UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 Or 15(D) Of The Securities Act Of 1934
For the quarterly period ended May 31, 2003
Commission file number: 0-26217
CHINA NETTV HOLDINGS INC.
(Exact name of small business issuer as specified in its charter)
Nevada 98-02031-70
(State or other jurisdiction of (IRS Employee Identification No.)
incorporation or organization)
Suite 950 - 789 West Pender Street, Vancouver, B.C. V6C 1H2
(Address of principal executive offices)
(604) 689-4407
(Issuer's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 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:
Common Stock, $0.001 par value 37,446,200
(Class) (Outstanding as of July 7, 2003)
CHINA NETTV HOLDINGS INC.
FORM 10-QSB
INDEX
Page
----
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheet of China NetTV Holdings Inc. and
Subsidiary at May 31, 2003 and November 30, 2002...................................3
Consolidated Statement of Operations
for the three and nine months ended May 31, 2003 and November 30, 2002
and for the Period September 15, 1998 (date of inception) to
May 31, 2003.......................................................................4
Consolidated Statement of Cash Flows for the nine months ended May 31,
2003 and 2002 and for the period September 15, 1998 (date of
inception)
to May 31, 2003....................................................................5
Statement of Changes in Stockholders' Equity
for the period September 15, 1998 (date of inception) to
May 31, 2003.......................................................................6
Notes to Financial Statements...........................................................7
Item 2. Management's Discussion and Analysis or Plan of Operation...............................10
Item 3. Controls and Procedures.................................................................13
Part II - OTHER INFORMATION
Item 5. Other Information.......................................................................13
Item 6. Exhibits and Reports on Form 8-K........................................................14
Signatures.......................................................................................15
2
Part I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
CHINA NETTV HOLDINGS, INC. AND SUBSIDIARY
(Development Stage Company)
INTERIM CONSOLIDATED BALANCE SHEETS
May 31, 2003 and November 30, 2002
----------------------------------
ASSETS May 31, August 31,
2003 2002
---- ----
Current Assets
Cash $ 1,264 $ 1,882
------------ -------------
Total current assets $ 1,264 $ 1,882
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable - related parties $ 82,769 $ 79,400
Accounts payable 60,861 45,372
------------ -------------
Total Current Liabilities 143,630 124,772
------------ -------------
STOCKHOLDERS' EQUITY (DEFICIENCY)
Common stock
200,000,000 shares authorized, at $0.001 par value;
37,446,200 shares issued and outstanding 37,446 37,446
Capital in excess of par value 1,364,802 1,364,802
Deficit accumulated during the development stage (1,544,614) (1,525,138)
------------ -------------
Total Stockholders' Equity (Deficiency) (142,366) (122,890)
------------ -------------
$ 1,264 $ 1,882
============ =============
The accompanying notes are an integral part of these financial statements.
3
CHINA NETTV HOLDINGS, INC. AND SUBSIDIARY
(Development Stage Company)
INTERIM CONSOLIDATED STATEMENT OF OPERATIONS
for the three and nine months ended May 31, 2003 and 2002
and the Period September 15, 1998 (Date of Inception) to May 31, 2003
---------------------------------------------------------------------
September 15,
Three months ended Nine months ended 1998 to
May 31, May 31, May 31,
2003 2002 2003 2002 2003
---- ---- ---- ---- ----
Revenues $ -- $ -- $ -- $ -- $ 1,448
Expenses
Administrative 3,301 15,036 19,476 77,582 266,062
------------ ------------- ------------ ------------- -------------
Net loss before other losses (3,301) (15,036) (19,476) (77,582) (264,614)
Loss on investment -- -- -- -- (1,280,000)
------------- ------------- ------------ ------------- --------------
Net loss $ (3,301) $ (15,036) $ (19,476) $ (77,582) $ (1,544,614)
============ ============= ============ ============= ==============
Net loss per common share
Basic $ (0.00) $ (0.00) $ (0.00) $ (0.00)
============ ============= ============ =============
Average outstanding shares
Basic 37,446,200 37,446,200 37,446,200 37,276,756
============ ============= ============ =============
The accompanying notes are an integral part of these financial statements.
