UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year Ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES ACT OF 1934
Commission File No. 33-55254-11
FORLINK SOFTWARE CORPORATION, INC.
(Name of Small Business Issuer in its Charter)
Nevada 87-0438458
--------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
94 Rue de Lausanne, CH1202 Geneva, Switzerland N/A
(Address of principal executive offices) (Zip Code)
Issuer's Telephone number: 41-22-9000000
-------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered Common Stock
NASDAQ
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant=s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
of any amendment to this Form 10-KSB. [ ]
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding as of December 31, 1999
CLASS A COMMON STOCK 25,000,000
State the issuers revenue for its most fiscal year:$67,238
<PAGE>
PART I
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ITEM 1. DESCRIPTION OF BUSINESS
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(a) Business Development
FORLINK SOFTWARE CORPORATION, INC. (Formerly Light Energy Management,
Inc. and formerly Why Not?, Inc.) (the "Company" or the "Registrant" ) is a
Nevada corporation which was originally incorporated on January 7, 1986 under
the laws of the State of Utah under the name of Why Not?, Inc. and subsequently
reorganized under the laws of Nevada on December 30, 1993. The Company's
reorganization plan was formulated for the purpose of changing the state of
domicile and provided that the Company form a new corporation in Nevada which
acquired all of the contractual obligations, shareholder rights and identity of
the Utah corporation, and then the Utah corporation was dissolved. The Company
is in the developmental stage, and its operations to date have been limited.
In May of 1998, the Company entered into an agreement under the terms
of which it intended to merge with Teknocapital Finance Ltd. Pursuant to that
merger agreement, the shareholders of Teknocapital would exchange 100% of the
issued and outstanding shares of Teknocapital for 4,000,000 of the Company's
common stock. Pursuant to that agreement, the existing Board of Directors of Why
Not?, Inc. resigned. New members were appointed to fill their vacancies and
Teknocapital management assumed responsibility for the Company's affairs.
Thereafter, the merger agreement with Teknocapital was substantially
modified. Specifically, the consideration given for the issuance of the
4,000,000 shares of the Company's common stock was changed from 100% of the
issued and outstanding shares of Teknocapital to the execution of promissory
notes totaling $275,000 payable to the Company by Harrop & Co. With the
execution of these promissory notes, the merger with Teknocapital was abandoned
and the Company continued its activities as an unfunded venture in search of a
suitable business acquisition or business combination. In November, 1998 the
Company's name was changed to Light Energy Management, Inc. in anticipation of
merging with another company. The merger did not occur, but the Company was
unable to register the old name of Why Not?, Inc.
On November 3, 1999, the Company entered into a Plan of Reorganization
with Beijing Shijiyonglian Ruanjian Jishu Youxian Gongsi (Beijing Forlink
Software Technology Co. Ltd, (hereinafter "BFSTC"), under the terms of which
BFSTC gained control of the Company.
Pursuant to the Plan of Reorganization, the Company acquired 100% of
the issued and outstanding shares of BFSTC in exchange for 20,000,000 shares of
the Company's authorized, but unissued, common stock. BFSTC is engaged in the
Internet e-commerce and Internet software development business, and the Internet
vertical portal business. The business of BFSTC has become the business of the
Company.
(b) Business of the Issuer
The Company's business now is focused in two areas: (1) Building and
operating an Internet destination site and E-commerce site, and (2) Developing
Internet tools to help other businesses to enter E-commerce business. All of the
Company's business is conducted in the People's Republic of China.
Internet Destination Site
An Internet destination site is different from general-purpose portal
site. A general-purpose portal site provides directories and search engines to
help users to find information on line. Most of the portal sites also provide
news and other services. A destination site, however, is focused on one sector
or even one product. After analyzing China's Internet market and the development
stage it was in, considering the fact that several large general purpose portal
sites were already in place, BFSTC chose to set up a software destination site,
Softhouse (www.softhose.com.cn), as its first destination site. The Company
plans to develop more destination sites later. It has chosen to start with the
software sector because: (1) China's software development was one step behind
other developed countries; (2) most of the Chinese Internet users were
interested in gaining access to new software; (3) none of the existing software
sites in China were advanced enough to meet users demand; and, (4) BFSTC's
software engineers had been in the software business for many years and know the
software market well.
2
<PAGE>
Softhouse
Softhouse hosts software information, online software sales, online
software auctions, free software downloading and software forums. Softhouse
sells over 10,000 domestic software titles, and provides detailed product
introduction and links to software vendors.
Software Information
At Softhouse, users can get timely software information from around the
world, such as sector news, software company news, new product introduction,
upcoming product introduction, etc. Users can easily search for specific
software information, price, and customer comments and suggestions.
Online Software Sales and Auction
Softhouse sells software in two ways: online supermarket and online
auction. Since BFSTC will sell to the end users directly online, no storefront
rental will be paid and inventory is kept low. In fact, some orders are shipped
to customers by the software vendors directly. Management expect that such cost
savings will make the Company's prices competitive. Online sales remove space
and time restrictions so that the Company can sell to customers worldwide 24
hours a day, 7 days a week. There are over 10,000 software titles available,
which include almost all titles available in China. Customers can quickly find
the software title they are looking for via category search or multiple keyword
rapid search. The Company believes that these advantages over traditional sales
channels make Softhouse attractive to consumers.
Online auction is another sales model that brings customers and vendors
closer to each other. There are new titles on auction every day, with a starting
bid of 1 Yuan. The auction not only attracts customer participation, it also
provides vendors with reference on how their software should be priced in the
future.
