8-K/A 1 subfm8ka82300.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A Amendment No. 1 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: (Date of earliest event reported): August 23, 2000 ----------------- S.W. LAM, INC. ------------------------------------------------------ (Exact name of Registrant as specified in its charter) 0-22049 ------------------------- (Commission file number) Nevada 62-1563911 ---------------------------------------------- ----------------------- (State or other jurisdiction of incorporation) (I.R.S. Employer Identification Number) Unit 25-32, 2nd Floor, Block B, Focal Industrial Centre 21 Man Lok Street, Hunghom, Hong Kong -------------------------------------------------------- (Address of principal executive offices) (Zip code) 852-2766-3688 ----------------------------------------------------- (Registrant's telephone number, including area code) ---------------------------------------------------------- (Former name or former address, if changed since last report) Item 5. Other Events On August 23, 2000, Hang Fung Gold Technology Limited (HFGTL), a Company listed on the Stock Exchange of Hong Kong and Quality Prince Limited (collectively the "Group") closed a Sale and Purchase Agreement (the "Agreement") with New Epoch Holdings International Limited relating to the sale and purchase of 49.9% of the issued share capital of New Epoch Information (BVI) Company Limited ("New Epoch"). New Epoch is engaged in developing and facilitating e-commerce trading facilities between the People's Republic of China (the "PRC") and the rest of the world, using offline trading services to complement its Internet B2B platform. New Epoch, through a joint venture company which is 49% owned by New Epoch and 51% by China International Electronic Commerce Centre-an information technology arm of the Ministry of Foreign Trade and Economic Co-operation of the PRC operates a portal under the domain name www.chinatradeworld.com a B2B site designed to facilitate international trade with the PRC. Under the terms of the Agreement, the Group acquired a 49.9% interest in New Epoch for approximately $24,000,000 (HK$187,000,000) which was satisfied by issuing 1,632 million shares of HFGTL (the "New Epoch Transaction"). In addition, HFGTL on August 28, 2000 placed 550 million shares of its common stock with independent investors for approximately $8,000,000 (HK$62.7 million) (the "HFGTL Placement"). As a result of the foregoing transactions: 1. The Registrant's indirect ownership interest in HFGTL decreased from 53.145% to 31.4%. 2. HFGTL and its subsidiaries results of operation are no longer consolidated for financial statements purposes, but are recorded using the "equity method" of accounting. 3. The Registrant reported a loss on disposal of subsidiaries, relating to the decrease in the Registrant's ownership percentage in HFGTL based on the difference in the Registrant's interest in the net assets value of HFGTL prior to the New Epoch Transaction and the Registrant's interest in the net assets value of HFGTL after the New Epoch Transaction. 4. The Registrant reported a gain on dilution of equity interest relating to the HFGTL Placement based on the difference in the Registrant's interest in the net assets value of HFGTL prior to and after the HFGTL Placement. 2 Item 7. Financial Statements and Exhibits (a) Audited Financial Statements of New Epoch Information (BVI) Company Limited for the period ended March 31, 2000 and unaudited financial statements for the three months ended June 30, 2000. (b) Proforma Consolidated Financial Statements (unaudited) for the year ended March 31, 2000 and three months ended June 30, 2000. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. S.W. LAM, INC. By: /s/ Lam Sai Wing -------------------------------- Lam Sai Wing, President and Chief Executive Officer Date: January 29, 2001 3 Audited Financial Statements NEW EPOCH INFORMATION (BVI) COMPANY LIMITED Period from November 8, 1999 (inception) through March 31, 2000 with report of the independent auditors NEW EPOCH INFORMATION (BVI) COMPANY LIMITED AND SUBSIDIARY INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page ------- Report of the Independent Auditors F-1 Consolidated Balance Sheet of March 31, 2000 F-2 Consolidated Statement of Operations for the period from November 8, 1999 (inception) through March 31, 2000 F-3 Consolidated Statement of Changes in Shareholders' Equity for the period from