accepted accounting principles in
the United Stated of America and present the financial statements of the Company
and its wholly owned subsidiary, BCM. All material intercompany transactions
have been eliminated. The Company believes that the disclosures are adequate to
make the information presented not misleading.
F-5
<PAGE> 8
NOTE 2 - BASIS OF PRESENTATION, ACCOUNTING AND PRINCIPLES OF
CONSOLIDATION - CONTINUED
In the opinion of Management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows as of June 30, 2000 and for the three and
six months ended June 30, 2000 and 1999, have been made. The results of
operations for the three and six months ended June 30, 2000 and 1999 are not
necessarily indicative of the operating results for the full year.
NOTE 3 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES
FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS
The functional currency of the Company is US$ and the financial records are
maintained and the financial statements prepared in US$. The functional currency
of BCM is Renminbi (RMB) and the financial records are maintained and the
financial statements are prepared in RMB.
Foreign currency transactions during the period are translated into US$ at the
exchange rates ruling at the transaction dates. Gain and loss resulting from
foreign currency transactions are included in the statement of operations.
Assets and liabilities denominated in foreign currencies at the balance sheet
date are translated into US$ at year end exchange rates. When assets,
liabilities and equity denominated in RMB are translated into US$, translated
adjustments are included as a component of stockholders' equity.
Exchange rates between US$ and RMB were fairly stable during the period
presented. The rate ruling as of June 30, 2000 is US$1: RMB8.28. Due to the
stability of the exchange rates, there were no net adjustments in the
stockholders' equity.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include all highly liquid investments with an original
maturity of three months or less.
RELATED PARTY
A related party is an entity that can control or significantly influence the
management or operating policies of another entity to the extent one of the
entities may be prevented from pursuing its own interests. A related party may
also be any party the entity deals with that can exercise that control.
F-6
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NOTE 3 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES - CONTINUED
OFFICE EQUIPMENT AND DEPRECIATION
Equipment is stated at cost. Depreciation is computed using the straight-line
method to allocate the cost of depreciable assets over the estimated useful
lives of the assets as follows:
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ESTIMATED
USEFUL LIFE
(IN YEARS)
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Computer equipment 5
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Maintenance, repairs and minor renewals are charged directly to the statement of
operations as incurred. Additions and betterments to office equipment are
capitalized. When assets are disposed of, the related cost and accumulated
depreciation thereon are removed from the accounts and any resulting gain or
loss is included in the statement of operations.
REVENUE RECOGNITION
Revenue from software sales is recognised when all shipment obligations have
been met, fees are fixed and determinable, collection of sales proceeds is
deemed probable, and persuasive evidence of an agreement exists.
Revenue from goods sold is recognised when title of goods sold has passed to the
purchasers, which is at the time of delivery.
INVENTORIES
Inventory is accounted for on the weighted average method and is stated at the
lower of cost and market. Market value is determined by reference to the sales
proceeds of items sold in the ordinary course of business after the balance
sheet date or to management estimates based on prevailing market conditions.
LONG-LIVED ASSETS
The Company periodically reviews their long-lived assets for impairment based
upon the estimated undiscounted future cash flows expected to result from the
use of the asset and its eventual disposition. When events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable, the asset is written down to its net realizable value.
F-7
<PAGE> 10
NOTE 3 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES
The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 109. Under SFAS No. 109, deferred tax
liabilities or assets at the end of each period are determined using the tax
rate expected to be in effect when taxes are actually paid or recovered.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amount expected to be realized.
FAIR VALUES OF FINANCIAL INSTRUMENTS
The carrying amounts of certain financial instruments approximate their fair
values as of June 30, 2000 because of the relatively short-term maturity of
these instruments.
