SCHEDULE 14C
(RULE 14c-201)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION AMENDMENT # 1
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES
EXCHANGE ACT OF 1934
Check the appropriate box:
[X] Preliminary information statement [ ] Confidential for use of the
Commission only(as permitted by
Rule 14c-5(d)(2))
[ ] Definitive information statement
FORLINK SOFTWARE CORPORATION, INC.
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(Name of Registrant as Specified in Its Charter)
Payment of filing fee (Check the appropriate box):
[X] No Fee Required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and O-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11. (Set forth the amount on which the filing fee
is calculated and state how it was determined.)
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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1
[ ] Fee paid previously with preliminary materials:
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Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
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(4) Date filed:
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FANG YUAN MANSION 9F,
ZHONGGUANCUN SOUTH STREET YI NO. 56,
HAIDIAN DISTRICT, BEIJING, PRC 100044
INFORMATION STATEMENT
----------------------------------------------
GENERAL
---------------------
NOTICE AND INFORMATION STATEMENT DATED MARCH ____, 2001
TO THE STOCKHOLDERS OF FROLINK SOFTWARE CORPORATION, INC.
In accordance with the provisions of Section 78.320 of the Nevada General
Corporate Law ("NGCL"), notice is hereby given that a majority of the owners of
Forlink Software Corporation, Inc. owning 18,475,000 shares of Forlink Software
Corporation, Inc. representing 72.5% will be voting on March ____, 2001 to
acquire all of the outstanding stock of Beijing Slait Science & Technology
Development Limited Co., a China corporation ( the "Company") having not less
than the minimum number of votes that would be necessary to authorize or take
such action, as described below has, by written 2 consent without a meeting and
without a vote, on March _____, 2001 ("the written consent") in lieu of any
meting taken the following shareholder actions:
Only holders of record of the Company stock at the close of business on March
__, 2001, are entitled to receive notice of the informal action by the
shareholders in accordance with Section 78.320 of the NGCL. This Information
Statement is being sent on or about March ____, 2001 to such holders of record.
No response is being requested from you and you are requested not to respond to
this Information Statement. In accordance with Section 78.320 of the NGCL,
unless otherwise provided in the articles of incorporation or the bylaws, any
action required or permitted to be taken at a meeting of the stockholders may be
taken without a meeting if, before or after the action, a written consent
thereto is signed by stockholders holding at least a majority of the voting
power, except that if a different proportion of voting power is required for
such an action at a meeting, then that proportion of written consents is
required.
WE ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED
NOT TO SEND US A PROXY.
Company:
Fang Yuan Mansion 9F
Zhongguancun South Street Yi No. 56
Haidian District, Beijing, PRC 100044
Tel. 011-8610 8802 6368
FORLINK SOFTWARE CORPORATION, INC.
INFORMATION STATEMENT FOR SHAREHOLDERS
No Solicitation of Votes
Under Section 78.320 of the NGCL, in lieu of a meeting, shareholder action may
be taken by written consent of a majority of the outstanding shares necessary to
authorize the transaction. The officers and directors of Forlink Software
Corporation, Inc. owned 18,475,000 shares of common stock of the Company, which
represents approximately 72.5% of the total number of outstanding shares of the
Company eligible to vote before the transaction occurs. Therefore, other than
the officers and directors, no vote of any other shareholder of the Company will
be required to authorize the acquisition.
The Board of Directors of the Company approved the acquisition at a meeting on
March ___, 2001.
PRINCIPAL STOCKHOLDERS
So far is known to the Company, the following table sets forth the beneficial
owners of 3 5% or more of the Common Stock as of March ____, 2001. Beneficial
ownership has been determined for purposes herein in accordance with Rule 13d-3
of the Securities Exchange Act of 1934 as amended, under which a person is
deemed to be the beneficial owner of securities if such person has or shares
voting power or investment power in respect of such securities or has the right
to acquire beneficial ownership within 60 days.
