UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of The Securities Exchange Act of 1934
ASIA PROPERTIES, INC.
(Name of Small Business Issuer in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
47-0855301
(I. R. S. Employer Identification No.)
114 Magnolia Street, Suite 400-115, Bellingham, Washington 98225
(Address of principal executive offices) (Zip Code)
(Issuer's telephone number) (360) 392-2841
Securities to be registered pursuant to Section 12(b) of the Act:
None |
Securities to be registered pursuant to Section 12(g) of the Act:
TABLE OF CONTENTS
PART I
Item 1. Description of Business.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Item 3. Description of Property.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
Item 5. Directors and Executive Officers, Promoters and Control Persons.
Item 6. Executive Compensation.
Item 7. Certain Relationships and Related Transactions.
Item 8. Description of Securities.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters.
Item 2. Legal Proceedings.
Item 3. Changes in and Disagreements with Accountants.
Item 4. Recent Sales of Unregistered Securities.
Item 5. Indemnification of Directors and Officers.
PART F/S Financial Statements
PART III
Item 1. Index to Exhibits.
Item 2. Description of Exhibits.
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ITEM 1. DESCRIPTION OF BUSINESS.
INTRODUCTION:
Asia Properties, Inc (hereafter referred to as Asia Properties or API) was incorporated in the State of Nevada on April 6, 1998 in order to acquire residential and commercial real estate in Southeast Asia for resale or development. Asia Properties is a development stage company that does not as yet own any property and has not generated any revenues from operations. Shares of API are currently listed for sale on the Pink Sheets under the trading symbol ASPZ.
NATURE OF BUSINESS:
We plan to acquire raw land and build resorts initially in Thailand and then in other parts of Southeast Asia. Our focus of acquisition will be in resort locations in Thailand including: Pattaya, Hua Hin. Koh Samui, with an initial focus on Phuket.
The types of property we plan to develop are beach oriented four or five star resorts to be managed by an international hotel management company such as Starwood Hotels or Hyatt International. Investors are advised that Asia Properties does not currently own any properties.
LETTER OF INTENT
On May 19, 2004, we signed a letter of intent with Lehman Brothers Asian Investments Ltd. (Lehman) The letter of intent, which has a one year period of validity, defines the intent of API and Lehman to work together to examine the possible construction and management of a resort on Mai Khao Beach, Phuket, Thailand. This development will utilize the ability of API to identify and secure a suitable resort site, to provide conceptualization and to provide on-site project management assistance during the build-out phase. Lehman will examine the possibility of providing construction financing, contributing equity or debt financing and negotiating related construction and hotel management contracts.
API has identified and is negotiating the purchase of a 160 rai (72 acres) beachfront property at Mai Khao Beach on Phuket Island.
API and Lehman are discussing an arrangement whereby API or its Thailand registered wholly-owned affiliate, Asia Properties, (Thailand) Ltd. ("API-T") would purchase 100% of the land and Lehman or one or more of its affiliates, would finance or arrange for the financing of the turn-key build-out of the resort.
On August 25, 2004, the Company signed an agreement with Lifeway Enterprise, to organize the placement of credit or loan facilities to participate with equity ownership in the 160 rai (72 acres) of beach front on Mai Khao Beach in Phuket, Thailand.
To date, API has negotiated the purchase of the property for Baht 3.7 million (US $90,000) per rai. A total of 60 rai is proposed for the development by API and Lehman in the form of a hotel and/or resort development. We intend to initially develop the project into a 250-room 5 star hotel with villas and condos for sale. API and Lehman envision all development to be under the general management of an internationally recognized resort operator. Employees
Mr. Daniel McKinney is our President and principal executive, accounting and financial officer and is employed full time by the Company. On February 28, 2003 we engaged the consulting services of Geoff Armstrong, through his company, World Web Publishing.com Corp. Mr. Armstrong performs the duties of secretary to Asia Properties. He assists us with the preparation and maintenance of all internal corporate documentation. Mr. Armstrong also assists us with the initial preparation of all required regulatory documents and will perform additional duties at the reasonable instruction of the President.
We presently have no other employees.
We plan to engage the services of an international hotel management company such as Starwood Hotels or Hyatt Hotels to manage our proposed beach resort. We plan to acquire assets both for purposes of capital gain and income. The amount or percentage of assets which will be invested in any specific property can only be determined at the time of such proposed investment. However, API does not have a limit on the amount or percentage of its assets that may be invested in any specific property.
Through our wholly-owned subsidiary, Asia Properties (Thailand) Ltd, ("API (T)"), we plan to acquire properties that have the following attributes:
We or API (T) must be able to acquire a freehold interest or an interest known in the United States. as "fee simple". This will give the owner the outright possession and use of the land, to dispose of the land as he or she wishes to sell it, give it away, trade it for other things, lease it to others, or pass it to others upon death.
The Property must have considerable capital appreciation potential and rental income to be cash flow positive within twenty-four months of acquisition.
If under construction, the property must be at a substantial discount to cost or if completed, must have a substantial potential for improvement.
We will primarily consider a property's capital appreciation potential and business cash flow models before investing in a particular property. We plan to use the latest valuation techniques to bid competitively for properties. We expect to maximize the best possible rental return or cash flow on each property that is purchased by aggressively marketing the properties. We plan to initially purchase raw land to develop a beach resort in Phuket.
In an effort to obtain the maximum possible gain from each property, we will consider selling properties only when the economic benefit to us warrants that action.
COMPETITION
We plan to develop a five star resort in Phuket, Thailand. Currently, there are less than 1900 five star rooms available on Phuket Island. Prices range from US $200 per night in the off-season at the Le Meridien, to a high of US $5,000 per night for a villa in the high season at the Banyan Tree Resort. The Le Meridien is a 20-year-old property that needs to be renovated in order to continue to be considered as a five star property. The Banyan Tree is a resort featuring villas rather than rooms. Phuket also features a Sheraton, a Conrad and a Dusit Resort. Raffles and Hilton are planning resorts to be opened by 2006. However we are not certain that substantial additional competition will not develop and that we will be able to compete successfully against future competitors. Additionally, many competitors are much larger than we are with substantially greater financial resources than we may be able to develop.
REGULATIONS
In order to proceed with the development of resorts in Thailand, Asia Properties will be required to obtain an environmental study, which must be submitted to the Thailand Environmental Department for approval. This includes a comprehensive report from an independent environmental consultant, which reports on access to sewerage systems and disposal, access to potable water, potential impact on wildlife and potential for other environmental damage. Once approval is obtained, structural design and architectural conceptuals must be submitted to the Thailand Lands Department for building permit approval.
RESTRICTIONS AND CONTROLS
We are not aware of any other share ownership restrictions, foreign currency controls, dividend restrictions or others affecting our investment in the Phuket property.
MARKET DEMAND
There is a growing demand from international visitors, who bring with them hard currency and high levels of repeat business, for high end destination resorts in the South East Asian region. This is regarded as offering value for money and with excellent infrastructure (modern facilities, serviced by modern airlines and reliable service).
LOW COSTS - Thailand generally experiences relatively low labor costs for both construction and operations of five star hotels compared to many other regions.
SALES & MARKETING - We believe we will benefit from a targeted sales, marketing and distribution network through sales offices and partnerships in our major feeder markets (UK, Japan, Australia, USA and Thailand) as well as through relationships with travel agents and tour operators. We plan to utilize the internet and magazines with articles and selective media coverage to promote the resort.
- Asia is perceived to offer more value for money and a better overall exotic resort experience due to varied cultural and shopping activities available, than other traditional international resort and winter destinations such as the Caribbean.
- Low building costs and low hotel operating costs are further reduced by being expensed in soft currencies, while the vast majority of income is in hard currency due to US dollar pricing policies. This will help to provide natural protection against foreign exchange exposure.
THAILAND TOURISM
The tourism industry in Thailand has recorded consistent growth. Visiting Thailand is generally seen to be a far less costly and a better value-for-money option than other resort destinations in Asia. This has been further assisted by the continuing currency devaluation of the Thai Baht which has strengthened foreign buying power of visitors. The Tourism Authority of Thailand (TAT) and the Pacific Asia Travel Association (PATA) expect a significant increase in visitors to Asian countries over the next four years, with Thailand alone predicted to welcome 20 million a year according to the TAT.
Phuket is one of the more popular resort destinations in Thailand and already enjoys an established international recognition, and at the same time, possesses considerable potential for further growth.
PHUKET - AN INTERNATIONAL DESTINATION
Phuket is considered to be a well-established international resort destination with a strong demand for growth. Phuket is conveniently linked to Europe and overseas countries provided via Phuket International Airport.
Renovations to expand the Phuket International Airport have recently been completed. In addition, the island's road system has being extensively improved, with a new highway between the airport and the main resorts. The local authorities are developing a new convention center in order to induce more tourism and business tourism to Phuket. The expansion of Phuket International Airport, improvements in infrastructure as well as new tourist attractions are expected to provide a positive impact and a renewed impact on the sustained growth of tourism in Phuket. In the past decade, tourism has become the biggest earner for the area, and continues to grow with more than 3 million visitors every year.
Phuket is the largest island in Thailand. At 543 square kilometers, it is about the same size as Singapore. Phuket is just over an hour's fight from Bangkok or Singapore with daily connections to most major Asian airports.
Phuket lies some 8 north of the Equator, and borders Phangnga Bay to the north and is joined to the mainland of Thailand by the Sarasin Bridge. To the south and west lies the Andaman Sea and the Krabi Sea to the east. Based upon data from the Tourism Authority of Thailand, Phuket currently offers approximately 20,000 hotel rooms, ranging from family run guest houses to luxurious five star resorts.
MAI KHAO BEACH combined with Nai Yang beach, is almost 17 kilometers long. It is largely deserted with only a few bungalow complexes, a campsite, and a new Marriott resort located there. Our planned resort will be located within a few kilometers south of the Marriott Hotel and about 5 kilometers from the airport.
THE ANDAMAN SEA, separated from the Bay of Bengal by the Andaman-Nicobar Ridge, is part of the Indian Ocean. Thailand's Andaman coast extends for 870 km from the Surin Islands on the northern border with Burma to Tarutao National Park on the southern border with Malaysia. Hundreds of islands are accessible to small craft from Phuket.
KHAO SOK NATIONAL PARK, on the mainland just to the north of Phuket, has large areas of tropical forest, which have a wide variety of plants and animals. Eco-tours have started in the last few years, offering the opportunity to experience the forest and get close to nature. Most operate in small groups to minimize impact on the environment.
ENVIRONMENTAL CONSIDERATIONS
In order to proceed with the development of a resort, Asia Properties will be required to obtain an environmental study which must be submitted to the Thailand Environmental Department for approval. This includes a comprehensive report from an independent environmental consultant which reports on access to sewerage systems and disposal, access to potable water, potential impact on wildlife and potential for other environmental damage. Once approval is obtained, structural design and architectural conceptuals must be submitted to the Thailand Lands Department for building permit approval.
The cost of compliance with environmental laws in Thailand, although they are not possible to quantify at present, will entail the following: costs respecting the engineering details connection to sewerage systems and disposal, access to potable water, hiring an environmental consultant to develop and submit an impact study for submission to the Thailand Environmental Protection Agency. The resort will be required to maintain the sewerage and potable water systems, and refuse disposal.
ASIA PROPERTIES, INTERNATIONAL (THAILAND) CO. LTD.
Asia Properties, Inc. owns 100% of Asia Properties, International (Thailand) Co. Ltd. This subsidiary was incorporated to purchase future property in the Kingdom of Thailand. The sole officer and director of API-T is Daniel S. MckinneyThe registered address is: 86/14 Soi Sukhumvit 31, Klongton-Nua, Wattana, Bangkok. The company is currently dormant. The Government and tax filings of the company are currently managed by our Thai lawyer, Ms. Pannada Sangdoung, P-Plus International Law Co. Ltd.
ENTELLIUM CORPORATION
In the past, Mr. Mckinney was responsible for providing certain general business services, arranging financing, investment banking advice, corporate restructuring services and consulting to Entellium Corporation. Mr. Mckinney's services for Entellium granted him the right to purchase 2 million shares of Entellium. As a result, On August 1, 2002 we purchased two million shares representing apprpoximately 11% of Entellium for $0.01 per share or $20,000. We do not intend to make any further investment in the securities of any other companies.
Entellium is an Application Service Provider (ASP), with offices in the United States, Malaysia and Singapore, that provides web-based, customer relationship management (CRM) solutions that automate and optimize the way companies obtain, maintain and develop customer relationships and loyalty. Entellium's headquarters are located in Seattle, Washington, with a global research and development center in Kuala Lumpur, Malaysia and a sales and marketing office in Singapore. On August 1, 2002 we signed a subscription agreement with Entellium Corporation, in which we purchased 2 million shares of Entellium at a price of $0.01 per share, in lieu of a terminated Letter of Intent to affect a share exchange with Entellium, and for providing services and consulting. Mr. Mckinney served as a director of Entellium from April to July 2003. Mr. Mckinney had no prior affiliation with Entellium other than as a consultant. Mr. Mckinney has no current relationship with Entellium.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
THE FOLLOWING INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE CONSOLIDATED FINANCIAL STATEMENTS OF ASIA PROPERTIES AND THE NOTES THERETO APPEARING ELSEWHERE IN THIS FILING. STATEMENTS IN THIS MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION AND ELSEWHERE IN THIS REGISTRATION STATEMENT THAT ARE NOT STATEMENTS OF HISTORICAL OR CURRENT FACT CONSTITUTE "FORWARD-LOOKING STATEMENTS."
The following management discussion should be read together with the Asia Properties, Inc. financial statements included in this registration statement See "Index to Financial Statements" at page F-1. Those financial statements have been prepared in accordance with generally accepted accounting principles of the United States of America.
GENERAL OVERVIEW
Asia Properties, Inc. is a development stage company, which was incorporated in 1998. Asia Properties plans to invest in real estate business in Southeast Asia. Asia Properties will initially devote most of its efforts toward organization and fund raising for planned Asian and Southeast Asian real estate investments, and no revenues have yet been generated from any such operations. Asia Properties has experienced recurring losses from operations since its inception and as of June 30, 2004, Asia Properties has had a working capital deficit of $33,716 and an accumulated deficit from operations of $1,940,403. As noted in the independent audit report for the audited Asia Properties financial statements for the year ending 2003 and included in this registration statement, these factors raise doubt about the ability of Asia Properties to continue as a going concern. Realization of the Company's business plan is dependent upon the
Company's ability to meet its future financing requirements, and the success of future operations. This is because we have not generated any revenues since inception. Our only other source for cash at this time is through investments or loans from management. We must raise cash to implement our project and stay in business.