Free Software Downloading
Free software attracts a lot of users to Softhouse. There are many
organizations and individuals providing free software downloading. The Company
tries to collect as many titles as possible. There are over 8000 titles of free
software available on Softhouse right now and the number is increasing at about
100 titles per day. The Company provides category search and multiple keyword
rapid search to help users find the software title they are looking for quickly
and conveniently.
Software Forum
Software Forum is site maintained by the Company for users to
communicate with each other, publish suggestions, tips and information, look for
help and help others. Forums are categorized according to software category.
Users can also open up new forums according to their own interests. The
Company's goal is to build Software Forum as a virtual community to attract more
users. More visitors to the Company's site will bring more value to the site.
Software Publishing
Traditional methods of software publishing are costly and time
consuming. Publishing new products on the Internet is much faster and cheaper.
The Company hopes that Softhouse will become China's online software publishing
platform, where vendors will be able to quickly present their new products to
larger numbers of software users with very little advertising cost.
The Company's strategy for Softhouse is to provide top quality service
and attract large number of visitors so revenue can be generated through both
online sales and online advertising.
Internet Tools
BFSTC has developed its own Internet tool product line: a carrier scale
electronic messaging system For-mail and an enterprise E-commerce system For E-
Business. Both products have been successfully implemented by customers.
For-Mail has been deployed to provide free e-mail service on one of a high
profile portal sites in China, www.tonghua.com.cn. Users have praised the system
as fast, stable, and easy to use. For-Business has been successfully running on
the site owned by one of the largest Chinese computer company, Legend, and one
Japanese giant, Toshiba: www.ltclub.legend.com.cn.
3
<PAGE>
For-Mail V3.0
For-Mail is a large scale messaging system, designed for ISPs, free
e-mail service providers and other companies which need a scalable, stable,
administrable e-mail system. It runs on UNIX or LINUX platforms. Unlike other
email systems, such as sendmail, For-Mail e-mail has a WEB MAIL subsystem.
E-mail users can complete their e-mail operation on their browser.
For-Business
For-Business is a complete E-commerce system that runs on UNIX or LINUX
platforms. It is clean and requires little data transfer. It is also secure,
stable and scalable. It has a friendly user interface and supports remote
maintenance. For-Business has the follow subsystems:
Product registry;
Product search;
Online shopping;
Order sheet inquiring online; Administration system; Supplier inquiring;
Dealer support system; Product release system; Post-sale service and
support.
Market Environment: The Number of Internet Users in China
The size of the Company's market depends on the number of users in
China. According to the China Internet Network Information Center statistics,
the number of Internet users in China was 670,000 in December 1997. The number
reached 2,100,000 by the end of 1998. In June 1999, that number surged to
4,000,000. Although this number is still relatively small, it is increasing at
the rate of 200% per year, though there obviously is no assurance that it will
continue to increase at that rate in the future. It is estimated that by the end
of the year 2000, the number of Internet users in China will reach 15,000,000.
Online Payment
The success of online software sales also depends on the availability
of secure, convenient, online payment services. Chinese banks are implementing
online payment systems. China Merchant Bank, Bank of China, and China
Construction Bank have started providing Internet online payment services. It is
the Company's understanding that by early 2000, an authorizing center, led by
the Bank of China, with the participation of 11 major Chinese banks, will be
online.
Delivery
Presently there are several ways for delivering an order to a customer.
1) Postal service. It is cheap (usually 10 Yuan for delivering a software
CD or diskette), but it is slow (usually takes 3 to 10 days).
2) EMS and other express delivery. It is fast (usually 1 to 4 days), but it
is more expensive (usually 30 Yuan).
3) Delivery provided by the Company. Within the Beijing city limit,
software can be delivered to the customer the same day for free. As more
warehouses are established in other cities, it is expected that the same
service will be available in other cities, too. Currently, the Company
has no such warehouses.
Competitive Analysis
Competition to Softhouse (www.software.com.cn)
As a software E-commerce site, Softhouse's main competitor is Lian Bang
Software Co. Lian Bang is one of China's largest software sales chain. It
understands the software market well and has good software sales experience. It
also has well established relations with software vendors. However, its online
sales competes with its own software retail chain. And the Company perceives
that Lian Bang lacks Internet technical personnel which limits its ability to
further develop on the Internet.
Lian Bang's 8848.net is an E-commerce site. It not only sells software,
it also sells hardware, books and even food. On the other hand, Softhouse is a
software destination site. It focuses on the software business and tries to
establish a software online community. The Company's theme and direction is
different from that of Lian Bang.
4
<PAGE>
Major Chinese portal sites such as Sohu, Sina.com and Netease.com may
compete with Softhouse for advertising clients. But since Softhouse will be
mainly targeting a specific group of advertising clients, namely clients in the
software sector, the Company hopes to limit competition from these portal sites.
Competition in the Internet Tool Market
There are two Chinese companies that have the products similar to the
Company's Carrier Scale Electronic Messaging (E-mail) System: Netease and
Asiainfo.
Netease is the first company in China to develope a large scale e-mail
server system and currently has the largest market share in China. But the
Company perceives that Netease's e-mail server has problems in its system design
that make it hard for that system to handle more than 300,000 users. The
Company's For-Mail system can easily handle over one million users. Also,
Netease has started to provide free e-mail service and may no longer put a lot
of effort into the e-mail system development.
Asiainfo's e-mail server is based on a very expensive hardware system,
while For-Mail can run on a wide range of machines, from PC servers to high end
servers.
