U.S. 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, 2001.
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
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(Name of small business in its charter)
Nevada 88-0404114
(State or other Jurisdiction of Incorporation) (IRS Employer Id. No.)
Unit 10, 8980 Fraserwood Court
Burnaby, British Columbia
Canada V5J 5H7
(Address of Principal Office)
Issuer's telephone number: (604) 438-3598
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, 2001, 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 registrant for the three-month periods
ended September 30, 2001 and September 30, 2000, 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, Canada, V7Y 1C6
- --------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
--------------------------------------
Board of Directors and Stockholders
Digital Village World Technologies, Inc. (formerly Body Concepts, Corp.)
(A Nevada Corporation)
(A Development Stage Company)
We have reviewed the accompanying Consolidated Balance Sheet of Digital Village
World Technologies, Inc. (formerly Body Concepts, Corp.) (A Nevada Corporation)
(A Development Stage Company) as of September 30, 2001, and the Statements of
Operations, Cash Flows and Changes in Stockholders' Equity for the nine month
period then ended. These financial statements are the responsibility of the
Company's management.
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.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with United States generally accepted accounting principles (GAAP).
The September 30, 2000 financial statements of Digital Village World
Technologies, Inc. were reviewed by other accountants whose report dated
November 15, 2000, stated that they were not aware of any material modifications
that should be made to those statements in order for them to be in conformity
with generally accepted accounting principles.
/s/Moen and Company
Chartered Accountants
Vancouver, British Columbia, Canada
November 9, 2001
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(FORMERLY BODY CONCEPTS, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Consolidated Balance Sheets
September 30, 2001 and September 30, 2000
(In US Dollars)
(Unaudited)
2001 2000
---- ----
Assets
Current Assets
Cash and cash equivalents (note 3) $ 10,899 $ 43,633
Accounts receivable (note 4) 4,354 -
Prepaid expenses and deposit 5,107 -
------------ ------------
20,360 43,633
------------ ------------
Fixed Assets, at cost (note 2) 83,028 -
Less: accumulated depreciation (19,371) -
------------ ------------
63,657 -
------------ ------------
Goodwill, at cost (note 5) 48,070 -
------------ ------------
$ 132,087 $ 43,633
============ ============
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued (note 6) $ 50,275 $ 550
Current portion of loan (note 8) 6,811
Due to related parties (note 7) 194,481 -
------------ ------------
251,567 550
------------ ------------
Long-term Liabilities
Loan payable (note 8) 5,108 -
------------ ------------
Stockholders' Equity
Capital stock (note 10)
Authorized
62,500,000 common shares at $0.0004 par value
Issued
12,906,000 common shares (2000 - 4,375,000
shares - post split) - par value 5,162 1,750
Paid in capital in excess of par
value of stock 116,734 75,750
------------ ------------
121,896 77,500
Deficit, accumulated during the
development stage (246,281) (34,417)
Cumulative translation (note 2) (203) -
------------ ------------
(124,588) 43,083
------------ ------------
$ 132,087 $ 43,633
============ ============
Approved on behalf of the board:
/s/Yu Wen Cheng , Director
- ---------------------------------------------
/s/Peng Chen , Director
- ---------------------------------------------
See Accompanying Notes and Independent Accountants' Review Report
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(FORMERLY BODY CONCEPTS, INC.)