4
CHINA NETTV HOLDINGS, INC. AND SUBSIDIARY
(Development Stage Company)
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
for the nine months ended May 31, 2003 and 2002
and the Period September 15, 1998 (Date of Inception) to May 31, 2003
---------------------------------------------------------------------
Nine months ended September 15, 1998
May 31 to May 31,
2003 2002 2003
---- ---- ----
Cash flows from operating activities
Net loss $ (19,476) $ (77,582) $(1,544,614)
Adjustments to reconcile net loss to net
cash provided by operating activities
Change in accounts payable 18,858 10,582 60,861
Capital contribution - expenses -- -- 9,000
Issuance of common stock for expenses -- 50,000 50,000
Loss in investment -- -- 1,280,000
------------ ------------ ------------
Net Decrease in Cash From Operations (618) (17,000) (144,753)
------------ ------------ ------------
Cash Flows from Investing Activity
Investment in joint venture -- -- (1,280,000)
------------ ------------ ------------
Cash Flows from Financing Activities
Proceeds from loan - related parties -- -- 82,769
Proceeds from issuance of common stock -- -- 1,343,248
------------ ------------ ------------
-- -- 1,426,017
------------ ------------ ------------
Net (decrease) increase in cash (618) (17,000) 1,264
Cash at beginning of period 1,882 17,992 --
------------ ------------ ------------
Cash at end of period $ 1,264 $ 992 $ 1,264
============ ============ ============
Schedule of non-cash flows from operating activities
Capital contributions
- expenses paid by officer $ -- $ -- $ 9,000
Issuance of 250,000 common shares for
consulting expense - at $0.20 -- 50,000 50,000
------------ ------------ ------------
$ -- $ 50,000 $ 59,000
============ ============ ============
The accompanying notes are an integral part of these financial statements.
5
CHINA NETTV HOLDINGS, INC. AND SUBSIDIARY
(Development Stage Company)
INTERIM STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the period September 15, 1998 (Date of Inception) to May 31, 2003
---------------------------------------------------------------------
Capital in
Common Stock Excess of Accumulated
Shares* Amount Par Value Deficit
------ ------ --------- -------
Balance, September 15, 1998
(date of inception) -- $ -- $ -- $ --
Issuance of common stock for cash
- at $0.0004 - February 5, 1999 15,000,000 15,000 (9,000) --
Issuance of common stock for cash
- at $0.0008 - February 7, 1999 18,750,000 18,750 (3,750) --
Issuance of common stock for cash
- at $0.04 - February 23, 1999 156,200 156 6,092 --
Capital contributions
- expenses paid by officers -- -- 4,500 --
Net operating loss for the year ended
August 31, 1999 -- -- -- (18,593)
------------ ------------ ------------ ------------
Balance, August 31, 1999 33,906,200 33,906 (2,158) (18,593)
Capital contributions
- expenses paid by officers -- -- 4,500 --
Net operating loss for the year ended
August 31, 2000 -- -- -- (78,995)
------------ ------------ ------------ ------------
Balance, August 31, 2000 33,906,200 33,906 2,342 (97,588)
Issuance of common stock for cash
- at $0.40 2,902,500 2,903 1,158,097 --
Net operating loss for the year
ended August 31, 2001 -- -- -- (68,153)
------------ ------------ ------------ ------------
Balance, August 31, 2001 36,808,700 36,809 1,160,439 (165,741)
Issuance of common stock for cash
- at $0.40 387,500 387 154,613 --
Issuance of common stock for
consulting fee - at $0.20 250,000 250 49,750 --
Net operating loss for the year ended
August 31, 2002 -- -- -- (1,359,397)
------------ ------------ ------------ ------------
Balance, August 31, 2002 37,446,200 37,446 1,364,802 (1,525,138)
Net operating loss for the nine months
ended May 31, 2003 -- -- -- (19,476)
------------ ------------ ------------ ------------
Balance, May 31, 2003 37,446,200 $ 37,446 $ 1,364,802 $(1,544,614)
============ ============ ============ ============
* The number of shares outstanding has been retroactively restated for the
effect of a forward stock split completed on December 17, 2001 on a basis of 5
for 2.
