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UNITED
STATES
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SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K
(X) ANNUAL REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For
the fiscal year ended December
31, 2007
OR
( ) TRANSITION REPORT
UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For
the transition period from ______________ to
_____________
Commission
File Number : 0 - 26559
CHINA
MOBILITY SOLUTIONS, INC.
(Name
of small business issuer in its charter )
Florida
330-751560
(State or other jurisdiction of incorporation
or organization
)
( I. R. S. Empl. Ident. No. )
407-1270 Robson Street, Vancouver, B.C. V6E 3Z6
(Address of principal
executive offices ) ( Zip Code )
604
- 632 - 9638
(Issuer's
telephone number )
Securities
registered under Section 12(b) of the Exchange Act
: None
Securities
registered under Section 12(g) of the Exchange Act :- Common
Stock, $0.001 par value
Check
whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the 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
( )
Check
if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-K contained in this form,
and no disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statement
incorporated by reference in Part III of this Form 10-K or any amendment
to this Form 10-K ( )
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-
accelerated
filer, or a small reporting company. See definitions of "large accelerated
filer," "accelerated filer,"
and
"small reporting company" in Rule 12B-2 of the Exchange
Act. (Check one) :
Large accelerated filer
( )
Accelerated
filer ( )
Non-accelerated
filer ( )
Smaller
reporting
company ( )
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange
Act) YES ( X ) NO
( )
The aggregate market value of the voting stock
held by non-affiliates of the registrant on September 30, 2008
was
$5,314,243 based on a closing bid price of $0.25 per share
Number of outstanding shares of the
Registrant's $0.001 par value common stock, as of September 30,2008
was
21,256,971
shares.
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CHINA
MOBILITY SOLUTIONS, INC.
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FORM
10-K
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|
For
the Fiscal Year Ended December 31, 2007
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TABLE
OF CONTENTS
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PART
1
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Page
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Item
1
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Description
of Business
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1 -
5
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Item
1A
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Risk
Factors
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6
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Item
1B
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Unresolved
Staff Comments
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6
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Item
2
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Properties
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6
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Item
3
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Legal
Proceedings
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6
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Item
4
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Submission
of Matters to a Vote of Security Holders
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6
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PART
2
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Item
5
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Market
for the Registrant's Common Equity, Related Stockholder Matters and
Issuer
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7 -
8
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Purchases
of Equity Securities
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Item
6
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Selected
Financial Data
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9 -
10
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Item
7
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Management's
Discussion and Analysis of Financial Condition and Results of
Operations
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10
- 12
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Item
7A
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Quantitative
and Qualitative Disclosures about Market Risk
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12
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Item
8
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Financial
Statements and Supplementary Data
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12
- 21
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Item
9
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Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
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22
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Item
9A
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Controls
and Procedures
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22
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Item
9B
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Other
Information
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23
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PART
3
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Item
10
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Directors,
Executive Officers and Corporate Governance
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23
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Item
11
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Executive
Compensation
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24
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Item
12
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Security
Ownership of Certain Beneficial Owners and Management and
Related
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Stockholder
Matters
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24
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Item
13
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Certain
Relationships and Related Transactions, and Director
Independence
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24
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Item
14
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Principal
Accountant Fees and Services
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24
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PART
4
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Item
15
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Exhibits
and Financial Statement Schedules
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24
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Signatures
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Exhibit
Index
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PART
1
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ITEM
1. DESCRIPTION OF BUSINESS
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(a) General
Description and Development of Business
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On
January 16, 2007, application for liquidation (the "Liquidation") of the
operating subsidiaries of China Mobility
Solutions, Inc. (the "Company") in the Peoples' Republic of China ("PRC")
was approved by the Haidian
District, Beijing Bureau of Commerce. The Liquidation application was made
in October, 2006, upon
the advice of PRC counsel that the Beijing Rule of Liquidation was the
sole means available to the Company
to insure the repayment of the $3,350,000 (less any amount that has been
converted) principal amount
of convertible debentures ("Debentures") which matured on August 15,
2006.
In
October 2006, the Company was notified by the PRC State Administration of
Foreign Exchange ("SAFE") that
its application to convert certain cash held by Beijing Quicknet
Technology Development Limited ("Quicknet")
and Shiji Yingfu (the "PRC Subsidiaries") into U.S. dollars and repay the
Debentures was denied. As
part of the Liquidation, the PRC Subsidiaries were ordered to discontinue
operations and set up a liquidation
committee. Their accounting responsibilities were transferred from the
Company to a PRC accounting
firm approved by the PRC regulatory authority. The operations of the PRC
Subsidiaries are reflected
as discontinued operations for the year ended December 31,
2007.
Upon
the Liquidation of the PRC Subsidiaries and the repayment of outstanding
Debentures, the Company does
not know whether the PRC subsidiaries will continue to operate as
subsidiaries of the Company in new entities,
although it is not currently expected they will.
In
view of the foregoing, as a result of the Liquidation, the Company's sole
operations are those of Windsor Education
Academy Inc., a British Columbia based school specializing in English as a
Second Language courses
for foreign students. This business had total revenues of $81,588 for
2007. This operation was discontinued
in September 2007.
On
September 6, 1996, the Company was incorporated under the laws of the
State of Florida under the name of
Placer Technologies, Inc. It conducted an initial public offering of
200,000 shares @ $0.25 per share to achieve
$50,000 in capital. In December 1996, pursuant to a Rule15C2-11 filing,
the Company obtained
approval
to have its Common Stock quoted on the OTCBB, which is a national
quotation service maintained by
the NASD.
The
Company's initial primary service consisted of developing web home pages
for small business in the U.S.A.
It generated minimal revenues in 1996.
On
April 2, 1997, the Company acquired a 100% interest in Infornet Invesment
Limited ("Infornet"), a Hong Kong
corporation. In August 1997 Infornet entered into a joint venture
agreement with Xin Hai Technology Development
Ltd. ("Xin Hai"). Xin Hai was an experienced internet-related services
provider, but the business suffered
loses and was sold and discontinued in
2001.
On
June 11, 1997, the Company purchased a 100% interest in Infornet
Investment Corp. a British Columbia corporation.
Infornet Investment Corp. is the subsidiary that manages daily operations
of the Company.
On
July 24, 1998, the Company changed its name from Placer Technologies, Inc.
to Xin Net Corp.
In
June 2004, the Company changed its name to China Mobility Solutions, Inc.
concurrent with a one-for-three reverse
split.
In
August 2008, the Company changed its name to Global Peopleline Telecom
Inc. concurrent with one-for-hundred
reverse
split.
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On
June 23, 2004, the Company consummated the acquisition of a 49% interest
in Quicknet, a company organized
under the laws of the Peoples' Republic of China, pursuant to a share
purchase agreement. The Company
issued 6,120,000 shares of its common stock as payment. On September 30,
2005, the Company
indirectly,
through an affiliate, acquired control of the remaining outstanding shares
of common stock of Quicknet,
and paid US$2,000,000 on September 30, 2005 and an additional US$2,000,000
on or about December
31, 2005. See the discussion under the heading "Quicknet Acquisition" set
forth below.
On
August 8, 2006, the Company and President of a subsidiary of the Company
consummated the acquisition
of a 49% interest in Beijing Topbiz Technology Development Corp., Ltd., a
company organized and
existing under the laws of the People's Republic of China ("Topbiz"),
pursuant to a share purchase agreement.
Topbiz
develops and customizes short messaging system, or SMS, platforms for
banks in China. Topbiz generated
US$2.67 million in revenue and US$785,000 in net profit in 2005, and had
US$1.25 million cash- on-hand
as of December 31, 2005. All such figures have been audited in accordance
with U.S. generally accepted
accounting principles.
As
of September 30, 2006, $950,000 had been paid by the Company. According to
the Topbiz Agreement, the
Company should make a payment of US$1,350,000 three months after closing
date which is before end of
November, 2006. However, since the Company had started the liquidation
process by then, it could not make
such payment on time. The Company and Topbiz stopped the ownership
transferring process and the
Company and Topbiz could not reached an amended agreement on the payment
schedule. The deposit of
US$900,000 was written off in December 31, 2006 and the balance of
US$50,000 was written off in December
31, 2007.
CORPORATE
OVERVIEW
China
Mobility Solutions' structure showing its subsidiaries during 2006 prior
to the Liquidation which commenced
in January 2007 was as follows, with the jurisdiction of incorporation of
each subsidiary included in
parentheses:
China
Mobility Solutions, Inc (Florida, U.S.A.)
Infornet
Investment Corp. Infornet
Investment Ltd.
(100%
Owned) (100%
Owned)
(BC,
Canada) (Hong
Kong)
Windsor Education Academy Inc. Beijing
ShiJiYing Fu Consultant Corp. Ltd.
(100%
Owned) (100%
Owned)
(BC,
Canada) (Beijing,
China)
Xinbiz Corp. Xinbiz
Ltd.
(100% Owned) (100%
Owned by Xinbiz Corp.)
(British
Virgin Islands) - Dormant (Hong
Kong) - Dormant
Beijing
Quick Net Technology Development Corp.
(49%
Owned and 51% Indirectly Owned and Controlled)
(Beijing,
China)
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The
Company incorporated Xinbiz Corp. (British Virgin Islands) on January 14,
2000 and its subsidiary Xinbiz
Ltd. (Hong Kong) on March 10, 2000. Both of these companies are wholly
owned subsidiaries. Xinbiz
Corp. and Xinbiz Ltd. did not have any operations in the past three
years.