The main competitor in the US market would be software.com. The
Company's For-Mail is comparable to software.com's products, yet management
believes For- Mail's price can be set at less than half of software.com's
prices.
E-commerce system
Right now there is no well known E-commerce system in the Chinese
market. There are many E-commerce solution providers in the US and international
markets. Those easy to use, wizard-driven catalog builders for small business
sell for as low as $399. The more sophisticated ones (those that are comparable
to For- Business in features), designed for the large enterprise and for more
serious e- commerce applications, sell for more than $3,000 for single
storefront license and over $6,000 for multiple storefront license. Again, with
the Company's low labor cost, For-Business can be marketed at a price that is
much lower than the price of comparable products.
(2) Status of Publicly Announced New Products or Services
On November 24, 1999, the Company filed a Form 8-K which described the
Bejing Forlink/Light Energy transaction. The terms of the reorganization which
took place as a result of this transaction were outlined in that Form 8-K
filing, the narrative of which is incorporated herein by this reference.
(3) Effect of Governmental Approval and Regulation
The company is subject to various laws and governmental regulations
applicable to business generally. The Company believes it is in compliance with
such laws and that such laws do not have a material impact on its operations.
(4) Cost of Environmental Regulation
The Company anticipates that it will have no material costs associated
with compliance with either federal, state or local environmental law.
(5) Employees
The Company currently has approximately 32 full time employees.
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ITEM 2. DESCRIPTION OF PROPERTY
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(1) Principal Plants and Property and Description of Real Estate and
Operating Data.
The Company currently rents its facilities in Beijing, China. Its
facilities are located at Baihua Kejiyuan B3, Baishiqiao Road No. 15, Haidian
District, Beijing, China. The Company has a one-year lease on this facility
running from December 8, 1999 to December 7, 2000.
(2) Investment Policies
The Company has no particular policy regarding each of the following
types of investments:
5
<PAGE>
(1) Investments in real estate or interests in real estate;
(2) Investments in real estate mortgages; or,
(3) Securities of or interests in entities primarily engaged in real
estate activities.
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ITEM 3. LEGAL PROCEEDINGS
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There are no pending legal proceedings involving the Company.
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ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
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The Company did not submit any matter to a vote of the shareholders in
1999. All action taken by shareholders in 1999 was taken via written consent of
a majority of shareholders as provided for under the laws of the State of Utah.
PART II
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ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
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The Common Stock of the Company is currently trading on the Over The
Counter Bulletin Board system under the symbol "FRLK". Prior to November of
1999, the Company traded under the symbol "YNOT".
The following table sets forth the range of high and low bid prices for
the Company's Common Stock for each quarterly period indicated as reported by
the NASDAQ's Historical Research Department. Quotations reflect inter-dealer
prices without retail markup, markdown or commissions and may not represent
actual trades.
Common Stock
Quarter Ended High Bid Low Bid
------------- -------- -------
March 31, 2000 $23.50 $7.25
December 31, 1999 $8.125 $0.0313
September 30, 1999 $0.1 $0.02
June 30, 1999 $0.09 $0.05
March 31, 1999 $2.00 $0.035
December 31, 1998 $0.7 $0.875
September 30, 1998 $0.19 $0.22
June 30, 1998 $0.625 $0.875
Holders
On March 31, 2000 there were 25,000,000 shares of the Company's common
stock outstanding.
Dividends
The Company has never paid cash dividends on its Common Stock and does
not intend to do so in the foreseeable future. The Company currently intends to
retain its earnings for the operation and expansion of its business.
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
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Statements contained herein that are not historical facts are forward-
looking statements as that term is defined by the Private Securities Litigation
6
<PAGE>
Reform Act of 1995. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, the forward-looking
statements are subject to risks and uncertainties that could cause actual
results to differ from those projected. The Company cautions investors that any
forward-looking statements made by the Company are not guarantees of future
performance and that actual results may differ materially from those in the
forward-looking statements. Such risks and uncertainties include, without
limitation: well established competitors who have substantially greater
financial resources and longer operating histories, regulatory delays or
denials, ability to compete as a start-up company in a highly competitive
market, and access to sources of capital.
Plan of Operation
During the year 2000 the Company intends to expand its operations as a
computer software provider. Management plans to establish the Company's internet
infrastructure, including the acquisition and installation of appropriate
computer equipment, as well establish a program for the promotion of the
Company's services. Mangement has established a budget of $2,500,000 for its
operations in 2000.
Management anticipates that the acquisitions and installation of
equipment and establishment of a promotion program will be paid for from funds
the Company will receive from planned business combinations or financing
arrangements the Company already has made. The Company presently is attempting
to raise $2,000,000 from the sale of Company's stock. Additional capital needs
will be met either through additional sales of the Company's stock or through
generated revenues from the Company's operations. It is possible that the
Company will be unable to sell such stock and that it may not receive such
funds, in which case the Company's plans to install its computer systems and
promote its business will be postponed and may not occur unless substitute
funding can be obtained. The Company's current cash on hand is insufficient to
meet the Company's capital needs for the next 12 months.
In the event the Company does not obtain the planned funding,
management intend to pursue business combinations with other companies within
the computer industry in China. Management believes that such combinations will
allow the Company to continue its operations until adequate funding is available
for the Company's independent operations. Of course, the ability of the Company
to enter into such combinations is contingent upon management's ability to
locate a suitable business partner and negotiate an acceptable arrangement for a
business combination.
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ITEM 7. FINANCIAL STATEMENTS
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7
<PAGE>
Forlink Software Corporation, Inc.
(Formerly known as Why Not?, Inc.)