On April 25, 2000, Asia Properties, Inc. filed a Form F-4 Registration Statement (Commission File No. 333-11892) as the registrant, Asia Properties Investments, Inc., in order to properly affect the reincorporation of Asia Properties from the State of Nevada to the British Virgin Islands. On June 19, 2002, the Form F-4 Registration Statement was withdrawn via a Form RW following the decision by the Company not to proceed with the reincorporation from a Nevada corporation to a British Virgin Islands company.
Previously, The efforts to purchase a Thailand real estate company, Northbridge Communities Limited, was terminated on November 20, 2000 and removed from the F-4.
The Company has decided not to reincorporate elsewhere and will remain as a Nevada corporation. Asia Properties Investments Inc. was incorporated solely for the purpose of redomiciling in the British Virgin Islands and the proposed merger. As the merger did not proceed, Asia Properties Investments, Inc has been terminated.
On June 6, 2003, Asia Properties, Inc. filed a Form SB-2 Registration Statement (Commission File No. 333-105931), in connection with the registration of shares under an equity line of credit we had entered into with Cornell Capital Partners. On July 26, 2004, the Form SB-2 Registration Statement was withdrawn via a Form RW following the decision by the Company not to proceed with the line of credit with Cornell.
In July 2000, Asia Properties received loans from Daniel S. McKinney and Nicholas St. Johnston, executive officers and directors of Asia Properties, and their affiliated entities in the total amount of approximately $411,348. Specifically, these loans were as follows: Daniel Mckinney - $92,580, Coldway Limited - $139,000 (Mr. McKinney and his spouse, Ms. Gaik-Im own 100% of the outstanding shares of Coldway Limited) Nicholas St. Johnston $40,768. Milliard Limited $139,000 (Nicholas St. Johnston owns 100% of the outstanding shares of Milliard Limited). These loans were unsecured, were not interest bearing and no other charges were to be applied. The loans were payable on demand. Additionally, Daniel McKinney, loaned $42,337 to API in 2001, $58,908 in 2002, $14,373 in 2003 and $35,086.00 from January 1, 2004 to June 30, 2004 for general expenses and operations
Asia Properties was unable to repay the loans in cash and therefore issued shares of common stock in repayment of the loans. This shareholder loan was converted to additional shares of 411,348 on December 29, 2000 at a price of
$1.00 per share. Daniel McKinney, a director loaned $42,337 to API in 2001, $58,908 in 2002, $14,373 in 2003 and $35,086.00 from January 1, 2004 to June 30, 2004 for general expenses and operations.
On August 1, 2002 we signed a subscription agreement with Entellium Corporation, in which we purchased 2 million shares of Entellium at a price of $0.01 per share, for providing services and consulting. Entellium is an Application Service Provider (ASP), with offices in USA, Malaysia and Singapore, which provides Customer Relations Management ("CRM") solutions based on the Microsoft.NET(R) web services platform.
RESULTS OF OPERATIONS
FROM INCEPTION ON APRIL 6, 1998 TO JUNE 30, 2004
During the period from April 6, 1998 (date of inception) to June 30, 2004, Asia Properties generated no revenues from operations and raised net cash through financing activities of $641,600 from private placements of its common stock as follows: a total of $234,547 was raised during the year ended December 31, 1999, $55,140 was raised for the year ended December 31, 2000, and $351,913 was raised for the year ended December 31, 2001. There were no additional cash flows from financing activities through June 30 2004. As of June 30, 2004, Asia Properties had a working capital deficit of $33,716.
Our general and administrative expense for the period of April 6, 1998 (inception) to June 30, 2004 was a total of $1,940,403. This constitutes our primary expense during the period. Our general and administrative expenses effectively became our net loss for the period with a net loss per share of approximately $0.29 for the period from inception to June 30, 2004.
Our general and administrative expense for the period of January 1, 2004 to June 30, 2004 was $43.239. Our general and administrative expenses effectively became our net loss for the period with a net loss per share of approximately $0.0065.
Our general and administrative expense for the period of April 6, 1998 (inception) to December 31, 2003, was our primary expenses during this period, and was a total of $1,897,164. Our general and administrative expenses effectively became our net loss for the period with a net loss per share of approximately $0.283.
PLAN OF OPERATIONS
Asia Properties plans to acquire, manage, and develop income-producing real property in Southeast Asia and acquire real property in Southeast Asia for long-term capital gains. Asia Properties' plan of operations also includes identifying suitable companies that own income-producing property for purposes of acquisition. Our immediate goal is to acquire and develop a 72 acre freehold property on Mai Khao beach in Phuket, Thailand
When possible through financings or through negotiations on purchases, we intend to use our common stock to finance acquisitions and retain as much cash as possible for working capital and development purposes.
LIQUIDITY AND CAPITAL RESOURCES
Asia Properties is a development stage company which has not generated any revenues from operations and has experienced recurring losses from operations since its inception. As of the date of this registration statement, we have yet to generate any revenues from our business operations. As of June 30, 2004 we had sustained operating losses of $1,940,403 since inception.
Asia Properties will be dependent on loans from management to pay current general and administration expenses. In July 2000, Asia Properties received loans from Daniel S. McKinney and Nicholas St. Johnston, executive officers and directors of Asia Properties, and their affiliated entities in the total amount of approximately $411,348. These loans were payable on demand. Asia Properties was unable to repay the loans in cash and therefore issued shares of common stock in repayment of the loans. This shareholder loan was converted to additional shares of 411,348 on December 29, 2000 at a price of $1.00 per share. Daniel McKinney, a director loaned $42,337 to API in 2001, $58,908 in 2002, $14,373 in 2003 and $35,086.00 from January 1, 2004 to June 30, 2004 for general expenses and operations.
Presently, we have virtually no cash available for working capital. As of June 30, 2004, we had accounts payable of $33,923 and no other accrued liabilities.
KCSA Worldwide provided investor relations services from August 1998 until September 2000. On October 4, 2001 58,000 shares of Asia Properties were issued to KCSA Worldwide at a price of $0.44 per share in lieu of a fee of $25,659
On February 28, 2003, 10,000 shares of Asia Properties were issued to Falcon Crest Capital. Falcon Crest Capital provided investment banking services.
As noted in Item 1. Description of Business, Asia Properties has signed a letter of intent with Lehman Brothers Asian Investments Ltd., which outlines the intent of API and Lehman to work together to consider the construction and management of a resort on Mai Khao Beach, Phuket, Thailand. Lehman will examine the possibility of providing construction financing, contributing equity or debt financing and negotiating related construction and hotel management contracts.
API and Lehman are discussing an arrangement whereby API or its Thailand registered affiliate, Asia Properties, (Thailand) Ltd. ("API-T") would purchase 100% of the land and Lehman or one or more of its affiliates, would finance or arrange for the financing of the turn-key build-out of the resort.
Additionally, on August 25, 2004, the Company signed an agreement with Lifeway Enterprise, to organize the placement of credit or loan facilities to participate with equity ownership in the 160 rai (72 acres) of beach front on Mai Khao Beach in Phuket, Thailand.
Asia Properties, Inc. will be able to continue satisfying its cash requirements on a limited basis via loans and advances from its CEO, Daniel S. Mckinney. However, there is no written or otherwise commitment from the CEO or any of the
Directors to provide any additional cash to the Company beyond what has already been provided. The Company may need to seek financings in addition to the possibilities outlined in the letter of intent signed with Lehman.
Upon the acquisition of a suitable property, Asia Properties will hire two additional employees in Thailand as administrative and account staff in anticipation of initiating the buildout of a proposed resort as well as other possible projects. We anticipate two extra employees will cost a total $1,000 per month based on current Thailand labor costs.
Mr. Mckinney has donated services valued at $5,000 per month to Asia Properties. This is not reflected in deferred salary or loans.
Our auditor in its opinion to our financial statements has raised substantial doubt about the Company's ability to continue as a going concern. Additionally, the Company has an accumulated deficit of $1,940,403.
Our acquisition strategy will be dependent on our ability to sign a definitive funding agreement with Lehman Brothers. We are also seeking alternative sources of financing. If we are not able to secure substantial financing in a reasonable period of time, it is unlikely that we will be able to acquire the Thai property referenced above or to initially implement our acquisition strategy.
On May 19, 2004, we signed a letter of intent with Lehman Brothers Asian Investments Ltd. (Lehman) The letter of intent, which has a one year period of validity, defines the intent of API and Lehman to work together to examine the possible construction and management of a resort on Mai Khao Beach, Phuket, Thailand. Lehman will examine the possibility of providing construction financing, contributing equity or debt financing and negotiating related construction and hotel management contracts. API has identified and is negotiating the purchase of a 160 rai (72 acres) beachfront property at Mai Khao Beach on Phuket Island.
API and Lehman are discussing an arrangement whereby API or its Thailand registered wholly-owned affiliate, Asia Properties, (Thailand) Ltd. ("API-T") would purchase 100% of the land and Lehman or one or more of its affiliates, would finance or arrange for the financing of the turn-key build-out of the resort.
On August 25, 2004, the Company also signed an agreement with Lifeway Enterprise, to organize the placement of credit or loan facilities to participate with equity ownership in the 160 rai (72 acres) of beach front on Mai Khao Beach in Phuket, Thailand.
Foreign currency
Asia Properties prepares its financial statements using United States dollars as the reporting currency. However, some transactions are conducted in Thailand currency - Baht, which is the functional currency in Thailand. Transactions in Baht are translated into United States dollars as the financial reporting currency. Foreign currency transactions are translated at the applicable rates of exchange prevailing at the dates of the transactions. Assets and liabilities are denominated at applicable rates prevailing at the balance sheet date.
Currently, the exchange rate of Baht to United States dollars is relatively stable and Asia Properties does not expect any major fluctuation in the currency rate, which would affect the comprehensive income result of exchange gains and losses.
Inflation
Asia Properties intends to acquire and develop real estate projects in Southeast Asia. Real estate values are inflation sensitive and fluctuate from time to time, depending on factors such as the general economic conditions in Southeast Asia. Asia Properties believes that the real estate values in Southeast Asia are currently low. Any future inflation in real estate values will affect Asia Properties' planned real estate development operations.
CAPITAL STOCK
(a) During fiscal 1999 the Company issued 70,834 common shares, having a value of $234,547, to various consultants and employees as stock based compensation. This amount was charged to operations in fiscal 1999.
(b) During fiscal 2000 the Company issued 438,100 common shares for having a total value of $332,729 to various consultants and employees as stock based compensation. This amount was charged to operations during fiscal 2000. Of these shares issued the Company caused 30,000 common shares to be cancelled at no cost to the Company and returned to treasury during fiscal 2001.
(c) During fiscal 2000 the Company issued 133,248 common shares having a value of $133,348 to settle debt.
(d) During fiscal 2001 the Company issued 60,000 common shares having a value of $36,000 for consulting services. The Company also issued 58,000 common shares having a value of $21,260 to settle debt.
New Accounting Standards
Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, was issued in June 1998 and will be effective for all fiscal quarters for all fiscal years, which began after June 15, 2000. This standard established accounting and reporting standards for derivative financial instruments and for hedging activities.
Entellium Corporation
On August 1, 2002 we signed a subscription agreement with Entellium Corporation, in which we purchased 2 million shares of Entellium at a price of $0.01 per share. We acquired shares at this price as compensation for providing Entellium with services and consulting performed by Mr. Mckinney. Mr. Mckinney was responsible for providing general business services, arranging financing, investment banking advice, corporate restructuring services and consulting to the CEO and CFO of Entellium. Mr. Mckinney's services for Entellium granted him the right to purchase the 2 million shares of Entellium. As a result, on August 1, 2002, we purchased two million shares of Entellium for $0.01 per share or $20,000. Fifteen thousand dollars was paid to the company, a further $2,500 was paid to Speechforms on behalf of Entellium and a note for $2,500 that was subsequently paid. Speechforms is not an affiliate of Asia Properties or Entellium.
ITEM 3. DESCRIPTION OF PROPERTY.
The principal executive office of Asia Properties is located at 114 West Magnolia, Suite 400-115, Bellingham, WA 98225. That space was occupied under a one-year lease from an unaffiliated party for $100 per month. That lease expired February 1, 2001. The Office continues to operate out of the same premises on month to month lease basis for $100 per month.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table shows the beneficial ownership of Asia Properties common stock as of June 30, 2003. The table shows each person known to us who owns beneficially more than five percent of the outstanding common stock of Asia Properties based on 6,600,782 shares being outstanding as of December 31, 2002, and the total amount of common stock of Asia Properties owned by each of its Directors and Executive Officers and for all of its Directors and Executive Officers as a group.
ACTUAL ACTUAL
IDENTITY OF PERSON . . . . . . . . AMOUNT OF PERCENT OF
OR GROUP . . . . . . . . . . . . . SHARES OWNED SHARES OWNED CLASS
---------------------------------- ------------- ------------- ------
Daniel S. McKinney (1)
13976 Marine Drive
White Rock, BC V4B1A5 Canada. . . 2,415,980 (1) 36.6% Common
---------------------------------- ------------- ------------- ------
Crestview Associates Ltd. (1)
908 Universal Commercial Bldg.
69 Peking Road, TST Hong Kong . . 700,000 (1) 10.4% Common
---------------------------------- ------------- ------------- ------
Coldway Limited (1)
86/14 Sukhumvit 31
Bangkok 10110, Thailand. . . . . . 164,900 (1) 2.5% Common
---------------------------------- ------------- ------------- ------
Lim Gaik-Im (2)
13976 Marine Drive
White Rock, BC V4B1A5 Canada. . . 2,415,980 (2) 36.6% Common
---------------------------------- ------------- ------------- ------
Nicholas St. Johnston (3)
86/14 Sukhumvit 31 . . . . . . . .
Bangkok 10110, Thailand. . . . . . 1,579,768 23.9% Common
---------------------------------- ------------- -------------
Milliard Limited (3)
86/14 Sukhumvit 31
Bangkok 10110, Thailand. . . . . . 539,000(2) 8.2% Common
---------------------------------- ------------- ------------- ------
David Roberts (4)
5B Kennedy Heights
10 Kennedy Row, Hong Kong. . . . . 5,000 Less than 1% Common
---------------------------------- ------------- ------------- ------
Geoff Armstrong (5)
250 H Street #123
Blaine, WA 98230 . . . . . . . . . 60,000 Less than 1% Common
---------------------------------- ------------- ------------- ------
World Web Publishing.com Corp (5)
250 H Street #123
Blaine, WA 98230 . . . . . . . . . 50,000 (5) Less than 1% Common
---------------------------------- ------------- ------------- ------
Officers and Directors as a Group
(four persons) . . . . . . . . . . 4,060,748 60.7% Common
---------------------------------- ------------- ------------- ------
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BENEFICIAL OWNERSHIP OF SECURITIES: Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, involving the determination of beneficial owners of securities, includes as beneficial owners of securities, any person who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has, or shares, voting power and/or investment power with respect to the securities, and any person who has the right to acquire beneficial ownership of the security within sixty days through means including the exercise of any option, warrant or conversion of a security.
