ASIA8, INC.
Notes to the Condensed Financial Statements (Unaudited)
June 30, 2013
NOTE 1 - ORGANIZATION AND HISTORY
Asia8, Inc. (the “Company”) was incorporated in Nevada as “H&L Investments, Inc.” in September of
1996. On December 22, 1999 the Company changed its name to “Asia4sale.com, Inc.” on acquiring
Asia4Sale.com, Ltd., a Hong Kong registered software development company. The Company sold
Asia4Sale.com, Ltd. in January of 2005.
The Company acquired a 49% interest in World Wide Auctioneers, Inc., a Nevada registered corporation,
holding 100% of a British Virgin Island registered company World Wide Auctioneers, Ltd (“World
Wide”), an international equipment auction company on June 30, 2000. World Wide, based in the United
Arab Emirates (UAE) holds unreserved auctions on a consignment basis for the sale of construction,
industrial and transportation equipment. On August 8, 2003 World Wide Auctioneers, Inc. sold 100% of
World Wide to a Nevada registered company, WWA Group, Inc. (“WWA Group”) in a stock exchange
transaction. The stock exchange caused the Company to acquire a minority equity investment in WWA
Group which it accounted for using the equity method. WWA Group sold World Wide to Seven
International Holdings, Ltd. (“Seven”), a Hong Kong registered company, on October 31, 2010, in
exchange for Seven’s assumption of the assets and liabilities of World Wide subject to certain exceptions.
The disposition did not affect WWA Group’s interest in Asset Forum, LLC., its ownership of proprietary
on-line auction software or its equity interest and debt position in Infrastructure Developments Corp.
(“Infrastructure”). On March 26, 2012, the Company sold 3,240,000 shares from its investment in WWA
Group at a price of $0.025 per share, for a net amount of $81,000. On May 20, 2012 the Company
divested itself of an additional 2,412,408 shares of WWA Group to settle a net amount of $109,048 in
debt. At June 30, 2013 the Company did not own substantial shareholding in WWA Group and therefore
did not record its share in the profit and loss of WWA Group for the period ended June 30, 2013.
The Company maintains the exclusive rights to distribute Unic Cranes, Atomix boats and Renhe Mobile
House products or “Wing Houses” in the UAE though it has since discontinued distribution efforts in
relation to the Unic Crane and Atomix boat products.
NOTE 2 – GOING CONCERN
The accompanying consolidated financial statements have been prepared on a going concern basis, which
contemplates the realization of assets and liabilities in the normal course of business. Accordingly, they
do not include any adjustments relating to the realization of the carrying value of assets or the amounts
and classification of liabilities that might be necessary should the Company be unable to continue as a
going concern. The Company has accumulated losses and working capital and cash flows from operations
are negative which raises doubt as to the validity of the going concern assumptions. These financials do
not include any adjustments to the carrying value of the assets and liabilities, the reported revenues and
expenses and balance sheet classifications used that would be necessary if the going concern assumption
were not appropriate; such adjustments could be material.
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ASIA8, INC.
Notes to the Condensed Financial Statements (Unaudited)
June 30, 2013
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Presentation
The accompanying consolidated financial statements include our accounts and the accounts of our
subsidiaries. All intercompany accounts and transactions have been eliminated.
Our interim financial statements have been prepared in accordance with generally accepted accounting
principles in the United States (“U.S.GAAP”) for interim financial information and the rules and
regulations of the Securities and Exchange Commission (the “SEC”) for interim financial statements and
accounting policies, consistent, in all material respects with those applied in preparing our audited
consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2012. Accordingly, they do not include all of the information and footnotes required by
U.S. generally accepted accounting principles for complete financial statements. In our opinion, all
adjustments, consisting of only normal recurring adjustments considered necessary for fair presentation,
have been included.
Operating results for the three and six months ended June 30, 2013 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2013 or any future period.
b. Basic Loss per Share
For the Three Months Ended June 30, 2013
Income
Shares
Per-Share
(Numerator)
(Denominator)
Amount
$ (7,667)
30,692,727
$ (0.00)
For the Three Months Ended June 30, 2012
Income
Shares
Per Share
(Numerator)
(Denominator)
Amount
$
20,039
30,692,727
$ 0.00
The computations of basic loss per share of common stock are based on the weighted average number of
shares outstanding at the date of the financial statements. There are no common stock equivalents
outstanding.
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ASIA8, INC.