Report of Independent Certified Public Accountants
and Consolidated Financial Statements
December 31, 1999 and 1998
<PAGE>
<TABLE>
Forlink Software Corporation, Inc.
(Formerly known as Why Not?, Inc.)
Index To Consolidated Financial Statements
<CAPTION>
Pages
-----
<S> <C>
Report of Independent Certified Public Accountants 1
Consolidated Balance Sheets 2
Consolidated Statements of Operations 3
Consolidated Statements of Stockholders' Equity 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6 - 10
</TABLE>
<PAGE>
Report of Independent Certified Public Accountants
To the Board of Directors of
Forlink Software Corporation, Inc.
(Formerly known as Why Not?, Inc.)
We have audited the accompanying consolidated balance sheets of Forlink Software
Corporation, Inc. as of December 31, 1999 and 1998, and the related consolidated
statements of operations, stockholders' equity and cash flows for the year ended
December 31, 1999 and the period from inception (November 11, 1998) to December
31, 1998. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Forlink
Software Corporation, Inc. as of December 31, 1999 and 1998 and the results of
its consolidated operations and cash flows for the year ended December 31, 1999
and the period from inception (November 11, 1998) to December 31, 1998, in
conformity with generally accepted accounting principles in the United States of
America.
/s/BDO International
- --------------------
BDO International
Certified Public Accountants
Hong Kong,
February 21, 2000
-1-
<PAGE>
<TABLE>
Forlink Software Corporation, Inc.
(Formerly known as Why Not?, Inc.)
Consolidated Balance Sheets
(Expressed in US Dollars)
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
ASSETS
<S> <C> <C>
Current assets
Cash and cash equivalents $ 856,233 $ 88,964
Accounts receivable 1,690 --
Other receivables, deposits and prepayments 17,044 28
Inventories (Note 4) 34,286 --
--------- ---------
Total current assets 909,253 88,992
Plant and equipment, net (Note 5) 43,792 30,082
--------- ---------
Total assets $ 953,045 $ 119,074
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Amounts due to stockholders (Note 6) $ 120,773 $ --
Other payables and accrued expenses (Note 7) 560,476 4,720
Other taxes payable (Note 8) 1,100 28
--------- ---------
Total current liabilities 682,349 4,748
--------- ---------
Commitments and contingencies (Note 9)
Stockholders' equity
Common stock, par value $0.001 per share;
100,000,000 shares authorized; 25,000,000 and
20,000,000 shares issued and outstanding, respectively 25,000 20,000
Additional paid-in capital 250,630 100,773
Accumulated losses (4,934) (6,447)
--------- ---------
Total stockholders' equity 270,696 114,326
--------- ---------
Total liabilities and stockholders' equity $ 953,045 $ 119,074
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
-2-
<PAGE>
Forlink Software Corporation, Inc.
(Formerly known as Why Not?, Inc.)
Consolidated Statements of Operations
(Expressed in US Dollars)
Period from
inception
Year ended (November 11,
December 31, 1998) to
1999 December 31,
1998
------------ ------------
Net sales $ 67,238 $ --
Cost of sales (17,200) --
------------ ------------
Gross profit 50,038 --
Selling expenses (8,992) --
General and administrative expenses (40,975) (6,447)
------------ ------------
Operating income/(loss) 71 (6,447)
Other income, including interest of $1,432 1,442 --
------------ ------------
Income/(loss) before income tax 1,513 (6,447)
Provision for income tax (Note 10) -- --
------------ ------------
Net income/(loss) $ 1,513 $ (6,447)
============ ============
Earnings/(loss) per share - basic and diluted $ -- $ --
============ ============
Weighted average common shares
outstanding - basic and diluted 20,833,000 20,000,000
============ ============
See accompanying notes to consolidated financial statements.
-3-
<PAGE>
Forlink Software Corporation, Inc.
(Formerly known as Why Not?, Inc.)
Consolidated Statements of Stockholders' Equity (Deficiency)
(Expressed in US Dollars)
<TABLE>
<CAPTION>
Common Stock
--------------------------
Number Additional Total
of Paid-in Subscription Accumulated Stockholders'
Shares Amount Capital Receivable Losses Equity
---------- ---------- ----------- ------------ ------------ -------------
Balance,
<S> <C> <C> <C> <C> <C> <C>
November 11, 1998 - $ - $ - $ - $ - $ -
Issuance of common
stock to BFST
stockholders 20,000,000 20,000 100,773 - - 120,773
Net loss - - - - (6,447) (6,447)
---------- ---------- ----------- ------------ ------------ -------------
Balance,
December 31, 1998 20,000,000 20,000 100,773 - (6,447) 114,326
Return of capital to
BFST stockholders - - (120,773) - - (120,773)
Issuance of common
stock in connection
with reverse
acquisition (Note 5,000,000 5,000 270,630 (275,000) - 630
1)
Payment of
subscription
receivable (Note 3) - - - 275,000 - 275,000
Net income - - - - 1,513 1,513
---------- ---------- ----------- ------------ ------------ -------------
Balance,
December 31, 1999 25,000,000 $ 25,000 $ 250,630 $ - $ (4,934) $ 270,696
========== ========== =========== ============ ============ =============
</TABLE>
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
Forlink Software Corporation, Inc.
(Formerly known as Why Not?, Inc.)
