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 September 30, 2003.
¨ Transaction report under section 13 or 15(d) of the Securities Exchange Act of 1934
for the transition period from ________ to __________
.
Commission File No.: 0-30851
SUPER ENERGY INVESTMENTS CORPORATION
(Name of small business in its charter)
Nevada | 88-0404114 |
(State or other Jurisdiction of Incorporation) | (IRS Employer Id. No.) |
19thFloor, Dahangjiye Building, 33 North Renda Road, Beijing, China 100080
(Address of Principal Office)
86-10-8268-4688
Issuer’s telephone number
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act during the past 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes x No ¨
State the number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date. At September 30, 2003, there were 12,906,000 common
shares outstanding with a par value of $0.0004.
Transitional Small Business Disclosure Format (Check one): Yes ¨ No ¨
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
The unaudited financial statements of the Company for the three-month and nine month periods ended September 30, 2003 and September 30, 2002, follow. The financial statements reflect all adjustments which are, in the opinion of management, necessary so as to ensure a fair statement of the results for the interim period presented.
MOEN AND COMPANY
CHARTERED ACCOUNTANTS
PO Box 10129 | ||
1400 IBM Tower | Telephone: | (604) 662-8899 |
701 West Georgia Street | Fax: | (604) 662-8809 |
Vancouver, BC V7Y 1C6 |
INDEPENDENT ACCOUNTANTS’ REVIEW REPORT
To the Directors and Shareholders of Super Energy Investments Corporation (A Nevada Corporation) (A Development Stage Company)
We have reviewed the accompanying Consolidated Balance Sheets of Super Energy Investments Corporation (Formerly Digital Village World Technologies, Inc.) (A Nevada Corporation) (A Development Stage Company) as of September 30, 2003 and September 30, 2002 (as restated), and the Statements of Operations, Retained Earnings, Cash Flows and Changes in Stockholders’ Equity for the nine month periods ended September 30, 2003 and September 30, 2002 (as restated). These financial statements are the responsibility of the Company’s management.
We also reviewed the amendment described in Note 9 and Note 10 that were applied to restate the nine month period ended September 30, 2002. In our opinion, such adjustments are appropriate based on subsequent events.
We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
On the basis of our review, we are not aware of any material modifications that should be made to the accompanying financial statements as of September 30, 2003 and September 30, 2002 (as restated), in order for them to be in conformity with United States generally accepted accounting principles (GAAP).
“Moen and Company” | |
Chartered Accountants | |
Vancouver, British Columbia, Canada | |
October 30, 2003 |
(FORMERLY DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Consolidated Balance Sheet
September 30, 2003 and September 30, 2002
(In US Dollars)
(Unaudited)
As Restated | ||||||
Notes 9&10 | ||||||
2003 | 2002 | |||||
Assets | ||||||
Current Assets | ||||||
Cash and cash equivalents | $ | 5,481 | $ | 4,659 | ||
Accounts receivable | -- | 2,953 | ||||
Prepaid expenses | 762 | -- | ||||
6,243 | 7,612 | |||||
Fixed Assets, at cost (note 2) | 6,649 | 65,783 | ||||
Less: accumulated depreciation | (1,276 | ) | (22,104 | ) | ||
5,373 | 43,679 | |||||
Goodwill, at cost (note 3) | -- | 48,070 | ||||
5,373 | 91,749 | |||||
$ | 11,616 | $ | 99,361 | |||
Liabilities and Stockholders' Equity | ||||||
Current Liabilities | ||||||
Accounts payable and accrued (note 4) | $ | 71,580 | $ | 18,190 | ||
Due to related parties (note 5) | 177,777 | 56,800 | ||||
249,357 | 74,990 | |||||
Stockholders' Equity | ||||||
Capital stock | ||||||
Authorized | ||||||
62,500,000 common shares at $0.0004 each par value | ||||||
Issued | ||||||
12,906,000 common shares - par value | 5,162 | 5,162 | ||||
Paid in capital in excess of par value of stock | 413,012 | 413,012 | ||||
418,174 | 418,174 | |||||
Deficit, accumulated during the development stage | (656,042 | ) | (393,930 | ) | ||
Cumulative translation adjustment (note 2) | 127 | 127 | ||||
(237,741 | ) | 24,371 | ||||
$ | 11,616 | $ | 99,361 |
Approved on behalf of the board:
"Mr. Chen Zhiqing, Director and Chief Executive Officer
"Ms. Ni Jinrong" , Director and Chief Financial Officer
See Accompanying Notes and Independent Accountants' Review Report
(FORMERLY DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Consolidated Statements of Operation
For the Periods Ended September 30, 2003 and 2002
(In U.S. Dollars)
(Unaudited)
Cumulative From | Quarter Ended | Nine Months Ended | |||||||||||||
Inception Date | September 30 | September 30 | |||||||||||||
of Sep. 15, 1998 | As Restated | As Restated | |||||||||||||
to Sept. 30, | Notes 9&10 | Notes 9&10 | |||||||||||||
2003 | 2003 | 2002 | 2003 | 2002 | |||||||||||
Revenue | |||||||||||||||
Interest and other income | $ | 10,688 | $ | 927 | $ | -- | $ | 2,779 | $ | -- | |||||
Administration Costs | |||||||||||||||
Bank charges and interest | 2,349 | -- | 51 | 182 | 119 | ||||||||||
Consulting | 11,982 | -- | -- | -- | -- | ||||||||||
Depreciation | 23,380 | 445 | 2,935 | 1,276 | 8,616 | ||||||||||