Notes to the Condensed Financial Statements (Unaudited)
June 30, 2013
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES, Continued
c. Recent Accounting Pronouncements
In February 2013, the FASB issued authoritative guidance related to reclassifications out of accumulated
OCI. Under the amendments in this update, an entity is required to report, in one place, information about
reclassifications out of accumulated OCI and to report changes in its accumulated OCI balances. For
significant items reclassified out of accumulated OCI to net income in their entirety in the same reporting
period, reporting is required about the effect of the reclassifications on the respective line items in the
statement where net income is presented. For items that are not reclassified to net income in their entirety
in the same reporting period, a cross reference to other disclosures currently required under U.S. GAAP is
required in the notes to the consolidated financial statements. We plan to adopt this guidance in the first
quarter of fiscal year 2013 and do not believe that the adoption of this guidance will have a material
impact on its Consolidated Financial Statements.
NOTE 4- EQUITY INVESTMENT
In August 2000 the Company paid $970,000 cash to acquire 49% of World Wide Auctioneers, Inc., a
Nevada registered company holding 100% of British Virgin Island registered company World Wide
Auctioneers, Ltd. (“World Wide”). In August 2003 World Wide Auctioneers, Inc., sold 100% of World
Wide to WWA Group in a stock for stock transaction whereby the stock of WWA Group was issued
directly to owners of World Wide Auctioneers, Inc. The Company was issued 7,525,000 shares of WWA
Group in 2003, comprising 47.5% of the issued and outstanding stock of WWA Group. At December 31,
2011 the Company owned 32% of the issued and outstanding shares of WWA Group. On March 26,
2012, the Company sold 3,240,000 out of its investment in WWA Group shares at a price of $0.025 per
share, for a net amount of $81,000. At March 31, 2012, the Company owned 16% of the issued and
outstanding WWA Group common stock. At April 15, 2012 the Company divested itself of 2,412,408
shares out of its investment in WWA Group shares to settle $109,049 in various debts. As a result the
Company does not own a substantial shareholding in WWA Group and therefore no longer records its
share in the profit and loss of WWA Group for the period ended June 30, 2013.
NOTE 5- EQUITY TRANSACTIONS
In 2012, the Company issued 4,152,000 shares of common stock to retire 2,280 preferred shares series
1comprised of $228,000 in principal and $83,400 in interest valued at $0.075 a share. Further the
Company issued 2,129,367 shares of common stock by converting notes payable and other payables into
equity at $0.03 per share.
.
In 2009, the Company issued 255,282 shares of common stock for cash at $0.16 per share.
In 2008, the Company issued 1,084,243 shares of common stock by converting notes payables into equity
at $0.16 per share. In 2007, the Company issued 2,124,250 shares of common stock for cash at prices
ranging from $0.08 to $0.16 per share for a total value of $304,800. Further, the Company issued 1,280
shares of preferred stock for cash at $100 per share.
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ASIA8, INC.
Notes to the Condensed Financial Statements (Unaudited)
June 30, 2013
NOTE 5 – EQUITY TRANSACTIONS, Continued
In 2007, the Company issued 1,000 shares of preferred stock at $100 per share. Each share of preferred
stock was convertible to 400 shares of common stock. The Series 1 preferred shares had a coupon rate of
9% interest per annum, with no redemption provision.
NOTE 6 - ADDITIONAL FOOTNOTES INCLUDED BY REFERENCE
Except as indicated in the Note 1 through Note 5, above, there have been no other material changes in the
information disclosed in the notes to the financial statements included in the Company’s Form 10-K for
the year-ended December 31, 2012. Therefore, those footnotes are included herein by reference.
NOTE 7 – USE OF ESTIMATES
The preparation of the financial statements in conformity with generally accepted accounting principles in
United States of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
NOTE 8 – ACCOUNTS PAYABLE TO RELATED PARTY
Accounts Payable and Accrued Expenses do not include any Notes Payable to related party.
NOTE 9 – SUBSEQUENT EVENTS
The Company evaluated its June 30, 2013 financial statements for subsequent events through the date the
financial statements were issued. The Company is not aware of any subsequent events which would
require recognition or disclosure in the financial statements.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other
parts of this quarterly report contain forward-looking statements that involve risks and uncertainties.
Forward-looking statements can be identified by words such as “anticipates,” “expects,” “believes,”
“plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees of future
performance and our actual results may differ significantly from the results discussed in the forward-
looking statements. Factors that might cause such differences include but are not limited to those
discussed in the subsection entitled Forward-Looking Statements and Factors That May Affect Future
Results and Financial Condition below. The following discussion should be read in conjunction with our
financial statements and notes thereto included in this report. All information presented herein is based on
our period ended June 30, 2013. Our fiscal year end is December 31.