The accompanying notes are an integral part of these financial statements.
6
CHINA NETTV HOLDINGS, INC. AND SUBSIDIARY
(Development Stage Company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2003
------------
Note 1 Organization
------------
The Company was incorporated under the laws of the State of Nevada
on September 15, 1998 with the name "Vancouver's Finest Coffee
Company" with authorized common stock of 200,000,000 shares at
$0.001 par value. On August 30, 2000 the name was changed to
"China NetTV Holdings, Inc."
Since its inception the Company has completed Regulation D
offerings of 37,446,200 shares of its capital stock for
$1,343,248.
The Company is in the development stage.
Note 2 Summary of Significant Accounting Policies
------------------------------------------
Accounting Methods
------------------
The Company recognizes income and expenses based on the accrual
method of accounting.
Dividend Policy
---------------
The Company has not yet adopted a policy regarding payment of
dividends.
Income Taxes
------------
On May 31, 2003, the Company had a net operating loss carryforward
of $1,544,614. The tax benefit of approximately $463,384 from the
loss carry forward has been fully offset by a valuation reserve
because the use of the future tax benefit is doubtful since the
Company has no operations. The loss carryforward will expire in
2023.
Basic Net Income (Loss) Per Share
---------------------------------
Basic net income (loss) per share amounts are computed based on
the weighted average number of shares actually outstanding.
Cash and Cash Equivalents
-------------------------
The Company considers all highly liquid instruments purchased with
a maturity, at the time of purchase, of less than three months, to
be cash equivalents.
Principals of Consolidation
---------------------------
The consolidated financial statements shown in this report
includes the operating information of the parent and its wholly
owned subsidiary. All inter-company transactions have been
eliminated.
7
Note 2 Summary Of Significant Accounting Policies - (cont'd)
------------------------------------------
Financial Instruments
---------------------
The carrying amounts of financial instruments, including cash and
accounts payable, are considered by management to be their
estimated fair values.
Estimates and Assumptions
-------------------------
Management uses estimates and assumptions in preparing financial
statements in accordance with accounting principles generally
accepted in the United States of America. Those estimates and
assumptions affect the reported amounts of the assets and
liabilities, the disclosure of contingent assets and liabilities,
and the reported revenues and expenses. Actual results could vary
from the estimates that were assumed in preparing these financial
statements.
Other Recent Accounting Pronouncements
--------------------------------------
The Company does not expect that the adoption of other recent
accounting pronouncements to have any material impact on its
financial statements.
Note 3 Significant Transactions with Related Parties
---------------------------------------------
Officers and directors have acquired 40% of the common stock
issued and have made non interest bearing, demand, loans to the
Company of $82,769.
Note 4 Stock Option Plan
-----------------
The Company's board of directors approved a stock option plan for
the sale of 5,000,000 shares of the Company's common stock at
$0.40 per share. The stock option plan will expire in May 2005 or
the directors have retained the right to cancel the plan at any
time before May 2005 and can make awards to the officers and
directors, employees, and others as designated by the directors.
As at May 31, 2003, there are 5,000,000 stock options outstanding.
Note 5 Going Concern
-------------
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. The Company
does not have sufficient working capital for its planned activity,
and to service its debt, which raises substantial doubt about its
ability to continue as a going concern.
Continuation of the Company as a going concern is dependent upon
obtaining additional working capital and the management of the
Company has developed a strategy, which believes will accomplish
this objective through additional equity funding and long term
loans which will enable the Company to continue operations for the
coming year.