Through
its wholly owned subsidiary, Infornet Investment Ltd. (Hong Kong), the
Company formed a joint venture
with Xin Hai Technology Development Ltd. for upgrading telecommunication
technology and services in
China. This evolved into an internet-focused service provider and
e-commerce solutions business. However, the
Company decided in May 2001 to focus its business in China on domain name
registration and web-hosting
services and to discontinue Internet access provision services. On June
22, 2001, the Company entered
into an agreement to sell its ISP assets (Xin Hai). The price for the sale
was $700,000 (USD) payable to
the Company in Renminbi at the official exchange rate. As of December 31,
2003, $500,000 had been received
for the transaction. A loss provision of $200,000 was made against the
balance of the sales price as
the Company determined that the purchaser will not be able to pay the
remaining balance.
Since
the Company started its Internet-related business in The People's Republic
of China ("PRC" or "China"), it
has seen rapid growth in internet use in China; but it has also seen an
equal, if not greater, growth in companies
entering this arena. As a result, the industry experienced severely
reduced operating margins and continued
losses. Although the Company was considered an early leader in the domain
name registration field,
due to the lack of adequate funding, future growth potential against the
many competitors was limited at
best. The Company had struggled for several years to break even and was
hoping for required funding to
grow,
but the plan was nullified when the funding failed to materialize. As
China becomes more and more open
according to the terms of the World Trade Organization, the world's
largest, well-funded companies have
been given access to the China market and have seriously compromised the
Company's competitive
position.
In
February 2003, the Company signed an agreement to sell the Company's China
assets (domain name registration)
to a subsidiary of Sino-i.com Limited, a Hong Kong Stock Exchange listed
company, for a total consideration
of RMB 20 million (approx. US$2.4 million). The Company has received the
entire purchase price,
and the divestiture was completed in 2004.
Education
Business
In
2002, the Company redirected its resources to the education and training
field. On January 6, 2003, the Company
announced the acquisition of Windsor Education Academy Inc. ("Windsor"), a
Richmond, British Columbia
based school specializing in English as a Second Language (ESL) courses to
foreign students.
Total
consideration was CAD $200,000 (about US $128,000 ). Windsor is
government-certified and received a
number of ESL students from the Provincial Government of British Columbia,
but all government programs involving
Windsor ended March 31, 2005. Windsor Academy has a campus in Richmond,
British Columbia. They
are equipped with personal computers and standard classroom fixtures.
Because of the outbreak of SARS,
and its implications for public health and travel to and from China, the
Company could not consummate
any other major acquisitions in China and in Hong Kong during a one-year
period beginning in
March
2003 and, therefore decided to maintain the operation of Windsor while
looking for other opportunities. The
Company ceased this operation in September 2007.
Office
Location
China Mobility Solutions, Inc. currently
maintains an office at : # 407 - 1270 Robson Street, Vancouver, BC
V6E
3Z6 ( telephone number is 1-604-632-9638
).
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Discontinued
Quicknet Operations
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On
June 23, 2004, the Company completed the acquisition of a 49% equity
interest from the shareholders of
Beijing Quicknet Technology Development Corp. ("Quicknet"), located in
Beijing, China by signing a Purchase
Agreement (the "Quicknet Purchase Agreement"). As described above, the
Liquidation of Quicknet
began
in January 2007 and its operations are reflected as discontinued
operations. Management does not believe
that the operations of Quicknet will be transferred to a new entity
controlled by the Company following the
completion of the Liquidation. Quicknet was engaged in the development of
software for mobile/wireless
communication
and for Short Message Services ("SMS"). The Company acquired the 49%
equity interest from
Quicknet shareholders in exchange for the Company's issuance of 6,120,000
shares of common stock of
the Company at a deemed price of $0.50 per share (2,040,000 post-reverse
split shares at a market price of
$0.27 per share for a total of $550,800). In June 2004, the Company signed
a Purchase Agreement (the "Chinaco
Purchase Agreement") with Beijing Shi Ji Rong Chuang Service &
Technology Co., Ltd., a local China
company ("Chinaco"). Which then owned 2% of the equity interest of
Quicknet having purchased a 1%
interest from each of the two shareholders of Quicknet, Mr. Bo Yu and Mr.
Fang Hu. Under the Chinaco Purchase
Agreement, the Company was granted the right to purchase 100% of the
equity of Chinaco for nominal
consideration, solely when Chinese law permits such sale. Chinaco is owned
by two senior officers of
the Company who have Chinese citizenship. Due to current government
restrictions on foreign ownership of
telecommunication companies in China, the Company was not permitted to
acquire the additional 2% of the
equity interest of Quicknet that is still held by Chinaco. At present,
foreign investors such as the Company
can only own up to 49% of telecommunications and related businesses in
China. The 2% Chinaco interest
will only be transferree to the Company at such time Chinese law permits
increased ownership of telecommunications
and related business by foreign investors such as the Company. Chinese law
does not currently
permit such transfer, therefore, Chinaco has granted an unconditional,
irrevocable proxy, without time
limited, to the Company. Through the above-described proxy, the Company
can appoint all directors and
officers of Quicknet and therefore directly and indirectly controls 51% of
the equity interest of Quicknet through
its own equity ownership and its control of Chinaco.
Under
the Quicknet Purchase Agreement, the Company had an option to acquire the
remaining 49% equity interest
in Quicknet through Chinaco from the Quicknet Shareholders within the
first year for $4,000,000. The
Company also had an option to acquire this remaining 49% equity interest
in Quicknet within the second
year
for $5,000,000. The Quicknet Purchase Agreement provided that the Company
could pay these amounts by
50% in shares of the common stock of the Company and 50% in cash. The
final percentage of shares versus
cash could be negotiated between both parties. The Company exercised its
right to purchase the
remaining
49% interest in August 2005 ( the "Option Exercise"), by having Chinaco
purchase a 24.5% interest
from each of the two shareholders of Quicknet, Mr. Bo Yu and Mr. Fang Hu,
for a total of 49% interest
for the agreed-upon purchase price of US $4,000,000. The purchase price
had been paid in the form of
cash. On September 30, 2005, the Company paid US $2,000,000, and paid
another US $2,000,000 before December
31, 2005.
As
previously mentioned, pursuant to the Chinaco Purchase Agreement, the
Company was granted the right to
acquire 100% of the equity of Chinaco, if and when Chinese law permits.
The Company directly owns 49% of
Quicknet and through Chinaco, indirectly controls a combined total of 51%
equity interest, and thus controls
a total 100% of Quicknet. The Company has the right to appoint all of the
directors of Beijing Quicknet.
Until
such time, if ever, that Chinese law permits the transfer of a controlling
interest in Quicknet, the Company will
maintain control of Quicknet under its Quicknet Purchase Agreement,
Chinaco Purchase Agreement, and August
2005 Option Exercise. However, currently, the Company will be unable to
directly own the remaining 51%
interest held by
Chinaco.
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The
Company raised (a) US $1,255,000 through issuing common stock and (b) US
$3,350,000 through issuing
senior
convertible debentures and Class A Warrants and Class B Warrants in 2005
in an offering exempt from
registration
pursuant to Regulation D under the Securities Act of 1993, as amended. A
portion of the proceeds
of
these offerings were used to complete the Quicknet Purchase
Agreement.
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Discontinued
Internet Services
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Up
until late 2002, the Company's business was focused on domain name
registration, web hosting and web
design
services under the ChinaDNS banner. It operated the website
www.chinadns.com, the first in the
PRC
to offer online site registration. In October 1999, ChinaDNS was approved
as an Official Agent of Network
Solutions,
Inc.
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Due
to the continued loss on operations ($254,035 in 2002) in 2003, the
Company entered into an Agreement
to
sell the domain name registration business to China Enterprise, an ASP,
for about $2,400,000, a sale
which
was completed in 2004. We are treating the DNS business as discontinued
operations at this time,
as
China Enterprise is in full control of the
assets.
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NEW
EVENTS
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On
June 5, 2008, the Company and PeopleLine Telecom Inc., a Nevada
corporation with offices at suite - 175
E 15 Avenue, Vancouver, British Columbia V5T 2P6 ("PeopleLine" or
"Seller"), and Mr. Edward Gallagher, entered
into a non-binding Letter of Intent (the "LOI") regarding the acquisition
of approximately 74% of the common
stock of PeopleLine by the Company and Mr. Edward Gallagher. The purpose
of the LOI is to outline
the
objective of consummating the
acquisition.
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PeopleLine
is a Public Company (Pink Sheets Symbol: PPTM) incorporated in Nevada and
managed from its Vancouver
BC office. The Company is an established Internet Service Provider in
Vancouver and a holder of a
CRTC Class B License permitting the Company to sell Local VoIP telephone
services across Canada.
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Mr.
Gallagher specializes in mergers and acquisition, as well as take-over
financing. He was the Chairman of Canada
Payphone Corporation, the first private payphone owner and operator in
Canada. He helped deregulate through
Government Legislation the payphone industry in Canada, and negotiated an
exclusive contract for the installation/operation
of AT & T payphones for
Canada.