(a) Beneficial Ownership before the Acquisition of Beijing Slait Science
and Technology Development Limited, Co. and shares that approved the
acquisition.
- --------- ------------------------------- --------------------------- ----------
Title Name and Address Amount and Nature of %of Class
of Class of Beneficial Owner Percent
- --------- ------------------------------- ---------------------------- ---------
- --------- ------------------------------- ---------------------------- ---------
Common Liang Che
- -- Zhong Zhi SRP Co 5,781,000 22.7%
- -- Shen Nan Zhong RD Shnzhn Director, CEO, Treasurer
- -- Guang Dong Province -
- -- China -
- --------- ------------------------------- ---------------------------- ---------
- --------- ------------------------------- ---------------------------- ---------
- -- Wei, Song
- -- No. 6 BLDG S Dong Cheng 5,612,500 22%
- -- E. Dist. Saio Zhen Pantu Director
- -- Guang Dong Pro -
- -- China -
- --------- ------------------------------- ---------------------------- ---------
- --------- ------------------------------- ---------------------------- ---------
- -- Xiaoxia Zhao
- -- 231-2-501 Hui Xing Li 5,790,500 22.7%
- -- Chao Yang District President Chairman
- -- Beijing -
- -- China -
- --------- ------------------------------- ---------------------------- ---------
- --------- ------------------------------- ---------------------------- ---------
- -- Cede & Co - 13.4%
- -- P.O. Box 222 -
- -- Bowling Green Station -
- -- New York, New York 10274 3,409,345
- --------- ------------------------------- ---------------------------- ---------
- --------- ------------------------------- ---------------------------- ---------
- -- Jei Zhang - 5.1%
- -- No. 21 Shiu Jun Nan Nie -
- -- Guangzhou -
- -- Guang Dong Province 1,291,000
- -- China Director , Secretary
- --------- ------------------------------- ---------------------------- ---------
- --------- ------------------------------- ---------------------------- ---------
- -- Michael J.A. Harrop - 4.7%
- -- 94 Rue de Lausanne -
- -- Geneva SWITZERLAND -
- -- CH1202 1,200,000
- --------- ------------------------------- ---------------------------- ---------
All Officers and Directors as a group owned 79.8% prior to the acquisition of
Beijing Slait Science and Technology Development Limited, Co.
As a result of the acquisition of Beijing Slait Science and Technology
Development Limited, Co. and the issuance of 59,430,000 shares of common stock
bringing the new total outstanding stock to 84,900,000, the new officers
directors and beneficial owners are as follows.
- --------------- ---------------------- ---------------------------- ------------
Title Name of Beneficial Amount and Nature of
of Class Owner Percent % of Class
- --------------- ----------------------- ---------------------------- -----------
- --------------- ----------------------- ---------------------------- -----------
Common * Liang Che 5,781,000 6.8%
- --------------- ------------------------ ---------------------------- ----------
- --------------- ------------------------ ---------------------------- ----------
* Wei, Song 5,612,500 6.6%
- --------------- ------------------------- ---------------------------- ---------
- --------------- ------------------------- ---------------------------- ---------
** Xiaoxia Zhao 5,790,500 6.8%
Chairman, Secretary,
Treasurer
- --------------- ------------------------- ---------------------------- ---------
- --------------- ------------------------- ---------------------------- ---------
* Jing Zeng 5,260,000 6.1%
- --------------- ------------------------- ---------------------------- ---------
- --------------- ------------------------- ---------------------------- ---------
** Yi He 23,800,000 28%
President, Director
- --------------- -------------------------- ---------------------------- --------
- --------------- -------------------------- ---------------------------- --------
* Honkeung Lam 9,000,000 10.6%
Director
- --------------- --------------------------- ---------------------------- -------
* 5% or greater shareholder
** Officer Director after the acquisition.
Forlink Software Corporation, Inc. is not required to solicit and is not
soliciting votes or consents from any of the Company's other shareholders.