Discussion and Analysis
General
The Company’s current focus is to work towards our acquisition of Emerging Market Property Advisors
Ltd. (“EMP”). On May 16, 2012 our board of directors caused us to enter into a Share Exchange
Agreement to acquire all of the issued and outstanding shares of EMP in exchange for a forty nine percent
(49%) interest in the Company’s common stock. The transaction is subject to shareholder approval and
`requires us to obtain audited financial statements for EMP, which accounts are currently in process.
EMP is involved in the internet marketing of a wide range of international real estate investment
opportunities through lead generation, email marketing campaigns and property showings to buyers
around the world. Sellers are also offered assistance with corporate identity, web development and
enhanced graphics to build awareness of the opportunities presented.
Despite the decrease in our equity interest in WWA Group Inc. (“WWA Group”) and its agreement to be
acquired by Summit Digital, Inc., we continue to work with WWA Group and Infrastructure
Development Corporation (“Infrastructure”) to leverage those relationships to develop the distribution of
Wing House mobile shelter systems. We anticipate that we will require additional capital to market this
business and recognize that the economic downturn in the global economy has decreased demand for our
products that depend on the vitality of the construction sector industry.
Distribution Rights
We are displaying and using Wing House office units on the internet and in a yard in Thailand while
actively marketing the units by email. We are offering the units for sale or rental on a 60 day delivery
schedule from order date. We are negotiating financing with the manufacturer to spur sales efforts though
demand for this type of housing has receded. Infrastructure may continue to tender contracts in Asia that
may lead to more “in house” created demand for the units. The Company and Infrastructure will share
gross profits made on any sales or rentals generated by Infrastructure’s efforts.
WWA Group Equity Interest
Since the relationship between the Company and WWA Group is one of common management control,
we benefit from the contacts and business development opportunities generated by its business activities.
We intend to provide additional business support to WWA Group as necessary to help grow the value of
our remaining equity interest, and to provide us opportunities generated by WWA Group.
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Infrastructure
Even though WWA Group no longer maintains a consolidated equity interest in Infrastructure, we
continue to believe that despite competitive pricing pressures, a significant number of projects will fall
within the criteria expressed by Infrastructure and that alternative fuel conversions will become
widespread as fuel prices rise and fueling infrastructure becomes available.
Since Infrastructure shares common management with the Company we believe that there exists an
opportunity to utilize our international presence and existing relationships to assist Infrastructure in
procuring new projects and managing existing ones. We expect to continue to work with Infrastructure on
an as needed basis to provide any assistance that might be required and within our ability to assist.
Asset Forum LLC.
On May 1, 2012 WWA Group abandoned efforts to commercialize the operations of Asset Forum LLC.
due to a lack of sufficient resources to develop the site and intense completion in the online auction space.
Expansion Plans into other Businesses
The Company has signed a Share Exchange Agreement to acquire EMP, a UK limited liability company
in a stock for stock exchange transaction that is involved in the marketing of international real estate
opportunities to prospective investors through the internet. EMP offers lead generation, email marketing
campaigns and property showings to a variety of clients that are intent on presenting a wide array of real
estate investment options to international investors. Clients are also offered assistance with corporate
identity, web development and enhanced graphics to build awareness of the opportunities presented.
Since 2005 EMP has consistently increased its revenue stream, grown gross profit margins, and
established a loyal customer base. The transaction is intended as a stock exchange whereby the Company
will acquire EMP as a wholly owned subsidiary that will continue to operate as an autonomous unit. We
expect to close the transaction in the 3nd quarter of 2013 subject to shareholder approval.
Financial Condition and Business Development Risks
Our financial condition and results of operations will depend primarily on prospective income generated
from our investments and/or expansion businesses. Meanwhile, our continued operation is tied to our
ability to realize debt or equity financing. Since the Company is currently without income it can provide
no assurance that income will be forthcoming or in the event income is realized that such return will
provide sufficient cash flows to sustain our operations.
Our business development strategy is prone to significant risks and uncertainties which are having an
immediate impact on our efforts to realize net cash flow. We have a limited history of generating income.
Should we be unable to generate income, the Company’s ability to continue its business operations will
be in jeopardy.
Results of Operations
During the period ending June 30, 2013, the Company failed to realize revenues from the sale of its
products, which failure resulted in a continuation of net losses for the period. Nevertheless, the Company
remains optimistic that Wing Houses are in demand, and that a global economic recovery in 2013
alongside the efforts of Infrastructure will generate sales of Wing Houses.