(A Nevada Corporation)
(A Development Stage Company)
Consolidated Statement of Operations
September 30, 2001 and September 30, 2000
(In US Dollars)
(Unaudited)
Cumulative From
Inception Date Nine Months
of Sep. 15, 1998 Quarter Ended Ended
to Sep. 30, September 30, September 30,
------------------------- -------------------------
2001 2001 2000 2001 2000
-------------- ------------ ------------ ------------ ------------
Revenue
Interest and other income $ 7,791 $ 171 $ 598 $ 3,937 $ 2,106
----------- ----------- ----------- ----------- -----------
Administration Costs
Advertising 712 - - - -
Bank charges and interest 1,940 625 67 1,435 202
Consulting 11,982 4,655 - 5,978 20,000
Depreciation 19,371 6,758 - 18,865 -
License, dues and insurance 1,885 900 - 900 -
Office costs 5,574 1,151 - 5,256 -
Rentals and leases 20,872 4,240 - 18,651 300
Professional fees 55,647 23,234 - 47,710 2,550
Salary and benefits 48,627 8,425 - 44,680 -
Stock-based compensation 20,000 - - 20,000 -
Telephone and utilities 16,230 1,878 - 15,697 -
Transfer agent and filing fees 23,756 16,509 - 22,420 200
Travel and promotion 27,476 3,665 - 25,537 -
----------- ----------- ----------- ----------- -----------
254,072 72,040 67 227,129 23,252
----------- ----------- ----------- ----------- -----------
Net profit (loss) for the period $ (246,281) $ (71,869) $ 531 $ (223,192) $ (21,146)
=========== =========== =========== =========== ===========
Basic and diluted profit (loss) per share $ (0.01) $ (0.00) $ (0.02) $ (0.00)
=========== =========== =========== ===========
Weighted average number of
common shares used to
compute basic and fully
diluted loss per share 12,906,000 4,375,000 12,893,335 4,375,000
=========== =========== =========== ===========
See Accompanying Notes and Independent Accountants' Review Report
Page
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Consolidated Statements of Retained Earnings (Deficit)
(In US Dollars)
(Unaudited)
Cumulative From
Inception Date Nine Months
of Sep. 15, 1998 Quarter Ended Ended
to Sep. 30, September 30, September 30,
------------------------- -------------------------
2001 2001 2000 2001 2000
-------------- ------------ ------------ ------------ ------------
Retained earnings (deficit),
beginning of period $ (174,412) $ (34,948) $ (23,089) $ (13,271)
Net profit (loss) for the period $ (246,281) (71,869) 531 (223,192) (21,146)
----------- ----------- ----------- ----------- -----------
Retained earnings (deficit),
end of period $ (246,281) $ (246,281) $ (34,417) $ (246,281) $ (34,417)
=========== =========== =========== =========== ===========
See Accompanying Notes and Independent Accountants' Review Report
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Consolidated Statements of Cash Flows
(In US Dollars)
(Unaudited)
Cumulative From
Inception Date Nine Months
of Sep. 15, 1998 Quarter Ended Ended
to Sep. 30, September 30, September 30,
------------------------- -------------------------
2001 2001 2000 2001 2000
-------------- ------------ ------------ ------------ ------------
Cash derived from (used for)
Operating activities
Net profit (loss) for the period $ (246,281) $ (71,869) $ 531 $ (223,192) $ (21,146)
Items not requiring use of cash
Depreciation 19,371 6,758 - 18,865 -
Cumulative translation (203) - - 265 -
Changes in non-cash
working capital items
Accounts receivable (4,354) 7,352 - 5,966 -
Prepaid expenses and deposit (5,107) - - (5,107) -
Accounts payable and accrued 50,275 41,986 - 30,596 -
----------- ----------- ----------- ----------- -----------
(186,299) (15,773) 531 (172,607) (21,146)
----------- ----------- ----------- ----------- -----------
Financing activities
Issuance of shares 121,896 - - 41,000 -
Loan payable 11,919 (1,703) - (5,109) -
Due to related parties 194,481 19,547 - 50,058 -
----------- ----------- ----------- ----------- -----------
328,296 17,844 - 85,949 -
----------- ----------- ----------- ----------- -----------
Investing activities
Capital assets purchased (83,028) - - - -
Goodwill (48,070) - - - -
----------- ----------- ----------- ----------- -----------
(131,098) - - - -
----------- ----------- ----------- ----------- -----------
Cash and cash equivalents, increase
(decrease) during the period 10,899 2,071 531 (86,658) (21,146)
Cash and cash equivalents,
beginning of period 8,828 43,102 97,557 64,779
----------- ----------- ----------- ----------- -----------
Cash and cash equivalents,
end of period $ 10,899 $ 10,899 $ 43,633 $ 10,899 $ 43,633
=========== =========== =========== =========== ===========
See Accompanying Notes and Independent Accountants' Review Report
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
From Date of Inception on September 15, 1998 to September 30, 2001
(In U.S. Dollars)
(Unaudited)
Deficit Accum-
Number of Additional Total ulated During Total
Common par Paid-in Capital The Develop- Cumulative Stockholders'
Shares Value Capital Stock ment Stage Translation 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 nine months
ended September 30, 2001 (223,192) (223,192)
Cumulative translation 265 265
------------------------------------------------------------------------------------------
Balance, September 30, 2001 12,906,000 $5,162 $116,734 $121,896 $(246,281) $ (203) $ (124,588)
=========================================================================================
See Accompanying Notes and Independent Accountants' Review Report
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2001
(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.