USE OF ESTIMATES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS No. 133"), Accounting for
Derivative Instruments and Hedging Activities. SFAS No. 133 requires companies
to recognize all derivative contracts as either assets or liabilities in the
balance sheet and to measure them at fair value. If certain conditions are met,
a derivative may be specifically designated as a hedge, the objective of which
is to match the timing of gain or loss recognition on the hedging derivative
with the recognition of (i) the changes in the fair value of the hedged asset or
liability that are attributable to the hedged risk or (ii) the earnings effect
of the hedged forecasted transaction. For a derivative not designated as a
hedging instrument, the gain or loss is recognized as income in the period of
change. SFAS No. 133 as amended by SFAS No. 137 is effective for all fiscal
quarters of fiscal years beginning after June 15, 2000. Based on its current and
planned future activities relative to derivative instruments, the Company
believes that the adoption of SFAS No. 133 will not have a significant effect on
its financial statements.
On December 3, 1999, the SEC issued Staff Accounting Bulletin 101 ("SAB 101"),
Revenue Recognition in Financial Statements. SAB 101 summarizes some of the
SEC's interpretations of the application of generally accepted accounting
principles to revenue recognition. Revenue recognition under SAB 101 was
initially effective for the Company's first quarter 2000 financial statements.
However, SAB 101B, which was released June 26, 2000, delayed adoption of SAB 101
until no later than the fourth fiscal quarter 2000. Changes resulting from SAB
101 require that a cumulative effect of such changes for 1999 and prior years be
recorded as an adjustment to net income on January 1, 2000 plus adjust the
statement of operations for the three months ended in the quarter of adoption.
Although the Company is still in the process of reviewing SAB 101, it believes
that its revenue recognition practices are in substantial compliance with SAB
101 and that adoption of its provisions would not be material to its annual or
quarterly results of operations.
NOTE 4 - AMOUNTS DUE FROM RELATED COMPANIES
The amounts due from the related companies, in which two of the directors of the
Company have beneficial interests, are unsecured, interest free and without
fixed terms of repayment.
F-8
<PAGE> 11
NOTE 5 - AMOUNT DUE FROM FORMER OWNER OF BCM
The Company, from time to time, received from or made repayment to one of the
former owners of BCM. The amount does not bear any interest and does not have
clearly defined terms of repayments. Now this former owner of BCM is both one of
the directors and shareholders of the Company.
NOTE 6 - INVENTORIES
The inventories as of June 30, 2000 are products for resale.
NOTE 7 - OTHER TAX RECOVERABLE
Other tax recoverable represents Valued-Added Tax ("VAT"). The Company is
subject to output VAT levied at the rate of 17% of its operating revenue. The
input VAT paid on purchases of materials and other direct inputs can be used to
offset the output VAT levied on operating revenue to determine the net VAT
payable or recoverable.
NOTE 8 - OFFICE EQUIPMENT, NET
<TABLE>
<CAPTION>
JUNE 30, 2000 DECEMBER 31, 1999
(UNAUDITED) (AUDITED)
<S> <C> <C>
Office equipment $ 51,226 $ 15,017
Less: Accumulated depreciation 2,864 492
-------- --------
$ 48,362 $ 14,525
======== ========
</TABLE>
NOTE 9 - AMOUNTS DUE TO DIRECTORS
The amounts due to directors are unsecured, interest free and does not have
clearly defined terms of repayments.
NOTE 10 - AMOUNTS DUE TO SHAREHOLDERS
The amounts represent cash consideration payable to the original owners of BCM
in connection with the reverse acquisition of BCM by the Company. These owners
became the major stockholders of the Company following the reverse acquisition.
F-9
<PAGE> 12
NOTE 11 - AMOUNTS DUE FROM RELATED COMPANIES
The amounts due from related companies are unsecured, interest free and created
under normal course of business.
NOTE 12 - LOANS FROM FORMER OWNERS OF BCM
The loans are unsecured and interest free. In February 2000, the entire loan
balance was capitalized by the increase of the registered share capital of BCM
to RMB5 million.
NOTE 13 - INCOME TAX
No provision for income tax has been made in the financial statements as the
Company has no assessable income for the period.