Consolidated Statements of Cash Flows
Increase/(Decrease) in Cash and Cash Equivalents
(Expressed in US Dollars)
Period from
inception
Year ended (November 11,
December 31, 1998) to
1999 December 31,
1998
--------- ---------
Cash flows from operating activities
Net income/(loss) $ 1,513 $ (6,447)
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation of plant and equipment 4,773 --
Changes in:
Accounts receivable (1,690) --
Other receivables, deposits and prepayments (17,016) (28)
Inventories (34,286) --
Other payables and accrued expenses 55,756 4,720
Other taxes payable 1,072 28
--------- ---------
Net cash provided by/(used in) operating activities 10,122 (1,727)
--------- ---------
Cash flows from investing activities
Acquisition of plant and equipment (18,483) (30,082)
Acquisition of a subsidiary -- 120,773
--------- ---------
Net cash provided by/(used in) investing activities (18,483) 90,691
--------- ---------
Cash flows from financing activities
Payment of common stock subscription receivable 275,000 --
Monies received from a potential investor 500,000 --
Capital contribution by a stockholder 630 --
--------- ---------
Net cash provided by financing activities 775,630 --
--------- ---------
Net increase in cash and cash equivalents 767,269 88,964
Cash and cash equivalents at beginning of year 88,964 --
--------- ---------
Cash and cash equivalents at end of year $ 856,233 $ 88,964
========= =========
See accompanying notes to consolidated financial statements.
-5-
<PAGE>
Forlink Software Corporation, Inc.
(Formerly known as Why Not?, Inc.)
Notes To Consolidated Financial Statements
(Expressed in US Dollars)
Note 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Beijing Forlink Software Technology Co., Ltd. ("BFST") was established in the
People's Republic of China (the "PRC") on November 11, 1998 as a limited
liability company. It commenced operations in May 1999 and is engaged in the
provision of E-commerce and internet information services and the development
and sales of internet software in the PRC.
On November 3, 1999, 100% of the common stock of BFST was acquired by Light
Energy Management, Inc. ("LEM"), in exchange for 20,000,000 shares of LEM's
$0.001 par value common stock, plus a cash consideration of Renminbi (RMB)
1,000,000. For accounting purposes, the acquisition has been treated as the
acquisition of LEM by BFST with BFST as the acquirer (reverse acquisition). The
historical financial statements prior to November 3, 1999 are those of BFST. All
shares and per share data prior to the acquisition have been restated to reflect
the stock issuance as a recapitalization of BFST.
LEM was initially incorporated in the State of Utah on January 7, 1986, under
the name of Why Not?, Inc. ("Why Not"). On December 30, 1993, Why Not was
dissolved as a Utah corporation and re-incorporated as a Nevada corporation. In
December 1998, Why Not changed its name to Light Energy Management, Inc. On
December 6, 1999, LEM changed its name to Forlink Software Corporation, Inc.
NOTE 2 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES
Basis of Accounting and Principles of Consolidation
The consolidated financial statements are prepared in accordance with generally
accepted accounting principles in the United States of America and present the
financial statements of the Company and its wholly owned subsidiary, BFST. All
material intercompany transactions have been eliminated.
Foreign Currency Translation and Transactions
The functional currency of the Company is US$ and the financial records are
maintained and the financial statements prepared in US$. The functional currency
of BFST is RMB and the financial records are maintained and the financial
statements prepared in RMB.
Foreign currency transactions during the year are translated into US$ 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$, translation
adjustments are included as a component of stockholders' equity.
Exchange rates between US$ and RMB are fairly stable during the period
presented. The rates ruling as of December 31, 1998 and 1999 are US$1 : RMB8.27
and US$1 : RMB8.28, respectively. Due to the stability of the exchange rates,
there were no net adjustments in stockholders' equity.
-6-
<PAGE>
Forlink Software Corporation, Inc.
(Formerly known as Why Not?, Inc.)
Notes To Consolidated Financial Statements
(Expressed in US Dollars)
NOTE 2 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES (Cont'd)
Revenue Recognition
Revenue from the sale of software is recognized when title of goods sold has
passed to the buyers, which is usually at the time of delivery.
Revenue from the provision of internet information services is recognized when
the relevant services are provided.
Inventories
Inventories are stated at the lower of cost or market. Cost of raw materials
includes cost of purchase computed using the first-in-first-out method; cost of
work-in-progress and finished goods includes cost of materials, direct labor and
an appropriate proportion of production overheads that have been incurred in
bringing the inventories to their present location and condition. 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.
Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid investments with an original
maturity of three months or less.
Plant, Equipment and Depreciation
Plant and equipment are 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:
Estimated
useful life
(in years)
--------------
Computer equipment 5
Office equipment 5
Motor vehicle 5
Maintenance, repairs and minor renewals are charged directly to the statement of
operations as incurred. Additions and betterments to plant and 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.
-7-
<PAGE>
Forlink Software Corporation, Inc.
(Formerly known as Why Not?, Inc.)
Notes To Consolidated Financial Statements
(Expressed in US Dollars)
NOTE 2 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES (Cont'd)
Long-lived Assets
The Company and BFST periodically review their long-lived assets for impairment
based upon the estimated 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.
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.
Net Loss Per Common Share
The Company computes net loss per share in accordance with SFAS No. 128,
Earnings per Share ("SFAS No. 128") and SEC Staff Accounting Bulletin No. 98
("SAB 98"). Under the provisions of SFAS No. 128 and SAB 98, basic net loss per
share is computed by dividing the net loss available to common shareholders for
the period by the weighted average number of shares of common stock outstanding
during the period. The calculation of diluted net loss per share gives effect to
common stock equivalents, however, potential common shares are excluded if their
effect is antidilutive.
