SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10QSB
Quarterly Report under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended Commission File Number
----------------- ----------------------
0-30145
September 30, 2004 33-41063-A
GLOBAL ASSETS & SERVICES, INC.
--------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-3723328
---------------------------------- --------------------------
State or Other Jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
13575 58th Street North, Suite 122, Clearwater, FL 33760
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(Address of principal Executive Offices Zip Code)
Registrant's telephone number, including area code: (727) 538-1434
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to the filing
requirements for at least the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
88,997,767 as of September 30, 2004
Item 1. Financial Statements
GLOBAL ASSETS & SERVICES, INC.
(RESTATED)
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
FOR THE NINE-MONTHS ENDED SEPTEMBER 30, 2004
Michael Johnson & Co., LLC.
9175 Kenyon Ave., #100
Denver, CO 80237
Phone: 303-796-0099
Fax: 303-796-0137
ACCOUNTANT'S REVIEW REPORT
Board of Directors of
Global Assets and Services, Inc.
We have reviewed the accompanying balance sheet for Global Assets & Services,
Inc. (a development stage company) for September 30, 2004 and the related
statements of operations for the three and nine-months ended September 30, 2004
and 2003 and for the period from May 25, 1988 (inception) to September 30, 2004
and cash flows for the nine-months ended September 30, 2004 and 2003 and for the
period from May 25, 1988 (inception) to September 30, 2004, included in the
accompanying Securities and Exchange Commission 10-QSB for the period ended
September 30, 2004. These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States, the objective
of which is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are unaware of any material modifications that should be
made to the accompanying financial statements for them to be in conformity with
accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company is in the Development State, and will require
funds from profitable operations, from borrowing or from sale of equity
securities to execute its business plan. Management's plan in regard to these
matters, are also discussed in Note 2. These factors raise substantial doubt
about its ability to continue as a going concern. The financial statements do
not include any adjustments that might result from this uncertainty.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the balance sheet as of December 31, 2003, and
the related statements of operations, stockholders' equity and cash flows for
the year then ended (not presented herein). In our report dated April 12, 2004,
we expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying balance sheet as of
September 30, 2004 is fairly stated in all material respects in relation to the
balance sheet from which it has been derived.
/s/ Michael Johnson & Co., LLC
Michael Johnson & Co., LLC
Denver, CO
November 15, 2004
F-1
GLOBAL ASSETS AND SERVICES, INC.
(A Development Stage Company)
Balance Sheets
(Unaudited)
September 30, December 31,
2004 2003
----------------- ------------------
ASSETS:
Current assets:
Cash $ 1,000 $ 332
----------------- ------------------
Total current assets 1,000 332
----------------- ------------------
TOTAL ASSETS $ 1,000 $ 332
================= ==================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts Payable and Accrued Liabilities $ - $ 21,795
Notes Payable - Shareholder 1,000 31,175
----------------- ------------------
Total Current Liabilities 1,000 52,970
----------------- ------------------
Stockholders' Equity:
Common Stock, $.001 Par Value, 100,000,000 shares
authorized, 88,997,767 shares issued and outstanding 88,997 31,497
in 2004 and 31,497,767 issued and outstanding in 2003
Additional Paid-In Capital 3,243,653 3,013,653
Deficit accumulated during the development stage (3,332,650) (3,097,788)
----------------- ------------------
Total Stockholders' Equity (Deficit) - (52,638)
----------------- ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,000 $ 332
================= ==================
See Accountant's Review Report.