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The
Company and Mr. Edward Gallagher (hereby refers as "Buyer") will purchase
Thirty million (30,000,000) PeopleLine
shares held by four (4) existing shareholders at $0.015 per share.
PeopleLine will have forty million
three hundred and ninety-four thousand four hundred and twenty-seven
(40,394,427) shares of its common
stock outstanding mandatory prior to the sale of stock. The company debt
of PeopleLine approximating
$325,000 will be the responsibility of the Buyer. PeopleLine will be the
sole operating subsidiary of
the business
combination.
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Completion
of the transaction is conditioned upon satisfactory completion of due
diligence by both parties, respective
Board of Directors and shareholders approval, if required, approval of at
least 75% of CHMS' outstanding
debenture holders to the terms of this transaction, and other customary
closing
conditions.
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ITEM
1A. RISK FACTORS
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We
operate in a dynamic and rapidly changing business environment that
involves substantial risks and
uncertainty.
Additional risks not presently known to us, or that we currently deem
immaterial, may become
important
factors that impair our business operations. Any of these risks could
caused, or contribute to
causing,
our actual results to differ materially from expectations. Prospective and
existing investors are
strongly
urged to carefully consider the various cautionary statements and risks
set forth in this report and
our
other public filings.
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As
of December 31, 2007 most of our operations are either in liquidation
process or have ceased operating,
we
are not subject to any risk factors.
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ITEM
1B. UNRESOLVED STAFF COMMENTS
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Not
applicable.
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ITEM
2. PROPERTIES
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China
Mobility Solutions, Inc. current maintains a leased office of
approximately 600 square feet at :
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#
407 - 1270 Robson Street, Vancouver, BC Canada V6E 3Z6 (telephone number
is 1-604-632-9638)
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ITEM
3. LEGAL PROCEEDINGS
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In
the ordinary course of business, the Company may be involved in legal
proceedings from time to time.
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As
of the date of this report, the only legal proceedings to report were that
:
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On
September 18, 2006, Southridge Partners, L.P. ("Plaintiff") commenced a
lawsuit against the Company in
the Supreme Court of the State of New York, New York County (No. 603266)
for an alleged default on repayment
of its Senior Convertible Debentures due August 15, 2006 (the
"Debentures"). The motion for summary
judgement in lieu of complaint was granted based on the Company's
Debentures in the amount of $500,000
in favor of Plaintiff which was due on August 15, 2006, with interest at
12% per annum. The Plaintiff
is taking steps to execute its default
judgement.
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On
November 25, 2006, Iroquois Management Fund LTD ("Plaintiff") commenced a
lawsuit against the Company
in the Supreme Court of the State of New York, New York County (No.
6604397/06). The action is
a motion for summary judgement in lieu of complaint based on the Company's
Debentures in the amount of
$375,000 in favor of Plainfiff which was due on August 15, 2006, with
interest at 6% per annum from June
30, 2005 to August 15, 2006, and with interest at 12% per annum from
August 15, 2006 to the date of
entry of judgement, plus costs and
disbursements.
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On
February 7, 2005, the Company was sued by Sino-I Technology Limited for
$88,270 for an alleged beach of
warranty and a claim under a guarantee. The Company has retained separate
counsel to represent it in the
action. Counsel for the Company submitted a Notice of Motion to the
Plaintiff's lawyer on March 7, 2005 and
is seeking an extension of response date. The Company intends to
vigorously defend the suit.
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No
director, officer or affiliate of China Mobility Solutions, Inc., and no
owner of record or beneficial owner of more
than 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 it
in reference to pending litigation.
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See
Item 1. "General Description and Development of Business" for information
concerning the Liquidation of
certain PRC Subsidiaries of the Company.
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ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
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None.
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PART
2
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ITEM
5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED
STOCKHOLDERS MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
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( a
) The Company's common stock is traded on the Over-the-Counter
Bulletin Board maintained by the NASD
under
the trading symbol "CHMS.OB." The following table sets forth high and low
bid prices of the common
stock
for years ended December 31, 2006 and December 31, 2007 as quoted by the
NASD over-the-counter-
bulletin
board as follows :
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|
2007
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|
First
Quarter
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0.15
|
0.045
|
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Second
Quarter
|
0.51
|
0.025
|
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Third
Quarter
|
1.40
|
0.65
|
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Fourth
Quarter
|
1.00
|
0.40
|
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2006
|
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|
First
Quarter
|
0.35
|
0.25
|
|
Second
Quarter
|
0.36
|
0.20
|
|
Third
Quarter
|
0.22
|
0.11
|
|
Fourth
Quarter
|
0.29
|
0.08
|
|
Quotation,
if made, represent only prices between dealers and do not include retail
markups, markdowns or commissions
and accordingly, may not represent actual
transactions.
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The
rules and regulations governing the trading of small issuers' securities,
the Company's securities are presently
classified as "Penny Stock", a classification which places significant
restrictions upon broker-dealers desiring
to make a market in these securities. It has been difficult for management
to interest broker-dealers in
our securities and it is anticipated that these difficulties will continue
until the Company is able to obtain a listing
on NASDAQ, at which time market may trade its securities without complying
with the stringent requirements.
The existence of market quotations should not be considered evidence of an
"established public trading
market". The public trading market is presently limited as to the number
of market markers in Company stock
and the number of states within which its stock is permitted to be
traded.
|
||
|
Holders
|
||
|
( b
) As of September 30, 2008, China Mobility Solutions, Inc. had
approximately 229 shareholders of record of
its common stock. The actual number of stockholders is greater than this
number of record holders, and includes
stockholders who are beneficial owners, but whose shares are held in
street name by brokers and other
nominees.
Dividends
|
||
|
( c
) No dividends on outstanding common stock have ever been paid.
The Company do not anticipate paying any
cash dividends in the foreseeable
future.
|
||
|
Recent
Sales of Unregistered Securities and Use of Proceeds
|
|
None
|
|
A
total of 39,522,500 shares of common stock were issued to 29 Debentures
holders under Conversion Agreements
in satisfaction of $1,675,000 total principal amount of Debentures and
$301,125 unpaid accrued interest
and late registration penalty fees on February 12,
2007.
|
|
During
the Board of Directors meeting on August 7, 2007 resolved to issue to the
President and CFO, Angela
Du a total of 20,000,000 restricted common shares of the Company stock as
compensation for past services
for the period ended December 31, 2005. The Company shall pay to the
President and CFO, Angela
Du, by way of bonus, accrued salary payable in the amount of $110,000 and
issued 73,000,000 restricted
common shares of the Company stock for the fiscal year ended December 31,
2006. The Company shall
increase the salary of the President and CFO, Angela Du to $150,000 and
issued 100,000,000 restricted
common shares of the Company stock for the fiscal year ended December 31,
2007. The Company shall
pay to the Secretary, Ernest Cheung by way of bonus, accrued salary
payable in the amount of $10,000
and issued 6,700,000 restricted common shares of the Company stock for the
fiscal period ended December
31, 2006. The Company shall increase the salary of the Secretary, Ernest
Cheung to $75,000 and
issued 50,000,000 restricted common shares of the Company stock for the
year 2007. The Company shall
issue to Mr. John R Gaetz, 3,300,000 restricted common shares of the
Company stock for joining the Board
of Directors. All shares shall be be issued at a deem value of $0.0015 per
share.
|
|
During
the Board of Directors meeting on August 7, 2007 resolved to issue
2,000,000 shares of the Company's
common stock to Presidents Corporate Group for assisting and advising the
Company.
|
|
Purchasers
of Equity Securities by the Small Business Issuer and Affiliated
Purchases
|
|
None
|
|
ITEM
6. SELECTED FINANCIAL DATA
|
|
The
selected consolidated financial data set forth below should be read in
conjunction with "Management's Discussion
and Analysis of Financial Condition and Results of Operations," the
consolidated financial statements
and the related notes included elsewhere in this Annual Report on Form
10-K, and other information
we have filed with the SEC.
|
|
The
consolidated statements of operations data for the years ended December
31, 2007, 2006, 2005, 2004 and
2003 and the consolidated balance sheet data at December 31, 2007, 2006,
2005, 2004 and 2003 are derived
from our audited and unaudited consolidated financial statements. The
diluted net loss per share
computation
excludes shares of common stock issuable upon exercise or conversion of
other securities, including
outstanding warrants and options to purchase common stock and common stock
subject to repurchase
rights, because their effect would be
antidilutive.