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Revenue
Revenue for the six month periods ended June 30, 2013 and June 30, 2012 was zero. The lack of
revenues over the comparative periods can be primarily attributed to the effect that a global recession has
had on the demand for Wing Houses. We expect revenue from the sale of Wing Houses in future periods
with a return to economic normalization, and in connection with the anticipated acquisition of EMP.
Operating Expenses
Operating expenses for the three month period ended June 30, 2013, were $7,667 as compared to
$43,514 for the three month period ended June 30, 2012. Operating expenses for the six month period
ended June 30, 2013 were $10,727 as compared to $61,164 for the six month period ended June 30, 2012.
The decrease in expenses over the comparative three and six month periods can be attributed to a decrease
in general and administrative expenses. We expect that operating expenses will increase in future periods
as funds become available for marketing Wing Houses and in connection with the anticipated acquisition
of EMP
Depreciation and amortization expenses for the three and six month periods ended June 30, 2013 and June
30, 2012 were $0. Depreciation and amortization expenses are not anticipated in future periods.
Other Income (Expenses)
Other income for the three month period ended June 30, 2013, was $0 as compared to other
income of $63,552 for the three month period ended June 30, 2012. Other income for the six month
period ended June 30, 2013 were $0 as compared to other income of $29,400 for the six month period
ended June 30, 2012. The absence of other expense in the current period can be primarily attributed to the
lack of losses recognized in the prior comparative periods as a result of consolidating our equity
investment in WWA Group. Since we no longer consolidate our equity interests we expect to return to
other income in future periods.
Net Income (Losses)
Net loss for the three month period ended June 30, 2013, were $7,667 as compared to a net income of
$20,039 for the three month period ended June 30, 2012. Net losses for the six month period ended June
30, 2013 were $10,727 as compared to $31,764 for the six month period ended June 30, 2012. The
transition to net loss from net income and the decrease in net losses in the current six month periods
respectively can be attributed to the exclusion of income from our equity investment and to the decrease
in general and administrative expenses, the decrease in preferred stock dividend and the decrease in the
loss from equity investments. We expect to continue to realize net losses until such time as our operations
produce revenue.
Capital Expenditures
The Company did not spend any significant amounts on capital expenditures during the three and six
month periods ended June 30, 2013.
Income Tax Expense (Benefit)
The Company may have an income tax benefit resulting from net operating losses to offset any future
operating profit. However, the Company has not recorded this benefit in the financial statements because
it cannot be assured that it will utilize the net operating losses carried forward in future years.
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Liquidity and Capital Resources
As of June 30, 2013, the Company had a working capital deficit of $26,441.Our current assets were
$7,959 consisting of $365 in cash, and $7,594 in other current assets. Our total assets were $50,319
consisting of current assets and our equity investments totaling $42,360. At June 30, 2013, our current
and total liabilities were $34,400 which consisted of accounts payable and accrued expenses.
Cash flow used in operating activities for the six month period ended June 30, 2013, was $89 as
compared to cash flow used in operating activities of $250,182 for the six month period ended June 30,
2012. The change in cash flow used in operating activities in the current six month period can be
primarily attributed to the decrease in net losses offset by increase in accounts payable and accrued
expenses. We expect that cash flow used in operating activities will continue to decrease as net losses
decrease.
Cash flow provided by investing activities for the six month periods ended June 30, 2013 and June 30,
2012, was $0 and $190,048 respectively. Cash flow provided by investing activities in the period ended
June 30, 2012 can be attributed to the sale of a portion of the Company’s interest in WWA Group and the
divestiture of a portion of the Company’s interest in WWA Group as a result of debt settlements. We
expect to continue to look to cash flow provided by investing periods in future periods to sustain
operations.
Cash flow provided in financing activities for the period ended June 30, 2013, was $0 as compared to
$61,286 in cash flow provided financing activities for the period ended June 30, 2012.Cash flow provided
by financing activities in the period can be attributed to the issuance of common shares for debt offset by
a decrease in a note payable. We expect to have net cash provided by financing activities in the near term
in order to continue operations.
The Company’s current assets are insufficient to conduct its business operations over the next twelve (12)
months. We will have to seek at least $100,000 in debt or equity financing over the next twelve months to
fund marketing efforts for our Wing Houses and to integrate the operations of EMP into our own. The
Company has no current commitments or arrangements with respect to, or immediate sources of this
funding. Further, no assurances can be given that funding is available. The Company’s shareholders are
the most likely source of new funding in the form of loans or equity placements though none have made
any commitment for future investment and the Company has no agreement formal or otherwise. The
Company’s inability to obtain sufficient funding will have a material adverse affect on its ability to
continue business operations.