(1) The common shares shown as being beneficially owned by Daniel S. McKinney total 2,415,980 or 36% of the Company and include:
951,080 shares held in his name,
700,000 shares held by Crestview Associates Limited, 164,900 shares held by Coldway Limited 600,000 Lim Gaik-Im, the spouse of Mr. Mckinney.
Mr. McKinney and his spouse, Ms. Gaik-Im own all of the outstanding ownership
interests of Crestview Associates. Mr. McKinney is a director of Coldway. Ms.
Gaik-Im is a citizen of Malaysia and not a resident of the United States.
(2) Includes 600,000 shares held directly by Lim Gaik-Im, Mr. McKinney's spouse,
as well as the other shares attributable to Mr. Mckinney as reflected in
footnote 1 above.
(3) The shares shown as being beneficially owned by Nicholas St. Johnston total 1,579,768 or 23.7% of the issued and outstanding shares of the Company and include:
1,040,768 shares held in his name; 539,000 shares held by Milliard Limited. Nicholas St. Johnston owns all of the outstanding ownership interests of Milliard Limited
(4) Does not include 20,000 shares previously deemed beneficially owned by Mr. Roberts which were in the form of options at a price of $1.56 per share, which expired on January 31, 2004
(5) The shares shown as being beneficially owned by Geoff Armstrong total 60,000 and include:
10,000 shares held in his name; 50,000 Options at a price of $1,00 per share held in the name of World Web Publishing.com Corp., which is owned as to 100% by Geoff Armstrong, an officer of the Company.
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The following table sets forth the names and ages of our current directors and executive officers, their principal offices and positions and the date each such person became a director or executive officer. The Board of Directors elects our executive officers annually. Our directors serve one-year terms or until their successors are elected and accept their positions. The executive officers serve terms of one year or until their death, resignation or removal by the Board of Directors. There are no family relationships or understandings between any of the directors and executive officers. In addition, there was no arrangement or understanding between any executive officer and any other person pursuant to which any person was selected as an executive officer.
Name of Director or Current Position Date of Position
Executive Officer Age and Office & Term of Office
--------------------- -------- ---------------------------------- ----------------
April 6, 2005
Daniel S. McKinney 43 President, Chief Executive Officer, Term: one year
and Director April 6, 2005
Nicholas St. Johnston 42 Director Term: one year
February 25, 2005
David Roberts 56 Director Term: one year
May 2005
Geoff Armstrong 62 Secretary Term: one year
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DANIEL S. MCKINNEY, President, Chief Executive Officer, and Director . Co-founder; Asia Properties, Inc. From 1981 until 1999, Mr. Mckinney established Mckinney International, a Hong Kong based company engaged in cutting gemstones & supplying world markets. From 1982-84 he founded the Hong Kong Gem & Jewelry show. From 1984 to 1987 he worked to establish Wynmere Ltd., Thailand, a direct selling jewelry company with its manufacturing in Bangkok and gemstone sourcing in Hong Kong In 1989, he established Coldway Ltd., an investment banking firm. In 1994, Mr. McKinney founded Cement Services, Ltd., a construction company, based in Bangkok. In 1998 he founded Asia Properties, Inc. a Bangkok based public real estate company. From 1999-2001 Mr. Mckinney served as a board member of Sunflower (USA) Ltd., a public company with a large industrial facility in China manufacturing copper pipes. Mr. Mckinney graduated from Hong Kong International School in 1979 and studied Chemistry and Biology at Houston Baptist University from 1979 to 1981. Mr. Mckinney speaks Cantonese, Thai, some Portuguese, and Malay.
NICHOLAS ST. JOHNSTON, Director. Co-founder; Asia Properties, Inc. Since December 1, 2001 Mr. St. Johnston has been a Senior Vice President with Greenwich Asia, a real estate banking firm based in Singapore,. Mr. Johnston is a Chartered Surveyor and real estate professional with 19 years experience (17 of which have been in Asia). He qualified as a Chartered Surveyor while working for Hillier Parker, a real estate consultant firm based in London, before moving to Hong Kong in 1984 , to work with Jardines and Hong Kong Land, a property holding company based in Hong Kong. He was a founding Director of the Hong Kong office of Sallmanns PLC, a real estate consulting company based in Hong Kong, before establishing the Thai branch office for International property consultant, Brooke Hillier Parker as the joint Managing Director in 1990. He has acted as property appraiser, investment advisor, and agent. In 1995, he joined property developer Wave Development, in Bangkok, and became the Chief Operations Officer, before co-founding API in April 1998. He formed the Thai branch of the Royal Institution of Chartered Surveyors (RICS), in 1990, and remains active on the committee, which he has chaired twice. Mr. St. Johnston holds a degree with honors from Trent University in England.
DAVID ROBERTS, Director. Mr. Roberts, based in Hong Kong, worked with Hoare Govett, a brokerage firm in Hong Kong 1990 until he retired in January 1999. Since January 1999 he has served as a director in Thailand of ABN AMRO Asia Securities Pcl., a brokerage firm Also since January 1999 he has been a Director of Finansa Ltd., a boutique investment bank based in Bangkok, Frontier Fund Management Co., a Southeast Asian-based mutual fund, and the Siam Investment Fund, which invests solely in Thailand. Prior to joining Hoare
Govett Asia Group in, he was employed by Citibank for 14 years where he served in a number of senior positions throughout Asia including as a director of Vickers Da Costa Ltd., Hong Kong. He has been a Council Member of the Stock Exchange of Hong Kong since 1986, a member of the Exchange's Listing Committee and a Director of the Hong Kong Securities Clearing Company.
GEOFF ARMSTRONG, Secretary. (B.A.) Concordia University 1967. President, Alphanet Communications Corp. since November 1991. Alphanet Communications Corp. was established in 1991 to prepare and assist with the preparation of promotional materials for companies including text and photographs, and to prepare and assist with the preparation of internal corporate documents. Since 1999, the provision of promotional materials has included the provision of text and photographs for the development of websites. He has been President, of Societe Sapphanna S.A.R.L., Madagascar since April 2000, and President of World Web Publishing.com Corp which was incorporated in the State of Nevada on August 14, 2000. World Web Publishing is in the process of developing an online book publishing and distribution company. Mr. Armstrong has been a Freelance business writer since 1990.
ITEM 6. EXECUTIVE COMPENSATION.
The President of the Company has donated services valued at $5,000 per month. This amount has been charged to operations and classified as "donated capital" in stockholders' deficit. The total value of Mr. Mckinney's donated services since 2001 is $240,000. This is not reflected as deferred salary. Mr. Mckinney intends to continue donating his services until such time as the Company is realizing a profit from its planned operations.
SUMMARY COMPENSATION TABLE
The following table sets forth the total compensation paid to or accrued, during the fiscal years ended December 31, 2000, 2001, 2002 and 2003 to Asia Property's highest paid executive officers. No salaries were paid prior to 2000. No restricted stock awards, long-term incentive plan payout or other types of compensation, other than the compensation identified in the chart below, were paid to these executive officers during these fiscal years.
COMPENSATION LONG TERM
NAME AND. . . . . . . . . . . . . . RESTRICTED COMPENSATION
POSITION. . . . . . . . . . . . . . YEAR STOCK OPTIONS
----------------------------------- ------------ ------------ -------
2000 139,000 NIL
2001 NIL NIL
Daniel Mckinney . . . . . . . . . . 2002 NIL NIL
President & Chief Executive Officer 2003 NIL NIL
2004 NIL NIL
------------ ------------ -------
2000 139,000 NIL
2001 NIL NIL
Nicholas. . . . . . . . . . . . . . 2002 NIL NIL
St. Johnston. . . . . . . . . . . . 2003 NIL NIL
Director. . . . . . . . . . . . . . 2004 NIL NIL
----------------------------------- ------------ ------------ -------
2000 5,000 20,000
2001 NIL NIL
2002 NIL NIL
David Diehl . . . . . . . . . . . . 2003 NIL NIL
Director. . . . . . . . . . . . . . 2004 NIL NIL
----------------------------------- ------------ ------------ -------
2000 5,000 NIL
2001 NIL NIL
2002 NIL NIL
David Roberts . . . . . . . . . . . 2003 NIL NIL
Director. . . . . . . . . . . . . . 2004 NIL NIL
----------------------------------- ------------ ------------ -------
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(1) All other compensation includes health insurance and life insurance plans or benefits, car allowances, etc. The Company may omit information regarding group life, health, hospitalization, medical reimbursement or relocation plans that do not discriminate in scope, terms or operation, in favor of executive officers of directors of the registrant and that are available generally to all salaried employees.
LTIP: "Long-Term Incentive Plan" means any plan providing compensation intended to serve as incentive for performance to occur over a period longer than one fiscal year, whether such performance is measured by reference to financial performance of the Company or an affiliate, the Company's stock price, or any other measure, but excluding restricted stock, stock option and Stock Appreciation Rights (SAR) plans.
The Company has made no compensation to any of its employees, other than compensation noted in the above table.
The Company has no Long-Term Incentive Plan and has made no Long-Term Incentive Plan payouts The Company has granted no bonuses to any of its employees since inception.
STOCK OPTION GRANTS
In February 2001 we issued three-year options to purchase 20,000 shares at a price of $1.56 per share to David Diehl and 20,000 shares at a price of $1.56 per share to David Roberts, both Directors of the Company. These options expired on January 31, 2004 without being exercised. Mr. Diehl is no longer a director. We did not issue any grants of stock options in the 2002 fiscal year to any officer or director.
On February 28, 2003 we issued 50,000 options to World Web Publishing.com Corp. at a price of $1.00 per share for a period of three years. Mr. Armstrong, an officer of the Company, holds all of the outstanding ownership interests of World Web Publishing.com Corp.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
STOCK OPTIONS
During 2000, we issued 5,000 shares to our two directors, David Diehl and David Roberts. We also granted three-year options to purchase up to 20,000 shares at an exercise price of $1.56 per share to these directors; David Diehl and David Roberts which expired on January 31, 2004. Also in 2000, we issued consulting fees to consulting companies owned by some of our officers and directors and issued our common stock to some of our officers and directors during 1999 and 2000. David Diehl is no longer a director.
The weighted average number of shares under option and option price for the period ended December 31, 2004 are as follows:
SHARES UNDER OPTION AND OPTION PRICE
------------------------------------
Remaining
Life of
Shares Option Date Expiry Options Current
Name of Optionee Optioned Price Granted Date (Months) Status
------------------------------------ --------- ------- -------- -------- -------- -------
David Diehl 20,000 $ 1.56 02/02/01 01/31/04 0 Expired
------------------------------------ --------- ------- -------- -------- -------- -------
David Roberts 20,000 $ 1.56 02/02/01 01/31/04 0 Expired
------------------------------------ --------- ------- -------- -------- -------- -------
World Web
Publishing.com Corp. 50,000 $ 1.00 02/28/03 02/28/05 6 Open
------------------------------------ --------- ------- -------- -------- -------- -------
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The options were granted for services provided or to be provided to the Company.
During 2000, we issued 5,000 shares to David Diehl a Director of the Company, and 5,000 shares to David Roberts also a Director, pursuant to Terms of Appointment as Directors. The value of the shares was at an agreed upon price of $1.00 per share. David Diehl is no longer a director. These shares were issued as compensation for becoming a director in Asia Properties.
In July 2000, Asia Properties received loans from Daniel S. McKinney and Nicholas St. Johnston, executive officers and directors of Asia Properties, and their affiliated entities in the total amount of approximately $411,348. Specifically, these loans were as follows: Daniel Mckinney - $92,580, Coldway Limited - $139,000 (Mr. McKinney and his spouse, Ms. Gaik-Im own 100% of the outstanding shares of Coldway Limited) Nicholas St. Johnston $40,768. Milliard Limited $139,000 (Nicholas St. Johnston owns 100% of the outstanding shares of Milliard Limited).
These loans were payable on demand. Asia Properties was unable to repay the loans in cash and therefore issued shares of common stock in repayment of the loans. This shareholder loan was converted to additional shares of 411,348 on
December 29, 2000 at a price of $1.00 per share as follows: Daniel McKinney, a director loaned $42,337 to API in 2001 and $58,908 in 2002 for general expenses and operations.
On February 28, 2003 we engaged the consulting services of Geoff Armstrong, an officer of the Company, through his company, World Web Publishing.com Corp. Mr. Armstrong will be paid the sum of $5,000 and has received additional compensation of 10,000 restricted shares as well as an option to purchase 50,000 shares at a price of $1.00 per share for two years. The option terminates on February 28, 2005.
Mr. Mckinney has donated services valued at $5,000 per month to Asia Properties. This is not reflected in deferred salary or loans.
ITEM 8. DESCRIPTION OF SECURITIES.
The following statements relating to the capital stock set forth the material terms of the Company's securities; however, reference is made to the more detailed provisions of the Articles of Incorporation and the By-laws, copies of which are filed as exhibits to this registration statement.
COMMON STOCK
The Company's Articles of Incorporation authorize the issuance of 50,000,000 shares of common stock, par value $0.001 per share, of which 6,720,782 shares are issued and outstanding as of June 30, 2004.
Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of common stock do not have cumulative voting rights. Holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the Board of Directors in its discretion from funds legally available therefore.
In the event of a liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share pro rata all assets remaining after payment in full of all liabilities. All of the outstanding shares of common stock are fully paid and non-assessable.
Holders of common stock have no preemptive rights to purchase the Company's common stock. There are no conversion or redemption rights or sinking fund provisions with respect to the common stock.
PREFERRED STOCK
The Company is not currently authorized to issue shares of Preferred Stock and has no plans to issue any preferred stock nor adopt any series, preferences or other classification of preferred stock. Accordingly, there are no preferred shares issued or outstanding as of the date of this registration statement.
DIVIDEND POLICY
We do not intend to pay additional dividends on our common stock. We plan to retain any earnings for use in the operation of our business and to find future growth.
The Company has never paid a cash dividend on its Common Stock nor does the Company anticipate paying cash dividends on its Common Stock in the near future. It is the present policy of the Company not to pay cash dividends on the Common Stock but to retain earnings, if any, to fund growth and expansion. Under Nevada law, a company is prohibited from paying dividends if the Company, as a result of paying such dividends, would not be able to pay its debts as they come due, or if the Company's total liabilities and preferences to preferred shareholders if any exceed total assets. Any payment of cash dividends of the Common Stock in the future will be dependent upon the Company's financial condition, results of operations, current and anticipated cash requirements, plans for expansion, as well as other factors the Board of Directors deems relevant.