Fair Value of Financial Instruments
The carrying amounts of certain financial instruments, including cash, accounts
receivable and other payables and accrued expenses approximate their fair values
as of December 31, 1999 and 1998 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.
-8-
<PAGE>
Forlink Software Corporation, Inc.
(Formerly known as Why Not?, Inc.)
Notes To Consolidated Financial Statements
(Expressed in US Dollars)
NOTE 2 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES (Cont'd)
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.
NOTE 3 - SUBSCRIPTION RECEIVABLE
This represents subscription monies receivable in connection with the private
placement of 4,000,000 shares of common stock of LEM prior to the reverse
acquisition of BFST.
NOTE 4 - INVENTORIES
December 31, December 31,
1999 1998
------- -------
Raw materials $ 892 $ --
Work-in-progress 33,394 --
Finished goods -- --
------- -------
$34,286 $ --
------- -------
NOTE 5 - PLANT AND EQUIPMENT, NET
December 31, December 31,
1999 1998
------- -------
Computer equipment $27,734 $10,386
Office equipment 2,046 877
Motor vehicle 18,785 18,819
------- -------
48,565 30,082
Less: Accumulated depreciation 4,773 --
------- -------
$43,792 $30,082
======= =======
-9-
<PAGE>
Forlink Software Corporation, Inc.
(Formerly known as Why Not?, Inc.)
Notes To Consolidated Financial Statements
(Expressed in US Dollars)
NOTE 6 - AMOUNTS DUE TO STOCKHOLDERS
The amounts represent cash consideration payable to the original investors of
BFST in connection with the reverse acquisition of BFST by the Company. These
investors became the major stockholders of the Company following the reverse
acquisition.
NOTE 7 - SUBSEQUENT EVENT
The Company is presently attempting to raise $2,000,000 through the sale of
200,000 shares of its common stock. The investors will also receive warrants to
purchase 200,000 shares of common stock at $6.00 per share. Other payables and
accrued expenses at December 31, 1999 includes $500,000 non-refundable monies
received from a potential investor in this offering. Such amount will be
capitalized as common stock and additional paid-in-capital when the underlying
shares are actually issued.
NOTE 8 - OTHER TAXES PAYABLE
Other taxes payable comprise mainly Valued-Added Tax ("VAT") and Business Tax
("BT"). VAT is charged at a rate of 6% on the selling price of BFST's products.
BT is charged at a rate of 5% on the revenue from the provision of internet
information services.
NOTE 9 - COMMITMENTS AND CONTINGENCIES
Operating Lease Commitment
During the year ended December 31, 1999 and the period ended December 31, 1998,
BFST incurred lease expenses amounting to $1,861 and $nil, respectively. As of
December 31, 1999, BFST had commitments under a non-cancellable operating lease
expiring within one year amounting to $26,521.
NOTE 10 - INCOME TAX
Pursuant to an approval document dated June 23, 1999 issued by the Beijing Tax
Bureau, BFST, being a "New Technology Enterprise" is eligible to full exemption
from PRC Corporate Income Tax for a period of 3 years commencing January 1,
1999.
No provision for income tax has been made in 1998 as BFST incurred losses during
that year.
No provision for deferred taxation has been made as there is no material
temporary difference at the balance sheet date.
-10-
<PAGE>
- --------------------------------------------------------------------------------
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ACCOUNTING AND FINANCIAL DISCLOSURE.
- --------------------------------------------------------------------------------
There have been no disagreements with the Company's independent
accountants over any item involving the Company's financial statements. Light
Energy Management, Inc.'s independent accountant during 1998 was Smith &
Company, Certified Public Accountants, 10 West 100 South, Suite 700, Salt Lake
City, Utah 84101- 1554. Subsequent to that time, the Company has selected a new
independent accountant. The details of that selection are described in the
Company's Form 8-K filed on January 10, 2000. That 8-K filing is incorporated
herein by this reference.
PART III
------------------------------------------------------------------------------
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
ACT
- --------------------------------------------------------------------------------
8
<PAGE>
(a) Directors and Executive Officers
From November of 1999 through the end of 1999, and through the date of
this Form-10KSB, the directors and executive officers of the Company, their
ages, positions in the Company, the dates of their initial election or
appointment as director or executive officer, and the expiration of the terms as
directors were, and are, as follows:
Name Age Position Period
- ------------------- ----- ------------------------- ----------------------
Xiaoxia Zhao 35 President and Director Sept. 1999 to present
Liang Che 34 Chief Executive Officer Sept. 1999 to present
& Director
Jie Zhang 34 Vice President Sept. 1999 to present
Michael J.A. Harrop 53 Director May 1998 to present
The Company's directors are elected at the annual meeting of
stockholders, or via an appropriate shareholder consent, and hold office until
their successors are elected and qualified. The Company's officers are appointed
annually by the Board of Directors and serve at the pleasure of the Board.
(b) Business Experience:
Xiaoxia Zhao, Master's Degree in Computer Science
- ------------
Oct. 1998 - present: Founder, Chairman of the Board and Chief
Technical Officer of the Company.
Jan. 1998 - Oct. 1998: Vice President and Chief Technical Officer of
GBS InfoTech. Co.
Designed and supervised the creation of
Tonghua search engine and portal site:
www.tonghua.com.cn. It has become one of the
most famous sites in China within half a
year. Was in charge of Beijing Telecom 8188
ISP project. The site (www.cj).net.cn) has
been in operation since 1998 and has become
an ISP with 100 million Yuan monthly revenue.