Incorporation costs | 26,101 | -- | -- | 26,101 | -- | ||||||||||
License, dues and insurance | 3,302 | -- | -- | -- | 1,417 | ||||||||||
Office costs | 30,818 | 2,740 | 812 | 7,312 | 3,644 | ||||||||||
Other taxes | 668 | -- | -- | 668 | -- | ||||||||||
Rentals and leases | 46,206 | -- | 5,500 | -- | 16,423 | ||||||||||
Professional fees | 177,451 | 4,040 | 7,231 | 13,015 | 24,311 | ||||||||||
Salary and benefits | 73,584 | -- | -- | 16,593 | 1,428 | ||||||||||
Stock-based compensation | 20,000 | -- | -- | -- | -- | ||||||||||
Telephone and utilities | 20,755 | -- | 1,400 | -- | 4,262 | ||||||||||
Transfer agent and filing fees | 22,830 | 1,407 | 482 | 1,407 | (3,251 | ) | |||||||||
Travel and promotion | 53,071 | -- | -- | 642 | 11,530 | ||||||||||
Loss on disposition of fixed assets | 49,389 | -- | -- | -- | -- | ||||||||||
Write off investment in, and advances to, | |||||||||||||||
YuXun Digital Hi-Tech Co., Ltd. | 56,774 | -- | 56,774 | -- | 56,774 | ||||||||||
Goodwill impairment | 48,070 | -- | -- | -- | -- | ||||||||||
666,730 | 8,632 | 75,185 | 67,196 | 125,273 | |||||||||||
Net profit (loss) for the period | $ | (656,042 | ) | $ | (7,705 | ) | $ | (75,185 | ) | $ | (64,417 | ) | $ | (125,273 | ) |
Basic and diluted profit (loss) per share | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.01 | ) | |||
Weighted average number of | |||||||||||||||
common shares used to | |||||||||||||||
compute basic and fully | |||||||||||||||
diluted loss per share | 12,906,000 | 12,906,000 | 12,906,000 | 12,906,000 |
See Accompanying Notes and Independent Accountants' Review Report
(FORMERLY DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Consolidated Statements of Retained Earnings (Deficit)
For the Periods Ended September 30, 2003 and 2002
(In U.S. Dollars)
(Unaudited)
Cumulative From | Quarter Ended | Nine Months Ended | |||||||||||||
Inception Date | September 30 | September 30 | |||||||||||||
of Sep. 15, 1998 | As Restated | As Restated | |||||||||||||
to Sept. 30, | Notes 9&10 | Notes 9&10 | |||||||||||||
2003 | 2003 | 2002 | 2003 | 2002 | |||||||||||
Retained earnings (deficit), | |||||||||||||||
beginning of period | $ | -- | $ | (648,337 | ) | $ | (318,745 | ) | $ | (591,625 | ) | $ | (268,657 | ) | |
Net profit (loss) for the period | (656,042 | ) | (7,705 | ) | (75,185 | ) | (64,417 | ) | (125,273 | ) | |||||
Retained earnings (deficit), | |||||||||||||||
end of period | $ | (656,042 | ) | $ | (656,042 | ) | $ | (393,930 | ) | $ | (656,042 | ) | $ | (393,930 | ) |
See Accompanying Notes and Independent Accountants' Review Report
(FORMERLY DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Consolidated Statements of Cash Flow
For the Periods Ended September 30, 2003 and 2002
(In U.S. Dollars)
(Unaudited)
Cumulative From | Quarter Ended | Nine Months Ended | |||||||||||||
Inception Date | September 30 | September 30 | |||||||||||||
of Sep. 15, 1998 | As Restated | As Restated | |||||||||||||
to Sept. 30, | Notes 9&10 | Notes 9&10 | |||||||||||||
2003 | 2003 | 2002 | 2003 | 2002 | |||||||||||
Cash derived from (used for) | |||||||||||||||
Operating activities | |||||||||||||||
Net profit (loss) for the period | $ | (656,042 | ) | $ | (7,705 | ) | $ | (75,185 | ) | $ | (64,417 | ) | $ | (125,273 | ) |
Items not requiring use of cash | |||||||||||||||
Depreciation | 23,380 | 445 | 2,935 | 1,276 | 8,616 | ||||||||||
Write off investment in, and advances to, | |||||||||||||||
YuXun Digital Hi-Tech Co., Ltd. | -- | 56,774 | -- | 56,774 | |||||||||||
Cumulative translation | 127 | -- | (73 | ) | -- | (53 | ) | ||||||||
Loss on disposition of fixed assets | 49,389 | -- | -- | -- | -- | ||||||||||
Stock-based compensation | 20,000 | -- | -- | -- | -- | ||||||||||
Changes in non-cash | |||||||||||||||
working capital items | |||||||||||||||
Accounts receivable | -- | -- | 4,926 | 3,998 | 1,920 | ||||||||||
Prepaid expenses and deposit | (762 | ) | 763 | -- | (762 | ) | -- | ||||||||
Accounts payable and accrued | 71,580 | 1,447 | 5,025 | 8,142 | (30,334 | ) | |||||||||
(492,328 | ) | (5,050 | ) | (5,598 | ) | (51,763 | ) | (88,350 | ) | ||||||
Financing activities | |||||||||||||||
Issuance of shares | 398,174 | -- | -- | -- | -- | ||||||||||
Due to related parties | 177,777 | (434,634 | ) | 5,737 | (80,884 | ) | 90,726 | ||||||||
575,951 | (434,634 | ) | 5,737 | (80,884 | ) | 90,726 | |||||||||
Investing activities | |||||||||||||||
Fixed assets purchased | (78,142 | ) | -- | -- | (6,649 | ) | -- | ||||||||
Deferred charges | -- | 18,097 | -- | -- | -- | ||||||||||
(78,142 | ) | 18,097 | -- | (6,649 | ) | -- | |||||||||
Cash and cash equivalents, increase | |||||||||||||||
(decrease) during the period | 5,481 | (421,587 | ) | 139 | (139,296 | ) | 2,376 | ||||||||
Cash and cash equivalents, | |||||||||||||||
beginning of period | -- | 427,068 | 4,520 | 144,777 | 2,283 | ||||||||||
Cash and cash equivalents, | |||||||||||||||
end of period | $ | 5,481 | $ | 5,481 | $ | 4,659 | $ | 5,481 | $ | 4,659 |
See Accompanying Notes and Independent Accountants' Review Report
SUPER ENERGY INVESTMENTS CORPORTATION
(FORMERLY DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Consolidated Statement of Changes in Stockholders' Equity