REPORTS TO STOCKHOLDERS
The Company intends to comply with the periodic reporting requirements of the Securities Exchange Act of 1934. The Company plans to furnish its stockholders with an annual report for each fiscal year ending December 31 containing financial statements audited by its independent certified public accountants. Additionally, the Company will issue unaudited quarterly or other interim reports to its stockholders.
TRANSFER AGENT
The transfer agent and registrar for our Common Stock is Computershare Transfer & Trust Company, Inc., 350 Indiana Street, Suite 800, Golden, CO 80401.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
MARKET INFORMATION: Asia Properties common stock has been quoted in United States markets since January 25, 1999 and since that time has been the subject of limited and sporadic quotations in the Pink Sheets under the symbol "ASPZ". Asia Properties intends to apply to have its capital shares listed on the over-the-counter bulletin board maintained by the National Association of Stock Dealers (NASD). We have not, at this time, made application to the NASD over-the-counter Bulletin Board. We will make such application only upon completion of this 10-SB Registration Statement and our consequent status as a reporting company under SEC rules. We will also have to meet the other qualification requirements from Nasdaq. However, Asia Properties cannot make any assurance that quotations on the over-the-counter bulletin board will be approved.
PENNY STOCK REGULATIONS: our common stock is quoted on the Pink Sheets, maintained by Pink Sheets LLC, a privately owned company headquartered in New York City, under the symbol "ASPZ". On August 12, 2004 the last reported sale price of our common stock was $0.84 per share. The Company's common stock is subject to provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), commonly referred to as the "penny stock rule." Section 15(g) sets forth certain requirements for transactions in penny stocks, and Rule 15g-9(d) incorporates the definition of "penny stock" that is found in Rule 3a51-1 of the Exchange Act. The SEC generally defines "penny stock" to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. As long as the Company's common stock is deemed to be a penny stock, trading in the shares will be subject to additional sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors.
The following table shows the high and low per share price quotations of Asia Properties common stock as reported in the Pink Sheets for the periods presented. These quotations reflect inter dealer prices, without retail mark-up, mark-down or commissions, and may not necessarily represent actual transactions.
HIGH LOW
2004
Third Quarter
Second Quarter $0.70 $0.45
First Quarter $0.70 $0.40
2003
Fourth Quarter $1.90 $0.63
Third Quarter $2.60 $1.00
Second Quarter $3.00 $0.35
First Quarter $2.60 $0.50
2002:
Fourth Quarter $2.50 $0.35
Third Quarter $5.00 $0.20
Second Quarter $0.55 $0.25
First Quarter $0.40 $0.15
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HOLDERS: As of June 30, 2004 there were 73 holders of record of Asia Properties common stock. Many of these shares are held in street name, and consequently we have numerous additional beneficial owners.
ITEM 2. LEGAL PROCEEDINGS.
Asia Properties is not a party to any material legal proceedings and to the company's knowledge no such proceedings are threatened or contemplated by any party.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
In January 2003, the Company terminated Manning Elliott Chartered Accountants of Vancouver, Canada as its independent auditors. The reports of Manning Elliott on the Company's financial statements for the year ending December 31, 2001 has stated that the Company has losses from operations since inception, no source of revenues and insufficient working capital available to meet obligations over the next twelve months and that these factors raise substantial doubt about the Company's ability to continue as a going concern. Because of time constraints on the part of the Auditor for the fiscal year ending December 31, 2001, the Board of Directors and Audit Committee of API approved the decision to change accountants.
In January 2003, the Company engaged the accounting firm of Dale, Matheson, Carr-Hilton Chartered Accountants of Vancouver, Canada as its new independent accountants and who have prepared the financial statements included in this Registration Statement for the year ended December 31, 2003 and reviewed the statements for the year 2004 to date.
During the two most recent fiscal years and through December 31, 2003, there have been no disagreements between the Company and either Manning Elliot Chartered Accountants or Dale, Matheson, Carr-Hilton Chartered Accountants on any matter of accounting principles or practices, financial statement disclosure or auditing scope of procedure, which disagreements, if not resolved to the satisfaction of such firms, would have caused them to make reference to the subject matter thereof in their report on the Company's financial statements for such periods.
During the two most recent fiscal years and through December 31, 2003, with respect to reportable events as defined in Item 304(a)(1)(v) of Regulation S-B, it should be noted that the our current auditor has raised substantial doubt about the Company's ability to continue as a going concern .
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
On October 20, 2000, 100,000 shares were issued to Hudson Consulting as Settlement for five months of Investor and Public Relations services. These shares were issued in accordance with Section 4(2) of the Securities Act of 1933 for a private issuance of securities without any public solicitation.
On December 29, 2000, 411,348 shares of common stock were issued at a price of $1.00 per share as payment of loans to the Company totaling $411,348. These shares were issued as follows:
Daniel Mckinney was issued 92,580, shares based on a loan to the Company of $92,580. Coldway Limited was issued 139,000 shares, based on a loan to the Company of $139,000 (Mr. McKinney and his spouse, Ms. Gaik-Im own 100% of the
outstanding shares of Coldway Limited). Nicholas St. Johnston was issued 40,768 shares based on a loan to the Company of $40,768. Milliard Limited was issued 139,000 shares based on a loan to the Company of $139,000. (Nicholas St. Johnston owns 100% of the outstanding shares of Milliard Limited). These shares were issued in accordance with Section 4(2) of the Securities Act of 1933 for a private issuance of securities without any public solicitation.
The loans by Coldway and Milliard, totaling $278,000, were used to pay salaries all other loans were used for working Capital.
On February 9, 2001, 20,000 shares were issued to Melton J. Horwitz and 4,000 shares were issued to Melton J & Lorainne Charitable Trust to settle an outstanding debt. The dollar value of the shares issued on February 9, 2001 was $1.00 per share based on the average price of the shares during that period These shares were issued in accordance with Section 4(2) of the Securities Act of 1933 for a private issuance of securities without any public solicitation.
On February 28, 2001 36,000 shares were issued to Thiraphong Chansiri to settle an outstanding debt. The dollar value of the shares issued in February, 2001 was $1.00 per share based on the average price of the shares during that period. In addition, also on February 28, 2001 an option to purchase 20,000 shares at a price of $1.56 per share for a period of three years was granted to David Diehl for services and an option to purchase 20,000 shares at a price of $1.56 per share for a period of three years was granted to David Roberts for services. These shares were issued in accordance with Section 4(2) of the Securities Act of 1933 for a private issuance of securities without any public solicitation.
On October 4, 2001 58,000 shares were issued to KCSA Worldwide at a price of $0.44 per share in lieu of a fee of $25,659. KCSA provided investor relations services from August 1998 until September 2000. These shares were issued in accordance with Section 4(2) of the Securities Act of 1933 for a private issuance of securities without any public solicitation.
In October 2002, we issued 20,000 shares of our common stock valued at $10,000 to Cutler Law Group, our securities counsel, in consideration for legal services rendered. These shares were issued in accordance with Section 4(2) of the Securities Act of 1933 for a private issuance of securities without any public solicitation.
On February 28, 2003, 10,000 shares were issued to Falcon Crest Capital. Falcon Crest Capital provided investment banking services. Also on February 28, 2003, 10,000 shares were issued to World Web Publishing.com Corp. for consulting services and document preparation. The dollar value of the shares issued on February 28, 2003 and May 20, 2003 was $0.50 share based on the average price of the shares during that period. In addition, an option to purchase 50,000 to shares at a price of $1.00 per share for a period of two years was granted on February 28, 2003 to World Web Publishing.com, a company owned as to 100% by Geoff Armstrong, secretary to Asia properties, for current and ongoing services. These shares were issued in accordance with Section 4(2) of the Securities Act of 1933 for a private issuance of securities without any public solicitation.
On May 20, 2003, we issued 90,000 shares of our common stock as a commitment fee pursuant to a proposed equity line of credit to Cornell Capital Partners, L.P., and 10,000 shares of our common stock to TN Capital Equities, Ltd. pursuant to a placement agent agreement. The dollar value of the shares issued on May 20, 2003 was $2.20 based on the average price of the shares during that period. These issuances were completed without any public offering or solicitation and exempt in accordance with Section 4(2) of the Securities Act. API management has decided to terminate further pursuit of the equity line of credit with Cornell Capital Partners, and will therefore not require the services of TN Capital Equities, the placement agent. However, API will not be able to recover the shares issued to these parties.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 78.751 of Nevada Revised Statutes provides, in effect, that any person made a party to any action by reason of the fact that he is or was a director, officer, employee or agent of our company may and, in certain cases, must be indemnified by our company against, in the case of a non-derivative action, judgments, fines, amounts paid in settlement and reasonable expenses (including attorneys' fees) incurred by him as a result of such action, and in the case of a derivative action, against expenses (including attorneys' fees), if in either type of action he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of our company and in any criminal proceeding in which such person had reasonable cause to believe his conduct was lawful. This indemnification does not apply, in a derivative action, to matters as to which it is adjudged that the director, officer, employee or agent is liable to our company, unless upon court order it is determined that, despite such adjudication of liability, but in view of all the circumstances of the case, he is fairly and reasonably entitled to indemnification for expenses.
As authorized by Section 78.037 of Nevada Revised Statutes, our Articles of Incorporation eliminate or limit the personal liability of a director to our company or to any of its shareholders for monetary damage for a breach of fiduciary duty as a director, except for:
- Acts or omissions which involve intentional misconduct, fraud or knowing violation of law; or
- The payment of distributions in violation of Section 78.300 of Nevada Revised Statutes.
Our Articles of Incorporation provide for indemnification of officers and directors to the fullest extent permitted by Nevada law. Such indemnification applies in advance of the final disposition of a proceeding.
At present, there is no pending litigation or proceeding involving any director or officer as to which indemnification is being sought, nor are we aware of any threatened litigation that may result in claims for indemnification by any director or officer.
PART F/S FINANCIAL STATEMENTS
ASIA PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
(Stated in U.S. dollars)
AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
Asia Properties, Inc.
(A Development Stage Company)
We have audited the consolidated balance sheet of Asia Properties, Inc. (A Development Stage Company) as at December 31, 2003 and the statements of operations and deficit and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with United States generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2003 and the result of its operations and the cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1, the Company has been in the development stage since its inception on April 6, 1998. Realization of a major portion of the assets is dependent upon the Company's ability to meet its future financing requirements, and the success of future operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding those matters also are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Dale, Matheson, Carr-Hilton LaBonte
VANCOUVER, B.C. DALE, MATHESON, CARR-HILTON
JUNE 10, 2004 CHARTERED ACCOUNTANTS
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ASIA PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
December 31, 2003
(Stated in U.S. Dollars)
2003 2002
-------------------------------------------------------------------------------
$ $
ASSETS
CURRENT ASSETS
Cash. . . . . . . . . . . . . . . . . . . . . . . . 219 32
Prepaid expenses . . . . . . . . . . . . . . . . . . - 16,500
-------------------------------------------------------------------------------
TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . 219 16,532
INVESTMENT IN SHARES (Note 3). . . . . . . . . . . . 20,000 20,000
PROPERTY, PLANT AND EQUIPMENT (Note 4) . . . . . . . - 7,639
-------------------------------------------------------------------------------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . 20,219 44,171
===============================================================================
LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable. . . . . . . . . . . . . . . . . . 50,782 1,366
Accrued liabilities . . . . . . . . . . . . . . . . 5,000 5,000
Due to related parties (Note 5) . . . . . . . . . . 122,117 107,744
-------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES. . . . . . . . . . . . . . 177,899 114,110
SHAREHOLDERS' DEFICIT
SHARE CAPITAL (Note 6). . . . . . . . . . . . . . 6,721 6,601
ADDITIONAL PAID-IN CAPITAL. . . . . . . . . . . . 1,522,763 1,402,883
DONATED CAPITAL (Note 5). . . . . . . . . . . . . 210,000 150,000
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE. (1,897,164) (1,629,423)
TOTAL SHAREHOLDERS' DEFICIT. . . . . . . . . . . . . (157,680) (69,939)
-------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT. . . . . 20,219 44,171
===============================================================================
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CONTINGENT LIABILITY (Note 8)
SUBSEQUENT EVENT (Note 9)
ON BEHALF OF THE BOARD
Director
Director
See notes to financial statements
ASIA PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
Year ended December 31, 2003
(Stated in U.S. Dollars)
Accumulated from
April 6, 1998 For the Year For the Year
(Date of Inception) Ended Ended
to December 31, December December 31
2003 31, 2003 2002
$ $ $
----------------------------------------------- -------------------- -------------- -------------
REVENUE . . . . . . . . . . . . . . . . . . . . - - -
----------------------------------------------- -------------------- -------------- -------------
EXPENSES
Advertising and promotion . . . . . . . . . . . 581 -
Amortization. . . . . . . . . . . . . . . . . . - 4,047
Interest and bank charges . . . . . . . . . . . 1,606 350
Investment banking and finders fees . . . . . . 100,000 -
Management fees . . . . . . . . . . . . . . . . 60,000 60,000
Office and sundry . . . . . . . . . . . . . . . 1,859 2,809
Professional fees . . . . . . . . . . . . . . . 81,109 7,869
Telephone . . . . . . . . . . . . . . . . . . . 2,508 1,380
Travel. . . . . . . . . . . . . . . . . . . . . 11,328 6,575
Trust and filing fees . . . . . . . . . . . . . 1,706 20,309
----------------------------------------------- -------------------- -------------- -------------
2,033,427 260,697 103,339
----------------------------------------------- -------------------- -------------- -------------
LOSS BEFORE INCOME TAXES AND
EXTRAORDINARY ITEM. . . . . . . . . . . . . . . 2,033,427 260,697 103,339
INCOME TAXES RECOVERED. . . . . . . . . . . . . 595 595 -
----------------------------------------------- -------------------- -------------- -------------
LOSS BEFORE EXTRAORDINARY ITEMS . . . . . . . . (2,032,832) (260,102) (103,339)
EXTRAORDINARY ITEMS
Expense recovery (Note 8) . . . . . . . . . . . 143,307 143,307
Write-down of capital assets (Note 4) . . . . . (7,639) (7,639)
----------------------------------------------- -------------------- -------------- -------------
NET INCOME (LOSS) . . . . . . . . . . . . . . . (1,897,164) (267,741) 39,968
===================================================================== ============== =============
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE . (0.04) 0.01
============== =============
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC . . . 6,694,316 6,581,878
============== =============