8
Note 6 Subsequent Event
----------------
Subsequent to May 31, 2003, the Company entered into an
agreement to acquire 100% of the shares of Honglu Investment
Holdings, Inc., ("Honglu"), a Chinese mining company with mining
and/or prospecting permits and licenses in Tibet. The Company will
issue 97,700,000 shares for all the outstanding shares of Honglu.
The Company will pay a finders fee of 6,839,000 shares of the
Company in respect to the acquisiti
9
ITEM 2. PLAN OF OPERATIONS
When used in this Form 10-QSB, the words "expects," "anticipates," "estimates"
and similar expressions are intended to identify forward-looking statements.
Such statements are subject to risks and uncertainties, including those set
forth below under "Risks and Uncertainties," that could cause actual results to
differ materially from those projected. These forward-looking statements speak
only as of the date hereof. The Company expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in the Company's expectations
with regard thereto or any change in events, conditions or circumstances on
which any statement is based. This discussion should be read together with the
financial statements and other financial information included in this Form
10-QSB.
Plan of Operations
- ------------------
The Company has been using proceeds from private placements to fund the
Company's joint venture with Chengdu Qianfeng Digital AV Equipment Co. Ltd., in
the production of trial digital set-top boxes for Nanning TV in Guangxi Province
and to fund other opportunities relating to the growing demand for digital data
transmission technology and solutions for the television broadcasting and cable
industries in China.
As of May 31, 2003 the Company had paid $1,280,000 of the $1,500,000 due to
complete the purchase of the initial interest in the joint venture, however, we
have been unable to complete the terms of the agreement and, therefore,
management has elected to expense the initial payment from the company's books.
Discussions with QianFeng has led management to believe there will be no further
liability and if and when we can raise the necessary funding that we can pick
the contract up again.
The Company has had no revenues from operations since inception. The operations
of the Company have been financed through private placements and loans.
Results of Operations
- ---------------------
The Company has had no operations during this reporting period. During the
quarterly period covered by this report, the Company received no revenue and
incurred expenses of $3,301 stemming from general, administrative and tax
expenditures.
Liquidity
- ---------
As of May 31, 2003 the Company had total current assets of $1,264 and total
liabilities of $143,630.
RISKS AND UNCERTAINTIES
The Company has sought to identify what it believes to be the most significant
risks to its business, but cannot predict whether or to what extent any of such
risks may be realized nor can there be any assurances that the Company has
identified all possible risks that might arise. Investors should carefully
consider all of such risk factors before making an investment decision with
respect to the Company's stock.
10
NEGATIVE WORKING CAPITAL
The Company is in a serious negative working capital situation.
As of May 31, 2003 the Company had paid $1,280,000 of the $1,500,000 due to
complete the purchase of the initial interest in the joint venture, however, we
have been unable to complete the terms of the agreement and, therefore,
management has elected to expense the initial payment from the company's bbooks.
Discussions with QianFeng has led management to believe there will be no further
liability and if and when we can raise the necessary funding that we can pick
the contract up again.
LIMITED OPERATING HISTORY; ANTICIPATED LOSSES; UNCERTAINLY OF FUTURE RESULTS.
China NetTV Holdings Inc. has only a limited operating history upon which an
evaluation of the Company and its prospects can be based. The Company's
prospects must be evaluated with a view to the risks encountered by a company in
an early stage of development, particularly in light of the uncertainties
relating to the new and evolving distribution methods with which the Company
intends to operate and the acceptance of the Company's business model. To the
extent that such expenses are not subsequently followed by commensurate
revenues, the Company's business, results of operations and financial condition
will be materially adversely affected. There can be no assurance that the
Company will be able to generate sufficient revenues from the sale of their
products. If cash generated by operations is insufficient to satisfy the
Company's liquidity requirements, the Company may be required to sell additional
equity or debt securities. The sale of additional equity or convertible debt
securities would result in additional dilution to the Company's stockholders.
POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS.
The Company's quarterly operating results may fluctuate significantly in the
future as a result of a variety of factors, most of which are outside the
Company's control, including: the level of use of the Digital Audio/Video
equipment; the demand for high-tech goods; seasonal trends in the purchases of
electronics and advertising placements; the amount and timing of capital
expenditures and other costs relating to the expansion of the Company's
manufacturing operations; the introduction of new products and services by the
Company or its competitors; price competition or pricing changes in the
industry; technical difficulties or product development difficulties; general
economic conditions, and economic conditions specific to Digital Audio/Video
equipment. The Company's quarterly results may also be significantly impacted by
the impact of the accounting treatment of acquisitions, financing transactions
or other matters. Particularly at the Company's early stage of development, such
accounting treatment can have a material impact on the results for any quarter.
Due to the foregoing factors, among others, it is likely that the Company's
operating results will fall below the expectations of the Company or investors
in some future quarter.
LIMITED PUBLIC MARKET, POSSIBLE VOLATILITY OF SHARE PRICE.
The Company's Common Stock is currently quoted on the NASD OTC Bulletin Board
under the ticker symbol CNHD. As of May 31, 2003, there were approximately
37,446,200 shares of Common Stock outstanding. There can be no assurance that a
trading market will be sustained in the future. Factors such as, but not limited
to, technological innovations, new products, acquisitions or strategic alliances
entered into by the Company or its competitors, failure to meet security
analysts' expectations, government regulatory action, patent or proprietary
rights developments, and market conditions for technology stocks in general
could have a material effect on the volatility of the Company's stock price.
11
MANAGEMENT OF GROWTH
The Company, through its subsidiaries, expects to experience significant growth
in the number of employees and the scope of its operations. In particular, the
Company intends to hire additional engineering, sales, marketing, and
administrative personnel. Additionally, acquisitions could result in an increase
in employee headcount and business activity. Such activities could result in
increased responsibilities for management. The Company believes that is ability
to increase its customer support capability and to attract, train, and retain
qualified technical, sales, marketing, and management personnel, will be a
critical factor to its future success. In particular, the availability of
qualified sales engineering and management personnel is quite limited, and
competition among companies to attract and retain such personnel is intense.
During strong business cycles, the Company expects to experience continued
difficulty in filling its needs for qualified sales, engineering, and other
personnel.
The Company's future success will be highly dependent upon its ability to
successfully manage the expansion of its operations. The Company's ability to
manage and support its growth effectively will be substantially dependent on its
ability to implement adequate improvements to financial and management controls,
reporting and order entry systems, and other procedures and hire sufficient
numbers of financial, accounting, administrative, and management personnel. The
Company's expansion and the resulting growth in the number of its employees has
resulted in increased responsibility for both existing and new management
personnel. The Company is in the process of establishing and upgrading its
financial accounting and procedures. There can be no assurance that the Company
will be able to identify, attract, and retain experienced accounting and
financial personnel. The Company's future operating results will depend on the
ability of its management and other key employees to implement and improve its
systems for operations, financial control, and information management, and to
recruit, train, and manage its employee base. There can be no assurance that the
Company will be able to achieve or manage any such growth successfully or to
implement and maintain adequate financial and management controls and
procedures, and any inability to do so would have a material adverse effect on
the Company's business, results of operations, and financial condition.
The Company's future success depends upon its ability to address potential
market opportunities while managing its expenses to match its ability to finance
its operations. This need to manage its expenses will place a significant strain
on the Company's management and operational resources. If the Company is unable
to manage its expenses effectively, the Company's business, results of
operations, and financial condition will be materially adversely affected.
RISKS ASSOCIATED WITH ACQUISITIONS.
As part of its business strategy, the Company expects to acquire assets and
businesses relating to or complementary to its operations. These acquisitions by
the Company will involve risks commonly encountered in acquisitions of
companies. These risks include, among other things, the following: the Company
may be exposed to unknown liabilities of the acquired companies; the Company may
incur acquisition costs and expenses higher than it anticipated; fluctuations in
the Company's quarterly and annual operating results may occur due to the costs
and expenses of acquiring and integrating new businesses or technologies; the
Company may experience difficulties and expenses in assimilating the operations
and personnel of the acquired businesses; the Company's ongoing business may be
disrupted and its management's time and attention diverted; the Company may be
unable to integrate successfully.