|
| Year Ended December 31, | |||||
|
2007
|
2006
|
2005
|
2004
|
2003
|
|
|
Consolidated
Statements of Operations Data :
|
|||||
|
Revenues
:
|
|||||
|
Mobile
marketing services
|
0
|
0
|
4,703,348
|
1,871,960
|
0
|
|
Tuition
fee
|
81,588
|
93,041
|
199,280
|
298,806
|
280,723
|
|
Total
revenues
|
81,588
|
93,041
|
4,902,628
|
2,170,766
|
280,723
|
|
Cost
of revenue
|
|||||
|
Mobile
marketing services
|
0
|
0
|
1,372,707
|
412,222
|
0
|
|
Tuition
fee
|
748
|
7,327
|
54,584
|
61,013
|
134,340
|
|
748
|
7,327
|
1,427,291
|
473,235
|
134,340
|
|
|
Gross
profit
|
80,840
|
85,714
|
3,475,337
|
1,697,531
|
146,383
|
|
Expenses
|
|||||
|
Selling,
general and administrative expenses
|
1,056,952
|
1,040,368
|
4,563,037
|
1,939,747
|
337,093
|
|
Interest
expenses on convertible debentures
|
173,058
|
161,657
|
1,130,750
|
0
|
0
|
|
Late
registration penalty fees
|
57,016
|
481,968
|
0
|
0
|
0
|
|
Fair
value of warrants issued
|
0
|
0
|
6,891,486
|
0
|
0
|
|
Impairment
of deposit - Beijing Topbiz
|
50,000
|
900,000
|
0
|
0
|
0
|
|
Total
expenses
|
1,337,026
|
2,583,993
|
12,585,273
|
1,939,747
|
337,093
|
|
Income
(loss) from operations
|
-1,256,186
|
-2,498,279
|
-9,109,936
|
-242,216
|
-190,710
|
|
Other
income (loss)
|
11,015
|
43,980
|
84,952
|
11,601
|
-43,332
|
|
-1,245,171
|
-2,454,299
|
-9,024,984
|
-230,615
|
-234,042
|
|
|
Minority
interest
|
0
|
0
|
-138,469
|
-28,157
|
26,046
|
|
Income
(loss) from continuing operations
|
-1,245,171
|
-2,454,299
|
-9,163,453
|
-258,772
|
-207,996
|
|
Discontinued
operations :
|
|||||
|
Income
(loss) from discontinuing operations
|
0
|
1,150,154
|
0
|
-41,654
|
10,053
|
|
Gain
(loss) on liquidation of PRC subsidiaries
|
0
|
-6,566,822
|
0
|
0
|
0
|
|
Loss
from Assets held for sale
|
0
|
0
|
0
|
0
|
0
|
|
Gain
on disposal of ISP operations
|
0
|
0
|
0
|
0
|
-322,987
|
|
Gain
on disposal of internet-related operations
|
0
|
0
|
0
|
3,319,098
|
206,653
|
|
Net
income (loss)
|
-1,245,171
|
-7,870,967
|
-9,163,453
|
3,018,672
|
-314,277
|
|
Earnings
(loss) per share attributable to common stockholders :
|
|||||
|
Continue
operations
|
(0.01)
|
(0.12)
|
(0.52)
|
(0.02)
|
(0.01)
|
|
Discontinue
operations
|
(0.00)
|
(0.27)
|
0.00
|
0.22
|
(0.01)
|
|
Total
basic and diluted
|
(0.01)
|
(0.39)
|
(0.52)
|
0.20
|
(0.02)
|
|
Shares
used in computing net income (loss) per share
|
157,685,128
|
20,011,792
|
17,633,162
|
14,856,834
|
13,786,670
|
| Year Ended December 31, | |||||
|
2007
|
2006
|
2005
|
2004
|
2003
|
|
|
Consolidated
Balance Sheets Data :
|
|||||
|
Cash
and cash equivalents
|
2,840
|
288,149
|
6,138,609
|
5,380,622
|
3,303,591
|
|
Working
capital (deficit)
|
-2,389,088
|
-3,552,938
|
-352,402
|
3,014,052
|
450,161
|
|
Total
assets
|
165,784
|
511,150
|
11,222,363
|
6,447,030
|
6,320,612
|
|
Total
long-term debt
|
0
|
0
|
0
|
0
|
0
|
|
Total
stockholders' equity (deficit)
|
-2,251,445
|
-3,363,899
|
4,457,068
|
3,961,717
|
412,014
|
|
ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
|
|
As
described in Item 1 - General Description and Development of Business, in
January 2007, the Beijing Bureau of
Commerce approved the Liquidation of the Company's operating subsidiaries
in China. In connection with the Liquidation,
the accounting responsibilities for the operations of the PRC subsidiaries
were transferred from the Company
to a PRC accounting firm approved by the PRC regulatory authority. The
Company has been unable to
obtain reports from this accounting firm and has not received a definitive
opinion regarding the ultimate outcome of
these liquidations; accordingly, the Company has reduced the carrying
value of the net assets of the PRC subsidiaries
to $1 and to treat the operations as
discontinued.
|
|
Critical
Accounting Policies
|
|
Our
discussion and analysis is based upon our consolidated financial
statements, which have been prepared in accordance
with accounting principles generally accepted in the United States. The
preparation of these financial
statements requires us to make estimates and judgements that affect the
reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. On an on-going basis,
we evaluate our estimates, including those related to revenue recognition,
accounts receivable and allowance
for doubtful accounts, intangible and long-lived assets, and income taxes.
We base our estimates on historical
experience and on various other assumptions that are believed to be
reasonable under the circumstances, the
results of which form the basis for making judgements about the carrying
values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions
or
conditions.
|
|
An
accounting policy is deemed to be critical if it requires an accounting
estimate to be made based on assumptions
about matters that are highly uncertain at the time the estimate is made,
and if different estimates that
reasonably could have been used or changes in the accounting estimate that
are reasonably likely to occur could
materially change the financial statements. We believe the following
critical accounting policies reflect our more
significant estimates and assumptions in the preparation of our
consolidated financial
statements.
|
|
Contigencies
- We may be subject to certain asserted and unasserted claims encountered
in the normal course of
business. It is our belief that the resolution of these matters will not
have a material adverse effect on our financial
position or results of operations, however, we cannot provide assurance
that damages that result in a material
adverse effect on our financial position or results of operations will not
be imposed in these matters. We account
for contingent liabilities when it is probable that future expenditures
will be made and such expenditures can
be reasonably
estimated.
|
|
Income
Taxes - We record a valuation allowance to reduce our deferred tax assets
to the amount that is more likely
than not to be realized. We have considered future marker growth,
forecasted earnings, future taxable income, and
prudent and feasible tax planning strategies in determining the need for a
valuation allowance. We currently have
recorded a full valuation allowance against net deferred tax assets as we
currently believe it is more likely than not
that the deferred tax assets will not be
realized.
|
|
Valuation
Of Long-Lived Assets - We review property, plant and equipment and other
assets for impairment whenever
events or changes in circumstances indicate the carrying value of an asset
may nto be recoverable. Our
asset impairment review assesses the fair value of the assets based on the
future cash flows the assets
are
expected to generate. An impairment loss is recognized when estimated
undiscounted future cash flows expected
to result from the use of the asset plus net proceeds expected from
disposition of the asset (if any) are
less than the carrying value of the asset. When an impairment is
identified, the carrying amount of the asset is
reduced to its estimated fair value. Deterioration of our business in a
geographic region could lead to impairment
adjustments when identified. The accounting effect of an impairment loss
would be a charge to income,
thereby reducing our net
profit.
|
|
Forward-looking
statements
|
|
Statements
contained in this report include "forward-looking statements" within the
meaning of such term in Section
27A of the Securities Act of 1933, as amended (the "Securities Act") and
Section 21E of the Exchange Act.
Forward-looking statements involve known and unknown risks, uncertainities
and other factors which could cause
actual financial or operating results, performances or achievements
expressed or implied by the forward- looking
statements not to occur or be realized. Forward-looking statements
generally are based on our best estimates
of future results, performances or achievements, based upon current
conditions and the most recent results
of the companies involved and their respective industries. Forward-looking
statements may be identified by
the use of forward-looking terminology such as "may," "will," "could,"
"project," "expect," "believe," "anticipate,"
"intend," "continue," "potential," "opportunity," or similar terms,
variations of those terms or the negative
of those terms or other variations of those terms or comparable words or
expressions.
|
|
Potential
risks and uncertainties include, among other things, such factors as
:
|
|
- the
Liquidation of our PRC Subsidiaries as set forth in Item
1,
|
|
- our
business strategies and future plans of operations,
|
|
- general
economic conditions in the United States and elsewhere, as well as the
economic conditions
|
|
affecting
the industries in which we operate,
|
|
- the
market acceptance and amount of sales of our products and
services,
|
|
- our
historical losses,
|
|
- the
competitive enviroment within the industries in which we
compete,
|
|
- our
ability to raise additional capital, currently needed for expansion, and
other factors and information
|
|
discussed
in other sections of this report and in the documents incorporated by
reference in this report.
|
|
Persons
reading this report should carefully consider such risks, uncertainties
and other information, disclosures and
discussions which contain cautionary statements identifying important
factors that could cause actual results
to differ materially from those provided in the forward-looking
statements. We undertake no obligation to publicly
update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
|
|
Liquidity
and Capital Resources
|
|
The
Company had cash capital of $2,840 at year-end 2007. The Company has no
other capital resources other than
the ability to use its common stock to achieve additional capital raising.