PLUS: INCREMENTAL SHARES OF ASSUMED CONVERSION. 90,000 40,000
============== =============
ADJUSTED WEIGHTED AVERAGE SHARES. . . . . . . . 6,784,316 6,621,878
============== =============
|
See notes to financial statements
ASIA PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIENCY)
Year ended December 31, 2003
(Stated in U.S. Dollars)
Deficit
Accumulated
Common Stock During
------------- Additional the
Number Paid-in Development Development
of Amount Capital Stage Stage
Shares $ $ $ $
------------- ------------ ------------ ------------ ------------
Balance - December 31, 1998. . . . . . . . 7,250,600 7,251 634,349 641,600 (187,633)
------------- ------------ ------------ ------------ ------------
Shares issued for services . . . . . . . . 70,834 71 234,476 234,547 -
Net loss for the year. . . . . . . . . . . - - - - (660,954)
------------- ------------ ------------ ------------ ------------
Balance - December 31, 1999. . . . . . . . 7,321,434 7,322 868,825 876,147 (848,587)
Shares cancelled and returned to treasury. (1,400,000) (1,400) 1,400 - -
Shares issued for:
Services. . . . . . . . . . . . . . . 438,100 438 332,291 332,729 -
Settlement of debt. . . . . . . . . . 133,248 133 133,215 133,348 -
Net loss for the year. . . . . . . . . . . - - - - (479,683)
------------- ------------ ------------ ------------ ------------
Balance - December 31, 2000. . . . . . . . 6,492,782 6,493 1,335,731 1,342,224 (1,328,270)
Shares cancelled and returned to treasury. (30,000) (30) 30 - -
Shares issued for:
Services (Note 6(a)). . . . . . . . . 60,000 60 35,940 36,000 -
Settlement of debt (Note 6(a)). . . . 58,000 58 21,202 21,260 -
Net loss for the year. . . . . . . . . . . - - - - (341,121)
------------- ------------ ------------ ------------ ------------
Balance - December 31, 2001. . . . . . . . 6,580,782 6,581 1,392,903 1,399,484 (1,669,391)
Shares issued for services (Note 6(b)) . . 20,000 20 9,980 10,000 -
Net income for the year. . . . . . . . . . - - - - 39,968
------------- ------------ ------------ ------------ ------------
Balance - December 31, 2002. . . . . . . . 6,600,782 6,601 1,402,883 1,409,484 (1,629,423)
Shares issued for services (Note 6(c)) . . 120,000 120 119,880 120,000 -
Net income for the year. . . . . . . . . . - - - - (267,741)
------------- ------------ ------------ ------------ ------------
Balance - December 31, 2003. . . . . . . . 6,600,782 6,721 1,522,763 1,529,484 (1,897,164)
============= ============ ============ ============ ============
|
See notes to financial statements
ASIA PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended December 31, 2003
(Stated in U.S. Dollars)
Accumulated from
April 6, 1998 For the Year For the Year
(Date of Inception) Ended Ended
to December 31, December 31, December 31,
2003 2003 2002
$ $ $
-------------------- -------------- -------------
OPERATING ACTIVITIES
Net income (loss) . . . . . . . . . . . . . . . . . . . (1,897,164) (267,741) 39,968
Items not affecting cash
Amortization. . . . . . . . . . . . . . . . . . . . . 12,599 - 4,048
Write-down of investment to net realizable value. . . 27,000 - -
Write-down of capital assets (Note 4) . . . . . . . . 7,639 7,639
Donated consulting services (Note 5). . . . . . . . . 210,000 60,000 90,000
Deferred assets amortized . . . . . . . . . . . . . . 12,507 - -
Gain on forgiveness of debt . . . . . . . . . . . . . (143,307) - (143,307)
Shares issued for services rendered (Note 6). . . . . 733,276 120,000 10,000
Changes in non-cash working capital
Increase in prepaid assets. . . . . . . . . . . . . . - 16,500 (16,500)
Increase (decrease) in accounts payable and accruals. 353,697 49,416 (30,000)
-------------------- -------------- -------------
Cash flow used by operating activities. . . . . . . . . (683,753) (14,186) (45,791)
-------------------- -------------- -------------
INVESTING ACTIVITIES
Increase in deferred assets . . . . . . . . . . . . . . (12,507) - -
Purchase of securities (Note 3) . . . . . . . . . . . . (20,000) - (20,000)
Purchase of property, plant and equipment . . . . . . . (20,238) - -
Purchase of investment. . . . . . . . . . . . . . . . . (27,000) - -
-------------------- -------------- -------------
Cash flow used by investing activities. . . . . . . . . (79,745) - (20,000)
-------------------- -------------- -------------
FINANCING ACTIVITIES
Issuance of stock . . . . . . . . . . . . . . . . . . . 641,600
Advances from related parties . . . . . . . . . . . . . 122,117 14,373 65,407
-------------------- -------------- -------------
Cash flow from financing activities . . . . . . . . . . 763,117 14,373 65,407
-------------------- -------------- -------------
INCREASE (DECREASE) IN CASH FLOW. . . . . . . . . . . . . 219 187 (384)
CASH, BEGINNING OF YEAR . . . . . . . . . . . . . . . . . - 32 416
-------------------- -------------- -------------
CASH, END OF YEAR . . . . . . . . . . . . . . . . . . . . 219 219 32
==================== ============== =============
NON-CASH FINANCING ACTIVITIES
Shares issued for services rendered . . . . . . . . . . 733,276 120,000 10,000
Shares issued to settle debt. . . . . . . . . . . . . . 154,608 - -
-------------------- -------------- -------------
887,884 120,000 10,000
==================== ============== =============
|
See notes to financial statements
ASIA PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year ended December 31, 2003
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS AND CONTINUANCE OF OPERATIONS
Asia Properties, Inc. (the "Company") was incorporated in Nevada on April 6, 1998. The Company was formed to seek opportunities to invest in real estate projects in Asia. The Company has a 100% owned subsidiary, Asia Properties, International (Thailand) Ltd., which was registered in Thailand on August 2, 1999, to conduct the Company's real estate operations in Thailand.
Planned principal activities have not yet begun and revenues have not been realized as the company is still in its development stage. The Company will continue to be in the development stage until it commences its principal business activities and significant revenues begin. In a development stage company, management devotes most of its activities to developing a market for its business. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to emerge from the development stage with respect to any planned principal business activity is dependent upon its successful efforts to raise additional equity financing and/or attain profitable operations. Management has plans to seek additional capital through a private placement of its common stock as outlined below. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary in the event the Company cannot continue in existence.
On June 4, 2002 the Company signed a non-binding letter of intent with Entellium Investments, Ltd. ("Entellium") and Entellium's controlling shareholders, pursuant to which the parties agreed to complete a share exchange transaction that would result in a reverse takeover of the Company by Entellium. Entellium is based in Malaysia and is in the business of providing businesses of all sizes with a suite of e-business tools to simplify and enhance key sales, marketing and customer processes (Customer Relationship Management) at a fraction of the cost of traditional methods. On August 1, 2002 the Company terminated its Letter of Intent with Entellium and instead purchased two million shares representing 11% of Entellium for $0.01 per share or $20,000.
On October 3, 2002 the Company signed a letter of intent for an Equity Line of Credit with Cornell Capital Partners L.P. Under the terms of this agreement, Cornell is committed to purchase up to $10,000,000 worth of common shares of the Company over a 24 month period commencing on the date of registration of the Company's shares with the Securities and Exchange Commission. The purchase price of the shares will be equal to 98% of the market price at the time of purchase. These shares will have various restrictions placed on them as well as other obligations connected with the closing costs including $15,000 of legal fees associated with these transactions. Subsequently, on February 21, 2003, the Company amended the equity line from $10 million down to $5 million.
On February 19, 2003 the Company signed a Memorandum of Understanding to purchase 46 acres of beachfront land in Phuket, Thailand for $9.5 million. The Company intends to issue common stock for $5.33 million and seek bank financing for $4.16 million. The Company plans to utilize its Equity Line of Credit with Cornell Capital to develop a resort.
ASIA PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year ended December 31, 2003
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES
a) Consolidated Financial Statements
These consolidated financial statements include the accounts of the Company, and its 100% owned Thailand subsidiary, Asia Properties, International (Thailand) Ltd. This subsidiary is inactive, and no intercompany transactions have taken place; therefore, no transactions were required to be eliminated on consolidation.
b) Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
c) Foreign Currency Translation
The Company and its subsidiary use the US dollar as its functional currency. As operations in Thailand have not yet commenced, there were no foreign currency translation adjustments required for the year ended December 31, 2003. Assuming the US dollar does remain as the Company's functional currency, the Company's policy for accounting for foreign currency transactions when they do occur will be as follows: revenue, expenses and non-monetary balance sheet items in foreign currencies will bee translated into U.S. dollars at the rate of exchange prevailing on the transaction dates, and monetary balance sheet items will be translated at the rate prevailing at the balance sheet date. The resulting exchange gain or loss will be charged to operations.
d) Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less at the time of issuance to be cash equivalents.
e) Investment in shares
The Company considers the investment in shares of Entellium as available for sale securities. This investment is carried at cost as the fair market value of these securities is not readily determinable and the Company does not exercise significant influence over Entellium. In determining the appropriate carrying value of this investment management considers whether there are there any factors to indicate that an impairment in value has occurred. No adjustment for impairment in value is considered necessary at this time.
f) Property, Plant and Equipment
Office equipment is recorded at cost. Depreciation is computed on a straight-line basis over their estimated useful lives, ranging from three to seven years. The carrying values of capital assets are reviewed whenever events or circumstances indicate and impairment in carrying value may have occurred. Should an impairment be indicated, recoverable value is estimated by management based on future expected undiscounted cash flows from use or sale of the assets.
ASIA PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year ended December 31, 2003
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES - CONT'D
g) Basic and Diluted Net Income (Loss) per Share
The Company computes net income (loss) per share in accordance with Statement of Financial Accounting Standards ("SFAS") No.128, "Earnings per Share" (SFAS 128). SFAS 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.
h) Accounting for Stock-Based Compensation
SFAS No.123, "Accounting for Stock-Based Compensation", requires that stock awards granted be recognized as compensation expense based on fair values at the date of grant. Alternatively, a company may account for stock awards granted under Accounting Principles Board Opinion (APB) No.25, "Accounting for Stock Issued to Employees", and disclose pro forma income amounts which would have resulted from recognizing such awards at their fair value. The Company has elected to account for stock-based compensation for employees under APB No.25 and make the required pro forma disclosures for compensation expense. Stock based compensation for non-employees are accounted for using SFAS No.123.
i) Income Taxes
Income taxes are provided for using the liability method of accounting in accordance with SFAS No.109 "Accounting for Income Taxes". A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.
There is no provision for income taxes as the Company has incurred losses since inception. The Company's total deferred tax asset as of December 31, 2003 and 2002, is as follows:
2003 2002
$ $
-------------- ---------------
Net operating loss (267,741) (128,000)
Valuation allowance 267,741 128,000
-------------- ---------------
- -
============== ==============
|
ASIA PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year ended December 31, 2003
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES - CONT'D
i) Income Taxes cont.
The Company has incurred net operating losses as follows:
Amount Year of
Year of Loss $ Expiration
-------------- ------ ----------
1998 188,000 2017
1999 661,000 2018
2000 480,000 2019
2001 198,000 2020
2002 128,000 2021
2003 267,741 2022
|
j) Impairment
Certain long-term assets of the Company are reviewed at least quarterly to
determine whether there are indications the carrying value has become impaired,
pursuant to guidance established in Statement of Financial Accounting Standards
["SFAS"] No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets." Management considers assets to be impaired if the carrying value
exceeds the future projected cash flows from related operations (undiscounted
and without interest charges). If impairment is deemed to exist, the assets
will be written down to fair value. Management also re-evaluates the periods of
amortization to determine whether subsequent events and circumstances warrant
revised estimates of useful lives.
3. INVESTMENT
On August 1, 2002 the Company purchased two million shares of Entellium Investments Ltd. representing 11% of the outstanding voting shares of Entellium for $0.01 per share or $20,000. The Company was granted the right to purchase these shares at $0.01 per share for providing the following services:
a) General investment banking and business development
b) Development of market entry strategies into North America, including the
Telus deal
c) Strategic fund raising activities and arranging a US$5 million line of
credit
d) Consulting to Entellium's senior executives
e) Legal and accounting advisory and professional introductions
The fair market value of the investment in Entellium is assessed for impairment by management. No factors have come to management's attention that would indicate that a write down of this investment is required.
(See Note 2(e))
ASIA PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year ended December 31, 2003
(Stated in U.S. Dollars)
4. PROPERTY, PLANT AND EQUIPMENT
2003 2002
------------------------------------------- --------
Accumulated
Cost Amortization Disposals Net Net
$ $ $ $ $
--------- --------- -------- -------- ----------
Office equipment 20,238 20,238 7,639 - 7,639
========= ========= ======== ======== ==========
|
Office equipment consisted of various minor assets. The office was abandoned and the office equipment is no longer in use, so the balance of the undepreciated cost was written off
5. RELATED PARTY TRANSACTIONS
The amounts owing to the directors are unsecured, non-interest bearing and due on demand.
The President of the Company has donated services valued at $5,000 per month. This amount has been charged to operations and classified as "donated capital" in stockholders' deficit.
6. SHARE CAPITAL
2003 2002
---- ----
AUTHORIZED:
50,000,000 Common shares, par value of $0.0001 each
ISSUED:
6,720,792 Common shares $6,721 $6,601
|
The Company issued shares for services in the current and prior year as follows:
a) During year ended December 31, 2002, the Company issued 20,000 common shares having a value of $10,000 for legal services.
b) During year ended December 31, 2003, the Company issued 20,000 common shares having a value of $20,000 for legal services, and 100,000 common shares having a value of $100,000 for investment banker and finders services.
ASIA PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year ended December 31, 2003
(Stated in U.S. Dollars)
7. STOCK OPTIONS
The weighted average number of shares under option and option prices for the period ended December 31, 2003 are as follows:
Weighted
Shares Weighted Average
Under Average Remaining
Option Option Price Life of Options
$ $ (Months)
--------- -------------- ---------------
Beginning of period (a) 40,000 1.56 1
Granted (b) . . . . . . 50,000 1.00 14
Exercised . . . . . . . - - -
Cancelled . . . . . . . - - -
Lapsed. . . . . . . . . - - -
--------- -------------- ---------------
End of period . . . . . 90,000 1.25 8
========= ============== ===============
|
The options were granted for services provided or to be provided to the Company. SFAS No.123 requires that an enterprise recognize, or at its option, disclose the impact of the fair value of stock options and other forms of stock based compensation in the determination of income. The Company has elected under SFAS 123 to continue to measure compensation cost on the intrinsic value basis set out in APB Opinion No.25. As options are granted at exercise prices based on the market price of the Company's shares at the date of grant, no compensation cost is recognized. However, under SFAS 123, the impact on net income and income per share of the fair value of stock options must be measured and disclosed on a fair value based method on a pro forma basis.