Recent Transactions
Organization and Corporate History
Forlink Software Corporation Inc. (Formerly Light Energy Management, Inc. and
formerly Why Not?, Inc.) is a Nevada corporation which was originally
incorporated on January 7, 1986 under the laws of the State of Utah under the
name of Why Not?, Inc. and subsequently reorganized under the laws of Nevada on
December 30, 1993. The Company's reorganization plan was formulated for the
purpose of changing the state of domicile and provided that the Company form a
new corporation in Nevada which acquired all of the contractual obligations,
shareholder rights and identity of the Utah corporation, and then the 5 Utah
corporation was dissolved. The Company is in the developmental stage, and
its operations to date have been limited.
On November 3, 1999, the Company entered into a Plan of Reorganization
with Beijing Shijiyonglian Ruanjian Jishu Youxian Gongsi (Beijing Forlink
Software Technology Co. Ltd, (hereinafter "BFSTC"), under the terms of which
BFSTC gained control of the Company.
Pursuant to the Plan of Reorganization, the Company acquired 100% of
the issued and outstanding shares of BFSTC in exchange for 20,000,000 shares of
the Company's authorized, but unissued, common stock. BFSTC is engaged in the
Internet e-commerce and Internet software development business, and the Internet
vertical portal business. The business of BFSTC became the business of the
Company.
In May of 1998, the Company entered into an agreement under the terms
of which it intended to merge with Teknocapital Finance Ltd. Pursuant to that
merger agreement, the shareholders of Teknocapital would exchange 100% of the
issued and outstanding shares of Teknocapital for 4,000,000 of the Company's
common stock. Pursuant to that agreement, the existing Board of Directors of Why
Not?, Inc. resigned. New members were appointed to fill their vacancies and
Teknocapital management assumed responsibility for the Company's affairs.
Thereafter, the merger agreement with Teknocapital was substantially
modified. Specifically, the consideration given for the issuance of the
4,000,000 shares of the Company's common stock was changed from 100% of the
issued and outstanding shares of Teknocapital to the execution of promissory
notes totaling $ 275,000 payable to the Company by Harrop & Co. With the
execution of these promissory notes, the merger with Teknocapital was abandoned
and the Company continued its activities as an unfunded venture in search of a
suitable business acquisition or business combination. In November, 1998 the
Company's name was changed to Light Energy Management, Inc. in anticipation of
merging with another company. The merger did not occur, but the Company was
unable to register the old name of Why Not?, Inc.
Prior to May of 1998, the Company operated as an unfunded venture. The Company's
operations were funded through loans from officers, directors and major
shareholder in amounts sufficient to enable the Company to satisfy its reporting
and other obligations as a public company, and to commence, on a limited basis,
the process of investigating possible merger and acquisition candidates.
In May of 1998, the Company entered into an agreement under the terms
of which it intended to merge with a company named Teknocapital Finance, Ltd.
The Company entered into this agreement in hopes of developing a proprietary
internet based business information delivery technology called "Bizzmoz". The
Company intended to market Bizzmoz as an interactive information interface
between a sponsoring business or group and their selected audiences. Soon after
the agreement with Teknocapital in May of 1998, management came to believe that
the Company was more valuable as a vehicle for a business combination with a
line of business other than that proposed by the Teknocapital merger. As a
result, management chose to modify the consideration given for the issuance of
the 4,000,000 shares of the Company's common stock issued in connection with the
Teknocapital transaction. Rather than the acquisition of all of the issued and
outstanding shares of Teknocapital, the consideration
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for the issuance of these shares became the execution of promissory notes by the
shareholders. Thereafter, and throughout 1998, the Company once again operated
with capital contributions by management aimed solely at maintaining the
Company's reporting status and attractiveness as a candidate for combination
with another business.