F-2
GLOBAL ASSETS AND SERVICES, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
May 25, 1988
Three-Months Ended Nine-Months Ended (Inception) to
September 30, September 30, September 30,
2004 2003 2004 2003 2004
------------- ------------ ------------- ------------ ---------------
Revenue
Revenue $ - $ - $ - $ - $ 846,545
(Less) Cost of Sales - - - - (336,524)
------------- ------------ ------------- ------------ ---------------
Total Income - - - - 510,021
Operating Expenses
Doubtful Accounts - - - - 34,469
Consultant Fees 193,637 - 193,637 268,299 1,890,749
Legal & Accounting 40,975 500 40,975 3,000 158,183
Advertising - - - - 14,542
Directors & Officers Fees - - - 435,000 1,409,500
Telephone - 829 - 1,959 30,412
Travel - - - - 19,409
Rent - 1,125 - 3,998 52,594
Business Expenses - 869 250 3,612 228,257
------------- ------------ ------------- ------------ ---------------
Total Expenses 234,612 3,323 234,862 715,868 3,838,115
------------- ------------ ------------- ------------ ---------------
Net Loss From Operations (234,612) (3,323) (234,862) (715,868) (3,328,094)
------------- ------------ ------------- ------------ ---------------
Other Income
Interest Expense - - - - (8,577)
Interest Income - - - - 4,021
------------- ------------ ------------- ------------ ---------------
Net Loss $ (234,612) $ (3,323) $ (234,862) $(715,868) $ (3,332,650)
============= ============ ============= ============ ===============
Per Share Information:
Weighted average number of
common shares outstanding 31,497,767 29,292,767 31,497,767 29,292,767
------------- ------------ ------------- ------------
Net Loss per Common Share $ (0.01) * $ (0.01) $(0.02)
============= ============ ============= ============
See Accountant's Review Report
F-3
GLOBAL ASSETS AND SERVICES, INC.
(A Development Stage Company)
Statement of Cash Flows
(Unaudited)
May 25, 1988
Nine-Months Ended (Inception) to
September 30, September 30,
2004 2003 2004
-------------- -------------- ------------------
Cash Flows from Operating Activities:
Net Loss $(234,862) $(715,868) $ (3,332,650)
Stocks issued for services 37,500 700,000 2,195,437
Adjustments to reconcile net loss to cash
used in operating activities:
Increase (decrease) in accounts payable (21,795) 2 -
-------------- -------------- ------------------
Net Cash Flows Used by Operating Activities (219,157) (15,866) (1,137,213)
-------------- -------------- ------------------
Cash Flows from Financing Activities:
Proceeds from Notes Payable - Shareholder 1,000 16,500 1,000
Payment of Notes Payable - Shareholders (31,175) - -
Issuance of Stock for Asset Acquisition - - 656,250
Issuance of Common Stock 250,000 - 480,963
-------------- -------------- ------------------
Net Cash Flows Provided by Financing Activities 219,825 16,500 1,138,213
-------------- -------------- ------------------
Net Increase (Decrease) in Cash 668 634 1,000
-------------- -------------- ------------------
Cash and cash equivalents - Beginning of period 332 1,365 -
-------------- -------------- ------------------
Cash and cash equivalents - End of period $ 1,000 $ 1,999 $ 1,000
============== ============== ==================
Supplemental Disclosure of Cash Flow Information
Cash paid for Interest $ - $ - $ -
============== ============== ==================
Cash paid for Income Taxes $ - $ - $ -
============== ============== ==================
Non-Cash Transactions
Common stock issued for services $ 37,500 $ 700,000 $ 2,195,437
============== ============== ==================
See Accountant's Review Report
F-4
GLOBAL ASSETS AND SERVICES, INC.