SFAS No.123 requires that an enterprise recognize, or at its option, disclose the impact of the fair value of stock options and other forms of stock based compensation in the determination of income. The Company has elected under SFAS 123 to continue to measure compensation cost on the intrinsic value basis set out in APB Opinion No.25. As options are granted at exercise prices based on the market price of the Company's shares at the date of grant, no compensation cost is recognized. However, under SFAS 123, the impact on net income and income per share of the fair value of stock options must be measured and disclosed on a fair value based method on a pro forma basis.
The fair value of the employee's purchase rights under SFAS 123, was estimated using the Black-Scholes model using the following assumptions: risk free interest rate of 4.50%, expected volatility of 269%, an expected option life of two years, and no expected dividends.
If compensation expense had been determined pursuant to SFAS 123, the Company's net income (loss) and net income (loss) per share for the year ended December 31, 2003 and the year ended December 31, 2002 would have been as follows:
2003 2002
$ $
---------- ----------
Net income (loss)
As reported. . . . . . . . . . . (267,741) 39,968
Pro forma. . . . . . . . . . . . (310,155) 39,968
Basic net income (loss) per share
As reported. . . . . . . . . . . (0.04) 0.01
Pro forma. . . . . . . . . . . . (0.05) 0.01
|
ASIA PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year ended December 31, 2003
(Stated in U.S. Dollars)
8. CONTINGENCY
An account payable in the amount of $143,307 in respect of legal services in prior periods was reversed in 2002, as the legal work performed considered unsatisfactory. A gain on reversal of this debt was recorded in the current year. The Company believes the matter has been properly settled but the law firm that provided these services has not acknowledged in writing this settlement.
9. SUBSEQUENT EVENTS
a) The company issued a memo of understanding to Quest Resources Company Ltd (Quest Resources) on April 21, 2004, outlining their intent to purchase a controlling interest in Quest Resources and assist Quest Resources in its future investment program. This program includes the purchase and development of a resort in Chonburi, Thailand.
b) The company issued a letter of intent to Lehman Brothers Asian Investments Limited on May 19, 2004, outlining their intent to work together to develop the 46 acres of beachfront land in Phuket, Thailand that Asia Properties Ltd. has indicated it intends to purchase. As part of the agreement, Asia Properties Ltd. intends to finance the project with the line of credit from Cornell Capital Partners Ltd., and Lehman Brothers Asian Investments Limited will provide additional financing to complete the project.
ASIA PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
For the six month period ending June 30, 2004
(Stated in U.S. Dollars)
Asia Properties, Inc.
(A Development Stage Company)
Consolidated Balance Sheets
(Expressed in US Dollars)
June 30,2004 Dec. 31, 2003
$ $
-------------- ---------------
Assets
Current Assets
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 219
-------------- ---------------
Investment in Shares of Entellium Investments, Ltd.- at cost
-------------- ---------------
20,000 20,000
Total Assets. . . . . . . . . . . . . . . . . . . . . . . . . . 20,207 20,219
============== ===============
Liabilities and Stockholders' Deficit
Current Liabilities
Accounts Payable. . . . . . .. . . .. . . . . . . . . . . . . . 33,923 50,782
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . - 5,000
-------------- ---------------
33,923 55,782
Due to related parties - Deferred . . . . . . . . . . . . . . . 157,203 122,117
-------------- ---------------
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . 191,126 177,899
-------------- ---------------
Stockholders' Deficit
Common Stock, $0.001 par value 50,000,000 shares authorized;. . 6,721 6,721
Additional Paid-in Capital. . . . . . . . . . . . . . . . . . . 1,522,763 1,522,763
Donated Capital (Note 5). . . . . . . . . . . . . . . . . . . . 240,000 210,000
Deficit Accumulated During the Development Stage. . . . . . . . (1,940,403) (1,897,164)
-------------- ---------------
Total Stockholders' Deficit . . . . . . . . . . . . . . . . . . (170,919) (157,680)
-------------- ---------------
Total Liabilities and Stockholders' Deficit . . . . . . . . . . 20,207 20,219
============== ===============
|
Asia Properties, Inc.
(A Development Stage Company)
Consolidated Statements of Operations
(Expressed in Us Dollars)
For the Three Months For the Six Months
Ended June 30 Ended June 30
2004 2003 2004 2003
$ $ $ $
----------- ----------- ----------- -----------
Revenue . . . . . . . . . . . . . . -- - - -
----------- ----------- ----------- -----------
General and Administration Expenses
Management Fees . . . . . . . . . . 15,000 15,000 30,000 30,000
Investment Banking and Finders Fee. - 17,500 - 20,000
Audit & Legal . . . . . . . . . . . 3,676 15,418 4,116 18,530
Office Equipment Write off. . . . . - 7,639 - 7,639
Travel. . . . . . . . . . . . . . . 3,817 2,255 5,072 4,251
Trust & Filing Fees . . . . . . . . 340 637 431 1,066
Telephone & Internet. . . . . . . . 128 582 138 1,271
Promotion . . . . . . . . . . . . . 766 428 1,375 428
Bank Charges & Interest . . . . . . 423 404 871 743
Office Expenses . . . . . . . . . . 785 345 1,236 679
Compensation expense. . . . . . . . - - - 42,414
----------- ----------- ----------- -----------
Net Loss For The Period . . . . . . 24,935 60,208 43,239 127,021
=========== =========== =========== ===========
Net Loss Per Share. . . . . . . . . (0.004) (0.009) (0.006) (0.018)
=========== =========== =========== ===========
Weighted Average Shares Outstanding 6,720,782 6,720,782 6,720,782 6,720,782
=========== =========== =========== ===========
|
(Diluted loss per share has not been presented, as the result is anti-dilutive)
Asia Properties, Inc.
(A Development Stage Company)
Consolidated Statement of Stockholders' Deficit\
(Expressed in US Dollars)
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Total Stage
# $ $ $ $
------------ ------------ ----------- --------- ------------
Balance - December 31, 1998. . . . . . . . 5,850,600 5,851 635,749 641,600 (187,633)
Shares issued for services . . . . . . . . 70,834 71 234,476 234,547 -
Net loss for the year. . . . . . . . . . . - - - - (660,954)
------------ ------------ ----------- --------- ------------
Balance - December 31, 1999 (audited). . . 5,921,434 5,922 870,225 876,147 (848,587)
Shares issued for:
Services . . . . . . . . . . . . . . . . . 438,100 438 332,291 332,729 -
Settlement of debt . . . . . . . . . . . . 133,248 133 133,215 133,348 -
Net loss for the year. . . . . . . . . . . - - - - (479,683)
------------ ------------ ----------- --------- ------------
Balance - December 31, 2000 (audited). . . 6,492,782 6,493 1,335,731 1,342,224 (1,328,270)
Shares cancelled and returned to treasury. (30,000) (30) 30 - -
Shares issued for:
Services . . . . . . . . . . . . . . . . . 60,000 60 35,940 36,000 -
Settlement of debt . . . . . . . . . . . . 58,000 58 21,202 21,260 -
Net loss for the year . . . . . . . - - - - (340,121)
------------ ------------ ----------- --------- ------------
Balance - December 31, 2001 (audited). . . 6,580,782 6,581 1,392,903 1,399,484 (1,669,391)
Shares issued for services . . . . . . . . 20,000 20 9,980 10,000
Net income for the period. . . . . . . . . - - - - 39,968
------------ ------------ ----------- --------- ------------
Balance - December 31, 2002 (audited). . . 6,600,782 6,601 1,402,883 1,409,484 (1,629,423)
Shares issued for services . . . . . . . . 120,000 120 119,880 120,000
Net loss for the period. . . . . . . . . . (267,741)
------------ ------------ ----------- --------- ------------
Balance - December 31, 2003. . . . . . . . 6,720,782 6,721 1,522,763 1,529,484 (1,897,164)
Net loss for the period. . . . . . . . . . (43,239)
------------ ------------ ----------- --------- ------------
Balance - to June 30, 2004 . . . . . . . . 6,720,782 6 6,721 1,522,763 1,529,484 (1,940,403)
------------ ------------ ----------- --------- ------------
|
Asia Properties, Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Expressed in US Dollars)
Three Months ended Six Months Ended
June 30 June 30
2004 2003 2004 2003
-------- -------- --------- ---------
Cash provided by (used in)
Net loss for the period . . . . . . . . . . (24,935) (60,208) (43,239) (127,021)
Items not affecting cash
Amortization . . . . . . . . . . . . . . - 7,639 - 7,639
Donated Services . . . . . . . . . . . . 15,000 15,000 30,000 30,000
Reduction in Prepaid Expenses. . . . . . - 17,500 - 20,000
Change in non-cash working capital items. . (6,093) 16,872 (27,572) 60,160
-------- -------- --------- ---------
Cash Flow Used in Operating Activities. . . (3,842) (3,197) (40,811) (9,222)
-------- -------- --------- ---------
Financing Activities
Issuance of share capital . . . . . . . . - - - -
Advances from related parties . . . . . . 4,026 3,188 40,799 13,669
-------- -------- --------- ---------
Cash Flow Provided by Financing Activities. 4,026 3,188 40,799 13,669
-------- -------- --------- ---------
Net Increase (decrease) in Cash . . . . . . 184 (9) (12) 4,447
Cash - Beginning of Period. . . . . . . . . 23 107 219 416
-------- -------- --------- ---------
Cash - End of Period. . . . . . . . . . . . 207 98 207 4,863
======== ======== ========== =========
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year ended December 31, 2003
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS AND CONTINUANCE OF OPERATIONS
Asia Properties, Inc. (the "Company") was incorporated in Nevada on April 6, 1998. The Company was formed to seek opportunities to invest in real estate projects in Asia. The Company has a 100% owned subsidiary, Asia Properties, International (Thailand) Ltd., which was registered in Thailand on August 2, 1999, to conduct the Company's real estate operations in Thailand.
Planned principal activities have not yet begun and revenues have not been realized as the company is still in its development stage. The Company will continue to be in the development stage until it commences its principal business activities and significant revenues begin. In a development stage company, management devotes most of its activities to developing a market for its business. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to emerge from the development stage with respect to any planned principal business activity is dependent upon its successful efforts to raise additional equity financing and/or attain profitable operations. Management has plans to seek additional capital through a private placement of its common stock as outlined below. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary in the event the Company cannot continue in existence.
On June 4, 2002 the Company signed a non-binding letter of intent with Entellium Investments, Ltd. ("Entellium") and Entellium's controlling shareholders, pursuant to which the parties agreed to complete a share exchange transaction that would result in a reverse takeover of the Company by Entellium. Entellium is based in Malaysia and is in the business of providing businesses of all sizes with a suite of e-business tools to simplify and enhance key sales, marketing and customer processes (Customer Relationship Management) at a fraction of the cost of traditional methods. On August 1, 2002 the Company terminated its Letter of Intent with Entellium and instead purchased two million shares representing 11% of Entellium for $0.01 per share or $20,000.
On October 3, 2002 the Company signed a letter of intent for an Equity Line of Credit with Cornell Capital Partners L.P. Under the terms of this agreement, Cornell was committed to purchase up to $10,000,000 worth of common shares of the Company over a 24-month period commencing on the date of registration of the Company's shares with the Securities and Exchange Commission. The purchase price of the shares was to equal 98% of the market price at the time of purchase and would have various restrictions placed on them as well as other obligations connected with the closing costs including $15,000 of legal fees associated with these transactions. On August 22. 2004 the Company terminated this equity line. On August 25, 2004 the Company signed a new agreement with Lifeway Enterprises and Lehman Brothers Asian Investments Limited to fund the development of a resort. (see 9 - Subsequent Events)
On February 19, 2003 the Company signed a Memorandum of Understanding to purchase 46 acres of beachfront land in Phuket, Thailand for $9.5 million.
2. SIGNIFICANT ACCOUNTING POLICIES
a) Consolidated Financial Statements
These consolidated financial statements include the accounts of the Company, and its 100% owned Thailand subsidiary, Asia Properties, International (Thailand) Ltd. This subsidiary is inactive, and no intercompany transactions have taken place; therefore, no transactions were required to be eliminated on consolidation.
b) Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
c) Foreign Currency Translation
The Company and its subsidiary use the US dollar as its functional currency. As operations in Thailand have not yet commenced, there were no foreign currency translation adjustments required for the six-month period ended June 30, 2003. Assuming the US dollar does remain as the Company's functional currency, the Company's policy for accounting for foreign currency transactions when they do occur will be as follows: revenue, expenses and non-monetary balance sheet items in foreign currencies will bee translated into U.S. dollars at the rate of exchange prevailing on the transaction dates, and monetary balance sheet items will be translated at the rate prevailing at the balance sheet date. The resulting exchange gain or loss will be charged to operations.
d) Cash and Cash Equivalents
The Company considers all highly liquid investments with maturity of three months or less at the time of issuance to be cash equivalents.
e) Investment in shares
The Company considers the investment in shares of Entellium as available for sale securities. This investment is carried at cost as the fair market value of these securities is not readily determinable and the Company does not exercise significant influence over Entellium. In determining the appropriate carrying value of this investment management considers whether there are there any factors to indicate that impairment in value has occurred. No adjustment for impairment in value is considered necessary at this time.
f) Property, Plant and Equipment
Office equipment is recorded at cost. Depreciation is computed on a straight-line basis over their estimated useful lives, ranging from three to seven years. The carrying values of capital assets are reviewed whenever events or circumstances indicate and impairment in carrying value may have occurred. Should impairment be indicated, recoverable value is estimated by management based on future expected undiscounted cash flows from use or sale of the assets.
g) Basic and Diluted Net Income (Loss) per Share
The Company computes net income (loss) per share in accordance with Statement of Financial Accounting Standards ("SFAS") No.128, "Earnings per Share" (SFAS 128). SFAS 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period.
Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.
h) Accounting for Stock-Based Compensation
SFAS No.123, "Accounting for Stock-Based Compensation", requires that stock awards granted be recognized as compensation expense based on fair values at the date of grant. Alternatively, a company may account for stock awards granted under Accounting Principles Board Opinion (APB) No.25, "Accounting for Stock Issued to Employees", and disclose pro forma income amounts which would have resulted from recognizing such awards at their fair value. The Company has elected to account for stock-based compensation for employees under APB No.25 and make the required pro forma disclosures for compensation expense. Stock based compensation for non-employees are accounted for using SFAS No.123.
i) Income Taxes
Income taxes are provided for using the liability method of accounting in accordance with SFAS No.109 "Accounting for Income Taxes". A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.