From Date of Inception on September 15, 1998 to September 30, 2003
(In U.S. Dollars)
(Unaudited)
Deficit Accum- | ||||||||||||||||||||
Number of | Additional | Total | ulated During | Cumulative | Total | |||||||||||||||
Common | Par | Paid-in | Capital | The Develop- | Translation | Stockholders' | ||||||||||||||
Shares | Value | Capital | Stock | ment Stage | Adjustment | Equity | ||||||||||||||
9/15/98 issuance of common | ||||||||||||||||||||
stock for cash | 1,000,000 | $ | 1,000 | $ | 1,500 | $ | 2,500 | $ | 2,500 | |||||||||||
12/31/98 issuance of common | ||||||||||||||||||||
stock for cash | 750,000 | 750 | 74,250 | 75,000 | 75,000 | |||||||||||||||
Net loss for the year ended December 31, 1998 | $ | (737 | ) | (737 | ) | |||||||||||||||
Balance, December 31, 1998 | 1,750,000 | 1,750 | 75,750 | 77,500 | (737 | ) | 76,763 | |||||||||||||
Net loss for the year ended December 31, 1999 | (12,534 | ) | (12,534 | ) | ||||||||||||||||
Balance, December 31, 1999 | 1,750,000 | 1,750 | 75,750 | 77,500 | (13,271 | ) | 64,229 | |||||||||||||
Balance, May 19, 2000 | ||||||||||||||||||||
before forward split | 1,750,000 | 1,750 | 75,750 | 77,500 | (13,271 | ) | 64,229 | |||||||||||||
05/19/00 2.5 to 1 forward split | 4,375,000 | 1,750 | 75,750 | 77,500 | (13,271 | ) | 64,229 | |||||||||||||
12/18/00 share exchange | 8,490,000 | 3,396 | 3,396 | 3,396 | ||||||||||||||||
Net loss for the year ended December 31, 2000 | (9,818 | ) | (9,818 | ) | ||||||||||||||||
Cumulative translation | $ | (468 | ) | (468 | ) | |||||||||||||||
Balance, December 31, 2000 | 12,865,000 | 5,146 | 75,750 | 80,896 | (23,089 | ) | (468 | ) | 57,339 | |||||||||||
2/7/01 issuance of common | ||||||||||||||||||||
stock for cash | 10,000 | 4 | 9,996 | 10,000 | 10,000 | |||||||||||||||
3/30/01 issuance of common | ||||||||||||||||||||
stock for compensation | 20,000 | 8 | 19,992 | 20,000 | 20,000 | |||||||||||||||
4/6/01 issuance of common | ||||||||||||||||||||
stock for cash | 11,000 | 4 | 10,996 | 11,000 | 11,000 | |||||||||||||||
Net loss for year ended December 31, 2001 | (245,568 | ) | (245,568 | ) | ||||||||||||||||
Cumulative translation | 648 | 648 | ||||||||||||||||||
Balance, December 31, 2001 | 12,906,000 | 5,162 | 116,734 | 121,896 | (268,657 | ) | 180 | (146,581 | ) | |||||||||||
9/30/2002 Capitalization of amounts due to related | ||||||||||||||||||||
parties as additions to paid in capital | 296,278 | 296,278 | 296,278 | |||||||||||||||||
Net loss for the year ended December 31, 2002 | (322,968 | ) | (322,968 | ) | ||||||||||||||||
Cumulative translation adjustment | (53 | ) | (53 | ) | ||||||||||||||||
Balance, December 31, 2002 | 12,906,000 | 5,162 | 413,012 | 418,174 | (591,625 | ) | 127 | (173,324 | ) | |||||||||||
Net loss for nine months ended September 30, 2003 | (64,417 | ) | (64,417 | ) | ||||||||||||||||
Balance, September 30, 2003 | 12,906,000 | $ | 5,162 | $ | 413,012 | $ | 418,174 | $ | (656,042 | ) | $ | 127 | $ | (237,741 | ) |
See Accompanying Notes and Independent Accountants' Review Report
SUPER ENERGY INVESTMENTS CORPORTATION
(FORMERLY DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2003
(In U.S. Dollars)
(Unaudited)
Note 1. | ORGANIZATION AND NATURE OF BUSINESS The Company was incorporated under the laws of the State of Nevada on September 15, 1998, as Body Concepts, Inc. On May 25, 2000 the Company changed its name from Body Concepts, Inc. to Digital Village World Technologies, Inc., and on August 16, 2002, the Company changed its name to Super Energy Investments Corporation. On May 19, 2000 the Company increased its authorized capital stock from 25,000,000 common shares with a par value of $0.001 to 62,500,000 common shares with a par value of $0.0004 each par value. On May 19, 2000 the Company completed a 2.5:1 forward split of its outstanding stock. This forward split increased the number of issued and outstanding shares from 1,750,000 common shares to 4,375,000 common shares. Pursuant to the terms of a share exchange which was effective as of December 18, 2000, the Company acquired all of the issued and outstanding stock of Digital Village World Technologies (Canada) Inc. (“DVC”) in exchange for the issuance of 8,490,000 shares of its authorized but previously unissued common stock, which shares were valued at par value for purposes of the acquisition. The acquisition was accounted for as a purchase, and accordingly, the operating results for DVC are reported for the period subsequent to the acquisition. Assets and liabilities of DVC at the date of acquisition on December 18, 2000, are as follows: |
Assets | |||||
Cash and cash equivalents | $ | 56,725 | |||
Accounts receivable | 10,285 | ||||
Fixed assets, net | 83,028 | ||||
150,038 | |||||
Liabilities | |||||
Accounts payable | 13,161 | ||||
Current portion of loan | 6,811 | ||||
Due to related company | 20,000 | ||||
Due to related parties | 144,423 | ||||
184,395 | |||||
Long-term loan | 10,785 | ||||
195,180 | |||||
Net assets (liabilities) | (45,142 | ) | |||
Cumulative translation, included in above, | |||||
Booked in stockholders’ equity of the Company | 468 | ||||
(44,674 | ) | ||||
Goodwill on acquisition (note 5) | 48,070 | ||||
Issuance of 8,490,000 common shares at par value | $ | 3,396 |
1
SUPER ENERGY INVESTMENTS CORPORTATION