(A Development Stage Company)
Statement of Stockholders' Equity (Deficit)
September 30, 2004
(Unaudited)
Deficit
Accumulated
Additonal During the
Common Stock Paid-In Development
# of Shares Amount Capital Stage Totals
-------------- -------------- ------------- --------------- ----------------
Balance - December 31, 1997 4,397,767 4,397 204,566 (208,963) -
-------------- -------------- ------------- --------------- ----------------
Balance - December 31, 1998 4,397,767 4,397 204,566 (208,963) -
-------------- -------------- ------------- --------------- ----------------
Balance - December 31, 1999 4,397,767 4,397 204,566 (208,963) -
-------------- -------------- ------------- --------------- ----------------
Balance - December 31, 2000 4,397,767 4,397 204,566 (208,963) -
-------------- -------------- ------------- --------------- ----------------
Stock issued for services 12/11 3,400,000 3,400 - - 3,400
Net Loss for year - - - (39,462) (39,462)
-------------- -------------- ------------- --------------- ----------------
Balance - December 31, 2001 7,797,767 7,797 204,566 (248,425) (36,062)
-------------- -------------- ------------- --------------- ----------------
Stock issued for cash 3/28 20,000 20 1,980 - 2,000
Stock issued for services 3/28 6,800,000 6,800 673,200 - 680,000
Stock issued for services 4/2 1,000,000 1,000 99,000 - 100,000
Stock issued for services 6/18 500,000 500 49,500 - 50,000
Stock issued for services 7/12 710,000 710 70,327 - 71,037
Stock issued for Asset Acquistion 8/12 1,750,000 1,750 654,500 - 656,250
Stock issued for services 8/12 590,000 590 58,410 - 59,000
Stock issued for cash 9/18 80,000 80 19,920 - 20,000
Stock issued for cash 10/15 4,945,000 4,945 489,555 - 494,500
Net Loss for Year - - - (2,103,229) (2,103,229)
-------------- -------------- ------------- --------------- ----------------
Balance - December 31, 2002 24,192,767 24,192 2,320,958 (2,351,654) (6,504)
-------------- -------------- ------------- --------------- ----------------
Stock issued for services 1/15 2,775,000 2,775 252,225 - 255,000
Stock issued for services 3/11 2,630,000 2,630 252,370 - 255,000
Stock issued for services 4/20 100,000 100 9,900 - 10,000
Stock issued for services 5/28 1,800,000 1,800 178,200 - 180,000
Loss for Year - - - (746,134) (746,134)
-------------- -------------- ------------- --------------- ----------------
Balance - December 31, 2003 31,497,767 31,497 3,013,653 (3,097,788) (52,638)
-------------- -------------- ------------- --------------- ----------------
Stock Issued for Cash 50,000,000 50,000 200,000 - 250,000
Stock Issued for Services 7,500,000 7,500 30,000 - 37,500
Loss for Period - - - (234,862) (234,862)
-------------- -------------- ------------- --------------- ----------------
Balance - September 30, 2004 88,997,767 $ 88,997 $3,243,653 $(3,332,650) $ -
============== ============== ============= =============== ================
See Accountant's Review Report
F-5
GLOBAL ASSETS AND SERVICESS, INC.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2004
(Unaudited)
Note 1 - Presentation of Interim Information:
-----------------------------------
In the opinion of the management of Global Assets & Services, Inc., the
accompanying unaudited financial statements include all normal adjustments
considered necessary to present fairly the financial position as of September
30, 2004, and the results of operations for the three-months and nine-months
ended September 30, 2004 and 2003, and May 25, 1988 (inception) to September 31,
2004, and cash flows for the nine-months ended September 30, 2004 and 2003 and
May 25, 1988 (inception) to September 30, 2004. Interim results are not
necessarily indicative of results for a full year.
The financial statements and notes are presented as permitted by Form 10-QSB,
and do not contain certain information included in the Company's audited
financial statements and notes for the fiscal year ended December 31, 2003.
Note 2 - Going Concern:
-------------
The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business.
The Company is in the development stage and has not earned any revenue from
operations. The Company's ability to continue as a going concern is dependent
upon its ability to develop additional sources of capital or locate a merger
candidate and ultimately, achieve profitable operations. The accompanying
financial statements do not include any adjustments that might result from the
outcome of these uncertainties. Management is seeking new capital to revitalize
the Company.
F-6
GLOBAL ASSETS AND SERVICESS, INC.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2004
(Unaudited)
Note 3 - Share Purchase Agreement:
------------------------
On September 15, 2004 the Board of Directors resolved that for the consideration
received in the private placement ($250,000), the transfer agent is authorized
and instructed to issue 50,000,000 shares of Restricted Common stock to Praise
Direct Holdings Limited for the purchase of the assets of the company. It was
also resolved that 7,500,000 shares of Restricted Common stock be issued to Top
Harmony Holdings Limited for services.