The Company does not expect to pay cash dividends in the foreseeable future.
The Company had no lines of credit or other bank financing arrangements.
The Company has no defined benefit plan or contractual commitment with any of its officers or directors.
The Company has no current plans for the purchase or sale of any plant or equipment.
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Off Balance Sheet Arrangements
As of June 30, 2013, the Company has no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources
that is material to stockholders.
Critical Accounting Policies
In the notes to the audited financial statements for the year ended December 31, 2012 included in
our Form 10-K, the Company discussed those accounting policies that are considered to be
significant in determining the results of operations and our financial position. The Company
believes that the accounting principles we utilized conform to accounting principles generally
accepted in the United States of America.
The preparation of financial statements requires our management to make significant estimates
and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. By
their nature, these judgments are subject to an inherent degree of uncertainty. On an on-going
basis, we evaluate estimates. We base our estimates on historical experience and other facts and
circumstances that are believed to be reasonable, and the results form the basis for making
judgments about the carrying value of assets and liabilities. The actual results may differ from
these estimates under different assumptions or conditions. With respect to revenue recognition,
we apply the following critical accounting policies in the preparation of our financial statements.
Revenue Recognition
The Company intends to generate revenue through the sale of its products on a private,
commercial, and industrial basis. Revenue from product sales is recognized at the time the
product is shipped and invoiced and collectability is reasonably assured. The Company believes
that certain revenue should be recognized as title passes to the customer at the time of shipment.
Going Concern
The Company’s auditors have expressed an opinion as to the Company’s ability to continue as a
going concern as a result of an accumulated deficit of $3,766,257 as of December 31, 2012
which increased to $3,776,984 as of June 30, 2013. The Company’s ability to continue as a going
concern is subject to the ability of the Company to realize a profit and/or obtain funding from
outside sources. Management’s plan to address the Company’s ability to continue as a going
concern includes: (i) obtaining funding from the private placement of debt or equity; and (ii)
realizing revenues from the sale of Wing Houses or prospectively from the operations of EMP.
Management believes that it will be able to obtain funding to allow the Company to remain a
going concern through the methods discussed above, though there can be no assurances that such
methods will prove successful.
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Forward Looking Statements and Factors That May Affect Future Results and Financial Condition
The statements contained in the section titled Management’s Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this current report, with the exception of historical
facts, are forward looking statements. Forward looking statements reflect our current expectations and
beliefs regarding our future results of operations, performance, and achievements. These statements are
subject to risks and uncertainties and are based upon assumptions and beliefs that may or may not
materialize. These statements include, but are not limited to, statements concerning:
§ our anticipated financial performance;
§ the sufficiency of existing capital resources;
§ our ability to fund cash requirements for future operations;
§ uncertainties related to the growth of our business and the acceptance of our products and
services;
§ our ability to achieve and maintain an adequate customer base to generate sufficient revenues to
maintain and expand operations;
§ the volatility of the stock market; and,
§ general economic conditions.
We wish to caution readers that our operating results are subject to various risks and uncertainties that
could cause our actual results to differ materially from those discussed or anticipated including the factors
set forth in the section entitled Risk Factors included elsewhere in this report. We also wish to advise
readers not to place any undue reliance on the forward looking statements contained in this report, which
reflect our beliefs and expectations only as of the date of this report. We assume no obligation to update
or revise these forward looking statements to reflect new events or circumstances or any changes in our
beliefs or expectations, other than as required by law.
Stock-Based Compensation
The Company has adopted Accounting Standards Codification Topic (“ASC”) which addresses the
accounting for stock-based payment transactions in which an enterprise receives employee services in
exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the
enterprise’s equity instruments or that may be settled by the issuance of such equity instruments.
The Company has no outstanding stock options or related stock option expense.
We account for equity instruments issued in exchange for the receipt of goods or services from other than
employees in accordance with ASC 505. Costs are measured at the estimated fair market value of the
consideration received or the estimated fair value of the equity instruments issued, whichever is more
reliably measurable. The value of equity instruments issued for consideration other than employee
services is determined on the earliest of a performance commitment or completion of performance by the
provider of goods or services.
Recent Accounting Pronouncements
Please see Note 3 to our financial statements for recent accounting pronouncements.
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