There is no provision for income taxes as the Company has incurred losses since inception. The Company's total deferred tax asset as of December 31, 2003 and 2002, is as follows:
2003 2002
$ $
Net Operating loss (267,741) (128,000)
Valuation allowance 267,741 128,000
-------- --------
- -
========= ========
|
i) Income Taxes cont.
The Company has incurred net operating losses as follows:
Amount Year of
Year of Loss $ Expiration
-------------- ------ ----------
1998 188,000 2017
1999 661,000 2018
2000 480,000 2019
2001 198,000 2020
2002 128,000 2021
2003 267,741 2022
|
j) Impairment
Certain long-term assets of the Company are reviewed at least quarterly to
determine whether there are indications the carrying value has become impaired,
pursuant to guidance established in Statement of Financial Accounting Standards
["SFAS"] No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets." Management considers assets to be impaired if the carrying value
exceeds the future projected cash flows from related operations (undiscounted and without interest charges). If impairment is deemed to exist, the assets will be written down to fair value. Management also re-evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives.
3. INVESTMENT
On August 1, 2002 the Company purchased two million shares of Entellium Investments Ltd. representing 11% of the outstanding voting shares of Entellium for $0.01 per share or $20,000. The Company was granted the right to purchase these shares at $0.01 per share for providing the following services:
a) General investment banking and business development
b) Development of market entry strategies into North America, including the
Telus deal
c) Strategic fund raising activities and arranging a US$5 million line of
credit
d) Consulting to Entellium's senior executives
e) Legal and accounting advisory and professional introductions
The fair market value of the investment in Entellium is assessed for impairment by management. No factors have come to management's attention that would indicate that a write down of this investment is required.
(See Note 2(e))
4. PROPERTY, PLANT AND EQUIPMENT
2003 2002
Accumulated
Cost Amortization Disposals Net Net
$ $ $ $ $
------ ------ --------- -------- ------
Office equipment 20,238 20,238 7,639 - 7,639
====== ====== ========= ======== ======
|
Office equipment consisted of various minor assets. The office was abandoned and the office equipment is no longer in use, so the balance of the undepreciated cost was written off
5. RELATED PARTY TRANSACTIONS
The amounts owing to the directors are unsecured, non-interest bearing and due on demand.
The President of the Company has donated services valued at $5,000 per month. This amount has been charged to operations and classified as "donated capital" in stockholders' deficit.
6. SHARE CAPITAL
2003 2002
---- ----
AUTHORIZED:
50,000,000 Common shares, par value of $0.0001 each
ISSUED:
6,720,782 Common shares $6,721 $6,601
|
The Company issued shares for services in the current and prior year as follows:
a) During year ended December 31, 2002, the Company issued 20,000 common shares having a value of $10,000 for legal services.
b) During year ended December 31, 2003, the Company issued 20,000 common shares having a value of $20,000 for legal services, and 100,000 common shares having a value of $100,000 for investment banker and finders services.
7. STOCK OPTIONS
The weighted average number of shares under option and option prices for the period ended December 31, 2003 are as follows:
Weighted
Shares Weighted Average
Under Average Remaining
Option Option Price Life of Options
$ $ (Months)
------- ---------- ---------
Beginning of period (a) . . . . 40,000 1.56 1
Granted (b) 50,000 1.00 14
Exercised . . . . . . . - - -
Cancelled . . . . . . . . - - -
Lapsed. . . . . . . . . . - - -
------- ---------- ---------
End of Period . . . . . . . . 90,000 1.25 8
======= ========== =========
|
The options were granted for services provided or to be provided to the Company. SFAS No.123 requires that an enterprise recognize, or at its option, disclose the impact of the fair value of stock options and other forms of stock based compensation in the determination of income. The Company has elected under SFAS 123 to continue to measure compensation cost on the intrinsic value basis set out in APB Opinion No.25. As options are granted at exercise prices based on the market price of the Company's shares at the date of grant, no compensation cost is recognized. However, under SFAS 123, the impact on net income and income per share of the fair value of stock options must be measured and disclosed on a fair value based method on a pro forma basis.
SFAS No.123 requires that an enterprise recognize, or at its option, disclose the impact of the fair value of stock options and other forms of stock based compensation in the determination of income. The Company has elected under SFAS 123 to continue to measure compensation cost on the intrinsic value basis set out in APB Opinion No.25. As options are granted at exercise prices based on the market price of the Company's shares at the date of grant, no
compensation cost is recognized. However, under SFAS 123, the impact on net income and income per share of the fair value of stock options must be measured and disclosed on a fair value based method on a pro forma basis.
The fair value of the employee's purchase rights under SFAS 123, was estimated using the Black-Scholes model using the following assumptions: risk free interest rate of 4.50%, expected volatility of 269%, an expected option life of two years, and no expected dividends.
If compensation expense had been determined pursuant to SFAS 123, the Company's net income (loss) and net income (loss) per share for the year ended December 31, 2003 and the year ended December 31, 2002 would have been as follows:
2003 2002
$ $
--------- -------
Net income (loss)
As reported (267,741) 39,968
Pro forma (310,155) 39,968
Basic net income (loss) per share
As reported (0.04) 0.01
Pro forma (0.05) 0.01
8. CONTINGENCY
|
An account payable in the amount of $143,307 in respect of legal services in prior periods was reversed in 2002, as the legal work performed considered unsatisfactory. A gain on reversal of this debt was recorded in the current year. The Company believes the matter has been properly settled but the law firm that provided these services has not acknowledged in writing this settlement.
9. SUBSEQUENT EVENTS
a) The Company issued a memo of understanding to Quest Resources Company Ltd (Quest Resources) on April 21, 2004, outlining their intent to purchase a controlling interest in Quest Resources and assist Quest Resources in its future investment program. This program includes the purchase and development of a resort in Chonburi, Thailand. This Memorandum of Understanding expired on June 21, 2004.
b) The Company signed a letter of intent with Lehman Brothers Asian Investments Limited on May 19, 2004, outlining their intent to work together to develop the 46 acres of beachfront land in Phuket, Thailand that Asia Properties Ltd. has indicated it intends to purchase. As part of the agreement, Asia Properties Ltd. intends to finance the project with debt raised from Lifeway Enterprises and Lehman Brothers Asian Investments Limited will provide additional financing to complete the project.
c) The Company has signed an agreement with Lifeway Enterprise on August 25, 2004 to organize the placement of credit or loan facilities to participate with equity ownership in the 160 rai (72 acres) of beach front on Mai Khao Beach in Phuket, Thailand.
d) The Company terminated its Equity Line Agreement with Cornell Capital Partners, LLP on August 22, 2004.
PART III
ITEM 1. EXHIBITS
The following exhibits are filed as part of this registration statement:
3.1 Articles of Incorporation
3.2 By-laws
10.1 Daniel McKinney employment agreement
10.2 Stock Option Plan
10.3 Business Consultant Services Agreement dated March 4, 2003 between Asia
Properties, Inc. and World Web Publishing.com Corp.
10.4 Subscription Agreement for shares of Entellium Corporation*
10.5 Settlement Agreement dated July 2003between Asia Properties, Inc.
And Kanan, Corbin, Schupak & Aranow, Inc.
10.6 Agreement between KCSA Wordwide and Asia Properties, Inc.
22. Subsidiaries: Asia Properties, International (Thailand) Co. Ltd.
Incorporated in Thailand
31 Certificate of Daniel S. Mckinney pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
32 Certificate of Daniel S. Mckinney pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
III-1
PURSUANT TO THE REQUIREMENTS OF SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES STATED.
SIGNATURE. . . . . . . . . . TITLE DATE
---------------------------- ----------------- -----------------
President, Chief
Executive Officer and
Director (principal
executive, accounting and
financial officer)
/s/ Daniel Mckinney
----------------------------
Daniel Mckinney. . . . . . . November 26, 2004
----------------------------
/s/ Nicholas St. Johnston
----------------------------
Nicholas St. Johnston . . . . Director November 26, 2004
----------------------------
/s/ David Roberts
----------------------------
David Roberts. . . . . . . . . Director November 26, 2004
----------------------------
|
III-2
Articles of Incorporation
(PURSUANT TO NRS 78
STATE OF NEVADA
Secretary of State
1. NAME OF CORPORATION: ASIA PROPERTIES, INC.
2. RESIDENT AGENT: (designated resident agent and his STREET ADDRESS in Nevada where process may be served)
Name of Resident Agent: The Corporation Trust Company of Nevada. Street Address: One, East First Street, Reno, Nevada 89501
3. SHARES: (Number of shares the corporation is authorized to issue) Number of shares with par value: 50,000,000 Par Value: $0.001 Number of shares without par value: 0
4. GOVERNING BOARD: Shall be styled as (check one): X Directors Trustees
5. PURPOSE: (optional - see reverse side) The purpose of the corporation shall be:
6. OTHER MATTERS: This form includes the minimal statutory requirements to incorporate under NRS 78.- You may include additional information pursuant to NRS 78.037 or any other information you deem appropriate. If any of this additional information is contradictory to this form it cannot be filed and will be returned to you for correction. Number of pages attached 0
7. SIGNATURES OF INCORPORATORS: The names and addresses of each of the incorporators signing the articles: (signature must be notarized) (Attach additional pages if there are more than two incorporators.)
Christie L. Gomez Katrina M. Reyes Name (print) Name (print) 818 W. Seventh St., 2nd Fl. Los Angeles CA 90017 818 W. Seventh St., 2nd Fl. Los Angeles CA 90017 Address City/State/Zip Address City/State/Zip Signature Signature State of California County of Los Angeles State of California County of Los Angeles This instrument was acknowledged before me on This instrument was acknowledged before me on April 6, 1998 by April 6, 1998 by Christie L. Gomez Name of Person as Incorporator Katrina M. Reyes Name of Person as Incorporator of Asia Properties, Inc. of Asia Properties, Inc. (name of party on behalf of (name of party on behalf of whom instrument was executed) whom instrument was executed) See attached Sheet See attached Sheet Notary Public Signature Yadira H. Garcia Notary Public Signature Yadira H. Garcia (affix notary stamp or seal) (affix notary stamp or seal) |
8. CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT:
The Corporation Trust Company of Nevada hereby accept appointment as resident agent for the above named corporation.
The Corporation Trust Company of Nevada By: Stephanie A. Brooks April 6, 1998 Signature of Resident Agent (Assistant Secretary) Date |
BY-LAWS
of
Asia Properties, Inc.
A Nevada Corporation
ARTICLE I - OFFICES
The registered office of the Corporation in the State of Nevada shall be located in the City and State designated in the Articles of Incorporation. The Corporation may also maintain offices at such other places within or without the State of Nevada as the Board of Directors may, from time to time, determine.
ARTICLE II - MEETING OF SHAREHOLDERS
Section 1 - Annual Meetings: (Chapter 78.310)
The annual meeting of the shareholders of the Corporation shall be held at the time fixed. from time to time by the Directors.
Section 2 - Special Meetings: (Chapter 78.310)
Special meetings of the shareholders may be called by the Board of Directors or such person or persons authorized by the Board of Directors and shall be held within or without the State of Nevada.
Section 3 - Place of Meetings: (Chapter 78.310)
Meetings of shareholders shall be held at the registered office of the Corporation. or at such other places within or without the State of Nevada as the Directors may from time to time fix. If no designation is made. the meeting shall be held at the Corporation's registered office in the state of Nevada.
Section 4 - Notice of Meetings: (Section 78.370)
(a) Written or printed notice of each meeting of shareholders, whether annual or special, signed by the president. vice president or secretary, stating the time when and place where it is to be held. as well as the purpose or purposes for which the meeting is called, shall be served either
personally or by mail by or at the direction of the president, the secretary, or the officer or
the person calling the meeting. not less than ten or more than sixty days before the date of the meeting. unless the lapse of the prescribed time shall have been waived before or after the taking of such action upon each shareholder of record entitled to vote at such meeting, and to any other shareholder to whom the giving of notice may be required by law. If mailed, such notice shall be deemed to be given when deposited in the United States mail, addressed to the shareholder as it appears on the share transfer records of the Corporation or to the current address, which shareholder has delivered to the Corporation in a written notice.
*Unless otherwise stated herein all references to "Sections" in these Bylaws refer to those sections contained in Title 78 of the Nevada Private Corporations Law.
NV Bylaws - 1
(b) Further notice to a shareholder is not required when notice of two consecutive annual meetings, and all notices of meetings or of the taking of action by written consent without a meeting to him or her during the period between those two consecutive annual meetings: or all, and at least two payments sent by first-class mail of dividends or interest on securities during a 12-month period have been mailed addressed to him or her at his or her address as shown on the records of the Corporation and have been returned undeliverable.
Section 5 - Quorum: (Section 78.370)
(a) Except as otherwise provided herein, or by law, or in the Articles of Incorporation (such Articles and any amendments thereof being hereinafter collectively referred to as the "Articles of Incorporation"). a quorum shall be present at all meetings of shareholders of the Corporation if the holders of a majority of the shares entitled to vote on that matter are represented at the meeting in person or by proxy.
(b) The subsequent withdrawal of any shareholder from the meeting. after the commencement of a meeting or the refusal of any shareholder represented in person or by proxy to vote, shall have no effect on the existence of a quorum. after a quorum has been established at such meeting.
(c) Despite the absence of a quorum at any meeting of shareholders, the shareholders present may adjourn the meeting.
Section - Voting and Acting: (Section 78.320 & 78.350)
(a) Except as otherwise provided by law, the Articles of Incorporation, or these Bylaws, any corporate action, the affirmative vote of the majority of shares entitled to vote on that matter and represented either in person or by proxy at a meeting of shareholders at which a quorum is present, shall be the act of the shareholders of the Corporation.
(b) Except as otherwise provided by statute. the Certificate of Incorporation, or these bylaws. at each meeting of shareholders, each shareholder of the Corporation entitled to vote thereat. shall be entitled to one vote for each share registered in his name on the books of the Corporation.
(c) Where appropriate communication facilities are reasonably available, any or all shareholders shall have the right to participate in any shareholders' meeting, by means of conference telephone or any means of communications by which all persons participating in the meeting are able to hear each other.
Section 7 - Proxies: (Section 78.355)
Each shareholder entitled to vote or to express consent or dissent without a meeting, may do so either in person or by proxy. so long as such proxy is executed in writing by the shareholder himself, his authorized officer, director, employee or agent or by causing the signature of the stockholder to be affixed to the writing by any reasonable means, including, but not limited to, a facsimile signature. or by his attorney-in-fact there unto duly authorized in writing. Every proxy shall be revocable at will unless the proxy conspicuously states that it is irrevocable and the proxy is coupled with an interest. A telegram, telex, cablegram, or similar transmission by the shareholder, or a photographic, photostatic, facsimile, shall be treated as a valid proxy, and treated as a substitution of the original proxy, so long as such transmission is a complete reproduction executed by the shareholder. If it is determined that the telegram, cablegram or
NV Bylaws - 2
other electronic transmission is valid, the persons appointed by the Corporation to count the votes of shareholders and determine the validity of proxies and ballots or other persons making those determinations must specify the information upon which they relied. No proxy shall be valid after the expiration of six months from the date of its execution, unless otherwise provided in the proxy. Such instrument shall be exhibited to the Secretary at the meeting and shall be filed with the records of the Corporation. If any shareholder designates two or more persons to act as proxies. a majority of those persons present at the meeting. or, if one is present. then that one has and may exercise all of the powers conferred by the shareholder upon all of the persons so designated unless the shareholder provides otherwise.