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.
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 will be reported only 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
==========
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2001
(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.
The historical information of Digital Village World Technologies, Inc.
that is the basis for the pro forma information at December 18, 2000
is as follows:
Summary Balance Sheet
Assets
Cash $ 44,171
Advances to related company 20,000
----------
$ 64,171
==========
Liabilities
Accounts payable 1,871
----------
Stockholders' equity
Capital stock - par value 1,750
- additional paid-in capital 75,750
----------
77,500
Deficit (15,200)
----------
62,300
----------
$ 64,171
==========
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 subsidiary, Digital
Village World Technologies (Canada) Inc. 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".
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2001
(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 contacts 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.
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2001
(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 at September 30, 2001 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 - 20% per annum on the declining balance basis
Vehicles - 30% per annum on the declining balance basis
Computer equipment - 30% per annum on the declining balance basis
As at September 30, 2001, the fixed assets and accumulated
depreciation are as follows:
At Cost Accumulated Net Book
(12/18/00) Depreciation Value
---------- ------------ -----
Office equipment $ 5,430 $ 831 $ 4,599
Vehicles 28,350 7,220 21,130
Computer equipment 49,248 11,320 37,928
--------- --------- ---------
$ 83,028 $ 19,371 $ 63,657
========= ========= =========
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.
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2001
(In U.S. Dollars)
(Unaudited)
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Foreign currency translation
The functional currency of the parent Company Digital Village World
Technologies, Inc. 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.
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,
--------------------------------
2001 2000
--------------- ---------------
Beginning balance $ (468) $ -
Change during the period 265 -
--------------- ---------------
Ending balance $ (203) $ -
=============== ===============
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2001
(In U.S. Dollars)
(Unaudited)
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
The effect of exchange rate changes on cash balances forms part of the
reconciliation of change 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. During the current year, the
Company performed a review of its revenue recognition policies and
determined that it is in compliance with SAB 101.
Web Site Development Expenses
Web site development expenses relate to the development of new online
services and consist of employee compensation, as well as costs for
content, facilities and equipment. The consensus in the Financial
Accounting Standards Board Emerging Issues Task Force (EITF) Issue No.
00-2, Accounting for Web Site Development Costs, requires that certain
costs to develop Web sites be capitalized (and amortized) or expensed,
depending on the nature of the costs.
Shipping and Handing Fees and Costs
In September 2000, the Financial Accounting Standards Board Emerging
Issues Task Force (EITF) reached a final consensus on EITF Issue No.
00-10, Accounting for Shipping and Handling Fees and Costs. This
consensus requires that all amounts billed to a customer in a sale
transaction related to shipping and handling, be classified as
revenue. With respect to the classification of costs related to
shipping and handling incurred by the seller, the EITF determined that
the classification of such costs is an accounting policy decision that
should be disclosed. The Company will adopt the consensus in the Issue
in fiscal 2001.
Note 3. CASH AND CASH EQUIVALENTS - $10,899
The total for cash and cash equivalents as at September 30, 2001, is
made up as follows:
Cash in bank current accounts (indebtedness) $ (693)
GST refund cheques undeposited 9,685
Cash in lawyer's trust account 1,907
----------
Total $ 10,899
==========
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2001
(In U.S. Dollars)
(Unaudited)
Note 4. ACCOUNTS RECEIVABLE - $4,354
The accounts receivable balance of $4,354 as at September 30, 2001 are
Canadian Goods and Services Taxes refundable
Note 5. GOODWILL - $48,070
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 that will be amortized over ten years,
commencing after revenue commences from proposed operations.