POLITICAL RISKS
The market in China is monitored by the government, which could impose taxes or
restrictions at any time which would make operations unprofitable and infeasible
and cause a write-off of capital investment in Chinese manufacturing
opportunities.
12
A number of factors, beyond the Company's control and the effect of which cannot
be accurately predicted may affect the marketing of the Company's digital
set-top boxes. These factors include political policy on foreign ownership,
political policy to open the doors to foreign investors, and political policy on
technology exports.
RISKS ASSOCIATED WITH INTERNATIONAL MARKETS
The future success of the Company will depend in part on its ability to generate
sales within China. There can be no assurance, however, that the Company will be
successful in generating sales of its products. In addition, these will be
subject to a number of risks, including: foreign currency risk; the risks that
agreements may be difficult or impossible to enforce and receivables difficult
to collect through a foreign country's legal system; foreign customers may have
longer payment cycles; or foreign countries could impose withholding taxes or
otherwise tax the Company's foreign income, impose tariffs, embargoes, or
exchange controls, or adopt other restrictions on foreign trade. In addition,
the laws of certain countries do not protect the Company's offerings and
intellectual property rights to the same extent as the laws of the United
States. The Company has taken steps to mitigate these risks through joint
ventures with domestic Chinese companies, but there can be no assurance in the
adequacy of these protection measures.
ITEM 3. CONTROLS AND PROCEDURES
The registrant's Principal executive officers and principal financial officer,
based on their evaluation of the registrant's disclosure controls and procedures
(as defined in Rules 13a-14 (c) of the Securities Exchange Act of 1934) as of
May 31, 2003 have concluded that the registrants' disclosure controls and
procedures are adequate and effective to ensure that material information
relating to the registrants and their consolidated subsidiaries is recorded,
processed, summarized and reported within the time periods specified by the SEC'
s rules and forms, particularly during the period in which this quarterly report
has been prepared.
The registrants' principal executive officers and principal financial officer
have concluded that there were no significant changes in the registrants'
internal controls or in other factors that could significantly affect these
controls subsequent to May 31, 2003 the date of their most recent evaluation of
such controls, and that there was no significant deficiencies or material
weaknesses in the registrant's internal controls.
Part II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On July 9, 2003, the Company announced it had signed an agreement to acquire
100% of the shares of Honglu Investment Holdings, Inc., a Chinese mining
Company. Pursuant to the Agreement, Wang Zhi, Anthony Garson, Ronald Zie and
Yang Jie have been appointed to the Board of Directors of the Company effective
July 25, 2003. Maurice Tsakok continues as a director. Ernest Cheung and Marc
Hung have resigned as directors and officers of the Company and Ronald Xie has
been appointed President. The Company will file a current report on Form 8-K
disclosing the details of the information in a timely fashion.
13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Articles of Incorporation of the Registrant (1)
3.2 By-laws of the Registrant (1)
99.1 Section 906 Certification of CEO
99.2 Section 906 Certification of CFO
-------------------------------------------
(1) Included as an Exhibit to China NetTV Holdings Inc.'s
registration statement on Form 10-SB filed on May 28, 1999
(b) Reports on Form 8-K filed during the three months ended May 31, 2003.
There have been no current reports on Form 8-K filed by the Registrant
for the three months ended May 31, 2003.
14
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.
Date: July 11, 2003 China NetTV Holdings Inc.
/s/ Ronald Xie
--------------------------------------------
Ronald Xie
President
15
CERTIFICATIONS
I, Ronald Xie, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of China NetTV
Holdings, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
(a) Designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
date"); and
(c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
registrant's board of directors:
(a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls, and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date : July 11, 2003
/s/ Ronald Xie
- ------------------------------------
Ronald Xie
President
16