F-7
Item 2. Management's Discussion and Analysis of Financial Condition and Results
----------------------------------------------------------------------------
of Operations
-----------
The forward-looking statements included in Management's Discussion and
Analysis of Financial Condition and Results of Operations, which reflect
management's best judgment based on factors currently known, involve risks and
uncertainties. Our actual results may differ significantly from the results
discussed in the forward-looking statements. You should not regard their
inclusion as a representation by us that the objectives or plans will be
achieved. Factors that might cause such a difference include, but are not
limited to, competitive, technological, financial and business challenges making
it more difficult than expected to sell products and services. We may be unable
to hire and retain our key sales, technical and management personnel; there may
be other material adverse changes in our industry or in our operations or
business, and any or all of these factors may affect our ability to achieve our
projected sales growth. Forward-looking information provided by Global Assets
and Services, Inc. should be evaluated in the context of these factors.
Results of Operations for the quarter ended September 30, 2004 compared to
------------------------------------------------------------------------
quarter ended September 30, 2003
--------------------------------
The Company had no revenue for the period in 2004 or 2003. The company
incurred expenses totalling $234,612 in the quarter in 2003 compared to $3,323
in expenses in the quarter in 2003. The expenses in the quarter in 2004
consisted of legal and accounting of $40,975, consulting fees of $193,637, and
miscellaneous expenses. The company had a net loss of ($234,612) in the quarter
in 2004 compared to a ($3,323) loss in the quarter in 2003. The company had a
loss per share in the quarter in 2004 of ($.01). The loss per share in the
quarter in 2003 was nominal.
Results of Operations for the Nine Months Ended September 30, 2004 and
----------------------------------------------------------------------
September 30, 2003
------------------
The Company had no revenues for the nine month period ended September 30 in
2004 or 2003. The Company incurred expenses in the period in 2004 of $234,862
compared to $715,868 in the period in 2003. The company incurred $193,637 in
consulting, $40,975 in legal and accounting fees, $1,125 in rent, and $869 in
miscellaneous expenses in the period in 2004 compared to $268,299 in consulting
fees, $3,000 in legal and accounting, $435,000 in Directors' and officers' fees,
$1,959 in telephone expenses, $3,998 in rent, and $3,612 in miscellaneous
expenses in 2003 in the period. The company had a net loss of ($234,862) in the
nine month period in 2004 compared a net loss of ($715,868) in 2003. The net
loss per share was ($.01) for the period in 2004 and ($.02) in 2003.
2
The company expects to continue to incur expenses for the forseeable future
at a similar rate as in the nine month period in 2004. It cannot predict
revenues at the date of this report.
Liquidity and Capital Resources
-------------------------------
At September 2004, the Company had $1,000 cash and no other current assets
with which to conduct operations. The lack of liquidity or liquid assets raises
substantial doubt about the Company's ability to continue as a going concern
unless it is able to generate sufficient cash flows to meet its obligations and
sustain operations.
NEED FOR ADDITIONAL FINANCING
The Company does not have capital sufficient to meet the Company's cash
needs, including the costs of compliance with the continuing reporting
requirements of the Securities Exchange Act of 1934. The Company will have to
seek loans or equity placements to cover such cash needs. There is no assurance,
however, that without funds it will ultimately allow registrant to carry out any
business. The Company's needs for additional financing are likely to increase
substantially. The Company will need to raise additional funds to conduct any
business activities in the next twelve months.
No commitments to provide additional funds have been made by management or
other stockholders. Accordingly, there can be no assurance that any additional
funds will be available to the Company to allow it to cover its expenses as they
may be incurred. As of the date of this report management does not have any plan
for raising additional capital, and does not know if or when it can or will
develop a plan.
Irrespective of whether the Company's cash assets prove to be inadequate to
meet the Company's operational needs, the Company will compensate providers of
services by issuances of stock in lieu of cash.
The Company has no plans for any research and development in the next
twelve months. The Company has no plans at this time for purchases or sales of
fixed assets which would occur in the next twelve months.
The Company has no expectation or anticipation of significant changes in
number of employees in the next twelve months.
3
The Company's auditor has issued a "going concern" qualification as part of
his opinion in the Audit Report. There is substantial doubt about the ability of
the Company to continue as a "going concern." The Company has no business, no
capital, debt in excess of $234,000, all of which is current, no cash, no
assets, except intangible licenses which are illiquid and no capital
commitments. The effects of such conditions could easily be to cause the
Company's bankruptcy.