Pursuant to an approval document dated January 20, 2000 issued by the Beijing
Tax Bureau, BCM, being a "New Technology Enterprise", is eligible to full
exemption from PRC Corporate Income Tax for the period from June 1, 1999 to
December 31, 2001.
No provision for deferred taxation has been made as there is no material
temporary difference at the balance sheet date.
NOTE 14 - COMMITMENTS AND CONTINGENCIES
OPERATING LEASE COMMITMENT
As of June 30, 2000, the Company had commitments under a non-cancellable
operating lease expiring in excess of one year amounting to $331,758. Rental
payments for each of the succeeding periods are:
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July 1, 2000 to June 30, 2001 $ 189,576
July 1, 2001 to June 30, 2002 142,182
---------
$ 331,758
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F-10
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
Company's financial statements and notes thereto included elsewhere in this Form
10-QSB. Except for the historical information contained herein, the discussion
in this Form 10-QSB contains certain forward looking statements that involve
risks and uncertainties, such as statements of the Company's plans, objectives,
expectations and intentions. The cautionary statements made in this Form 10-QSB
should be read as being applicable to all related forward statements wherever
they appear in this Form 10-QSB. The Company's actual results could differ
materially form those discussed here.
The financial statements include all adjustments which in the opinion of and to
the best of management's knowledge are necessary to make the financial
statements not misleading.
Results of Operations
Three months ended June 30, 2000 compared to three months ended June 30, 1999,
and six months ended June 30, 2000 compared to six months ended June 30, 1999.
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<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
---------------------------------- ----------------------------------
JUNE 30, 2000 JUNE 30, 1999 JUNE 30, 2000 JUNE 30, 1999
<S> <C> <C> <C> <C>
Net sales 402,109 - 402,109 -
</TABLE>
The Company started implementation of its business plan during the second
quarter of this year. In order to fully conduct business and seize the market
opportunities, the Product Promotion Department and Video Network Department
were established. Meanwhile, the Sales Department was able to launch the
complete promotion and sales activities for our products and related monitoring
hardware equipment. The sales amount reached US$ 402,109 in this quarter
compared to zero volume before. Net sales were derived principally from the
sales of monitoring hardware equipment and the related applicable software
"Century Sight 2000".
To meet requirements of the full development of the Company's business and the
rapid growth of the Company, we moved ourselves to a new office address that is
more appropriate for the Company's business. Besides establishing two new
departments, we also employed several research engineers and some sales
engineers. These are the main reasons of the increase in administrative expenses
during this quarter. Sales development and market promotion also added to the
increase in expenses.
As the development investment increases, our new version of "Century Sight 2000"
software, our new communication controlling units and decoders, and our in-house
developed products have been launched in this quarter. It lays a good foundation
for future business and sales.
Liquidity and Capital Resource
During the first six months of 2000 the net decrease in cash and cash equivalent
was $5,289. The net cash used in operating activities was $381,923. In order to
cope with business growth, the Company used $36,209 for the acquisition of
office equipment.
In order for the Company to meet its continuing cash requirements and to
successfully implement its growth strategy, the Company will need to rely on
increased future revenues and/or will require additional financing. In the event
additional financing is required, no assurances can be given that such financing
will be available in the amount required or, if available, that it can be on
terms satisfactory to the Company.
Management of Growth
This is the first quarter of the year that the Company has been carrying out a
fully-structured sales activity. With the reorganization plan completed, the
Company will step into a rapid development stage in the next quarter. We believe
that there will be an important increase in the Company sales in the following
quarters.
2
<PAGE> 14
The good start of the sales in this quarter was benefited from the funds made
available by the shareholders of the Company. The Company expects that in-house
development of several products will be completed in the forthcoming quarter.
Some specific areas of development planned for the following third quarter are:
1. Start of sales of the in-house developed products in Shanghai Branch.
2. Application of the network video project, monitoring project and
in-house developed products in Hunan Branch.
3. Establishment of a branch in Chengdu for business towards western
China.
4. Product development: new single-route digital video recorder and
multi-route video recording systems will enter into the stage of
testing and trial running. Beta versions of the VOD system.