(FORMERLY DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2003
(In U.S. Dollars)
(Unaudited)
Note 1. | ORGANIZATION AND NATURE OF BUSINESS (cont’d) DVC is a Canadian company incorporated in the Province of British Columbia, Canada. DVC is an internet content provider that provides bi-lingual content in Chinese and English, technical services to companies in China, and provides third party internet services such as web design, web hosting and content development for firms that specialize in naturopathic and traditional eastern health sciences in North America. On September 26, 2002, the Company obtained registration of a 100% owned subsidiary company, Beijing JianBo Ion Technology Co., Ltd. (“Jianbo”), in Beijing of China. The proposed investment fund is $200,000, which has not been transferred to Jianbo based on the confirmation letter from JunYi Law Office dated August 28, 2003. On July 1, 2003, the government in Beijing of China gave the Company permission to postpone investing funds in Jianbo until December 15, 2003. JianBo will cooperate with Beijing Super Energy Yuheng Group (“Yuheng”) which owns advanced international technologies, to invest and build four large manufacturing bases. These bases are proposed to manufacture high precision disposable transfusion systems and equipment to supply the demand for a huge market in China. |
Note 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Digital Village World Technologies (Canada) Inc. and Beijing Jianbo Ion Technology Co., Ltd.All significant intercompany transactions and balances have been eliminated. Basis of presentation These financial statements have been prepared in accordance with Accounting Principles Generally Accepted in the United States (“USGAAP”). Development stage company The accompanying financial statements have been prepared in accordance with the provisions of Statement of Financial Accounting Standard No. 7, “Accounting and Reporting by Development Stage Enterprises”. |
2
SUPER ENERGY INVESTMENTS CORPORTATION
(FORMERLY DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2003
(In U.S. Dollars)
(Unaudited)
Note 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d) Use of estimates The preparation of financial statements in conformity with USGAAP 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 dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Cash and cash equivalents Cash and cash equivalents consist of cash on deposit and highly liquid short-term interest bearing securities with a maturity at the date of purchase of three months or less. Income Taxes Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the financial statement at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled as prescribed in FASB Statement No. 109, Accounting for Income Taxes. As changes in tax laws or rate are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Compensated absences Employees of the corporation are entitled to paid vacations, sick days and other time off depending on job classification, length of service and other factors. It is impractical to estimate the amount of compensation for future absences, and accordingly, no liability has been recorded in the accompanying financial statements. The corporation’s policy is to recognize the costs of compensated absences when paid to employees. Net profit per share The Company adopted Statement of Financial Accounting Standards No. 128 that requires the reporting of both basic and diluted earnings per share. Basic earnings per share is computed by dividing net income available to common shareowners by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. In accordance with FASB 128, any anti-dilution effects on net loss per share are excluded. |
3
SUPER ENERGY INVESTMENTS CORPORTATION
(FORMERLY DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2003
(In U.S. Dollars)
(Unaudited)
Note 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d) Disclosure about fair value of financial instruments The Company has financial instruments, none of which are held for trading purposes. The Company estimates that the fair value of all financial instruments as defined in FASB 107, does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying balance sheet. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value, and accordingly, the estimates are not necessarily indicative of the amounts that the Company could realize in a current market exchange. Concentration of credit risk Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents which are not collateralized. The Company limits its exposure to credit loss by placing its cash and cash equivalents with high credit quality financial institutions. Fixed assets Fixed assets are stated at cost less accumulated depreciation. Depreciation is recorded on the following rates: |
Office equipment | - 48.48% per annum on a straight-line basis | ||
Vehicles | - 30% per annum on the declining balance basis | ||
Computer equipment | - 19.4% per annum allocated on a straight-line basis | ||
As at September 30, 2003, the $6,649 of fixed assets is in the subsidiary company, Jianbo, as follows: |
Accumulated | Net Book | |||||||||||||||||||
Cost | Depreciation | Value | ||||||||||||||||||
09/30/02 | 09/30/03 | 09/30/02 | 09/30/03 | 09/30/02 | 09/30/03 | |||||||||||||||
Office equipment | $ | 5,430 | $ | 1,682 | $ | 6,281 | $ | 508 | $ | (851 | ) | $ | 1,174 | |||||||
Vehicles | 11,105 | -- | (1,906 | ) | -- | 13,011 | -- | |||||||||||||
Computer equipment | 49,248 | 4,967 | 17,729 | 768 | 31,519 | 4,199 | ||||||||||||||
$ | 65,783 | $ | 6,649 | $ | 22,104 | $ | 1,276 | $ | 43,679 | $ | 5,373 |
4
SUPER ENERGY INVESTMENTS CORPORTATION
(FORMERLY DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2003
(In U.S. Dollars)
(Unaudited)
Note 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d) Long-lived assets Statement of Financial Accounting Standards No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,” requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset in question may not be recoverable. This standard did not have a material effect on the Company’s results of operations, cash flows or financial position in these financial statements. Foreign currency translation The functional currency of the parent Company Super Energy Investments Corporation, is the United States Dollar and of Digital Village World Technologies (Canada) Inc. is the Canadian Dollar and the reporting currency on a consolidated basis is the United States Dollar. The assets, liabilities, and operations of the Company are expressed in the functional currency of the Company in United States Dollars. Operations of the subsidiary Digital Village World Technologies (Canada) Inc. are in Canadian Dollars and in conformity with US GAAP they are translated into the reporting currency, the United States Dollar. Monetary assets and liabilities are translated at the current rate of exchange. The weighted average exchange rate for the period is used to translate revenue, expenses, and gains or losses from the functional currency to the reporting currency. The gain or loss on translation is reported as a separate component of stockholders’ equity and not recognized in net income. Gains or losses on remeasurement are recognized in current net income. Gains or losses from foreign currency transactions are recognized in current net income. Fixed assets are measured at historical exchange rates that existed at the time of the transaction. Depreciation is recorded at historical exchange rates that existed at the time the underlying related asset was acquired. |
5
SUPER ENERGY INVESTMENTS CORPORTATION
(FORMERLY DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2003
(In U.S. Dollars)
(Unaudited)
Note 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d) An analysis of the changes in the cumulative translation adjustment as disclosed as part of stockholders’ equity, is as follows: |
Nine Months Ended | ||||||||
September 30, | ||||||||
2003 | 2002 | |||||||
Beginning balance | $ | 127 | $ | 180 | ||||
Change during the period | -- | (53 | ) | |||||
Ending balance | $ | 127 | $ | 127 | ||||
The effect of exchange rate changes on cash balances forms part of the reconciliation of changes in cash and cash equivalents during the period. Revenue Recognition The Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) 101, Revenue Recognition in Financial Statements, in December 1999. The SAB summarizes certain of the SEC staff’s views in applying generally accepted accounting principles to revenue recognition in financial statements. When the Company has revenue, the Company will perform a review of its revenue recognition policies and determine that it is in compliance with SAB 101. | ||||||||
Note 3. | GOODWILL On December 18, 2000, the acquisition of Digital Village World Technologies (Canada) Inc. included liabilities that exceeded the assets by $44,674 and the consideration of 8,490,000 treasury shares at par value of $0.0004 per share or $3,396, resulted in goodwill on the transaction of $48,070. Based on FAS-142, par. 18, goodwill is not amortized and is tested for impairment at a level of reporting referred to as a reporting unit. Accordingly, the goodwill of $48,070 aforementioned is written off in the year ended December 31, 2002 due to goodwill impairment. |
6
SUPER ENERGY INVESTMENTS CORPORTATION
(FORMERLY DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2003
(In U.S. Dollars)
(Unaudited)
Note 4. | ACCOUNTS PAYABLE AND ACCRUED Details of the total of accounts payable and accrued as at September 30, 2003, are as follows: |
Blake, Cassels & Graydon, LLP | $ | 8,054 | |||
Brian Roberts | 837 | ||||
Frascona, Joiner, Goodman and Greenstein, P.C. | 2,323 | ||||
Moen and Company | 44,099 | ||||
QED Law Group | 1,495 | ||||
Resident Agents of Nevada, Inc. | 346 | ||||
RR Donnelley Receivables, Inc. | 5,027 | ||||
Squamish Cable | 391 | ||||
Telus | 1,761 | ||||
Touchstone Property Management | 3,059 | ||||
Moffitt & Company, P. C. | 525 | ||||
67,917 | |||||
Other payables in Jianbo: | |||||
Payroll & benefits payable | 3,670 | ||||
Other | (7 | ) | |||
3,663 | |||||
Total | $ | 71,580 | |||
Note 5. | RELATED PARTY TRANSACTIONS The amount of $122,661 is due to Directors of the Company as at September 30, 2003 for loans that they have advanced to the Company. These amounts are unsecured, non interest bearing, with no specific terms of repayment, and are recorded as current liabilities in these financial statements. The amount of $55,116 is a loan from a party at arms length to the Company, Beijing Super Energy Yuheng Technology and Development Co., Ltd., which is controlled by a main shareholder and director of the Company, Mr. Chen Zhiqing; the maturity date is October 31, 2003 with interest rate at 6.903% per annum. | ||||
Note 6. | INCOME TAXES | ||||
a) | The most recent Federal Income Tax filing for the Company for the US was for the year ended December 31, 2001, disclosing no income taxes payable to the US Internal Revenue Service. | ||||
b) | There are losses that total of $656,042 carried forward that may be applied towards future profits. No deferred income taxes are recorded as an asset. A reserve has been claimed that offsets the amount of tax credit available from use of the loss carry forward because there is presently no indication that these tax losses will be utilized. |
7
SUPER ENERGY INVESTMENTS CORPORTATION
(FORMERLY DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2003
(In U.S. Dollars)
(Unaudited)
Note 7. | FINANCIAL INSTRUMENTS The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and accrued and due to related parties. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values. |
Note 8. | PENSION AND EMPLOYMENT LIABILITIES The Company does not have liabilities as at September 30, 2003, for pension, post-employment benefits or post-retirement benefits. The Company does not have a pension plan. |
Note 9. | PROPOSED ACQUISITION AND CHANGE OF CONTROL AGREEMENT ANDTERMINATION THEREOF |
(a) | Proposed Acquisition and Change of Control Agreement On August 16, 2002, the Company entered into a proposed Asset Purchase Agreement (the "Agreement") with Beijing Super Energy Yu Heng Technology Developments Co. Ltd. ("Yu Heng"), a party at arms length to the Company. Pursuant to the Agreement, the Company was to acquire all of the assets of Yu Heng, in exchange for 12,000,000 shares of the Company, at a price of $1.62 per share for consideration of $19,440,000, representing approximately 48.18 percent of the outstanding shares of the Company, after issuance of the shares for this proposed asset purchase. This agreement was subsequently terminated. | |
(b) | Termination of Abovementioned Agreement (in (a)) By Subsequent Agreement dated March 5, 2003, the acquisition and change of control agreement is terminated effective retroactively to the date of the initial agreement dated August 16, 2002, due to relevant laws of the PRC that create legal obstacles for the performance of the Asset Purchase Agreement, making it impossible for both parties to fully perform in accordance with the Asset Purchase Agreement and accordingly the Agreement is terminated. Pursuant to the termination Agreement, the following terms and conditions apply to the 12,000,000 shares of the Company that have been issued and the assets that were to be transferred to the Company: |
8
SUPER ENERGY INVESTMENTS CORPORTATION
(FORMERLY DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2003
(In U.S. Dollars)
(Unaudited)
Note 9. | PROPOSED ACQUISITION AND CHANGE OF CONTROL (cont’d) --AGREEMENT TERMINATED (cont’d) |
Repurchase of the 12,000,000 Shares issued by the Company | ||
1. | It is agreed, pursuant to Article 2 of the Termination Agreement, by both Parties that the Company shall repurchase the Shares from the Yu Heng at the price of zero dollars within (90) days upon the effectiveness of the March 5, 2003 Agreement. In the meantime, Yu Heng shall repay the Company any and all interest, income or profit (if any) accrued on the Shares it obtained during the period that it held the Shares. | |
2. | Prior to the repurchase of the Shares by the Company, Yu Heng as the holder of the Shares, agrees not to exercise any rights of a shareholder. | |
3. | Yu Heng undertakes to the Company that during the period that it held the Shares, it has not created, over the Shares, any encumbrances either in favor of itself or any third party. | |
Transfer of Assets It is agreed, pursuant to Article 3 of the Termination Agreement, by both Parties that the obligations of Yu Heng to the Company under the Asset Purchase Agreement (including but not limited to transferring the Asset to the Purchaser) shall be terminated immediately upon the effectiveness of this Agreement and be retroactive to the date of the acquisition Asset Purchase Agreement, and the Company shall not have any right of whatsoever nature to the Assets. | ||
Note 10. | AMENDMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS The previously issued financial statements for the nine months ended September 31, 2002 have been amended due to the termination of the Acquisition and Change of Control Agreement (see Note 9) and $296,278 of “Due to related parties” was forgiven and capitalized as “Paid in capital in excess of par value of stock”. A summary of amendments due to retroactive termination is as follows: |
9
SUPER ENERGY INVESTMENTS CORPORTATION
(FORMERLY DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2003
(In U.S. Dollars)
(Unaudited)
Note 10. | AMENDMENT OF ISSUED FINANCIAL STATEMENTS (cont’d) |
Adjustment for | |||||||||||
Retroactive Termination | |||||||||||
Figures | of Acquisition | ||||||||||
Before | and Change of | Figures | |||||||||
Restatement | Control Agreement | Restated | |||||||||
Assets | |||||||||||