Other than cash capital, its other assets
would be illiquid.
|
|
At
the fiscal year-end it had $28,141 in current assets and current
liablities of $2,417,229, consisting primarily of
$1,650,000 of Debentures which matured on August 15, 2006 and were in
default.
|
|
Need
for Additional Financing
|
|
|
Due
to new events regarding the non-binding Letter of Intent regarding the
acquisition of approximately 74% of
the common stock of PeopleLine Telecom the Company will have to seek loans
or equity placementss to cover
longer term cash needs to continue operations and
expansion.
|
|
|
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 operation expenses.
|
|
|
Results
of Operations for the year ended December 31, 2007 as compared to the year
ended December
31, 2006
|
|
|
Revenues
- The Company has revenues of $81,588 from tuition fees in 2007, compared
to $93,041 in 2006 from
its subsidiary : Windsor. The gross profit in 2007 was $80,840 compared to
$85,714 in 2006.
|
|
|
Operating
Expenses - The Company incurred operating expenses of $330,452 in 2007,
compared to operating expenses
of $1,040,368 in 2006.
|
|
|
Loss
from Continuing Operations - Loss from continuing operations for 2007 was
($1,245,171) compared to the 2006
operating loss of ($2,454,299).
|
|
|
Net
Loss - Net Loss to Common Stockholders in 2007 was ($1,245,171) in
contrast to a Net Loss of ($7,890,967)
in 2006.
|
|
|
Loss
per Share - Loss per share was ($0.01) in 2007 compared to loss per share
of ($0.39) in 2006.
|
|
|
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
|
|
The
Company does not hold any derivatives or investments that are subject to
market risk. The carrying values
of any financial instruments, approximate fair value as of those dates
because of the relatively short- term
maturity of these instruments which eliminates any potential market risk
associated with such instruments.
|
|
|
ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
|
CHINA
MOBILITY SOLUTIONS, INC. AND SUBSIDIARIES
|
|
|
INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
Contents
|
Pages
|
|
Consolidated
Balance Sheet as at December 31, 2007
|
13
|
|
Consolidated
Statements of Operations for the year ended December 31,
2007
|
14
|
|
Consolidated
Statements of Stockholders's Equity
|
15
|
|
Consolidated
Statements of Cash Flows for the year ended December 31,
2007
|
16
|
|
Notes
to the Financial Statements
|
17
- 21
|
|
CHINA
MOBILITY SOLUTIONS, INC. AND SUBSIDIARIES
|
||||
|
CONSOLIDATED
BALANCE SHEETS
|
||||
|
(Stated
in U.S. dollars)
|
||||
|
(audited)
|
||||
|
December
31,
|
||||
|
2007
|
2006
|
|||
|
ASSETS
|
||||
|
Current
Assets
|
||||
|
Cash
and cash equivalents
|
$
|
2,840
|
$
|
288,149
|
|
Accounts
receivable
|
0
|
3,373
|
||
|
Prepaid
expenses and other current assets
|
0
|
4,615
|
||
|
Amount
due from related parties
|
25,300
|
25,973
|
||
|
Net
assets of subsidiaries in liquidation
|
1
|
1
|
||
|
Total
Current Assets
|
28,141
|
322,111
|
||
|
Property
and Equipment, net of accumulated depreciation
|
9,632
|
11,129
|
||
|
of
$62,421 and $51,442, respectively (Note 3)
|
||||
|
Other
Assets
|
||||
|
Deposit
paid in connection with contemplated acquisition of Beijing
Topbiz
|
||||
|
less
allowance for doubtful recoverability
|
0
|
50,000
|
||
|
Investment
|
1
|
1
|
||
|
Goodwill
|
127,124
|
127,124
|
||
|
Other
assets
|
886
|
785
|
||
|
Total
Assets
|
$
|
165,784
|
$
|
511,150
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||
|
Current
Liabilities
|
||||
|
Accounts
payable and other accrued liabilities
|
$
|
474,561
|
$
|
537,200
|
|
Amount
due to related parties
|
292,668
|
0
|
||
|
Deferred
revenue
|
0
|
12,849
|
||
|
Convertible
debentures
|
1,650,000
|
3,325,000
|
||
|
Total
Current Liabilities
|
2,417,229
|
3,875,049
|
||
|
Stockholders'
Equity (Deficiency)
|
||||
|
Common
Stock : $0.001 par value
|
||||
|
authorized
: 500,000,000 common shares
|
||||
|
issued
and outstanding : 314,534,292 shares (2006: 20,011,792
shares)
|
314,534
|
20,012
|
||
|
Additional
paid in capital
|
20,555,929
|
18,492,826
|
||
|
Accumulated
deficit
|
-23,121,908
|
-21,876,737
|
||
|
Total
stockholders' equity (deficiency)
|
-2,251,445
|
-3,363,899
|
||
|
Total
Liabilities and Stockholders' Equity (Deficiency)
|
$
|
165,784
|
$
|
511,150
|
|
(The
accompanying notes are an integral part of these consolidated financial
statements)
|
||||
|
CHINA
MOBILITY SOLUTIONS, INC. AND SUBSIDIARIES
|
||||
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||
|
For
the year ended December 31, 2007 and 2006
|
||||
|
(Stated
in U.S. dollars)
|
||||
|
(audited)
|
Year
Ended December 31,
|
|||
|
2007
|
2006
|
|||
|
Revenue
|
||||
|
Tuition
fee
|
$
|
81,588
|
$ |
93,041
|
|
81,588
|
93,041
|
|||
|
Cost
of revenue
|
||||
|
Tuition
fee
|
748
|
7,327
|
||
|
748
|
7,327
|
|||
|
Gross
profit
|
80,840
|
|
85,714
|
|
|
Selling,
general, and administrative expenses
|
1,056,952
|
1,040,368
|
||
|
Income
(loss) from Operations
|
-976,112
|
-954,654
|
||
|
Other
income (Expense)
|
||||
|
Other
income
|
10,479
|
0
|
||
|
Interest
income
|
536
|
43,980
|
||
|
Interest
expense on convertible debentures
|
-173,058
|
-161,657
|
||
|
Late
registration penalty fees
|
-57,016
|
-481,968
|
||
|
Impairment
of deposit paid in connection with contemplated
|
||||
|
acquisition
of Beijing Topbiz
|
-50,000
|
-900,000
|
||
|
Other
income (expense) - net
|
-269,059
|
-1,499,645
|
||
|
Income
(loss) before Income Taxes
|
-1,245,171
|
-2,454,299
|
||
|
Income
tax expense
|
0
|
0
|
||
|
Income
(loss) from continuing operation
|
-1,245,171
|
-2,454,299
|
||
|
Discontinued
operations :
|
||||
|
Income
(loss) from discontinued operations
|
0
|
1,150,154
|
||
|
Gain
(loss) on liquidation of PRC subsidiaries
|
0
|
-6,566,822
|
||
|
Total
|
0
|
-5,416,668
|
||
|
Net
income (loss)
|
-1,245,171
|
-7,870,967
|
||
|
Net
income (loss) per share
|
||||
|
Continue
operations
|
(0.01)
|
(0.12)
|
||
|
Discontinued
operations
|
(0.00)
|
(0.27)
|
||
|
Total
|
(0.01)
|
(0.39)
|
||
|
Weighted
average number of common shares used to compute net income (loss) per
share
|
||||
|
Basic
and diluted
|
157,685,128
|
20,011,792
|
||
|
(The
accompanying notes are an integral part of these consolidated financial
statements)
|
||||
|
CHINA
MOBILITY SOLUTIONS, INC. AND SUBSIDIARIES
|
||||||
|
CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY
|
||||||
|
for the
year ended December 31, 2007
|
|
|||||
|
Stock
|
Additional
|
|||||
|
Common
|
Amount
At
|
Paid
In
|
Accumulated
|
|||
|
Stated
in U.S. dollars
|
Shares
|
Par
Value
|
Capital
|
Deficit
|
Total
|
|
|
Balance,
December 31, 2005
|
20,011,792
|
$
|
20,012
|
18,442,826
|
(14,005,770)
|
4,457,068
|
|
Fair
value of 200,000 warrants issued for services
|
||||||
|
rendered
|
50,000
|
50,000
|
||||
|
Net
loss for the year ended
|
||||||
|
December
31, 2006
|
(7,870,967)
|
(7,870,967)
|
||||
|
Balance,
December 31, 2006
|
20,011,792
|
$
|
20,012
|
18,492,826
|
(21,876,737)
|
(3,363,899)
|
|
Conversion
of convertible debentures to
|
||||||
|
common
shares @$0.05 per share
|
33,500,000
|
33,500
|
1,641,500
|
1,675,000
|
||
|
Conversion
of penalty & liquidated damage in relation
|
||||||
|
to
convertible debentures to shares @$0.05 per share
|
6,022,500
|
6,023
|
295,102
|
301,125
|
||
|
Shares
issued for directors' services
|
253,000,000
|
253,000
|
126,500
|
379,500
|
||
|
Shares
issued for services
|
2,000,000
|
2,000
|
2,000
|
|||
|
Net
loss for the year ended
|
||||||
|
December
31, 2007
|
(1,245,171)
|
(1,245,171)
|
||||
|
Balance,
December 31, 2007
|
314,534,292
|
314,535
|
20,555,928
|
(23,121,908)
|
(2,251,445)
|
|
|
(The
accompanying notes are an integral part of these consolidated financial
statements)
|
||||||
|
CHINA
MOBILITY SOLUTIONS, INC. AND SUBSIDIARIES
|
||||
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||
|
For
the year ended December 31, 2007 and 2006
|
||||
|
(Stated
in U.S. dollars)
|
||||
|
(audited)
|
||||
|
2007
|
2006
|
|||
|
Cash
flows from operating activities
|
||||
|
Net
loss
|
$
|
(1,245,171)
|
$
|
(7,870,967)
|
|
Adjustments
to reconcile net income (loss) to net cash
|
||||
|
provided
by (used for) operating activities :
|
||||
|
Depreciation
|
3,529
|
3,213
|
||
|
Impairment
of deposit paid in connection with contemplated
|
||||
|
acquisition
of Beijing Topbiz
|
50,000
|
900,000
|
||
|
Stock-based
compensation
|
0
|
50,000
|
||
|
Loss
on liquidation of PRC subsidiaries
|
0
|
6,566,822
|
||
|
Changes
in operating assets and liabilities
|
||||
|
Accounts
receivable
|
3,373
|
2,497
|
||
|
Prepaid
expenses and other current assets
|
4,615
|
230,550
|
||
|
Due
from related parties
|
673
|
0
|
||
|
Due
to related parties
|
292,668
|
3,530
|
||
|
Accounts
payable and other accrued liabilities
|
(62,639)
|
202,054
|
||
|
Deferred
revenue
|
(12,849)
|
(921,325)
|
||
|
Net
cash provided by (used in) operating activities
|
(965,801)
|
(833,626)
|
||
|
Cash
flows from investing activities
|
||||
|
Deposit
paid in connection with contemplated acquisition of Beijing
Topbiz
|
0
|
(950,000)
|
||
|
Cash
and cash equivalents of subsidiaries placed in liquidation
|
0
|
(4,033,661)
|
||
|
Purchases
of property and equipment
|
(2,138)
|
(4,811)
|
||
|
Net
cash provided by (used for) investing activities
|
(2,138)
|
(4,988,472)
|
||
|
Cash
flows from financing activities
|
||||
|
Convertible
debentures
|
(1,675,000)
|
(25,000)
|
||
|
Issuance
of common stock
|
2,357,625
|
0
|
||
|
Net
cash provided by (used for) financing activities
|
682,625
|
(25,000)
|
||
|
Effect
of exchange rate changes on cash
|
5
|
(3,362)
|
||
|
Increase
(decrease) in cash and cash equivalents
|
(285,309)
|
(5,850,460)
|
||
|
Cash
and cash equivalents - beginning of period
|
288,149
|
6,138,609
|
||
|
Cash
and cash equivalents - end of period
|
$
|
2,840
|
$
|
288,149
|
|
(The
accompanying notes are an integral part of these consolidated financial
statements)
|
|
CHINA
MOBILITY SOLUTIONS, INC. AND SUBSIDIARIES
|
|||||
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|||||
|
December
31, 2007
|
|||||
|
(Stated
in U.S. dollars)
|
|||||
|
(audited)
|
|||||
|
1
|
BASIS
OF PRESENTATION
|
||||
|
The
accompanying audited financial statements have been prepared in conformity
with accounting
|
|||||
|
principles
generally accepted in the United States of America. However, certain
information and footnote
|
|||||
|
disclosures
normally included in financial statements prepared in accordance with
generally accepted
|
|||||
|
accounting
principles have been omitted or condensed pursuant to the rules and
regulations of the
|
|||||
|
Securities
and Exchange Commission ("SEC"). In the opinion of management, all
adjustments of a
|
|||||
|
normal
recurring nature necessary for a fair presentation have been included. The
results for interim
|
|||||
|
periods
are not necessarily indicative of results for the entire year. These
condensed consolidated
|
|||||
|
financial
statements and accompanying notes should be read in conjunction with the
Company's annual
|
|||||
|
consolidated
financial statements and the notes thereto for the fiscal year ended
December 31, 2006
|
|||||
|
included
in its Annual Report on Form 10-KSB.
|
|||||
|
The
audited condensed consolidated financial statements include China Mobility
Solutions, Inc and
|
|||||
|
its
subsidiaries. All inter-company transactions and accounts have been
eliminated.
|
|||||
|
Certain
items have been reclassified to conform to the current period
presentation. There is no effect on
|
|||||
|
total
results of operations or stockholder's equity.
|
|||||
|
2
|
DISCONTINUED
OPERATIONS
|
||||
|
On
August 15, 2006, a total of $3,350,000 of convertible debentures become
due and payable. In October
|
|||||
|
2006,
the Company was notified by the PRC State Administration of Foreign
Exchange ("SAFE") that
|
|||||
|
its
application to convert certain cash held by the Company's two subsidiaries
organized under the laws
|
|||||
|
of
the People's Republic of China (the "PRC Subsidiaries") into U.S. dollars
and repay the debentures was
|
|||||
|
denied.
Later, in the three months ended December 31, 2006, based upon advice of
PRC counsel that
|
|||||
|
the
Beijing Rule of Liquidation was the sole means to repay the outstanding
debentures, the PRC
|
|||||
|
subsidiaries
submitted applications to a PRC regulatory authority to liquidate pursuant
to the Beijing Rule
|
|||||
|
of
Liquidation. In connection therewith, the accounting responsibilities for
the operations of the PRC
|
|||||
|
subsidiaries
were transferred from the Company to a PRC accounting firm approved by the
PRC regulatory
|
|||||
|
authority.
The Company has been unable to obtain reports from this accounting firm
and has not received
|
|||||
|
a
definitive opinion regarding the ultimate outcome of these liquidations;
accordingly, the Company reduced
|
|||||
|
the
carrying value of the net assets of the PRC Subsidiaries to $1 at December
31, 2006 and reflected
|
|||||
|
operations
of the PRC Subsidiaries to September 30, 2006 as discontinued operations.
In the event that
|
|||||
|
the
Company receives more than $1 from the liquidations, it will recognize a
gain in such future periods
|
|||||
|
that
the proceeds are realized.
|
|
3
|
PROPERTY
AND EQUIPMENT
|
|||
|
Property
and equipment, net consists of :
|
|
December
31
|
December
31
|
||
|
2007
|
2006
|
||
|
Equipment
|
$
|
41,913
|
36,913
|
|
Library
|
15,114
|
12,816
|
|
|
Furniture
|
15,026
|
12,842
|
|
|
Total
|
72,053
|
62,571
|
|
|
Less
: Accumulated depreciation
|
-62,421
|
-51,442
|
|
|
Net
book value
|
9,632
|
11,129
|
|
|
The
depreciation expenses charged to continuing operations for the year ended
December 31, 2007
|
||||
|
were
$3,491.
|
||||
|
4
|
CONVERTIBLE
DEBENTURES
|
|||
|
On
August 15, 2005, the Company completed an offering of 134 units ("Units")
for $3,350,000. Each Unit
|
||||
|
was
sold for $25,000, consisting of $25,000 principal amount of senior
convertible debentures (the
|
||||
|
"Debentures"),
and one new Series "A" Warrant and one new Seris "B" Warrant. The
Debentures were
|
||||
|
initially
convertible at $0.35 per share for 71,429 shares of common stock of the
Company; maturing on
|
||||
|
August
15, 2006 and accruing interest at a rate of not less than 6% per annum
equal to the sum of 2%
|
||||
|
per
annum plus the one -month London Inter-Bank Offer Rate ("LIBOR"). The
Debentures are subject to
|
||||
|
redemption
at 125% of the principal amount plus accrued interest commencing six
months after
|
||||
|
August
7, 2006.
|
||||
|
Each
Unit also included: (i) new Series "A" Warrants exercisable at $0.44 per
share to purchase 71,429
|
||||
|
shares
of Common Stock of the Company until February 15, 2009. The new Series "A"
and new Series
|
||||
|
"B"
Warrants are subject to redemption by the Company at $0.001 per Warrant at
any time commencing
|
||||
|
six
months and twelve months, respectively, from August 7, 2006, provided the
average closing bid price
|
||||
|
of
the common stock of the Company equals or exceeds 175% of the respective
exercise prices for 20
|
||||
|
consecutive
trading days.
|
||||
|
On
January 18, 2006, the Company received a letter (the "Default Notice")
from the attorney for
|
||||
|
Southridge
Partners, LP, (the "Lender"), the holder of $500,000 principal amount of
the Company's
|
||||
|
Senior
Convertible Debentures (the "Debenture") stating that the Company was in
default of certain
|
||||
|
transaction
agreements (the "Transaction Agreements") issued in connection with the
Debenture by
|
||||
|
virtue
of the Company's issuance of registered shares of stock to employees and
consultants under a
|
||||
|
Form
S-8 registration statement and the filing of the Form S-8 prior to the
date of effectiveness, August
|
||||
|
7,
2006, of the Company's SB-2 Registration Statement required under the
Registration Rights
|
||||
|
Agreement
(one of the Transaction Agreements).
|
||||
|
4
|
CONVERTIBLE
DEBENTURES (continued)
|
||||
|
The
Company denied that it was in default of the Transaction Agreements.