Note 6. ACCOUNTS PAYABLE - $50,275
Details of the total of accounts payable and accrued as at September
30, 2001, are as follows:
Frascona, Joiner, Goodman and Greenstein, P.C. $ 2,323
Loeb&Loeb LLP 4,670
Moen and Company 18,840
Moffitt & Company 525
Payroll and other payables 7,408
Resident Agents of Nevada, Inc. 197
RR Donnelley Receivables, Inc. 15,995
Signature Stock Transfer, Inc. 317
---------
Total $ 50,275
=========
Note 7. RELATED PARTY TRANSACTIONS - $194,481
The amount of $144,423 is due to a related party, Tianjin Teda Yu
Cheng Group. The amount of $50,058 is due to Directors of the Company
as at September 30, 2001 for loans that they have advanced to the
Company. These amounts are unsecured, non interest bearing, with no
specific terms of repayment.
Note 8. LOAN PAYABLE - $11,919
As at January 1, 2000, Mr. Richard Wang, Director and President of the
Company transferred a loan to DVC which was signed by him on June 21,
1999 with Ford Credit Canada Limited for financing of CAD$40,869 for
purchase of a new vehicle with the interest rate of 0.10% per annum
for a total of 48 payments with each payment of CAD$851.44 principal
and interest. This vehicle is owned by the Company. The first payment
commenced on July 21, 1999 and the last payment is due on June 21,
2003. This loan is guaranteed by Mr. Richard Wang. As at September 30,
2001, the principal balance is as follows:
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2001
(In U.S. Dollars)
(Unaudited)
Note 8. LOAN PAYABLE - $11,919 (cont'd)
Initial loan $ 27,246
Repayment to September 30, 2001 15,327
-----------
Balance, September 30, 2001 11,919
Current portion of loan 6,811
-----------
Long term loan at September 30, 2001 $ 5,108
===========
Note 9. LEASE OBLIGATIONS
a) Vehicle Lease
On January 19, 2000, DVC entered into a 36 month lease with
Lansdowne Dodge City Ltd. for a vehicle to be used by the
Company. Lease payments are expensed as they are incurred. Lease
obligations are as follows:
2001 CAD$ 2,000
2002 CAD$ 8,000
2003 CAD$ 667
b) Lease of Premises
DVC has lease obligations for office premises for the next 12
months for CAD$25,369.
Note 10. CAPITAL STOCK
a) Authorized: 62,500,000 common shares with a par value of $0.0004
per share.
b) Issued and outstanding common shares as at September 30, 2001,
are as follows:
Additional
Issued Number of Par Paid-in
Date Shares Value Capital Total
---------- ---------- ---------- ---------- ----------
private placement 15/09/1998 1,000,000 $ 1,000 $ 1,500 $ 2,500
private placement 31/12/1998 750,000 750 74,250 75,000
---------- ---------- ---------- ----------
Balance 31/12/1998 1,750,000 1,750 75,750 77,500
---------- ---------- ---------- ----------
Balance 31/12/1999 1,750,000 1,750 75,750 77,500
---------- ---------- ---------- ----------
Balance, before
forward split 19/05/2000 1,750,000 1,750 75,750 77,500
========== ========== ========== ==========
2.5:1 forward split 19/05/2000 4,375,000 1,750 75,750 77,500
Share exchange 18/12/2000 8,490,000 3,396 - 3,396
---------- ---------- ---------- ----------
Balance 31/12/2000 12,865,000 5,146 75,750 80,896
issued for cash 07/02/2001 10,000 4 9,996 10,000
issued for compensation 30/03/2001 20,000 8 19,992 20,000
issued for cash 06/04/2001 11,000 4 10,996 11,000
---------- ---------- ---------- ----------
Balance 30/09/2001 12,906,000 $ 5,162 $ 116,734 $ 121,896
========== ========== ========== ==========
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2001
(In U.S. Dollars)
(Unaudited)
Note 11. INCOME TAXES
a) The most recent Federal Income Tax filing for the Company for the
US was for the year ended December 31, 2000, disclosing no income
taxes payable to the US Internal Revenue Service.
b) There is a loss of $246,281 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.
Note 12. FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and cash
equivalents, accounts receivable, prepaid expenses and deposit,
accounts payable and accrued, current portion of loan, due to related
parties and long-term loan payable. 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 statements approximates their carrying values.
Note 13. PENSION AND EMPLOYMENT LIABILITIES
The Company does not have liabilities as at September 30, 2001, for
pension, post-employment benefits or post-retirement benefits. The
Company does not have a pension plan.
Note 14. NEW BUSINESS - PROFIT SHARING AGREEMENT
By agreement for reference dated May 1, 2000 and as amended on May 31,
2001, Digital Village World Technologies Inc, subsequently renamed
Digital Village World Technologies (Canada) Inc., ("DVC") entered into
an agreement with TianJin TEDA Yu Cheng Group Co Ltd., a wholly owned
subsidiary of the People's Daily Newspaper Group in China with its
principal place of business in Tianjin, the People's Republic of
cChina.("Yu Cheng").
(a) Proposed New Business Operations.
(i) Yu Cheng has formed a new domestic Chinese company called
Yuxun Digital Hi-Tech Co Ltd. ("Yuxun") which is a local
Internet Service Provider (ISP) in the Tianjin region;
(ii) Yuxun has agreed to form a domestic joint venture with
Tianjin Chuang Xian Information Development Co Ltd
("Chuang Xian") that will assume Yuxun's ISP business and
Chuang Xian's IT services to form a new business (New
Business);
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2001
(In U.S. Dollars)
(Unaudited)
Note 14. NEW BUSINESS - PROFIT SHARING AGREEMENT (cont'd)
(iii) The New Business requires working capital; Yu Cheng is the
controlling shareholder of DVC and as such wishes to
advance the business of DVC in China by having DVC provide
overall management for the New Business and to raise
working capital for the New Business in accordance with
this agreement.
(b) Management of New Business / Working Capital
(i) YU Cheung hereby appoints DVC to be its manager to manage
the affairs of the New Business for a term of 25 years,
unless terminated earlier as provided herein, provided
that (ii)
(ii) DVC assumes the responsibility for raising all working
capital requirements of the New Business.
(c) Profit Sharing
(i) Yu Cheung hereby agrees that 80% of the net profits of the
New Business (Profit Allocation) will be earned by DVC
provided DVC raises the required working capital, as
hereinafter defined, and provides the senior management,
as hereinafter defined, for the New Business.)
(ii) Net Profits will be defined according to GAAP as
determined by the auditor of the New Business, approved by
DVC.
(iii) The parties agree that semi-annually Net Profits will be
determined and 20% thereof, or such other amount agreed to
by the parties, shall be retained by the New Business as
working capital and that the balance distributed to the
parties on a 80/20 basis, 80% for DVC and 20% for Yu
Cheung, respectively, at each parties option. Either party
may choose to leave their portion of the Net Profits in
the New Business as addition to a loan account owed to
that party by the New Business.
(d) Management
(i) DVC will form a new Chinese firm, a wholly owned foreign
enterprise (WOFE) which will provide no fewer than two
senior executives, at DVC's cost, to provide on-going
executive management for the New Business.
(ii) Yu Cheng agrees that DVC may appoint 2 out of 5 persons to
be directors of the New Business.
(e) Conversion to Equity
The parties acknowledge that it is their intention to treat
DVC's Profit Allocation as a substitute to owning 80% of the
equity of the New Business and therefore as and when the rules
of China permit DVC to own, through the WOFE, shares in the New
Business, it is agreed that the parties will take such steps as
are necessary to have shares issued to the WOFE and upon such
event occurring the Profit Allocation will be adjusted, to
ensure that the underlying 80/20 arrangement is adhered to.