Beijing Slait Science & Technology Development Limited Co. Acquisition:
On January 11, 2001, the Company entered into an Agreement and Plan of
Reorganization (the "Agreement") with Forlink Software Corporation, Inc. to
purchase 100% ownership of Beijing Slait Science & Technology Development
Limited Co. in exchange for Common Stock of the Company. Beijing Slait Science &
Technology Development Limited Co. ("SLAIT") is an Application Integration
Technology (AIT) provider.
Established in 1998, The SLAIT Company is focusing on offering the Application
Integration Technology (AIT) and its applications. SLAIT also provides the
application total solutions of AIT for several industries: Telecommunications,
Financial Services, the Retailers and Third Party Logistics.
Based on its principle - Technology, Service and Quality are in First Priority,
the company provides the customers with state-of-art products and services in
both software and hardware, helps enterprises to offer e-commerce service to
their customers. Among these enterprises, there are Beijing Mobile Communication
Company, PICC (People's Insurance Company of China), and the Agricultural Bank
of China Guangdong Branch.
SLAIT provides services for training consultation and e-commerce transactions
and focuses on assisting customers in providing reliable e-commerce services
total application solutions. SLAIT also assists enterprises in various
industries in fully utilizing their existing investments in developing new
integrated application systems.
SLAIT has approximately 80 employees to include recognized senior technical,
sales and project management professionals with a great deal of experience,
intensive spirit of progress and consciousness toward innovation. The company
has newly established offices in the main cities of China with professional
experts for customer support.
I. Company business
SLAIT's business is focused in three areas : (1) Developing enterprise
application software, (2) Developing enterprise application integration (EAI)
platforms and tools, (3) application solutions consulting for enterprises II.
Products and tools
SLAIT has two application integration platforms : TPCS and ORBCS . They are as
follows:
(1) Transaction Process Control System -- TPCS
TPCS is based on an X/OPEN distributed Traction Process (DTP) model. TPCS
provides a platform and tools for distributed application development. At
present, TPCS 2.0 has been widely
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used in many large application projects and products, such as Business
Operation Support Systems (BOSS) used by China mobile communications
Corp.(CMCC), data center of People's Insurance of China Corp.(PICC), etc.
TPCS supports many operating systems environments ,such as HP HP-UX , IBM
AIX , SUN Solaris , SCO UNIX and windows platforms.
(2) Object Request Broker Control System -- ORBCS
ORBCS is based on OMG Common Object Request Broker Specification (CORBA).
ORBCS is an application integration platform which SLAIT is developing.
ORBCS 1.0 (based on CORBA 2.3) is used in Data Center projects of Beijing
Mobile Communication Corp. (BMCC). We expect the new application
integration platform to be widely used in many projects in the near future.
Combined with Software Engineering Environment (SEE) technology (such as
the Software Capability Maturity Model -SW-CMM), ORBCS promises to be
higher in productivity and quality of application development.
SLAIT has developed many application systems and solutions in several areas
, such as mobile communication, banking and large enterprises.
III. Market Analysis
SLAIT is focusing on the market of application integration. We believe the
market in China has just started. Because of lack of infrastructure of
application systems, the requirement of many enterprises for application
integration is weak. But some areas, such as mobile communication, banking and
some modern enterprises., have requirements to integrate application systems in
enterprises (A2A). We believe that based on the development of the Internet and
communications in China , the requirement of application integration tehnology
(AIT) and its solutions for the network economy will be continue to increase.
At present SLAIT has completed large quantities of application integration
projects in fields such as telecommunications, banking, insurance and
e-commerce. The offerings include integrated application solutions, requirement
analysis, planning proposal, systems design, equipment selection, software
development, installation and debugging, risk management and systems
maintenance. The company's business has spread through nearly 20 provinces,
cities and autonomous regions. We believe in excellent technique, sincere and
cooperative attitude and perfect after-sale service. We have received favorable
comments form our customers.