Cooperating with the Great Wall Computer
Group Co., led the development of the China
National Commodity Exchange
(www.ccec.com.cn). The system is based on IBM
RISC/6000, AIX and NetCommerce and has been
in operation since August, 1998. Cooperating
with Legend PDA network software.
Aug. 1997 - Jan. 1998: Chief Engineer, Beijing Long Ma Software
Development Co. Ltd. In charge of technology
management. In charge of system integration
department. Obtained the contract to develop
the first phase of the Tonghua project.
1996 - 1997: Yahoo!Japan leading engineer In charge of
Yahoo!Japan operation and support. Cooperated
with Panasonic to develop specialized search
engine. Worked with Lotus on category and
search system development. Worked with
Reuters and Daily News on news page
development.
1991 - 1996: System Engineer, Japan Itochu Group CRC
Research Institute. Developed Itochu
automobile export system. Itochu financial
system. In charge of Great Wall Unix
operating system technical support.
9
<PAGE>
1989 - 1991: Project Manager, China Great Wall Computer
Group Co. Participated Great Wall Unix
Chinese system development. Was in charge of
Sco Xenix 2.21 - Sco Unix 3.2 Chinese system
development. In charge of Great Wall Unix
operating system technical support.
Liang Che, Master's Degree in Computer Science
- ----------
1998 - Present: Founder, President of Forlink Software
Technology Co, Ltd.
1996 - 1998: President, Shenzhen Shen Pu Computer Co. Ltd.
Developed Shanghai railway ticketing system,
the largest ticketing system in China.
1992 - 1996 : Middle China/South West China District
general manager, Legend Advanced Systems Co.,
Ltd.
Co-founded the Legend Advanced Systems Co.,
Ltd. in 1992. In 1996, the company became the
largest system integrator in China with
revenue exceeding $5million a year.
1989 - 1992: Computer sales, Shenzhen She Ge Computer Co.
Jie Zhang, Master's Degree in Computer Science
- ---------
1998 - Present: Founder, Vice President, Manager of
Technology Development Department.
1989 - 1998: Senior Engineer, South China Computer Co.
In Charge of CEDGA monitor card In charge of
iron temperature control ASIC chip
development. In charge of network design for
networks composed of SUN, SGI, CISCO
equipments. In Feb. 1995 - Aug. 1996, was
sent to Japan to research international
banking software system on Fujitsu M series
super computer.
1988 - 1989 While in school, participated in the
development of the Chinese version of the Hua
Sheng Operating System Shell. Also
participated in the development of the
Chinese version of Unix system, which is a
government funded national project.
Michael J. A. Harrop, age 53, has been President and a Director of the
Company since May 1998. Mr. Harrop was educated at Cambridge University. For the
last 5 years he has been active in venture capital.
(c) Directors of Other Reporting Companies:
Michael J.A. Harrop is a director of Haas Neuveux & Co., Advanced
Lumitech, Inc. and Beach Couch, Inc.
(d) Employees:
The officers and directors who are identified above are the significant
employees of the Company.
(e) Family Relationships:
There are no family relationships between the officers and directors of
the company.
10
<PAGE>
(f) Involvement in Certain Legal Proceedings:
Except as listed below, none of the officers, directors, promoters or
control persons of the Company have been involved in the past five (5) years in
any of the following:
(1) Any bankruptcy petition filed by or against any business of
which such person was a general partner or executive officer
either at the time of the bankruptcy or within two years prior
to that time;
(2) Any conviction in a criminal proceedings or being subject to a
pending criminal proceeding (excluding traffic violations and
other minor offenses); except the following:
(3) Being subject to any order, judgment or decree, not
subsequently reversed, suspended or vacated, or any Court of
competent jurisdiction, permanently or temporarily enjoining,
barring, suspending or otherwise limiting his involvement in
any type of business, securities or banking activities (except
as set forth in (2) above); or
(4) Being found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading
Commission to have violated a federal or state securities laws
or commodities law, and the judgment has not been reversed,
suspended, or vacated (except as set forth in (2) above).
Michael J.A. Harrop, by virtue of the unlimited personal guarantee
accorded by him to Harrop & Cie. S.A., (formerly HF Trade & Finance S.A.) a
Swiss venture capital company that became insolvent subsequent to having acted
as guarantor of certain investments, underwent bankruptcy proceedings during
1994 in the District of Nyon, Switzerland. The bankruptcy procedure was closed
without complaint or suit on 22nd December 1995 by order of the President of the
Tribunal of the District of Nyon, Switzerland.
- --------------------------------------------------------------------------------
ITEM 10. EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
Prior to the Company's combination with Beijing Forlink in 1999, the
Company had not compensated its management in the last three years. However, the
following table sets forth information about compensation paid to, or accrued
for the benefit of the Company's officers and directors during the years ended
December 31, 1999, 1998 and 1997. This information includes amounts that were
paid to management of Beijing Forlink prior to the combination with the Company
and amounts paid to such management after the combination. None of the Company's
Executive Officers earned more than $100,000 during the years ended December 31,
1999, 1998 and 1997.