GOING CONCERN
The Company's auditor has issued a "going concern" qualification as part of
his opinion in the Audit Report for year ended December 31, 2003. There is
substantial doubt about the ability of the Company to continue as a "going
concern." The Company has no business, limited capital, debt in excess of $1,000
of which is all current, $1,000 in cash, minimal other liquid assets, and no
capital commitments. The effects of such conditions could be to cause the
Company's bankruptcy.
Management hopes to seek and obtain funding, via loans or private
placements of stock for operations, debt and to provide working capital.
Management has plans to seek capital in the form of loans or stock private
placements.
Item 3. Controls and Procedures
-------------------------------
The management of the company has evaluated the effectiveness of the
issuer's disclosure controls and procedures as of a date within 90 days prior to
the filing date of the report (evaluation date) and have concluded that the
disclosure controls and procedures are adequate and effective based upon their
evaluation as of the evaluation date.
There were no significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to the date of the
most recent evaluation of such, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Trends: The company expects that the trend of no income and ongoing losses
will continue in the future until a business operation has been achieved which
may afford revenues and potential cash flows. No assurance can be made that any
such operation will ever occur.
4
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
------ -----------------
None
ITEM 2. CHANGES IN SECURITIES
------ ---------------------
On September 15, 2004 the Board of Directors resolved that for the
consideration received in the private placement ($250,000), 50,000,000 shares of
Restricted Common stock was issued to Praise Direct Holdings Limited. Also
7,500,000 shares of Restricted Common stock be issued to Top Harmony Holdings
Limited for services.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
------ ------------------------------
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------ ---------------------------------------------------
None
ITEM 5. OTHER INFORMATION
------ -----------------
Xexi Xu was appointed President and director in September 2004, and Alice
Chan was appointed Secretary and director in September 2004.
New Directors and Executive Officers
The following biographical information concerning the New Directors is provided.
Mr. Xu Kexi, age 41, graduated from high school in Shanghai in 1982. Mr. Xu
was the supervisor of the Shanghai Textile Company from 1982 to 1985, the Export
Manager of Shengzhen China Import-Export Company from 1985-1990, the Manager of
Shanghai Galaxy Film Limited from 1990-1996. From 1996 to the present, Mr. Xu
has been the Chief Executive Officer of Shanghai Asia Loyalty Tradings Limited.
Miss Chan Yi Tung Alice Anastasia, age 36, graduated in 1995 from the
University of Minnesota, United States of America. She was the Administrative
Manager of Minghua Group Holdings Limited, a company listed on NASD's
Overt-the-Counter Bulletin Board in the United States of America until May 2002.
In the past, Miss Chan has worked as the Sales Manager for the KYH Steel Co.,
Limited, a steel stocklist in Hong Kong, and as the Administrative Officer of
B+B Asia Limited, a contractor in Hong Kong, with its parent company, located in
Germany. At present, Miss Chan is a director of Genuisoft Limited, a company
involved in the research, development, and production of remote surveillance
monitoring, data security, and wireless communication systems.
The New Directors have taken office on September 20, 2004. Mr. Xu Kexi, one
of the New Directors beneficially own 50,000,000 common shares of the Company.
None of the New Directors has been involved in any trans- action with the
Company or any of its Current Directors or officers that is required to be
disclosed pursuant to the rules and regulations of the Securities and Exchange
Commission prior to date hereof.
5
Prior to September 20, 2004, the Company spun off the shares of its wholly
owned subsidiary Global Tech Assets, Inc. pro rata to shareholders as a
dividend. Global Tech holds the technology licenses previously held by the
Company. None of which were producing revenue.
ITEM 6. EXHIBITS
------- --------
Exhibits: 31 Sarbanes-Oxley Certification
32 Sarbanes-Oxley Certification
6
GLOBAL ASSETS & SERVICES, INC.
(A Development Stage Company)
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 thereunto duly authorized.
GLOBAL ASSETS & SERVICES, INC.
Date: November 22, 2004 By: /s/ Kexi Xu
-------------------------------------
Kexi Xu, President, CEO, & CFO
7