The SLAIT Company is focusing on offering the Enterprise Application Integration
Technology (AIT) and its applications. SLAIT also provides the application total
solutions of AIT for several industries: mobile communications, bank and large
enterprise. Most technologies on the market today that enable enterprise
application integration (EAI) address only one or two aspects of integration,
forcing users to make multiple buying decisions to integrate portals with their
enterprises. In contrast , with SLAIT integration solutions, we offer the robust
integration brokering and data center technology needed to address the
converging requirements of application-to application(A2A), business-to business
(B2B) and business-to-consumer (B2C) integration at the Web portal . There are
8
two integration platforms within SLAIT solutions :
1) TPCS
2) ORBCS
The two integration platforms have been introduced at above section.
The requirement for EAI solutions is very large. The result of IDC research
(www.idc.com) shows that EAI solutions will increase 400% from $2.2 billion in
1998 to 11.6 billion in 2003. The other leading IT research institute - Gartner
Group (www.gartnergroup.com) thinks 98% of new applications will be supported by
EAI technologies in 2001.
Their revenues are derived from binding contracts of applications software,
hardware and integration services. We generate revenues from our two principal
businesses : application software and integration solutions. Integration
solution revenues consist of hardware sales and services including requirement
analysis, planning proposals, systems design, equipment selection, installation
and debugging, risk management and system maintenance etc.
The following are SLAIT's target market areas in 2001:
1) Mobile Communications
At present, the largest mobile company in the world is China Mobile
Communications Corp.(CMCC). CMCC owns about 80% of the mobile users in
china. The number of mobile users is about 50 million.
SLAIT is one of the earliest entrants in the market of mobile billing along
with customer and account management systems. The user list of SLAIT
includes Beijing Mobile Communications Corp.(CMCC)and Chongqing Mobile
Communications Corp..
IV. Cooperative Partners
SLAIT is the authorized value added reseller of HP, CISCO, and has experience in
server and workstations for HP along with sales and technical support for
network products for CISCO. In addition, SLAIT also maintains relationships with
GE, IBM, SUN, ORACLE ,INFORMIX and BEA Systems in marketing and development.
SLAIT's technique is not only approved by the customers, but also recognized by
the cooperative partners, and was awarded recognition in the following areas:
HP The best line value-added agent in 1998
HP Asia-Pacific achievement rapid growing prize in 1998
HP The best sales achievement prize in 1998
HP Excellent sales achievement prize in 1999
HP The Best Co-operation prize in 1999
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V. Competitive Analysis
At present, there are only a few software companies focusing on application
integration in China. Most of the software companies in China are focusing on
developing application software based on PC or concentrating systems . We feel
that the market of EAI is very large in China. We think that management and
technique are the keys to the market. We have done a great deal of work in these
areas.
There are three main competitors: Asiainfo Corp, Legend Corp. and China
software Corp.
SLAIT's past and present customer list includes:
o Banking
|X| Inter-city Banking System (ICBS) of Agricultural Bank of China, Guangdong
province.
|X| Network System for Public Service of Agricultural Bank of China, Jiangmen,
Guangdong province.
|X| ISC BC III emulation system transaction control interface (TCI) o
Telecommunication
|X| Integrated charging and business system of Beijing
MobileCommunication Company.
|X| Business and accounting system of Chongqing Mobile Communication Company o
Insurance
|X| Office automation system of PICC
|X| Secretarial document management system for insurance
|X| PICC data centralized treatment system
|X| PICC manager checking system
|X| PICC vehicle damage-assessment system
o Retail
Management Information System of Beijing Wanfang Supermarket
o Network Engineering
|X| Integrated network system project of Beijing Mobile Communication Company
|X| Wiring and network project of cities and regions under, and for PICC Henan
(province) branch
|X| Wiring and network project of PICC Jinan Branch
|X| Wiring
and network project of PICC Jiangxi Province branch
|X| Wiring and network project of cities and regions under, and for PICC Dalian
(city) branch
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|X| Network project of Tianshan Hotel
|X| Network project of Qiaoyuan Hotel
A Form 8-K will be filed with the Securities and Exchange Commission, as soon as
the acquisition closes in order for it to be reported. Attached as exhibit 1is a
copy of the Agreement.