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2001
(In U.S. Dollars)
(Unaudited)
Note 14. NEW BUSINESS - PROFIT SHARING AGREEMENT (cont'd)
(f) Capital
(i) DVC, through the WOFE, will provide capital of not less
than $500,000 US contributed over 12 months or as
otherwise agreed to by the parties hereto.
(ii) In the event that the Capital is not raised within the
said 12 months, the Profit Allocation shall be adjusted
based on the percentage actually raised of the $500,000
US.
(iii) Yu Cheung will assist the WOFE to have all capital
contributions registered as loans to the New Business, in
order to ensure that when the New Business is able, that
DVC will be able to repatriate the Capital out of China
should DVC so elect.
(g) Annual Budget
The parties agree that they will on an annual basis agree upon
an annual budget, prepared in accordance with United States GAPP
and that unless otherwise agreed, the New Business will be
managed in accordance with the annually agreed upon budget.
(h) Assignment
The Parties agree that DVC may assign this agreement to any 3rd
party provided that any assignee agrees to be bound by the terms
of this agreement.
(i) Termination
(i) This Agreement shall terminate and be of no further force
or effect if DVC fails to meet any material obligation of
this Agreement, or DVC files a voluntary petition in
bankruptcy, or an involuntary petition in bankruptcy is
filed against DVC , or DVC is liquidated or its business
transferred to a receiver, or DVC makes a general
assignment of all its assets on behalf of creditors.
(ii) Upon the occurrence of any event as set out in i(i),
above, Yu Cheng shall send a written notice to DVC stating
the nature of the breach. If the breach is curable DVC
shall have thirty days from the date of the notice to cure
the breach.
(j) Notice
Notices as to disputes or termination to be given under this
Agreement shall be signed by the party giving such notice and
mailed by certified or registered mail, addressed to the party
to be notified at its then current business address as set forth
at the beginning of this Agreement or as subsequently changed by
giving notice. Notice as to address changes, pricing changes,
warranty changes and other matters relating to policy and
business may by given to such addresses, by facsimile
transmission, telex, telegram or first class mail. Notices by
mail shall be deemed given three days after mailing.
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2001
(In U.S. Dollars)
(Unaudited)
Note 14. NEW BUSINESS - PROFIT SHARING AGREEMENT (cont'd)
(k) Settlement of disputes and Governing Law
(i) In the event a dispute arises in connection with the
interpretation or implementation of this Agreement, the
parties to the dispute shall attempt in the first instance
to resolve such dispute through amicable consultations. If
the dispute cannot be resolved in this manner within
thirty (30) days after first conferring, then any or all
parties to the dispute may refer the dispute to
arbitration by the Beijing International Arbitration
Committee ("Committee"). The number of arbitrators shall
be three. The claimant(s) in the dispute shall appoint one
arbitrator within thirty (30) days of filing notice of the
arbitration, and the respondent(s) in the dispute shall
appoint one arbitrator within thirty (30) days thereafter.
If the respondent fails to so appoint an arbitrator, the
Arbitration Centre shall appoint the second arbitrator.
The two arbitrators thus appointed shall choose the third
arbitrator, and if they fail to do so within thirty (30)
days after the appointment of the second arbitrator, the
third arbitrator shall be appointed by the Committee. The
arbitration proceedings shall be conducted in the English
language.
(ii) Any award of the arbitrators shall be final and binding on
the parties. The costs of arbitration shall be borne by
the losing party, unless the arbitrators determine that
this would be inequitable. The parties agree and recognize
that any award of the arbitrators shall be recognizable
and enforceable in any court having jurisdiction over the
party against whom the award was rendered, and also
wherever assets of such party are located.
(iii) The legal relations between the parties under this
contract shall be interpreted in accordance with the
substantive laws of China. Any disputes between the
parties concerning their legal obligations arising under
this contract which are submitted to arbitration pursuant
to this clause shall be decided pursuant to the
substantive laws of China.
(l) Non Competition
The parties agree that during the currency of this agreement
that they will not, directly or indirectly, in any manner
whatsoever, be engaged in any business competitive to the
business of New Business or advise or be concerned with or
interested or lend money to/or guaranty the debts or obligations
of a competitive business.