Section 8 - Action Without a Meeting: (Section 78.320)
Unless otherwise provided for in the Articles of Incorporation of the Corporation, any action to be taken at any annual or special shareholders' meeting, may be taken without a meeting. without prior notice and without a vote if written consents are signed by a majority of the shareholders of the Corporation. except however if a different proportion of voting power is required by law, the Articles of Incorporation or these Bylaws, than that proportion of written consents is required. Such written consents must be filed with the minutes of the proceedings of the shareholders of the Corporation.
ARTICLE III - BOARD OF DIRECTORS
Section 1 - Number, Term. Election and Qualifications: (Section 78. 115, 78.330)
(a) The first Board of Directors and all subsequent Boards of the Corporation shall consist of ( )unless and until otherwise determined by vote of a majority of the entire Board of Directors. The Board of Directors or shareholders all have the power, in the interim between annual and special meetings of the shareholders, to increase or decrease the number of Directors of the Corporation. A Director need not be a shareholder of the Corporation unless the Certificate of Incorporation of the Corporation or these Bylaws so require.
(b) Except as may otherwise be provided herein or in the Articles of Incorporation, the members of the Board of Directors of the Corporation shall be elected at the first annual shareholders' meeting and at each annual meeting thereafter, unless their terms are staggered in the Articles of Incorporation of the Corporation or these Bylaws, by a plurality of the votes cast at a meeting of shareholders, by the holders of shares entitled to vote in the election.
(c) The first Board of Directors shall hold office until the first annual meeting of shareholders and until their successors have been duly elected and qualified or until there is a decrease in the number of Directors. Thereinafter. Directors will be elected at the annual meeting of shareholders and shall hold office until the annual meeting of the shareholders next succeeding his election. unless their terms are staggered in the Articles of Incorporation of the Corporation (so long as at least one - fourth in number of the Directors of the Corporation are elected at each annual shareholders' meeting) or these Bylaws, or until his prior death, resignation or removal. Any Director may resign at any time upon written notice of such resignation to the Corporation
NV Bylaws - 3
(d) All Directors of the Corporation shall have equal voting power unless the Articles of Incorporation of the Corporation provide that the voting power of individual Directors or classes of Directors are greater than or less than that of any other individual Directors or classes of Directors. and the different voting powers may be stated in the Articles of Incorporation or may be dependent upon any fact or event that may be ascertained outside the Articles of Incorporation if the manner in which the fact or event may operate on those voting powers is stated in the Articles of Incorporation. If the Articles of Incorporation provide that any Directors have voting power greater than or less than other Directors of the Corporation, every reference in these Bylaws to a majority or other proportion of Directors shall be deemed to refer to majority or other proportion of the voting power of all the Directors or classes of Directors, as may be required by the Articles of Incorporation.
Section 2 - Duties and Powers: (Section 78.120)
The Board of Directors shall be responsible for the control and management of the business and affairs. property and interests of the Corporation, and may exercise all powers of the Corporation. except such as those stated under Nevada state law, are in the Articles of Incorporation or by these Bylaws. expressly conferred upon or reserved to the shareholders or any other person or persons named therein.
Section 3 - Regular Meetings: Notice: (Section 78.310)
(a) A regular meeting of the Board of Directors shall be held either within or without the State of Nevada at such time and at such place as the Board shall fix.
(b) No notice shall be required of any regular meeting of the Board of Directors and, if given. need not specify the purpose of the meeting; provided, however, that in case the Board of Direc-tors shall fix or change the time or place of any regular meeting when such time and place was fixed before such change, notice of such action shall be given to each director who shall not have been present at the meeting at which such action was taken within the time limited, and in the manner set forth in these Bylaws with respect to special meetings. unless such notice shall be waived in the manner set forth in these Bylaws.
Section 4 - Special Meetings: Notice: (Section 78.3lO)
a) Special meetings of the Board of Directors shall be held at such time and place as may be specified in the respective notices or waivers of notice thereof.
(b) Except as otherwise required statute, written notice of special meetings shall be mailed directly to each Director, addressed to him at his residence or usual place of business, or delivered orally with sufficient time for the convenient assembly of Directors thereat, or shall be sent to him at such place by telegram, radio or cable, or shall be delivered to him personally or given to him orally, not later than the day before the day on which the meeting is to be held. If mailed, the notice of any special meeting shall be deemed to be delivered on the second day after it is deposited in the United States mails7 so addressed, with postage prepaid. If notice is given by telegram, it shall be deemed to be delivered when the telegram is delivered to the telegraph
NV Bylaws - 4
company. A notice. or waiver of notice, except as required by these Bylaws need not specify the business to be transacted at or the purpose or purposes of the meeting.
(c) Notice of any special meeting shall not be required to be given to any Director who shall attend such meeting without protesting prior thereto or at its commencement. the lack of notice to him. or who submits a signed waiver of notice, whether before or after the meeting. Notice of any adjourned meeting shall not be required to be given.
Section 5 - Chairperson:
(The Chairperson of the Board, if any and if present, shall preside at all
meetings of the Board of
Directors. If there shall be no Chairperson, or he or she shall be absent. then
the President shall preside. and in his absence. any other director chosen by
the Board of Directors shall preside.
Section 6 - Quorum and Adjournments: (Section 78.315)
(a) At all meetings of the Board of Directors, or any committee thereof, the presence of a majority of the entire Board or such committee thereof, shall constitute a quorum for the transaction of business, except as otherwise provided by law, by the Certificate of Incorporation, or these Bylaws.
(b) A majority of the directors present at the time and place of any regular or special meeting, although less than a quorum, may adjourn the same from time to time without notice, whether or not a quorum exists. Notice of such adjourned meeting shall be given to Directors not present at time of the adjournment and. unless the time and place of the adjourned meeting are announced at the time of the adjournment. to the other Directors who were present at the adjourned meeting.
Section 7 - Manner of Acting: (Section 78.315)
(a) At all meetings of the Board of Directors, each director present shall have one vote, irrespective of the number of shares of stock, if any, which he may hold.
(b) Except as otherwise provided by law, by the Articles of Incorporation, or these bylaws, action approved by a majority of the votes of the Directors present at any meeting of the Board or any committee thereof, at which a quorum is present shall be the act of the Board of Directors or any committee thereof.
(c) Any action authorized in writing made prior or subsequent to such action, by all of the Directors entitled to vote thereon and filed with the minutes of the Corporation shall be the act of the Board of Directors, or any committee thereof, and have the same force and effect as if the same had been passed by unanimous vote at a duly called meeting of the Board or committee for all purposes.
(c) Where appropriate communications facilities are reasonably available, any or all directors shall have the right to participate in any Board of Directors meeting, or a committee of the Board of
NV Bylaws - 5
Directors' meeting. by means of conference telephone or any means of communications by which all persons participating in the meeting are able to hear each other.
Section 8 - Vacancies: (Section 78.335)
(a) Unless otherwise provided for by the Articles of Incorporation of the Corporation, any vacancy in the Board of Directors occurring by reason of an increase in the number of directors. or by reason of the death, resignation, disqualification, removal or inability to act of any director. or other cause. shall be filled by an affirmative vote of a majority of the remaining directors, though less than a quorum of the Board or by a sole remaining Director, at any regular meeting or special meeting of the Board of Directors called for that purpose except whenever the shareholders of any class or classes or series thereof are entitled to elect one or more Directors by the Certificate of Incorporation of the Corporation. vacancies and newly created directorships of such class or classes or series may be filled by a majority of the Directors elected by such class or classes or series thereof then in office, or by a sole remaining Director so elected.
(b) Unless otherwise provided for by law, the Articles of Incorporation or these Bylaws, when one or more Directors shall resign from the board and such resignation is effective at a future date. a majority of the directors, then in office, including those who have so resigned, shall have the power to fill such vacancy or vacancies the vote otherwise to take effect when such resignation or resignations shall become effective.
Section 9 - Resignation: (Section 78.335)
A Director may resign at any - time by giving written notice of such resignation to the Corporation.
Section 10 - Removal: (Section 78.335)
Unless otherwise provided for by the Articles of Incorporation, one or more or all the Directors of the Corporation may be removed with or without cause at any time by a vote of two-thirds of the shareholders entitled to vote thereon, at a special meeting of the shareholders called for that purpose. unless the Articles of Incorporation provide that Directors may only be removed for cause, provided however, such Director shall not be removed if the Corporation states in its Articles of Incorporation that its Directors shall be elected by cumulative voting and there are a sufficient number of shares cast against his or her removal, which if cumulatively voted at an election of Directors would be sufficient to elect him or her. If a Director was elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove that Director.
Section 11 - Compensation: (Section 78.140)
The Board of Directors may authorize and establish reasonable compensation of
the Directors for
services to the Corporation as Directors, including, but not limited to
attendance at any annual or
special meeting of the Board.
NV Bylaws - 6
Section 12 - Committees: (Section 78. 195)
Unless otherwise provided for by the Articles of Incorporation of the Corporation. the Board of Directors. may from time to time designate from among its members one or more committees. and alternate members thereof. as they deem desirable. each consisting of one or more members, with such powers and authority (to the extent permitted by law and these Bylaws) as may be provided in such resolution. Unless the Articles of Incorporation or Bylaws state otherwise, the Board of Directors may appoint natural persons who are not Directors to serve on such committees authorized herein. Each such committee shall serve at the pleasure of the Board and, unless other-wise stated by law, the Certificate of Incorporation of the Corporation or these Bylaws, shall be governed by the rules and regulations stated herein regarding the Board of Directors.
ARTICLE IV - OFFICERS
Section I - Number. Qualifications. Election and Term of Office: (Section 78.130)
(a) The Corporation's officers shall have such titles and duties as shall be stated in these Bylaws or in a resolution of the Board of Directors which is not inconsistent with these Bylaws. The officers of the Corporation shall consist of a president. secretary and treasurer, and also may have one or more vice presidents, assistant secretaries and assistant treasurers and such other officers as the Board of Directors may from time to time deem advisable. Any officer may hold two or more offices in the Corporation.
(b) The officers of the Corporation shall be elected by the Board of Directors at the regular annual meeting of the Board following the annual meeting of shareholders.
(c) Each officer shall hold office until the annual meeting of the Board of Directors next succeeding his election. and until his successor shall have been duly elected and qualified, subject to earlier termination by his or her death, resignation or removal.
Section 2 - Resignation:
Any officer may resign at any time by giving written notice of such resignation to the Corporation.
Section 3 - Removal:
Any officer elected by the Board of Directors may be removed, either with or without cause, and a successor elected by the Board at any time, and any officer or assistant officer, if appointed by another officer, may likewise be removed by such officer.
Section 4 - Vacancies:
(a) A vacancy however caused, occurring in the Board and any newly created Directorships resulting from an increase in the authorized number of Directors may be filled by the Board of Directors.
NV Bylaws - 7
Section 5 - Bonds:
The Corporation may require any or all of its officers or Agents to post a bond, or otherwise, to the Corporation for the faithful performance of their positions or duties.
Section 6 - Compensation:
The compensation of the officers of the Corporation shall be fixed from time to time by the Board of Directors.
ARTICLE V - LIABILITY OF DIRECTORS AND OFFICERS: (Section 78.7502)
Section 1 - Elimination of Liability:
A director or officer of the corporation shall not be personally liable to the Corporation or its stockholders for damages for breach of fiduciary duty as a director or officer, excepting only
(1) acts or omissions which involve intentional misconduct, fraud or a
knowing violation of law, or
(2) the payment of dividends in violation of Nevada Revised Statutes Section
78.288, except for a director who dissents to the payment as provided in Nevada
Revised Statutes Section 78.300, but liability shall otherwise be eliminated or
limited to the fullest extent permitted by Nevada law; as it may be allowed from
time to time.
Section 2 - Mandatory Indemnification:
The Corporation shall indemnify the officers and directors of the Corporation to the fullest extent permitted by Nevada law as the same exists or may hereafter be amended.
Section 3 - Mandatory Payment of Expenses:
The expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the Corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the corporation.
Section 4 - Effect of Amendment or Repeal
Except as provided in the Articles of Incorporation or by Nevada law, this corporation reserves the right to amend or repeal any provision contained in these Bylaws. However, any amendment to or repeal of any of the provisions shall not adversely affect any right or protection of a director or officer of the Corporation for or with respect to any act or omission of such director or officer occurring prior to such amendment or repeal.
Section 5 - Insurance
The corporation shall have power to purchase and maintain insurance on behalf of any person who is or was an officer, director, employee or agent of the Corporation against any liability asserted against or incurred by the officer, director, employee or agent in such capacity or arising
NV Bylaws - 8
out of such person's status as such whether or not the corporation would have the power to indemnify the officer, or director, employee or agent against such liability under the provisions of this Article.
ARTICLE VI - SHARES OF STOCK
Section I - Certificate of Stock: (Section 78.235)
(a) The shares of the Corporation shall be represented by certificates or shall be uncertificated shares.
(b) Certificated shares of the Corporation shall be signed, (either manually or by facsimile) by officers or agents designated by the Corporation for such purposes. and shall certify the number of shares owned by him in the Corporation. Whenever any certificate is countersigned or otherwise authenticated by a transfer agent or transfer clerk, and by a registrar, then a facsimile of the signatures of the officers or agents. the transfer agent or transfer clerk or the registrar of the Corporation may be printed or lithographed upon the certificate in lieu of the actual signatures. If the Corporation uses facsimile signatures of its officers and agents on its stock certificates. it cannot act as registrar of its own stock, but its transfer agent and registrar may be identical if the institution acting in those dual capacities countersigns or otherwise authenticates any stock certificates in both capacities. If any officer who has signed or whose facsimile signature has been placed upon such certificate. shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of its issue.
(c) If the Corporation issues uncertificated shares as provided for in these Bylaws, within a reasonable time after the issuance or transfer of such uncertificated shares, and at least annually thereafter. the Corporation shall send the shareholder a written statement certifying the number of shares owned by such shareholder in the Corporation.
(d) Except as otherwise provided by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of certificates representing shares of the same class and series shall be identical.
Section 2 - