-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NscIwxXw4rSjQT2Nsig5aEXyeASnnEF95d0HlxbFxhYwMA1ICSFqvnGkFOny/sTC DHhtIPMrd7wJrY0wAmkLPw== 0001062993-02-000372.txt : 20020816 0001062993-02-000372.hdr.sgml : 20020816 20020816141252 ACCESSION NUMBER: 0001062993-02-000372 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020816 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIGITAL VILLAGE WORLD TECHNOLOGIES INC CENTRAL INDEX KEY: 0001115911 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 88040114 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-30851 FILM NUMBER: 02741014 BUSINESS ADDRESS: STREET 1: UNIT #10 STREET 2: 8880 FRASERWOOD COURT CITY: BURNABY BC STATE: A1 ZIP: V5J5H7 BUSINESS PHONE: 6044383698 MAIL ADDRESS: STREET 1: UNIT #10 STREET 2: 8880 FRASERWOOD COURT CITY: BURNABY BC STATE: A1 ZIP: V5J5H7 10QSB 1 form10qsb.txt 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 June 30, 2002. ____ 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 _______ No ______ State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. At June 30, 2002, 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 and six month periods ended June 30, 2002 and June 30, 2001, follow. The financial statements reflect all adjustments which are, in the opinion of management, necessary so as to ensure a fair statement of the results for the interim period presented. MOEN AND COMPANY CHARTERED ACCOUNTANTS PO Box 10129 1400 IBM Tower Telephone: (604)662-8899 701 West Georgia Street Fax: (604)662-8809 Vancouver, BC V7Y 1C6 - -------------------------------------------------------------------------------- INDEPENDENT ACCOUNTANTS' REVIEW REPORT -------------------------------------- To the Directors and Shareholders of Digital Village World Technologies, Inc. (A Nevada Corporation) (A Development Stage Company) We have reviewed the accompanying Consolidated Balance Sheets of Digital Village World Technologies, Inc. (A Nevada Corporation) (A Development Stage Company) as of June 30, 2002 and June 30, 2001, and the Statements of Operations, Retained Earnings, Cash Flows and Changes in Stockholders' Equity for the six month periods then ended in accordance with Statements on Standards for Accounting and Review Services issued by the America Institute of Public Accountants. All information included in these financial statements is the representation of Digital Village World Technologies, Inc. A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an examination in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. On the basis of our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with United States generally accepted accounting principles (GAAP). /s/ Moen and Company Chartered Accountants Vancouver, British Columbia, Canada August 12, 2002 DIGITAL VILLAGE WORLD TECHNOLOGIES, INC. (A Nevada Corporation) (A Development Stage Company) Consolidated Balance Sheets June 30, 2002 and June 30, 2001 (In US Dollars) (Unaudited) 2002 2001 -------------- -------------- Assets Current Assets Cash and cash equivalents (note 3) $ 4,520 $ 8,828 Accounts receivable (note 4) 7,879 11,706 Prepaid expenses and deposit - 5,107 -------------- -------------- 12,399 25,641 -------------- -------------- Fixed Assets, at cost (note 2) 65,783 83,028 Less: accumulated depreciation (19,169) (12,613) -------------- -------------- 46,614 70,415 -------------- -------------- Investment and advance in Yuxun Digital Hi-Tech Co. Ltd. (note 14) 56,774 - -------------- -------------- Goodwill, at cost (note 5) 48,070 48,070 -------------- -------------- $ 163,857 $ 144,126 ============== ============== Liabilities and Stockholders' Equity Current Liabilities Accounts payable and accrued (note 6) $ 13,165 $ 8,289 Current portion of loan (note 8) - 6,811 -------------- -------------- 13,165 15,100 -------------- -------------- Long-term Liabilities Due to related parties (note 7) 347,341 174,934 Loan payable (note 8) - 6,811 -------------- -------------- 347,341 181,745 -------------- -------------- Stockholders' Equity Capital stock (note 9) Authorized 62,500,000 common shares at $0.0004 par value Issued 12,906,000 common shares - par value 5,162 5,162 Paid in capital in excess of par value of stock 116,734 116,734 -------------- -------------- 121,896 121,896 Deficit, accumulated during the development stage (318,745) (174,412) Cumulative translation adjustment (note 2) 200 (203) -------------- -------------- (196,649) (52,719) -------------- -------------- $ 163,857 $ 144,126 ============== ============== Approved on behalf of the board: /s/ Stephen E Dadson , Director - ----------------------------------- /s/ Richard Wang , Director - ----------------------------------- See Accompanying Notes and Independent Accountants' Review Report DIGITAL VILLAGE WORLD TECHNOLOGIES, INC. (A Nevada Corporation) (A Development Stage Company) Consolidated Statements of Operations (In US Dollars) (Unaudited)
Cumulative From Inception Date Six Months of Sep. 15, 1998 Quarter Ended Ended to June 30, June 30, June 30, ----------------------- ----------------------- 2002 2002 2001 2002 2001 ---------- ---------- ---------- ---------- ---------- Revenue Interest and other income $ 7,791 $ - $ - $ - $ 3,766 ---------- ---------- ---------- ---------- ---------- Administration Costs Advertising 712 - - - - Bank charges and interest 2,116 18 290 68 810 Consulting 11,982 - - - 1,323 Depreciation 19,169 2,840 6,758 5,681 12,107 License, dues and insurance 3,302 - - 1,417 - Office costs 9,278 851 927 2,832 4,105 Rentals and leases 37,647 5,933 8,362 10,923 14,411 Professional fees 81,007 15,212 800 17,080 24,476 Salary and benefits 56,991 - 9,798 1,428 36,255 Stock-based compensation 20,000 - - - 20,000 Telephone and utilities 19,355 1,530 1,995 2,862 13,819 Transfer agent and filing fees 20,248 (7,188) - (3,733) 5,911 Travel and promotion 39,019 5,273 7,817 11,530 21,872 Loss on disposition of fixed assets 5,710 - - - - ---------- ---------- ---------- ---------- ---------- 326,536 24,469 36,747 50,088 155,089 ---------- ---------- ---------- ---------- ---------- Net profit (loss) for the period $ (318,745) $ (24,469) $ (36,747) $ (50,088) $ (151,323) ========== ========== ========== ========== ========== Basic and diluted profit (loss) per share $ (0.00) $ (0.00) $ (0.00) $ (0.01) ========== ========== ========== ========== Weighted average number of common shares used to compute basic and fully diluted loss per share 12,906,000 12,902,366 12,906,000 12,888,666 ========== ========== ========== ==========
See Accompanying Notes and Independent Accountants' Review Report DIGITAL VILLAGE WORLD TECHNOLOGIES, INC. (A Nevada Corporation) (A Development Stage Company) Consolidated Statements of Retained Earnings (Deficit) (In US Dollars) (Unaudited)
Cumulative From Inception Date Six Months of Sep. 15, 1998 Quarter Ended Ended to June 30, June 30, June 30, ----------------------- ----------------------- 2002 2002 2001 2002 2001 ---------- ---------- ---------- ---------- ---------- Retained earnings (deficit), beginning of period $ - $ (294,276) $ (137,665) $ (268,657) $ (23,089) Net profit (loss) for the period (318,745) (24,469) (36,747) (50,088) (151,323) ---------- ---------- ---------- ---------- ---------- Retained earnings (deficit), end of period $ (318,745) $ (318,745) $ (174,412) $ (318,745) $ (174,412) ========== ========== ========== ========== ==========
See Accompanying Notes and Independent Accountants' Review Report DIGITAL VILLAGE WORLD TECHNOLOGIES, INC. (A Nevada Corporation) (A Development Stage Company) Consolidated Statements of Cash Flows (In US Dollars) (Unaudited)
Cumulative From Inception Date Six Months of Sep. 15, 1998 Quarter Ended Ended to June 30, June 30, June 30, ----------------------- ----------------------- 2002 2002 2001 2002 2001 ---------- ---------- ---------- ---------- ---------- Cash derived from (used for) Operating activities Net profit (loss) for the period $ (318,745) $ (24,469) $ (36,747) $ (50,088) $ (151,323) Items not requiring use of cash Depreciation 19,169 2,840 6,758 5,681 12,107 Cumulative translation adjustment 200 (198) 149 20 265 Changes in non-cash working capital items Accounts receivable (7,879) (813) - (3,006) (1,386) Prepaid expenses and deposit - - - - (5,107) Accounts payable and accrued 13,165 (15,534) (7,071) (35,359) (11,390) ---------- ---------- ---------- ---------- ---------- (294,090) (38,174) (36,911) (82,752) (156,834) ---------- ---------- ---------- ---------- ---------- Financing activities Issuance of shares 121,896 - 11,000 - 41,000 Loan payable - - (1,703) - (3,406) Due to related parties 347,341 - 30,511 84,989 30,511 ---------- ---------- ---------- ---------- ---------- 469,237 - 39,808 84,989 68,105 ---------- ---------- ---------- ---------- ---------- Investing activities Capital assets purchased (65,783) - - - - Investment and advance (56,774) - - - - Goodwill (48,070) - - - - ---------- ---------- ---------- ---------- ---------- (170,627) - - - - ---------- ---------- ---------- ---------- ---------- Cash and cash equivalents, increase (decrease) during the period 4,520 (38,174) 2,897 2,237 (88,729) Cash and cash equivalents, beginning of period - 42,694 5,931 2,283 97,557 ---------- ---------- ---------- ---------- ---------- Cash and cash equivalents, end of period $ 4,520 $ 4,520 $ 8,828 $ 4,520 $ 8,828 ========== ========== ========== ========== ==========
See Accompanying Notes and Independent Accountants' Review Report DIGITAL VILLAGE WORLD TECHNOLOGIES, INC. (A Nevada Corporation) (A Development Stage Company) Statement of Changes in Stockholders' Equity From Date of Inception on September 15, 1998 to June 30, 2002 (In US 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 year ended December 31, 2001 - - - - (245,568) - (245,568) Cumulative translation - - - - - 648 648 ---------------------------------------------------------------------------------------- Balance, December 31, 2001 12,906,000 5,162 116,734 121,896 (268,657) 180 (146,581) Net loss for six months ended June 30, 2002 - - - - (50,088) - (50,088) Cumulative translation - - - - - 20 20 ---------------------------------------------------------------------------------------- Balance, June 30, 2002 12,906,000 $5,162 $116,734 $121,896 $(318,745) $ 200 $(196,649) ========================================================================================
See Accompanying Notes and Independent Accountants' Review Report DIGITAL VILLAGE WORLD TECHNOLOGIES, INC. (A Nevada Corporation) (A Development Stage Company) Notes to Consolidated Financial Statements June 30, 2002 (In US 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 each par value. On May 19, 2000 the Company completed a 2.5:1 forward split of its outstanding stock. This forward split increased the number of issued and outstanding shares from 1,750,000 common shares to 4,375,000 common shares. Pursuant to the terms of a share exchange which was effective as of December 18, 2000, the Company acquired all of the issued and outstanding stock of Digital Village World Technologies (Canada) Inc. ("DVC") in exchange for the issuance of 8,490,000 shares of its authorized but previously unissued common stock, which shares were valued at par value for purposes of the acquisition. The acquisition was accounted for as a purchase, and accordingly, the operating results for DVC 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. (A Nevada Corporation) (A Development Stage Company) Notes to Consolidated Financial Statements June 30, 2002 (In US 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. (A Nevada Corporation) (A Development Stage Company) Notes to Consolidated Financial Statements June 30, 2002 (In US 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. (A Nevada Corporation) (A Development Stage Company) Notes to Consolidated Financial Statements June 30, 2002 (In US Dollars) (Unaudited) Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd) Disclosure about fair value of financial instruments The Company has financial instruments, none of which are held for trading purposes. The Company estimates that the fair value of all financial instruments as defined in FASB 107, does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying balance sheet. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value, and accordingly, the estimates are not necessarily indicative of the amounts that the Company could realize in a current market exchange. Concentration of credit risk Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents which are not collateralized. The Company limits its exposure to credit loss by placing its cash and cash equivalents with high credit quality financial institutions. Fixed assets Fixed assets are stated at cost less accumulated depreciation. Depreciation is recorded on the following rates: Office equipment - 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 June 30, 2002, the fixed assets and accumulated depreciation are as follows:
Accumulated Net Book At Cost Depreciation Value ----------------------------------- 12/31/01 6/30/01 6/30/02 6/30/02 6/30/02 ---------- ---------- ---------- ---------- ---------- Office equipment $ 5,430 $ 5,430 $ 5,430 $ 6,064 $ (634) Vehicles 11,105 28,350 11,105 (2,055) 13,160 Computer equipment 49,248 49,248 49,248 15,160 34,088 ---------- ---------- ---------- ---------- ---------- $ 65,783 $ 83,028 $ 65,783 $ 19,169 $ 46,614 ========== ========== ========== ========== ==========
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. (A Nevada Corporation) (A Development Stage Company) Notes to Consolidated Financial Statements June 30, 2002 (In US 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: Six Months Ended June 30, ---------------------------- 2002 2001 ------------- ------------- Beginning balance $ 180 $ (468) Change during the period 20 265 ------------- ------------- Ending balance $ 200 $ (203) ============= ============= The effect of exchange rate changes on cash balances forms part of the reconciliation of change in cash and cash equivalents during the period. DIGITAL VILLAGE WORLD TECHNOLOGIES, INC. (A Nevada Corporation) (A Development Stage Company) Notes to Consolidated Financial Statements June 30, 2002 (In US Dollars) (Unaudited) Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd) Revenue Recognition The Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) 101, Revenue Recognition in Financial Statements, in