November 8, 1999 (inception) through March 31, 2000 F-4 Consolidated Statement of Cash Flows for the period from November 8, 1999 (inception) through March 31, 2000 F-5 Notes to Consolidated Financial Statements F-6 REPORT OF THE INDEPENDENT AUDITORS The Board of Directors New Epoch Information (BVI) Company Limited: We have audited the accompanying consolidated balance sheet of New Epoch Information (BVI) Company Limited and subsidiary as of March 31, 2000 and the related consolidated statements of operations, changes in shareholders' equity and cash flows for the period from November 8, 1999 (inception) through March 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of New Epoch Information (BVI) Company Limited and subsidiary as of March 31, 2000 and the consolidated results of their operations and their cash flows for the period from November 8, 1999 (inception) through March 31, 2000 in conformity with accounting principles generally accepted in the United States of America. /s/ Ernst & Young Ernst & Young Hong Kong August 4, 2000 F-1 NEW EPOCH INFORMATION (BVI) COMPANY LIMITED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2000 March 31, 2000 HK$ ASSETS Bank balances 60,641 Due from a shareholder 3 1,129,617 Due from an equity investee (allowance: HK$2,376,711) 4 141,757 -------------- Total current assets 1,332,015 Investment in an equity investee 4 - -------------- Total assets 1,332,015 -------------- LIABILITIES AND SHAREHOLDERS' EQUITY Accrued liabilities 60,000 -------------- Total liabilities 60,000 -------------- Ordinary shares: US$1 per share Authorized shares - 50,000 ordinary shares Issued - 1,000 ordinary shares at March 31, 2000 7,780 Additional paid-in capital 4,992,220 Accumulated deficit (3,727,985) -------------- Total shareholders' equity 1,272,015 -------------- Total liabilities and shareholders' equity 1,332,015 ============== F-2 The accompanying notes form an integral part of these consolidated financial statements. NEW EPOCH INFORMATION (BVI) COMPANY LIMITED CONSOLIDATED STATEMENT OF OPERATIONS Period from November 8, 1999 (inception) through March 31, 2000 HK$ Sales - Cost of sales - -------------- Gross profit - Operating expenses: General and administrative (861,274) Provision for an amount due from an equity investee (2,376,711) -------------- Operating Loss (3,237,985) Share of net loss of an equity investee (490,000) -------------- Loss before income taxes (3,727,985) Provision for income taxes 5 - -------------- Net loss (3,727,985) ============== F-3 The accompanying notes form an integral part of these consolidated financial statements. NEW EPOCH INFORMATION (BVI) COMPANY LIMITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Ordinary Shares Additional Total paid-in Accumulated shareholders' Number Amount capital deficits equity ---------- ---------- ------------- ------------ -------------- HK$ HK$ HK$ HK$ Balance at November 8, 1999 (inception) - - - - - Issuance of ordinary shares 1,000 7,780 4,992,220 - 5,000,000 Net loss for the period - - - (3,727,985) (3,727,985) --------- ---------- ----------- ------------- -------------- Balance at March 31, 2000 1,000 7,780 4,992,220 (3,727,985) 1,272,015 ========= ========== =========== ============= ==============
F-4 The accompanying notes form an integral part of these consolidated financial statements. NEW EPOCH INFORMATION (BVI) COMPANY LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS Period from November 8, 1999 (inception) through March 31, 2000 HK$ Cash flows from operating activities: Net loss (3,727,985) Adjustments to reconcile net loss to net cash used in operating activities: Provision for an amount due from an equity investee Share of net loss of an equity investee 2,376,711 Change in operating assets and liabilities: 490,000 Due from a shareholder Accrued liabilities (1,129,617) 60,000 ---------------- Net cash used in operating activities (1,930,891) ---------------- Cash flows from investing activities: Investment in an equity investee (490,000) Advance to an equity investee (2,518,468) ---------------- Net cash used in investing activities (3,008,468) ---------------- Cash flows from financing activities: Issuance of ordinary share capital 5,000,000 ---------------- Net cash provided by financing activities 5,000,000 ---------------- Net increase in cash and cash equivalents 60,641 Cash and cash equivalents at beginning of period - ---------------- Cash and cash equivalents at end of period 60,641 ================ Supplemental disclosure of cash flow information: Cash paid during the period for: Interest - Income taxes - ================