5. Initiate increased training programs for sales engineers and research
engineers.
6. Expand product lines.
7. Conduct specialised promotion activities of in-house designed products
at exhibits as follows:
(a) Sep. 4-7, 2000 - attend 2000 China Financial Banking Technical
and Equipment Exhibition.
(b) Nov. 2000 - attend 2000 International Public Facilities and
Police Equipment Exhibition.
Some specific areas of development plans for the next third quarter of this year
are (Continued) :
8. Add new elements to the Company's Website to make it a key company and
investor development tool:
(a) Add a Weekly News channel to rapidly report Company trends,
including "Introducing our People", Latest Commercial News,
Management Manual, S&T Development and Financial Report.
(b) BBS platform to establish Real-time Technical Discussion,
Commercial News and Stock Information.
(c) Product channel: To co-ordinate the R&D of in-house products and
perfect the contents.
(d) Service channel: Increase service information.
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, readers of this document and any document
incorporated by reference herein, are advised that this document and documents
incorporated by reference into this document contain both statements of
historical facts and forward looking statements. Forward looking statements are
subject to certain risks and uncertainties, which could cause actual results to
differ materially from those indicated by the forward looking statements.
Examples of forward looking statements include, but are not limited to (i)
projections of revenues, income or loss, earning or loss per share, capital
expenditures, dividends, capital structure and other financial items, (ii)
statements of the plans and objectives of the Company or its management or Board
of Directors, including the introduction of new products, or estimates or
predictions of actions by customers, suppliers, competitors, or regulatory
authorities, (iii) statements of future economic performance, (iv) statements
about plans of the Company or its management or Board of Directors to raise
capital to fund the Company's business operations and its acquisitions, and (v)
statements of assumptions underlying other statements and statements about the
Company or its business. Forward looking statements are beyond the ability of
the Company to control and in many cases the Company cannot predict what factors
would cause results to differ materially from those indicated by the forward
looking statements.
3
<PAGE> 15
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company has settled its lawsuit against Productos Forestales de
Bolivar, CA ("PFB"), Richard Smith, Norman Piatti and David Bovi, which was
filed on July 28, 1999. Pursuant to a settlement agreement dated April 18, 2000,
all parties released each other from all claims relating to the lawsuit. The
Company disclaimed any interest in PFB. The defendants acknowledged that Michael
Harrop is the President and sole director of the Company as of the settlement
date and that Richard Smith was not an officer or a director. In connection with
the settlement, the Company authorized the sale of 78,796,000 of the 78,996,000
shares of common stock previously issued to Richard Smith (i.e., all but 200,000
shares) to several third parties. One of the third-party purchasers was Harrop
Lees Brown & Co., of which Michael Harrop is an affiliate.
ITEM 2. CHANGES IN SECURITIES.
On July 20, 2000 the Company's shareholders approved a reverse-split of
the outstanding, but not the authorized, shares of common stock of the Company
on a 10-for-1 basis. The reverse split became effective at the close of business
on July 21, 2000. On July 24, 2000 the Company's common stock began trading on
the OTC Bulletin Board on a post-split basis under the new symbol of CEML.
On August 5, 2000, the Board of Directors authorized the issuance of
20,000,000 shares of common stock to five persons in connection with the
acquisition of Beijing Century Milestone S&T Co., Ltd. Although the acquisition
was closed on April 26, 2000, the shares could not be issued until after the
reverse split was completed. The Company believes that this transaction was
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.
On July 20, 2000, the Company held a Special Shareholders' Meeting to
vote on the following proposals; (1) to effect a reverse-split of the
outstanding, but not the authorized, shares of common stock of the Company on a
10-for-1 basis and (2) to amend the Articles of Incorporation to change the
Company's name from Haas Neuveux & Company to Century Milestone S&T Co., Ltd.