December 1999. The SAB summarizes certain of the SEC staff's views in applying generally accepted accounting principles to revenue recognition in financial statements. When the Company has revenue, the Company will perform a review of its revenue recognition policies and determine that it is in compliance with SAB 101. Note 3. CASH AND CASH EQUIVALENTS - $4,520 The total for cash and cash equivalents as at June 30, 2002, is made up as follows: Cash in bank current accounts $ 2,675 Cash in lawyer's trust account 1,845 ------------ Total $ 4,520 ============ Note 4. ACCOUNTS RECEIVABLE - $7,879 The accounts receivable balance of $7,879 as at June 30, 2002 is Canadian Goods and Services Taxes refundable. $4,732 was subsequently received on August 9, 2002. 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 evaluated at each reporting period. Management has determined that there is no impairment in the value of this goodwill below its cost. Note 6. ACCOUNTS PAYABLE - $13,165 Details of the total of accounts payable and accrued as at June 30, 2002, are as follows: Frascona, Joiner, Goodman and Greenstein, P.C. $ 2,323 Moen and Company 4,862 Loeb & Loeb LLP 756 Resident Agents of Nevada, Inc. 197 RR Donnelley Receivables, Inc. 5,027 ------------ Total $ 13,165 ============ DIGITAL VILLAGE WORLD TECHNOLOGIES, INC. (A Nevada Corporation) (A Development Stage Company) Notes to Consolidated Financial Statements June 30, 2002 (In US Dollars) (Unaudited) Note 7. RELATED PARTY TRANSACTIONS - $347,341 The amount of $144,423 is due to a related party, Tianjin Teda Yu Cheng Group. The amount of $202,918 is due to Directors of the Company as at June 30, 2002 for loans that they have advanced to the Company. These amounts are unsecured, non interest bearing, with no specific terms of repayment, but in any event no earlier than June 30, 2003, and accordingly are classified as long-term liabilities. The comparative amount was previously disclosed as a current liability at June 30, 2001, and is restated in these financial statements. Note 8. LEASE OBLIGATIONS a) Vehicle Lease On January 19, 2000, DVC entered into a 36 month lease with Lansdowne Dodge City Ltd. for a vehicle to be used by the Company. Lease payments are expensed as they are incurred. Lease obligations are as follows: 2002 CAD$ 4,000 2003 CAD$ 667 b) Lease of Premises DVC has lease obligations for office premises for the next 12 months for CAD$25,369. Note 9. 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 June 30, 2002, are as follows:
Additional Issued Number of Par Paid-in Date Shares Value Capital Total -------------- -------------- -------------- -------------- -------------- private placement 9/15/98 1,000,000 $ 1,000 $ 1,500 $ 2,500 private placement 12/31/98 750,000 750 74,250 75,000 ---------- ---------- ---------- ---------- Balance 12/31/98 1,750,000 1,750 75,750 77,500 ---------- ---------- ---------- ---------- Balance 12/31/99 1,750,000 1,750 75,750 77,500 ---------- ---------- ---------- ---------- Balance, before forward split 5/19/00 1,750,000 $ 1,750 $ 75,750 $ 77,500 ========== ========== ========== ========== 2.5:1 forward split 5/19/00 4,375,000 1,750 75,750 77,500 Share exchange 12/18/00 8,490,000 3,396 - 3,396 ---------- ---------- ---------- ---------- Balance 12/31/00 12,865,000 5,146 75,750 80,896 issued for cash 2/7/01 10,000 4 9,996 10,000 issued for compensation 3/30/01 20,000 8 19,992 20,000 issued for cash 4/6/01 11,000 4 10,996 11,000 ---------- ---------- ---------- ---------- Balance 6/30/02 12,906,000 $ 5,162 $ 116,734 $ 121,896 ========== ========== ========== ==========
DIGITAL VILLAGE WORLD TECHNOLOGIES, INC. (A Nevada Corporation) (A Development Stage Company) Notes to Consolidated Financial Statements June 30, 2002 (In US Dollars) (Unaudited) Note 10. 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 $318,745 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 11. FINANCIAL INSTUMENTS The Company's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and accrued and due to related parties. It is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial statements approximates their carrying values. Note 12. PENSION AND EMPLOYMENT LIABILITIES The Company does not have liabilities as at June 30, 2002, for pension, post-employment benefits or post-retirement benefits. The Company does not have a pension plan. Note 13. 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 China.