F-5 The accompanying notes form an integral part of these consolidated financial statements. NEW EPOCH INFORMATION (BVI) COMPANY LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION The Company was incorporated in the British Virgin Islands with limited liability on November 8, 1999 for the purpose of investment in 49% of an equity investee, China International Electronic Commerce (HK) Limited , which engages in the operation of portal sites and the provision of advertising and content services. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Principles of consolidation The consolidated financial statements include the accounts of the Company and its subsidiary. Significant intercompany accounts and transactions have been eliminated on consolidation. The Company's investment in an equity investee, China International Electronic Commerce (HK) Limited, for the period from November 19, 1999 (inception) to March 31, 2000 have been accounted for by the equity method because the Company has the ability to exercise significant influence over the equity investee's operating and financial policies. (b) Foreign currency translation Foreign currency transactions are translated at the applicable rates of exchange prevailing at the transaction dates. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange prevailing at that date. Exchange differences are dealt with in the statements of operations. The functional currency of the Company is the Hong Kong dollar. (c) Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabililties and their respective tax bases. This method also requires the recognition of future tax benefits such as net operating loss carry forwards, to the extent that realization of such benefits is more likely than not. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. (d) Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. F-6 NEW EPOCH INFORMATION (BVI) COMPANY LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 3. DUE FROM A SHAREHOLDER The amount due from a shareholder is unsecured, interest-free and has no fixed terms of repayment. 4. INVESTMENT IN AN EQUITY INVESTEE The investment in an equity investee represents the Company's 49% equity interest in China International Electronic Commerce (HK) Limited. The financial information of the equity investee is set out below. March 31, 2000 HK$ Current assets 514,420 Non-current assets 873,676 Current liabilities (3,764,807) --------------- Total shareholders' equity (2,376,711) =============== Sales - Net loss (3,376,711) =============== F-7 NEW EPOCH INFORMATION (BVI) COMPANY LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 5. INCOME TAXES Under the current laws of the British Virgin Islands, the Company and its subsidiary are not subject to tax on income or capital gains, and no British Virgin Islands withholding tax would be imposed upon payments of dividends by the Company to its shareholders. The subsidiary operating in Hong Kong is governed by the Inland Revenue Ordinance and is subject to tax at a statutory tax rate of 16.0% in 2000. Period from November 8, 1999 (inception) through March 31, 2000 HK$ Pre-tax loss: British Virgin Islands - Hong Kong (3,727,985) ----------------- (3,727,985) ================= A reconciliation of income taxes computed at the Hong Kong statutory rate to the effective income tax provision recorded is as follows: Period from November 8, 1999 (inception) through March 31, 2000 HK$ Income tax benefit computed at the statutory rate 596,478 Non-deductible items (458,675) Benefit from operating losses not recorded (137,803) ------------------ Total income taxes - ================== F-8 NEW EPOCH INFORMATION (BVI) COMPANY LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 5. INCOME TAXES (continued) Significant components of the Company's deferred tax assets and liabilities at March 31, 2000 consisted of the following: March 31, 2000 HK$ Deferred tax assets: Net operating loss carry forwards 137,803 Valuation allowances (137,803) --------------- Net deferred taxes - =============== The net operating loss carry forwards have no expiration date. The Company does not believe that sufficient objective, positive evidence currently exists to conclude that recoverability of its net deferred tax assets is more likely than not. Consequently, the Company has provided a valuation allowance covering 100% of its deferred tax assets. 