The terms of the Agreement include the following:
(A)the Company will be acquiring 100% of the issued and outstanding Common Stock
of Beijing Slait Science & Technology Development Limited Co., making Beijing
Slait Science & Technology Development Limited Co. a wholly owned subsidiary of
the Company. The number of issued and outstanding Common Stock of Beijing Slait
Science & Technology Development Limited Co. is 59,430,000 with a par value of
$0.001 per share; and
(B) in consideration for the acquisition of the above shares, Beijing Slait
Science & Technology Development Limited Co., a Peoples Republic of China
corporation surrendered 1,000,000 shares restricted Common Stock of the Company,
representing 100% of the outstanding Common Stock.
Board of Directors
As part of the transaction, Messeurs Liang Che, Jie Zang, Wei Song, Michael
Harrop, Shengli Ma and Kanghua He resigned from the Board of Directors. Messeurs
Yi He and Honkeung Lam were appointed as new Directors to fill the vacancies.
The Officers and Directors along with their respective Biographies are as
follows:
Xiaoxia Zhao,
Chairman of the Board of Directors, Secretary, Treasurer
Mr. Zhao has a Master's Degree in Computer Science. From Jan. 1998 - Oct. 1998
Mr. Zhao was the Vice President and Chief Technical Officer of GBS InfoTech. Co.
where he Designed and supervised the creation of Tonghua search engine and
portal site: www.tonghua.com.cn. It has become one of the most famous sites in
China within half a year. Was in charge of Beijing Telecom 8188 ISP project. The
site (www.cj).net.cn) has been in operation since 1998 and has become an ISP
with 100 million Yuan monthly revenue. Cooperating with the Great Wall Computer
Group Co., led the development of the China National Commodity Exchange
(www.ccec.com.cn). The system is based on IBM RISC/6000, AIX and NetCommerce and
has been in operation since August, 1998. Cooperating with Legend PDA network
software.
Aug. 1997 - Jan. 1998: Chief Engineer, Beijing Long Ma Software Development Co.
Ltd. In charge of technology management. In charge of system integration
department. Obtained the contract to develop the first phase of the Tonghua
project.
1996 - 1997: Yahoo!Japan leading engineer In charge of Yahoo!Japan operation and
support. Cooperated with Panasonic to develop specialized search engine. Worked
with Lotus on category and search system development. Worked with Reuters and
Daily News on news page 11 development.
1991 - 1996: System Engineer, Japan Itochu Group CRC Research Institute.
Developed Itochu automobile export system. Itochu financial system. In charge of
Great Wall Unix operating system technical support.
1989 - 1991: Project Manager, China Great Wall Computer Group Co. Participated
Great Wall Unix Chinese system development. Was in charge of Sco Xenix 2.21 -
Sco Unix 3.2 Chinese system development. In charge of Great Wall Unix operating
system technical support.
Yi He
President Director
Mr. He has a Master's Degree in Computer Science. From Jan. 1998 - present Mr.
He was the Founder, Chairman and President of Beijing SLAIT Science & Technology
Development Limited Co.
Mar. 1993 - Jan. 1998: Mr. He was the President of Beijing Sunny Computer System
Engineering Co.
Aug. 1990 - Aug. 1992 Project Manager of China Great Wall Computer Group Co.
Sept. 1987 - Jul. 1990 Studied in the Computer Science Department of Peking
University
Sept. 1983 - Jul. 1987 Studied in the Computer Science Department of
Xi'an JiaoTong University
Honkeung Lam
Director
From Jul. 2000 - present Mr. Lam was the Chairman of Beijing Hi Sun in soft
Information Technology Ltd.
Jun. 1998 - Jun. 2000 Mr. Lam was the Chairman and President of Beijing
Jinshili Information Technology Ltd.
1992 - Feb. 1998 Mr. Lam was the Manager of Beijing office of Taiwan Acer
Computer (Far East) Co.
1988 - 1991 Mr. Lam was the Manager of Beijing office of American Altos Computer
(Far East) Co
More Information
Listed as exhibit #1 are the unaudited financials and accompanying notes for
Beijing Slait Science & Technology Development Limited Co. This Information
Statement is provided for information purposes only. We are not soliciting
proxies in connection with the items described herein. You are not required to
respond to this Notice. The accompanying Information Statement is for
information purposes only. Please read the accompanying information statement
carefully.
12
The Company files annual, quarterly and special reports and proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy any reports, statements or other information the Company files at the SEC's
public reference room at 450 Fifth Street N.W., Washington, D.C. 20549, or on
the SEC's web site, http://www.sec.gov.
You may call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. You may also obtain copies of the filings of the Company has
made with SEC directly from the Company by requesting them in writing or by
telephone at the following address:
Company:
Fang Yuan Mansion 9F
Zhongguancun South Street Yi No. 56
Haidian District, Beijing, PRC 100044
Tel. 011-8610 8802 6368
Payment of Expenses
The payment of expenses related to the preparation and filing of this
Information Statement has been made by the Company.
13
Exhibit 1
Beijing Slait Science & Technology Development Ltd., Co.
BALANCE SHEETS
(A Development Stage Company)
(Unaudited)
(Expressed in US Dollars)
December 31, December 31,
2000 1999
..................................................
ASSETS
Current assets
Cash and cash equivalents ....................... $ 30,649 $ 47,483
Accounts receivable ............................. 86,238 92,430
Other receivables, deposits and prepayments .... 1,345,823 1,232,688
Inventories ..................................... 72,744 171,470
---------- ----------
---------- ----------
Total current assets ............................... 1,535,454 1,544,071
Long-term investment ................................ 60,491 60,491
Plant and equipment, net ........................... 10,311 38,817
---------- ----------
---------- ----------
Total assets ........................................ $1,606,256 $1,643,379
========== ==========
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable ............................... $ 100,409 $ 410,364
Other payables and accrued expenses .......... 995,142 448,733
Other taxes payable ........................... 8,667 17,660
---------- ----------
---------- ----------
Total current liabilities .......................... 1,104,218 876,758
---------- ----------
---------- ----------
Commitments and contingencies
Stockholders' equity
Registered capital ............................. 131,265 131,265
Retained earnings .............................. 370,772 635,356
---------- ----------
---------- ----------
Total stockholders' equity .................... 502,038 766,621
---------- ----------
---------- ----------
Total liabilities and stockholders' equity ....... $1,606,256 $1,643,379
========== ==========
Beijing Slait Science & Technology Development Ltd.,Co.
Statements of Operations
(A Development Stage Company)
(Unaudited)
- --------------------------------------------------------------------------------
Year ended Year ended
December 31 December 31,
2000 1999
--------------- ---------------
..........................................
Net sales ................................... $ 3,125,962 $ 1,561,922
Cost of sales .............................. 2,637,355 1,014,429
----------- -----------
----------- -----------
Gross profit ................................ 488,607 547,492
Selling expenses ............................ 73,532 60,199
General and administrative expenses ....... 149,524 132,174
----------- -----------
----------- -----------
Operating income ............................ 266,550 355,120
Interest income .............................. 879 1,282
Other income, net ........................... (1,846) (6,697)
----------- -----------
----------- -----------
Income before income tax .................. 264,583 349,705
Provision for income tax .................. -- --
----------- -----------
----------- -----------
Net income for the year ..................... $ 264,583 $ 349,705
=========== ===========
The accompanying notes are an integral part of these financial statements.
Beijing Slait Science & Technology Development Ltd., Co.
Statement of Cash Flows
(A Development Stage Company)
(Unaudited)
For the year Ended
December 31,
2000 1999
- ------------------------------------------------------------------------
..................................................
Cash flows from operating activities
Net loss ........................................... $ 264,583 $ 349,705
Adjustments to reconcile net loss
to net cash used in operating activities
Depreciation of plant and equipment ............. 26 11,131
Non-cash compensation expense ................... --
---------
Change in:
Accounts receivable ........................... (6,192) (51,395)
Other receivables, deposits and prepayments ... 81,949 436,759
Inventories ................................... (98,726) (2,199)
Accounts payable .............................. 309,956 100,409
Other payables and accrued expenses ........... (501,906) (856,145)
Other taxes payable ........................... (4,324) (91,380)
--------- ---------
--------- ---------
Net cash used in operating activities ................ 45,366 (103,117)
--------- ---------
--------- ---------
Cash flows from investing activities
Acquisition of plant and equipment ............. (28,532) (1,483)
--------- ---------
--------- ---------
Net cash used in investing activities ................ (28,532) (1,483)
--------- ---------
--------- ---------
Cash flows from financing activities
Net cash provided by financing activities ............ -- --
--------- ---------
---------
Net (decrease)/increase in cash and cash equivalents . 16,834 (104,600)
Cash and cash equivalents at beginning of period ..... 30,649 135,249
--------- ---------
--------- ---------
Cash and cash equivalents at end of period ........... $ 47,483 $ 30,649
--------- ---------
Supplemental disclosure of significant ............... -- --
non-cash transactions
Notes to the Financial Statement
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Established in 1998, The SLAIT Company is focusing on offering the Application
Integration Technology (AIT) and its applications. SLAIT also provides the
application total solutions of AIT for several industries: Telecommunications,
Financial Services, the Retailers and Third Party Logistics.
SLAIT is a corporation duly organized, validly existing, and in good standing
under the laws of China, has all necessary corporate powers to own its
properties and to carry on its business as now owned and operated by it, is duly
qualified to do business and is in good standings in any jurisdiction its
business requires qualification.
NOTE 2 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES
a. Accounting Standards
The company's financial statements are prepared in accordance with the
Accounting Standards for Hi-tech Companies in the People's Republic of China.
b. Accounting Period
The company has elected a calendar year end.
c. Functional Currency
The functional currency of the company is RMB and the financial records are
maintained and the financial statements prepared in RMB.
d. Accounting and Valuation Method
The company's financial statements are prepared using the accrual method of
accounting. The valuation is made in accordance with cost.
e. Inventories Measurement
Inventories are divided into two categories: raw material and perishable goods.
The purchase of raw material is recorded at cost. The drawing and distribution
of raw materials are recorded at weighted average cost.
Perishable goods are amortized in the same accounting year they are purchased.
f. Long-term Investment
Long-term investment is stated at cost when it represents less than 20% of
votable shares of the invested company, or when the shares are not influential
in voting even if they equal or exceed 20%.
g. Long-lived Assets Measurement
Long-lived assets include any machine, equipment, vehicle and other
operation-related tools with a useful life exceeding one year and costs more
than RMB 2000 yuan.
Long-lived assets are recorded at cost.
Long-lived assets are depreciated using straight-line method. Different
depreciation rate is applicable to different assets according to their
respective cost, estimated useful life and residue value.
h. Revenue Recognition
o Revenue from sales of goods is recognized when title of goods sold has
passed to the buyers, and the company no longer manages or controls these
goods, and the payment has been made or payment documents have been
received, and relevant cost can be reliably computed.
o Revenue from provision of service is recognized when workload and relevant
cost can be reliably computed, and the payment has been made, and the
progress can be determined.
i. Income Tax
Income tax is stated as deferred tax liabilities.
NOTE 3 - TAX
a. Value Added Tax (VAT)
VAT rate is 17%.
b. Business Tax
Business tax rate is 5%.
c. Municipal Maintenance and Construction Tax (MMCT) and Attached Educational
Tax (AET)
MMCT is 7% of the total amount of VAT and Business Tax. AET is 3% of the total
amount of VAT and Business Tax.
d. Corporate Income Tax
The company is in the tax deduction period this year.