("Yu Cheng"). (a) Proposed 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. (A Nevada Corporation) (A Development Stage Company) Notes to Consolidated Financial Statements June 30, 2002 (In US Dollars) (Unaudited) Note 13. PROFIT SHARING AGREEMENT (cont'd) (iii) The 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 Business and to raise working capital for the 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 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 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 Business. ) (ii) Net Profits will be defined according to GAAP as determined by the auditor of the 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 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 Business as addition to a loan account owed to that party by the 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 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 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. (A Nevada Corporation) (A Development Stage Company) Notes to Consolidated Financial Statements June 30, 2002 (In US Dollars) (Unaudited) Note 13. 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 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. (A Nevada Corporation) (A Development Stage Company) Notes to Consolidated Financial Statements June 30, 2002 (In US Dollars) (Unaudited) Note 13. 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. Mr. Edward Chen, who resigned on May 15, 2002 as Director of the Company has paid $56,774 (480,000 Chinese Yuan) to Yuxun on behalf of the Company. This amount was recorded as an investment and advance to Yuxun Digital Hi-Tech Co. Ltd. and as a loan from related parties. DIGITAL VILLAGE WORLD TECHNOLOGIES, INC. (A Nevada Corporation) (A Development Stage Company) Notes to Consolidated Financial Statements June 30, 2002 (In US Dollars) (Unaudited) Note 13. PROFIT SHARING AGREEMENT (cont'd) The abovementioned joint venture has not been formed as yet due to inability of DVC to raise the $500,000 in capital as at June 30, 2002. This deal is being renegotiated. Note 14. 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. (A Nevada Corporation) (A Development Stage Company) Notes to Consolidated Financial Statements June 30, 2002 (In US Dollars) (Unaudited) Note 15. PROPOSED DEBT FINANCING The Company has, in January, 2002 entered into negotiations with a group of seven company shareholders for loans totaling in the aggregate $300,000 US, non-interest bearing, for a term of twenty-four months, secured by promissory notes to be issued to each lender for the specific amounts borrowed by the Company. To June 30, 2002, $96,000 US has been advanced to the Company and is included in amounts advanced by related parties (see note 7). Note 16. PROPOSED ACQUISITION/PROPOSED CHANGE OF CONTROL Subsequent to June 30, 2002, the Company entered into an Asset Purchase Agreement ( the "Agreement") with Beijing Super Energy Yu Heng Technology Developments Co. Ltd. ("Super Energy"). Pursuant to the Agreement, the Company would acquire all of the assets of Super Energy Yu Hen Co. Ltd, a 100% owned subsidiary of Super Energy in exchange for 12,000,000 shares of the Company, representing approximately 48.18 percent of the outstanding shares of the Company. Closing of the Agreement would result in a change in control of the Company. As of the date of this filing, the Agreement had not been closed. 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 and six month periods ended June 30, 2002 and June 30, 2001 and the Annual Report Form 10KSB filed by the Company on April 8, 2002 for the 2001 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 and six month periods ended June 30, 2002 and June 30, 2001. 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 and is currently being re-negotiated. Formal Chinese business operations have not as yet commenced. There was no revenue for the quarter and also no revenue earned during the comparable quarter in 2001. 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 $24,469 as compared to $36,747 for the comparable period in 2001. The 2002 figure included a $2,840 provision for depreciation. As a result, for the quarter ended June 30, 2002, the Company had a net loss of $24,469, as compared to a loss of $36,747 for the same quarter of 2001. General and administrative expenses were $24,469 for the three-month period ended June 30, 2002 versus $36,747 for the corresponding period in 2001. The expenses were primarily due to operating costs of DV-Canada which included expenditures of $5,933 for rental expenses, $1,530 in telephone and utilities costs, a credit balance for transfer agent fees of <$7,188>, and $5,273 for travel and promotion. Professional fees for the quarter were $15,212 as against $800 during the 2001 quarter. The 2001 comparative quarterly period reflected costs of $8,362 for rental expenses, $1,995 for telephone and utility costs, nil for transfer agent costs, and $7,817 for travel and promotion. Salaries and benefits expenses were nil for the period ended June 30, 2002 against $9,798 in the corresponding period in 2001. During the six-month period ended June 30, 2002, expenses totaled $50,088 