Management did not solicit proxies. The results of the matters voted upon by the
shareholders were as follows:
1. To effect a reverse-split of the outstanding, but not the authorized, shares
of common stock of the Company on a 10-for-1 basis:
For Against
--- -------
57,800,000 -0-
2. To amend the Articles of Incorporation to change the Company's name from
Haas Neuveux & Company to Century Milestone S&T Co., Ltd.:
For Against
--- -------
57,800,000 -0-
Effective July 21, 2000, the Company's name was changed from Haas
Neuveux & Company to Century Milestone S&T Co., Ltd.
4
<PAGE> 16
ITEM 5. OTHER INFORMATION
The current directors of the Company are as follows:
o Luo Yun
o Xiao Gang
o Bai Xiaodi
o Feng Jiming
o Michael J. Harrop
The current officers of the Company are as follows:
<TABLE>
<S> <C>
Xiao Gang...................................President and Chief Executive Officer ("CEO")
Feng Jiming.................................Secretary and Chief Technical Officer ("CTO")
Luo Yun.....................................Treasurer and Chief Financial Officer ("CFO")
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: Exhibit Number and Brief Description.
2.1 Preliminary Plan of Reorganization between the Company and
Beijing Century Milestone S&T Co., Ltd. dated March 6, 2000.
(Incorporated by reference to Exhibit 2.1 of the Company's
current report on Form 8-K dated April 26, 2000 and filed May
5, 2000.)
3.2 Bylaws dated May 11, 2000. (Incorporated by reference to
Exhibit 3.2 of the Company's Quarterly Report on Form 10-QSB
for the quarter ended March 31, 2000.)
3.3 Articles of Incorporation, as amended on July 21, 2000, and
currently in effect. (Incorporated by reference to Exhibit 3.3
of the Company's current report on Form 8-K dated July 20,
2000.)
27 Financial Data Schedule. (Filed herewith.)
(b) Reports on Form 8-K.
On July 10, 2000, the Company filed a current report on Form 8-K/A-1 to
provide the required financial statements regarding the acquisition of 100% of
the outstanding common stock of Beijing Century Milestone S&T Co., Ltd. on April
26, 2000.
On July 28, 2000, the Company filed a current report on Form 8-K to
report that the Company held a Special Shareholders' Meeting on July 20, 2000 to
vote on the following proposals: (1) to effect a reverse-split of the
outstanding, but not the authorized, shares of common stock of the Company on a
10-for-1 basis and (2) to amend the Articles of Incorporation changing the
Company's name from Haas Neuveux & Company to Century Milestone S&T Co., Ltd.
Management of the Company did not solicit proxies. The shareholders voted in
favor of both proposals. On July 21, 2000 the Company filed Articles of
Amendment changing its name from Haas Neuveux & Company to Century Milestone S&T
Co., Ltd. with the Colorado Secretary of State, which became effective as of
that date. At the close of business on July 21, 2000, the reverse-split of the
outstanding shares of common stock was effected.
5
<PAGE> 17
SIGNATURES
In accordance with the requirements of the Exchange Act, the Company
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CENTURY MILESTONE S&T, CO., LTD.
By: /s/ Luo Yun
----------------------------------
Luo Yun, Chief Financial Officer
Date: August 21, 2000
6
<PAGE> 18
EXHIBIT INDEX
NUMBER BRIEF DESCRIPTION
2.1 Preliminary Plan of Reorganization between the
Company and Beijing Century Milestone S&T Co., Ltd.,
dated March 6, 2000. (Incorporated by reference to
Exhibit 2.1 of the Company's current report on Form
8-K dated April 26, 2000 and filed May 5, 2000.)
3.2 Bylaws dated May 11, 2000. (Incorporated by reference
to Exhibit 3.2 of the Company's Quarterly Report on
Form 10-QSB for the quarter March 30, 2000.)
3.3 Articles of Incorporation, as amended on July 21,
2000, and currently in effect. (Incorporated by
reference to Exhibit 3.3 of the Company's current
report on Form 8-K dated July 20, 2000.)
27 Financial Data Schedule. (Filed herewith.)