However, in order to avoid
|
|||||
|
costly
litigation, the parties entered into a waiver/settlement agreement on May
4, 2006 (the "Waiver/
|
|||||
|
Settlement
Agreement").
|
|||||
|
In
accordance with the terms of the Waiver/Settlement Agreement, the initial
conversion price of the
|
|||||
|
Debenture
was reduced from $0.35 per share to $0.30 per share, the new Series "A"
Warrant exercise
|
|||||
|
price
was reduced from $0.44 to $0.38 per share and the new Series "B" Warrant
exercise price was
|
|||||
|
reduced
from $0.52 to $0.45 per share. In addition, the number of shares of the
Company's common
|
|||||
|
stock
exercisable upon conversion of each $25,000 principal amount of Debenture
and upon exercise
|
|||||
|
of
the new Series "A" and new Series "B" Warrants included in each Unit was
increased from 71,429
|
|||||
|
shares
to 83,333 shares for each of the Debenture, Class A Warrants and Class B
Warrants, or an
|
|||||
|
aggregate
of 250,000 shares per unit.
|
|||||
|
The
Lender waived the S-8 Default set forth in the Default Notice and the
Company agreed not to file
|
|||||
|
any
additional S-8 Registration Statements prior to 45 days after August 7,
2006.
|
|||||
|
On
August 15, 2006, the Company did not repay the $3,350,000 of Debentures
then due. The Company
|
|||||
|
has
paid all interest on the Debenture accrued through November 15, 2006. As
discussed in Note 2,
|
|||||
|
the
Company had applied to the regulatory authority in China to approve
converting its subsidiaries'
|
|||||
|
fund
into U.S. dollars and repay the Debentures and was denied. The Company was
advised that the
|
|||||
|
Rule
of Liquidation is the sole means of assuring repayment of the Debentures
and subsequently
|
|||||
|
submitted
applications for such liquidations to a PRC regulatory authority. At May
18, 2007, these
|
|||||
|
liquidations
have not been completed.
|
|||||
|
The
holder of an aggregate of $300,000 of the Debentures has agreed to extend
the due date to
|
|||||
|
December
31, 2007 with an interest rate of 10% per annum starting from August 15,
2006 and the
|
|||||
|
exercise
price of the new Series "A" Warrants and new Series "B" Warrants being
reduced to $0.15
|
|||||
|
and
$0.20 per share respectively. Other terms remain the same.
|
|||||
|
The
Company received letters (the "Default Letters") from the attorneys for
two holders of an aggregate
|
|||||
|
$875,000
principal amount of Debentures stating that the Company was in default
under the Debentures
|
|||||
|
as
a result of its failure to pay principal plus interest thereon. On
September 18, 2006, one of the
|
|||||
|
debenture
holders commenced a lawsuit against the Company in the Supreme Court of
the State of
|
|||||
|
New
York, New York County (No. 603266). The action is a motion for summary
judgement in lieu of
|
|||||
|
complaint
based on the Company's Debentures in the amount of $500,000 in favor of
Plaintiff which was
|
|||||
|
due
on August 15, 2006, with interest at 12% per annum. On January 19, 2007,
this motion was granted
|
|||||
|
and
a judgement in the amount of $545,440 was awarded the
Plaintiff.
|
|
4
|
CONVERTIBLE
DEBENTURES (continued)
|
||||
|
The
Company entered into conversion/settlement agreements (the "Conversion
Agreements") dated
|
|||||
|
February
2, 2007, which provided that the conversion price (the "Conversion Price")
of the Debentures,
|
|||||
|
as
set forth in paragraph 7(d) of the Debentures shall be reduced to $0.05
per share of Common Stock
|
|||||
|
("Underlying
Common Stock") issuable upon conversion (the "Conversion"), provided that
at least fifty
|
|||||
|
(50%)
percent in principal amount (or $1,675,000) of the initial $3,350,000 of
Debentures (the "Minimum
|
|||||
|
Conversion")
agree to the Conversion. The closing of the Conversion (the "Closing")
occurred on
|
|||||
|
February
12, 2007. Those Debenture holders who agree to the Conversion shall also
agree to convert
|
|||||
|
all
accrued but unpaid penalties and interest owed by the Company into Common
Stock at $0.05 per
|
|||||
|
share.
Pursuant to the terms of the May 4, 2006 Waiver/Settlement Agreement
entered into between
|
|||||
|
the
Company and Debenture holders the Conversion Price of the Debentures was
reduced to its
|
|||||
|
current
price of $0.30 per share. A total of 39,522,500 shares of common stock
were issued to 29
|
|||||
|
Debenture
holders under Conversion Agreements in satisfaction of $1,675,000 total
principal amount
|
|||||
|
of
Debentures and $301,125 unpaid accrued interest and late registration
penalty fees.
|
|||||
|
The
Conversion Agreements provided for the Debenture holders who signed such
agreements to:
|
|||||
|
(i)
terminate any and all pending litigation with the Company to which they
are a party, without prejudice
|
|||||
|
to
reinstatement if and only if the Minimum Conversion is not completed,
and/or the Company defaults
|
|||||
|
in
its obligations under the Conversion Agreements; (ii) in any vote of
shareholders not vote against any
|
|||||
|
nominee
to the Board of Directors of the Company and any proposal designated by
current management
|
|||||
|
of
the Company and its officers, directors, employees, representatives and
affiliates following the Closing.
|
|||||
|
The
Company agreed to make whatever filings are necessary with the SEC,
whether by way of
|
|||||
|
supplement
or post-effective amendment to this registration statement concerning the
Underlying Common
|
|||||
|
Stock,
to permit issuance of common stock at the reduced Conversion Price of
$0.05 per share.
|
|||||
|
Notwithstanding
the foregoing, only the original 214,287 shares of Common Stock issuable
underlying
|
|||||
|
each
$25,000 Unit, including 71,429 Shares of Common Stock underlying each
Debenture, are registered
|
|||||
|
on
this Registration Statement. Accordingly, at the reduced Conversion Price
of $0.05 per share an
|
|||||
|
aggregate
of 500,000 shares of Common Stock would be issuable upon conversion of the
Debentures and
|
|||||
|
an
additional 166,666 shares of Common Stock issuable upon exercise of
warrants included in the Units.
|
|||||
|
All
additional shares of Common Stock not included in this Registration
Statement, as well as those
|
|||||
|
issuable
in exchange for any interest and penalties due under the Debentures at the
time of the Closing,
|
|||||
|
have
been included in a second registration statement filed by the Company on
February 12, 2007.
|
|||||
|
The
Company shall also provide the Debenture holders with "most favored
nation" status and reduce the
|
|||||
|
Conversion
Price to the per share price of any equity offering made by the Company
within 18 months of
|
|||||
|
the
Closing Date. The Company shall issue such number of additional shares to
the Debenture holders
|
|||||
|
to
reduce their Conversion Price to that of such subsequent
offering.
|
|||||
|
At
December 31, 2007, accounts payable and accrued liabilities include
interest payable of $474,561 and
|
|||||
|
unpaid
late registration penalty fees payable of $129,277.
|
|
5
|
BASIC
AND DILUTED EARNINGS (LOSS) PER SHARE
|
||||
|
Basic
earnings (loss) per share are computed by dividing net earnings (loss)
available to common
|
|||||
|
stockholders
by the weighted-average number of common shares outstanding during the
period.
|
|||||
|
Diluted
earnings per share is computed by dividing net earnings available to
common stockholders
|
|||||
|
by
the weighted-average number of common shares outstanding during the period
increased to
|
|||||
|
include
the number of additional common shares that would have been outstanding if
potentially
|
|||||
|
dilutive
common shares had been issued.
|
|||||
|
The
following table sets forth the computations of shares and net loss used in
the calculation of basic
|
|||||
|
and
diluted loss per share for the year ended December 31, 2007 and
2006.
|
|||||
|
2007
|
2006
|
|||
|
Net
loss for the period
|
-1,245,171
|
-7,870,967
|
||
|
Weighted-average
number of shares outstanding
|
157,685,128
|
20,011,792
|
||
|
Effective
of dilutive securities :
|
||||
|
Dilutive
options - $0.30
|
0
|
0
|
||
|
Dilutive
warrants new Series "A" - $0.15
|
0
|
0
|
||
|
Dilutive
warrants new Series "A" - $0.38
|
0
|
0
|
||
|
Dilutive
warrants new Series "B" - $0.20
|
0
|
0
|
||
|
Dilutive
warrants new Series "B" - $0.45
|
0
|
0
|
||
|
Dilutive
warrants Series "C" - $0.45
|
0
|
0
|
||
|
Dilutive
potential common shares
|
0
|
0
|
||
|
Adjusted
weighted-average shares and assumed conversions
|
157,685,128
|
20,011,792
|
||
|
Basic
income (loss) per share attributable to common
shareholders
|
$
|
(0.01)
|
(0.39)
|
|
|
Diluted
income (loss) per share attributable to common
shareholders
|
$
|
(0.01)
|
(0.39)
|
|
|
The
effect of outstanding options and warrants was not included as the effect
would be anti-dilutive.
|
||||
|
6
|
SHARE
PURCHASE WARRANTS
|
||||
|
During
the year ended December 31, 2007, no share purchase warrants were issued,
exercised
|
|||||
|
or
cancelled.
|
|||||
|
As
of December 31, 2007, 122 new Series "A" warrants were outstanding which
entitle the holders to
|
|||||
|
purchase
83,333 common shares of the Company at $0.38 unitl February 15, 2008. 122
new Series "B"
|
|||||
|
warrants
were outstanding which entitle the holders to purchase 83,333 common
shares of the Company
|
|||||
|
at
$0.45 until February 15, 2009. 12 amended new Series "A" warrants were
outstanding which entitle the
|
|||||
|
holders
to purchase 83,333 common shares of the Company at $0.15 each until
February 15, 2008. 12
|
|||||
|
amendednew
Series "B" warrants were outstanding which entitle the holders to purchase
83,333 common
|
|||||
|
shares
of the Company at $0.20 until February 15, 2009. 200,000 Series "C"
warrants were outstanding
|
|||||
|
which
entitle the holders to purchase 200,000 common shares of the Company at
$0.45 each expiring on
|
|||||
|
May
5, 2010.
|
|||||
|
ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
|
On
August 21, 2006, we engaged Michael T. Studer, C.P.A., P.C., an
independent registered firm of Certified
|
|
Public
Accountants, as our principal independent accountant with the approval of
our company's board of
|
|
directors.