6. RISKS AND UNCERTAINTIES The Company's principal activity is an investment in 49% of an equity investee. During the period, the Company has share of net loss of the equity investee of HK$490,000 to the extent of the Company's investment and made a provision for amount due from the equity investee of HK$2,376,711 to the extent of the equity investee's net liabilities. The results of the Company is dependent on the profitability of the equity investee. F-9 NEW EPOCH INFORMATION (BVI) COMPANY LIMITED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2000 June 30, 2000 HK$ (unaudited) ASSETS Bank balances 808,815 Due from a shareholder - Due from an equity investee - ---------------- Total current assets 808,815 ---------------- Equipment 931,401 ---------------- Investment in an equity investee 15,028 ---------------- Total assets 1,755,244 ================ LIABILITIES AND SHAREHOLDERS' EQUITY Accrued liabilities 527,180 Due to a director 2,688,728 ---------------- Total liabilities 3,215,908 ---------------- Ordinary shares - US$1 per share Authorized shares - 50,000 ordinary shares Issued - 1,000 ordinary shares at March 31, 2000 7,780 Additional paid-in capital 4,992,220 Accumulated deficit (6,460,664) ---------------- Total shareholders' deficit (1,460,664) ---------------- Total liabilities and shareholders' equity 1,755,244 ================ F-10 NEW EPOCH INFORMATION (BVI) COMPANY LIMITED CONSOLIDATED STATEMENT OF OPERATIONS Period from April 1, 2000 through June 30, 2000 HK$ (unaudited) Sales - Cost of sales - ------------- Gross profit - Operating expenses: General and administrative 1,313,266 Provision for an amount due from an equity investee - ------------- Operating loss 1,313,266 Share of net loss of an equity investee 1,419,413 ------------- Loss before income taxes 2,732,679 Provision for income taxes - ------------- Net loss 2,732,679 ============= F-11 NEW EPOCH INFORMATION (BVI) COMPANY LIMITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) Ordinary shares Additional Total paid-in Accumulated Shareholders' Number Amount capital deficit deficit --------- -------- ------------ ------------- --------------- HK$ HK$ HK$ HK$ Balance at March 31, 2000 1,000 7,780 4,992,220 (3,727,985) 1,272,015 Net loss for the period - - - (2,732,679) (2,732,679) --------- -------- ----------- -------------- --------------- Balance at June 30, 2000 1,000 7,780 4,992,220 (6,460,664) (1,460,664) ========= ======== =========== ============== ===============
F-12 S.W. LAM, INC. & SUBSIDIARY PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS (On assumption the New Epoch Transaction and HFGTL Placement had occured at April 1, 1999) Year Ended March Three Months Ended 31, 2000 June 30, 2000 ------------------- -------------------- US$`000 US$`000 (unaudited) Total revenues 0 0 Cost of sales and services 0 0 ------------- ------------- Gross profit 0 0 Selling, general and administrative expenses (39) 0 ------------- ------------- Operating loss (39) 0 Share of profit of associates 3,443 749 Loss on disposal of subsidiaries - dilution of interest (5,810) 0 ------------- ------------- (Loss) income before income taxes (2,406) 749 Provision for income taxes Group 0 0 Associates 501 (64) ------------- ------------- Net (loss)/income (1,905) 685 ============= =============
F-13 S.W. LAM, INC. & SUBSIDIARY PROFORMA CONSOLIDATED BALANCE SHEET (On assumption the New Epoch Transaction and HFGTL Placement had occured at April 1, 1999) March 31, 2000 June 30, 2000 ----------------- ------------------ US$`000 US$`000 (unaudited) Current assets Cash and cash equivalents 91 91 ----------------- ------------------ Total current assets 91 91 ----------------- ------------------ Interest in associates 18,428 19,113 ----------------- ------------------ Total assets 18,519 19,204 ================= ================== Current liabilities Due to a director 395 395 ----------------- ------------------ Total liabilities 395 395 ----------------- ------------------ Shareholders' equity Common stock 13 13 Preferred stock 0 0 Additional paid in capital 508 508 Retained earnings 17,603 18,288 ----------------- ------------------ Total stockholders' equity 18,124 18,809 ----------------- ------------------ Total liabilities & stockholders' equity 18,519 19,204 ================= ==================
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