Summary Compensation Table
<TABLE>
<CAPTION>
LongTerm Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other
Annual Restricted Securities All Other
Compen- Stock Underlying LTIP Compen-
Name and Principal Salary Bonus sation Awards Options/ Payouts sation
Position Year ($) ($) ($) (Shares) SARs(#) ($) ($)
- -------------------- ----- ------- ------ ------- ---------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Xiaoxia Zhao 1999 $2,905 $None $None None None $None $None
President and 1998 $ None $None $None None None $None $None
Director 1997 $ None $None $None None None $None $None
Zhang Jie 1999 $1,561 None None None None None None
Vice President 1998 None None Non None None None None
Secretary, Direcotr 1997 None None None None None None None
Che Liang 1999 $2,927 $None $None None None $None $None
CEO/Treasurer 1998 $ None $None $None None None $None $None
Director 1997 $ None $None $None None None $None $None
Michael J. A. Harrop 1999 $ None $None $None None $None $None
Director 1998 $ None $None $None None $None $None
1997 $ None $None $None None $None $None
</TABLE>
11
<PAGE>
Shares were given to the officers and directors as part of the
combination of Beijing Forlink and the Company. Such shares are identified in
Item 11 below.
- --------------------------------------------------------------------------------
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- --------------------------------------------------------------------------------
(a) 5% Shareholders:
The following information sets forth certain information as of December
31, 1999 about each person who is known to the Company to be the beneficial
owner of more than five percent (5%) of the Company's Common Stock:
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Title Name and Address Amount and Nature of Percent of
of Class of Beneficial Owner Beneficial Ownership Class
- -------- ------------------------------------- --------------------- --------------
<S> <C> <C> <C>
Common Liang Che 5,812,500 23.2%
Zhong Zhi SRP Co
Shen Nan Zhong RD Shnzhn
Guang Dong Province
China
Wei, Song 5,812,500 23.2%
No. 6 BLDG S Dong Cheng
E. Dist. Saio Zhen Pantu
Guang Dong Pro
China
Xiaoxia Zhao 5,812,500 23.2%
231-2-501 Hui Xing Li
Chao Yang District
Beijing
China
Cede & Co 3,409,345 13.6%
P.O. Box 222
Bowling Green Station
New York, New York 10274
Jei Zhang 1,312,500 5.2%
No. 21 Shiu Jun Nan Nie
Guangzhou
Guang Dong Province
China
(b) Security Ownership of Management:
Common Liang Che 5,812,500 23.2%
Zhong Zhi SRP Co
Shen Nan Zhong RD Shnzhn
Guang Dong Province
China
Wei, Song 5,812,500 23.2%
No. 6 BLDG S Dong Cheng
E. Dist. Saio Zhen Pantu
Guang Dong Pro
China
Xiaoxia Zhao 5,812,500 23.2%
231-2-501 Hui Xing Li
Chao Yang District
Beijing
China
Jei Zhang 1,312,500 5.2%
No. 21 Shiu Jun Nan Nie
Guangzhou
Guang Dong Province
China
Michael J.A. Harrop1 1,200,000 4.8%
94 Rue de Lausanne
Geneva SWITZERLAND CH1202
All Directors and 19,950,000 79.8%
Officers as a Group
</TABLE>
12
<PAGE>
- --------------------------------------------------------------------------------
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------
The Company has entered into a modification agreement with Michael
Harrop, d.b.a. Harrop & Co. under the terms of which the Company agreed to
modify the consideration for the issuance of 4,000,000 shares of the Company's
common stock in May of 1998. Under the terms of this agreement, Mr. Harrop, an
officer and director of the Company, executed a promissory note in favor of the
Company in the amount of $275,000. The note is payable on or before May 1, 2000
and bears interest at the rate of 1 percent per annum.
Other than described above, no officer, director, nominee for election
as a director, or associate of such officer, director or nominee is or has been
in debt to the Company during the last fiscal year.
- --------------------------------------------------------------------------------
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
- --------------------------------------------------------------------------------
During the fourth quarter of 1999, the Company filed a Form 8-K on
November 18, 1999.
Assigned
Number Description
- ------ -----------
(2) Plan of acquisition, reorganization, arrangement, liquidation, or
succession: Plan of Reorganization filed with the Company's Form 8-K on
Novmeber 18, 1999.
(4) Instruments defining the rights of holders including indentures: None
(9) Voting Trust Agreement: None
(10) Material Contracts: None
(11) Statement regarding computation of per share earnings: Computations can
be determined from financial statements.
(13) Annual or quarterly reports, Form 10-Q:
(16) Letter on change in certifying accountant: Exhibits to the Form 8-K
filed on January 10, 2000.
(18) Letter on change in accounting principles: None.
(21) Subsidiaries of the registrant:
(22) Published report regarding matters submitted to vote: None
(23) Consent of reports and counsel:
(24) Power of Attorney: None
(27) Financial Data Schedule: Included
(99) Additional Exhibits: None
- --------
1 Mr. Harrop beneficially owns these shares through his control of
Harrop & Co.
13
<PAGE>
- --------------------------------------------------------------------------------
SIGNATURES
- --------------------------------------------------------------------------------
In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated: April 14, 2000.
FORLINK SOFTWARE CORPORATION, INC.
By: /s/Xiaoxia Zhao
---------------
Xiaoxia Zhao
President
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 856233
<SECURITIES> 0
<RECEIVABLES> 18734
<ALLOWANCES> 0
<INVENTORY> 34286
<CURRENT-ASSETS> 909253
<PP&E> 48565
<DEPRECIATION> (4773)
<TOTAL-ASSETS> 953045
<CURRENT-LIABILITIES> 682349
<BONDS> 0
0
0
<COMMON> 25000
<OTHER-SE> 245695
<TOTAL-LIABILITY-AND-EQUITY> 953045
<SALES> 67238
<TOTAL-REVENUES> 68680
<CGS> 17200
<TOTAL-COSTS> 17200
<OTHER-EXPENSES> 49967
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1513
<INCOME-TAX> 0
<INCOME-CONTINUING> 1513
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1513
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