Moen and Company LLP ("Moen") resigned on July21, 2006 as our independent
registered public
|
|
accounting
firm. Moen advised us they ceased doing business on July 21, 2006. Moen
was the Company's
|
|
independent
auditor and examined the financial statements of the Company for the
fiscal year ended
|
|
December
31, 2004 and 2005.
|
|
The
reports of Moen on the consolidated financial statements of the Company as
of and for the years ended
|
|
December
31, 2004 and 2005 did not contain an adverse opinion or disclaimer of
opinion, nor were they
|
|
qualified
or modified as to uncertainty, audit scope, or accounting
principles.
|
|
During
the years ended December 31, 2004 and 2005 through the date of resignation
there were no
|
|
disagreements
with Moen on any matter of accounting principles or practices, financial
statement disclosure,
|
|
or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Moen, would have
|
|
caused
Moen to make reference to the subject matter of the disagreement in its
reports on the Company's
|
|
consolidated
financial statements for such periods.
|
|
During
China Mobility's most recent fiscal year ended December 31, 2005 and the
subsequent interim period
|
|
from
January 1, 2006 - August 21, 2006, China Mobility did not consult with
Michael T. Studer, C.P.A., P.C.
|
|
with
respect to the application of accounting principles to a specified
transaction, either completed or
|
|
proposed,
or the type of audit opinion that might be rendered on China Mobility's
financial statements, or any
|
|
other
matters or reportable events as set forth in Items 304(a)(2)(i) and (ii)
of Regulation S-K.
|
|
ITEM
9A. CONTROLS AND PROCEDURES
|
|
The
Company maintains disclosure controls and procedures that are designed to
ensure that information
|
|
required
to be disclosed in the Company's Exchange Act reports is recorded,
processed and
|
|
summarized
and is reported within the time periods specified in the SEC's rules and
forms, and that
|
|
such
information is accumulated and communicated to the Company's management,
including its Chief
|
|
Executive
Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required
|
|
disclosure.
In designing and evaluating the disclosure control procedures, no matter
how well designed
|
|
and
operated, can provide onlyreasonable assurance of achieving the desired
control objectives, and
|
|
management
necessarily was required to apply its judgement in evaluating the
cost-benefit relationship
|
|
relationship
of possible controls and procedures.
|
|
As
of the date of this report, the Company's management, including the
President ( principal executive
|
|
officer
) and Chief Financial Officer, carried out an evaluation of the
effectiveness of the design and
|
|
operation
of the Company's disclosure controls and procedures pursuant to Exchange
Act Rule 13a - 14.
|
|
Based
upon the evaluation, the Company's President ( principal executive officer
) and Chief Financial
|
|
Officer
concluded that the Company's disclosure controls and procedures are
effective in timely alerting
|
|
them
to material information required to be included in the Company's periodic
SEC filings. There have
|
|
been
no significant changes in the Company's disclosure controls and procedures
or in other factors,
|
|
which
could significantly affect disclosure controls subsequent to the date the
Companys management
|
|
carried
out its evaluation. During the year covered by this annual report on Form
10K, there was no
|
|
change
in our internal control over financial reporting ( as defined in Rule 13a
- 15(f) under the Exchange
|
|
Act
) that materially affected, or is reasonably likely materially affect, our
internal control over financial
|
|
reporting.
|
|
ITEM
9B. OTHER INFORMATION
|
|
None.
|
|
PART
3
|
|
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
|
|
( a
) The following table furnishes the information concerning
Company directors and officers as of the date
|
|
of
this report. The directors of the Registrant are elected every year and
serve until their successors are
|
|
elected
and qualify.
|
|
Name
|
Age
|
Title
|
Term
|
|
Xiao-qing
Du
|
38
|
President
and Director
|
Annual
|
|
John
Gaetz
|
58
|
Director
and Secretary
|
Annual
|
|
The
following table sets forth the portion of their time the directors devote
to the Company :
|
|
Xiao-qing
Du
|
100%
|
||
|
John
Gaetz
|
20%
|
|
The
term of office for each director is one year, or until his/her successor
is elected at the Company annual
|
|
meeting
and is qualified. The term of office for each of the officers is at the
discretion of the Board of Directors.
|
|
( b
) Business Experience
|
|
The
following is a brief account of the business experience during the past
five years of each of the Company's
|
|
directors
and executive officers, including principal occupations and employment
during that period and the
|
|
name
and principal business of any corporation or other organization in which
such occupation and
|
|
employment
were carried on.
|
|
Xiao-Qing
Du, President and Director, age 38.
|
|
Ms.
Du has been President and Director of our Company since 2003. She received
a Bachelor of Science
|
|
in
International Finance in 1992 from East China Normal University. She
received a Master of Science in
|
|
Finance
and Management Science in 1996 from the University of Saskatchewan,
Canada. She was
|
|
Business
Manager of China Machinery & Equipment I/E Corp. (CMEC) from 1992 to
1994. Since 1997, she
|
|
has
been President of Infornet Investment Corp., the Company's wholly owned
subsidiary in Canada. She
|
|
was
President of China Mobility from 1997 to 1999. She ran the operations in
China of the domain name
|
|
service
and web-hosting business.
|
|
John
Gaetz, Director, age 58.
|
|
Mr.
Gaetz currently is founder and president of Presidents Corporate Group; a
company structured to provide
|
|
governance,
administration and management services for public companies. Previous
positions included a
|
|
two-year
term as founder and president of West Coast Stock Transfer Inc, a six-year
term as Vice President
|
|
and
CFO of UltraGuard Water System Inc; a public company engaged in
development and marketing
|
|
ultraviolet
based disinfection products and twenty five years spent in various
financial and senior management
|
|
positions
with the Harnischfeger Corporation, a major mining, construction and
defense equipment
|
|
manufacturer.
|
|
ITEM
11. EXECUTIVE COMPENSATION
|
|
Information
with respect to this item may be found in the section captioned
"Compensation of Directors"
|
|
appearing
in Schedule 14C of the Securities Exchange Act of 1934 filings on June
2008. This information
|
|
is
incorporated herein by reference.
|
|
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BEBEFICIAL OWNERS AND
MANAGEMENT AND
|
|
RELATED
STOCKHOLDER MATTERS
|
|
Information
with respect to this item may be found in the sections captioned "Security
Ownership of Directors
|
|
And
Officers And Certain Beneficial Owners" and "Certain Relationships and
Related Transactions" appearing
|
|
in
Schedule 14C of the Securities Exchange Act of 1934 filings on June 2008.
This information is incorporated
|
|
herein
by reference.
|
|
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE
|
|
Information
with respect to this item may be found in the section captioned
"Compensation of Directors" and
|
|
"Certain
Relationships and Related Transactions" appearing in Schedule 14C of the
Securities Exchange Act
|
|
of
1934 filings on June 2008. This information is incorporated herein by
reference.
|
|
ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
|
Information
with respect to this item may be found in the section captioned
"Independent Auditors" appearing
|
|
in
Schedule 14C of the Securities Exchange Act of 1934 filings on June 2008.
This information is incorporated
|
|
herein
by reference.
|
|
PART
4
|
|
ITEM
15. EXHIBITS AND FINANCIAL STATEMENT
SCHEDULES
|
|
SIGNATURES
AND EXHIBIT INDEX
|
|
(a)
The following documents are filed as part of this Report
:
|
|
1. Financial
Statements :
|
|
|
Page
|
|
|
Consolidated
Balance Sheet as of December 31, 2007 and 2006
|
13
|
|
Consolidated
Statements of Operations for the Years ended December 31, 2007 and
2006
|
14
|
|
Consolidated
Statements of Stockholders' Equity for the Years ended December 31,
2007,2006 and 2005
|
15
|
|
Consolidated
Statements of Cash Flows for the Years ended December 31, 2007 and
2006
|
16
|
|
Notes
to Consolidated Financial Statements
|
17
- 21
|
|
2
|
Exhibits
|
||
|
Exhibit
Number
|
Exhibit
Description
|
||
|
31.1
|
|||
|
31.2
|
|||
|
32.1
|
|||
|
32.2
|
|||
|
* These
certificates accompany China Mobility Solutions, Inc Annual
Reports on Form 10-K; they are not
|
|||
|
deemed
"filed" with the Securities and Exchange Commission and are not to be
incorporated by reference
|
|||
|
in
any filing of China Mobility Solutions, Inc. under the Securities Act of
1933, or the Securities Exchange
|
|||
|
Act
of 1934, whether made before or after the date hereof and irrespective of
any general incorporation
|
|||
|
langauge
in any filings.
|
|||
| 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.
|
|||
| China Mobility Solutions, Inc. | |||
|
January
22, 2009
|
By:
|
/s/ Angela Du | |
| Angela Du | |||
| Director and Chief Executive Officer | |||
| /s/ Ernest Cheung | |||
|
Ernest
Cheung
|
|||
| Chief Financial Officer | |||