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2001
(In U.S. Dollars)
(Unaudited)
Note 15. CONSULTING AGREEMENT - BRIAN ROBERTS
By agreement dated February 1, 2000, in accordance to the law of
British Columbia, Canada, Digital Village World Technologies Inc.,
subsequently renamed Digital Village World Technologies (Canada) Inc.,
entered into a Consulting Agreement with Brian Roberts ("Roberts")
whereby he would assist the Company in completion of its Business Plan
and set up its administrative systems, on a month to month basis.
Either party may terminate this agreement, with or without cause, upon
thirty days notice to the other party.
Terms and Conditions of the agreement:
(a) Remuneration
(i) The Company agrees to issue 250,000 fully paid common
shares of DVC at par value, for all services to be
performed by Roberts under this agreement
(ii) Roberts agrees to enter a pooling agreement at the time
the shares are issued wherein he agrees that he will not
sell, transfer or otherwise dispose of any of the Shares
before 18 months has elapsed from the date the Shares,
directly or indirectly, become publicly traded.
(b) Expenses
In addition to the Shares, in (a), above, DVC shall reimburse
Roberts, for all reasonable and necessary business expenses
incurred by him in the performance of his duties, including,
without limitation, expenses for travel, meals, entertainment
and other miscellaneous business expenses. Roberts shall submit
to DVC written, itemized expense accounts for approval with such
additional substantiation and justification as DVC may
reasonably request.
(c) Non-Competition
During the term of this agreement and for a term of one year
after its termination, Roberts covenants and agrees that he will
not directly or indirectly, whether as owner, shareholder,
director, agent, officer, consultant, independent contractor, or
in any other capacity whatsoever, of a corporation, partnership
or proprietorship, compete with DVC or any of its affiliates.
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC.
(formerly Body Concepts, Inc.)
(A Nevada Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2001
(In U.S. Dollars)
(Unaudited)
Note 16. PROPOSED EQUITY FUNDING - $12,000,000
On July 16, 2001, the Company signed Offshore Securities Subscription
Agreements with Tianjin Global Magnetic Card Co. Ltd. ("TGM") and
Tianjin Teda Yu Cheng Group Co. Ltd. ("Yu Cheng"), the Company's
present controlling shareholder, for 10,000,000 common shares and
2,000,000 common shares, respectively , all at a price of $1.00 each,
for the issuing a total of 12,000,000 common shares of the Company at
a price of $1.00 per share. Details are as follows:
Yu Cheng agreed to purchase 2,000,000 common shares and TGM agreed to
purchase 10,000,000 common shares at the mutually agreed date.
TGM is one of the largest credit and smart card manufactures in the
Asia-Pacific Region. It was the first card manufacturer in China to be
accredited by MasterCard International and Visa International and is
the only company in its field in China that trades publicly which it
has done since 1993 through the Shanghai Exchange.
TGM produces magnetic and smart cards and related integration and
application systems for domestic and foreign markets. TGM is also one
of the national Mints for the People's Republic of China printing
financial documents and packaging products. TGM is repidly expanding
the applications and the use of next generation smart cards for China
wide application. These initiatives require leading edge technology as
well as access to a broader range of capital markets to develop them.
To meet these needs TGM is investing in firms like the Company and its
new business unit, Digital Village RFS Technology Inc., which is
developing micro super conducting devices.
No financing relating to the above has been finalized at the date of
these financial statements, and any financing arranged is subject to
regulatory approvals.
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, 2001 and
September 30, 2000 and the Annual Report Form 10KSB filed by the Company on
April 17, 2001 for the 2000 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.
Results of operations - comparison of the three month periods ended September
30, 2001 and September 30, 2000.
The Company is a development stage company and, through its wholly owned Chinese
foreign enterprise Tianjin Navada Digital World Technologies Co. Ltd. ("WOFE"),
will 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 with 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.