which included $10,923 for rental expenses, $2,862 in telephone and utilities costs, an overall credit amount of <$3,733> for transfer agent costs and $11,530 for travel and promotion. The 2001 comparative six-month period reflected costs of $14,411 for rental expenses, $13,819 in telephone and utilities costs, $5,911 for transfer agent fees and $21,872 for travel and promotion. Salaries and benefits were $1,428 for the six-month period ended June 30, 2002 against $36,258 in the comparable period in 2001. Professional fees for the 2002 six-month period totaled $17,080 as against $24,476 in the 2001 comparative period. Revenues for the six-month period ended June 30, 2002 were nil as compared to $3,766 during the comparable six-month period in 2001. For the remainder of the current fiscal year, the Company expects to incur a loss as a result of expenses associated with compliance with the reporting requirements of the Securities Exchange Act of 1934 and costs related to launch of Chinese operations. During the balance of the 2002 fiscal year, the Company expects to launch its Chinese operations coincident with the closing of a significant equity financing. Liquidity and Capital Resources The cash balance at the end of the period was $4,520 compared to $8,828 at June 30, 2001. Accounts receivable at June 30, 2002 were $7,879 and there were no pre-paid expenses. Comparative figures for June 30, 2001 were $11,706 and $5,107. For the three-month period ended June 30, 2002, the Company's activities used cash and cash equivalents of $38,174 compared to a net increase in cash of $2,897 in the comparable period for 2001. For the six-month period ended June 30, 2002, the Company's activities increased cash by $2,237 compared to a usage of $88,729 in the comparable period in 2001. Working capital was <$766> as at June 30, 2002 versus $10,541 as at June 30, 2001. 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. To the extent of any shortfall in financing, the Company's operations will be delayed, curtailed or prevented, and the Company may be required to suspend or substantially modify its operations. There were no income taxes incurred for the reporting period. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is not a party to any pending or to the best of its knowledge, any threatened legal proceedings. No director, officer or affiliate of the Company, or owner of record or of more than five percent (5%) of the securities of the Company, or any associate of any such director, officer or security holder is a party adverse to the Company or has a material interest adverse to the Company in reference to pending litigation. ITEM 2. SALE OF UNREGISTERED SECURITIES None for the period. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not Applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS During the reporting period, no matters were submitted to a vote of security holders. ITEM 5. OTHER INFORMATION On July 23, 2002, the Company entered into an Asset Purchase Agreement (the "Agreement") with Beijing Super Energy Yu Heng Technology Developments Co. Ltd. ("Super Energy"). Puruant to the Agreement, the Company would acquire all of the assets of Super Energy Yu Hen Co. Ltd, a 100% owned subsidiary of Super Energy in exchange for 12,000,000 shares of the Company, representing approximately 48.18 percent of the outstanding shares of the Company. Closing of the Agreement would result in a change in control of the Company. As of the date of this filing, the Agreement had not been closed. During the quarter on May 15, 2002, Peng Chen, a director and Vice President of the Company, resigned his positions for personal reasons. 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 June 30, 2002. b. Filings on Form 8-K - none - Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Digital Village World Technologies, Inc. (the "Company") on Form 10-QSB for the period ending June 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report'), I, Stephen Dadson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Stephen Dadson - ------------------------------------------- Stephen Dadson Chief Executive Officer August 12, 2002 Exhibit 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Digital Village World Technologies, Inc. (the "Company") on Form 10-QSB for the period ending June 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report'), I, Richard Wang, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Richard Wang - ------------------------------------------- Richard Wang Chief Financial Officer August 12, 2002 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/ Richard Wang - ------------------------------------- ------------------------------------- Yu Wen Cheng, President Richard Wang, Director Date: August 14, 2002 -----END PRIVACY-ENHANCED MESSAGE-----