Current Assets | |||||||||||
Cash and cash equivalents | $ | 249,686 | $ | (245,027 | ) | $ | 4,659 | ||||
Accounts receivable | 4,366 | (1,413 | ) | 2,953 | |||||||
Inventory | 118,300 | (118,300 | ) | -- | |||||||
Prepaid expenses and deposits | 300,892 | (300,892 | ) | -- | |||||||
673,244 | (665,632 | ) | 7,612 | ||||||||
Fixed Assets, net | 364,885 | (321,206 | ) | 43,679 | |||||||
Intangible Assets | 12,554,036 | (12,554,036 | ) | -- | |||||||
Property and plant under construction | 3,819,205 | (3,819,205 | ) | -- | |||||||
Deferred Cost, net | 221,447 | (221,447 | ) | -- | |||||||
Goodwill, at cost | 48,070 | 0 | 48,070 | ||||||||
Total Assets | $ | 17,680,887 | $ | (17,581,526 | ) | $ | 99,361 | ||||
Liabilities and Stockholders' Equity | |||||||||||
Current Liabilities | |||||||||||
Accounts payable and accrued | $ | 262,902 | $ | (244,712 | ) | $ | 18,190 | ||||
Due to related parties | 353,078 | (296,278 | ) | 56,800 | |||||||
Total liabilities | 615,980 | (540,990 | ) | 74,990 | |||||||
Minority Interests | 328,888 | ||||||||||
Stockholders' Equity | |||||||||||
Capital stock | |||||||||||
Authorized: 62,500,000 common | |||||||||||
shares at $0.0004 par value | |||||||||||
Issued: | |||||||||||
24,906,000 common shares - par value | 9,962 | (9,962 | ) | -- | |||||||
Paid in capital in excess of par value of stock | 17,120,469 | (17,120,469 | ) | -- | |||||||
12,906,000 common shares - par value | 5,162 | 5,162 | |||||||||
Paid in capital in excess of par value of stock | 413,012 | 413,012 | |||||||||
17,130,431 | (16,712,257 | ) | 418,174 | ||||||||
Deficit, accumulated during the development | (394,539 | ) | 609 | (393,930 | ) | ||||||
Cumulative translation adjustment | 127 | 127 | |||||||||
16,736,019 | (16,711,648 | ) | 24,371 | ||||||||
$ | 17,680,887 | $ | (17,581,526 | ) | $ | 99,361 |
10
SUPER ENERGY INVESTMENTS CORPORTATION
(FORMERLY DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2003
(In U.S. Dollars)
(Unaudited)
Note 11. | WORKING CAPITAL The Company is short of the working capital, and in order for the Company to continue as a going concern, additional working capital is required. Management and directors of the Company have agreed to advance funds to the Company, as required, for the Company to continue its operations. |
11
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion should be read in conjunction with the accompanying financial statements for the three-month periods ended September 30, 2003 and 2002 and the Annual Report Form 10KSB filed by the Company on November 12, 2003 for the 2002 fiscal year.
Special Note Regarding Forward-Looking Statements – Certain statements in this report and elsewhere (such as in other filings by the Company with the Securities and Exchange Commission, press releases, presentations by the Company or its management and oral statements) may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, and “should” and variations of these words and similar expressions, are intended to identify these forward-looking statements. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
The Business
From December 2000 until August 2002, the Company attempted to develop an online education program in the city of Tianjin, China. On August 16, 2002, the Company entered into an Asset Purchase Agreement with Beijing Super Energy Yu Heng Technology Developments Co. Ltd. (Yu Heng), a Chinese joint stock company located in Beijing, in which the Company (through its 100% owned Chinese subsidiary, Beijing Global Health Products Technology Co. Ltd. (“Super Energy”) acquired certain Assets of Yu Heng. Closing of the Agreement resulted in a change of control of the Company.
The Assets consisted of all attendant items of a business owned by Yu Heng which manufactures and distributes a family of advanced proprietary medical intravenous (IV) infusion sets in China. The Assets included land, offices, manufacturing facilities, proprietary technology, goodwill, staff and management of approximately 280 people, established R&D facilities, and a product distribution network.
The transaction required the Company to change its name from Digital Village World Technologies Inc. (“DVWT”) to Super Energy Investments Corporation, to change its stock trading symbol from DVWT to SEIV, to change its Board of Directors membership and to issue 12 million new treasury shares of common stock to Yu Heng at a deemed price of $ 1.62 for a total transaction price equivalent to $19,512,195 (US) in consideration of Yu Heng selling the Assets to the Company. In a separate private transaction, DVWT’s control group, Tianjin Yu Cheng Group Co. Ltd., sold 1,600,000 of its 2,000,000 common share position to Chen Zhiqing, the majority shareholder of Yu Heng’s parent, Super Energy Heavy-Ion Science and Technology Co. Ltd (“ Parent”).
The subject transaction transferred control of the Registrant to Yu Heng and Chen Zhiqing by reason of Yu Heng owning 12 million (46.32%) of the then 25,906,000 shares issued in the Registrant.
The Agreement required that both Parties to the Agreement be governed by the laws of the PRC.
Subsequent to the closing of the acquisition, it became apparent to the director of the Registrant that a legal obstacle existed for performance of the Agreement by Yu Heng.