Formal operations have not as yet commenced. Revenue for the current quarter
was $ 171 in the form of interest earned compared to $598 in interest income
earned during the corresponding period in 2000. Expenses during the quarter,
which included costs of operations of Digital Village World Technologies
(Canada) Inc. ("DV-Canada"), which was acquired by the Company on December 18,
2000, were $72040 as compared to $67 for the corresponding period in 2000. The
2001 figure included a $6758 provision for depreciation; $4655 for consulting
services; $ 23234 for professional fees; and $ 16509 for transfer and filing
fees. As a result, for the quarter ended September 30, 2001, the Company had a
net loss of $71869, as compared to a profit of $531 for the same quarter of
2000.
The expenses included operating costs of DV-Canada which were$4240 for rental
expenses, $1878 in telephone and utilities costs and $3665 for travel and
promotion. Salaries and benefits expenses were $8425 for the period ended
September 30, 2001 compared to an insignificant amount in the corresponding
period in 2000.
The Company expects to continue to incur a loss as a result of expenses
associated with compliance with the reporting requirements of the Securities
Exchange Act of 1934, costs related to launch of Chinese operations and
continuation of the Canadian business.
Results of operations - comparison of the nine-month periods ended September 30,
2001 and September 30, 2000.
For the nine-month period ended September 30 2001, revenues were $3937 as
compared to $2106 for the corresponding period in 2000. Total expenses were
$227129, including a $18865 provision for depreciation. By comparison, during
the nine-month period ended September 30, 2000, expenses were $23252. The
increase in expenses directly related to the December 2000 acquisition of DV
- -Canada.
Liquidity and Capital Resources
The cash balance for the period ended September 30, 2001 was $10899 compared to
$43633 at September 30, 2000. This decrease was primarily due to increases in
operating expenditures related to DV-Canada after its acquisition in December
2000. For the period ended September 30, 2001, the Company's operating
activities used net cash of $186299 compared to $15773 in the comparable period
in 2000. Accounts payable were $ 50275. as at September 30,2001. The Company's
financing activities during the period provided net cash of $50275 which
consisted of non- interest bearing demand loans from a director.
Working capital was $ 231,207 as at September 30, 2001 compared to $43083 as
at September 30, 2000. The decrease in working capital included indebtedness of
$194481 due to related parties.
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 to meet its obligations under the Profit
Sharing Agreement and for current and long-term development, marketing, and
working capital. In July 2001, the Company announced a financing subscription
totaling $12,000,000 from two Chinese corporate investors. To date, such
financing has not been completed. There can be no assurances that such
financing will actually close. 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.
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
On July 16, 2001, the Company signed Offshore Securities Subscription Agreements
with two Chinese corporations - Tianjin Global Magnetic Card Co. Ltd. ("TGM")
and Tianjin Teda Yu Cheng Group Co. Ltd. ("Yu Cheng"), the Company's present
controlling shareholder, for 10,000,000 common shares and 2,000,000 common
shares respectively, all at a price of $1.00 each, for the issuing of a total of
12,000,000 common shares of the Company.
TGM is one of the largest credit and smart card manufacturers in the
Asia-Pacific Region. It was the first card manufacturer in China to be
accredited by MasterCard International and Visa International and is the only
company in its field in China that trades publicly which it has done since 1993
through the Shanghai Exchange.
TGM produces magnetic and smart cards and related integration and application
systems for domestic and foreign markets. TGM is also one of the National Mints
for the People's Republic of China printing financial documents and packaging
products. TGM is rapidly expanding its involvement with applications and uses
of next generation smart cards throughout China. These initiatives require
leading edge technology as well as access to a broader range of capital markets
to develop them. To meet these needs, TGM is investing in firms like the
Company and its new business unit, Digital Village RF Superconductor Technology
Inc., which is developing micro super conducting devices.
The Company issued a news release on July 12, 2001 announcing the receipt of the
two signed subscription agreements.
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, 2001.
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.
DIGITAL VILLAGE WORLD TECHNOLOGIES INC.
/s/ Yu Wen Cheng /s/ Peng Chen
_________________________ _________________________
Yu Wen Cheng, Director Peng Chen, Director
Date: November 14, 2001