Accordingly, on April 20, 2003, the Parties entered into an Agreement entitled Agreement on the Termination of the Asset Purchase Agreement. The Parties agreed that the original Agreement be terminated through non-performance due to PRC legal restrictions. The components of the original Agreement that have already been performed were reversed. A Form 8K-A filing announcing recision of the transaction was undertaken on May 1, 2003. A wholly owned Chinese subsidiary of the Registrant Beijing JianBo Ion Technology Co. Ltd. (“Jianbo”) was established on September 26, 2002 as a component of this transaction. Jianbo is inactive and holds $5,373 in net book value assets, primarily computer equipment located in Beijing.
The issuance of 12,000,000 shares to Yu Heng was rescinded, leaving Chen Zhiqing as the Control person.
Mr. Chen remains Chairman and President of the Registrant and Richard Wang is a second director.
The Company had previously established a wholly owned Chinese foreign enterprise Tianjin Navada Digital World Technologies Co. Ltd. (“WOFE”). Its purpose was to manage the operations of a Chinese domestic enterprise, CNTime Group, pursuant to the terms of a profit sharing agreement (“PSA”) which provides for the Company to receive 80% of the profits from the operations of the Chinese venture withs the Company required to provide certain agreed upon capital. In the event that the Company is unable to (i) provide the required capital or (ii) obtain an extension for providing the capital, the profit allocation under the PSA will be adjusted based on the percentage of capital actually contributed. The original PSA dated May 2000 was amended on May 31, 2001 and is currently being re-negotiated. Once the agreement re-negotiations are completed, formal Chinese business operations will be re-launched.
Results of operations – comparison of the three month periods ended September 30, 2003.
There was revenue of $927 for the quarter and revenue of nil earned during the comparable quarter in 2002. Expenses during the quarter were $8,632 as compared to $75,185 for the comparable period in 2002. The 2003 figure included a $445 provision for depreciation. As a result, for the quarter ended September 30, 2003, the Company had a net loss of $<7,705>, as compared to a loss of $75,185 for the same quarter of 2002.
General and administrative expenses were $7,705 for the three-month period ended September 30, 2003 versus $75,185 for the corresponding period in 2002. The expenses included expenditures of $4,040 for professional fees, $2,740 for office costs and $1,407 for transfer agent fees. Professional fees for the quarter were $4,040 as against $7,231 during the 2002 quarter. The 2002 comparative quarterly period reflected costs of $5,500 for rental expenses, $1,400 for telephone and utility costs, $482 for transfer agent costs, and $2,935 for depreciation. Salaries and benefits expenses were nil for the period ended September 30, 2003 and nil in the corresponding period in 2002.
During the nine-month period ended September 30, 2003, expenses totaled $67,196 which included $26,101 for incorporation costs and $7,312 for office costs. The 2002 comparative nine-month period reflected costs of $16,423 for rental expenses, $4,262 in telephone and utilities costs, $11,530 for travel and promotion and $8,616 for depreciation and $3,644 for office costs. Salaries and benefits were $16,593 for the nine-month period ended September 30, 2003 against $1,428 in the comparable period in 2002. Professional fees for the 2003 nine-month period totaled $13,015 as against $24,311 in the 2002 comparative period. Revenues for the nine-month period ended September 30, 2003 were $2,779 as compared to nil during the comparable nine-month period in 2002.
For the remainder of the current fiscal year, the Company expects to incur a loss as a result of expenses associated with compliance with the reporting requirements of the Securities Exchange Act of 1934 and costs related to re-launch of operations of the Company’s Chinese subsidiary.
Liquidity and Capital Resources
The cash and cash equivalent balance at the end of the period was $5,481 compared to $4,659 at September 30, 2002. Accounts receivable at September 30, 2003 were nil and pre-paid expenses were $762. Comparative figures for September 30, 2002 were $2,953 and nil. For the three-month period ended September 30, 2003, the Company’s activities decreased cash and cash equivalents of $421,587 compared to a net increase in cash of $139 in the comparable period for 2002. For the nine-month period ended September 30, 2003, the Company’s activities decreased cash by $139,296 compared to $2,376 generated in the comparable period in 2002.
Working capital was ($243,114) as at September 30, 2003 versus ($67,378) as at September 30, 2002.
The Company has historically relied upon sales of its common stock, debt instruments and loans from related parties to finance its operations. Additional financing will be required for current and long-term development, marketing, and working capital of the Company’s re-launch of planned operations in China. To the extent of any shortfall in financing, the Company’s operations will be delayed, curtailed or prevented, and the Company may be required to suspend or substantially modify its operations.
There were no income taxes incurred for the reporting period.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any pending or to the best of its knowledge, any threatened legal proceedings. No director, officer or affiliate of the Company, or owner of record or of more than five percent (5%) of the securities of the Company, or any associate of any such director, officer or security holder is a party adverse to the Company or has a material interest adverse to the Company in reference to pending litigation.
ITEM 2. SALE OF UNREGISTERED SECURITIES
None for the period.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
During the reporting period, no matters were submitted to a vote of security holders.
ITEM 5. OTHER INFORMATION
- None -
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. | (i) | The following is a list of exhibits filed as part of this quarterly filing on Form 10QSB. | ||
Financial statements for the period ended September 30, 2003. | ||||
31.1 | ||||
31.2 | Section 302 Certification of Chief Financial Officer | |||
32.1 | Section 906 Certification of Chief Executive Officer | |||
32.2 | Section 906 Certification of Chief Financial Officer | |||
b. | Filings on Form 8-K - none - |
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SUPER ENERGY INVESTMENTS CORPORATION
Chen Zhiqing, President and Director
Date: November 13, 2003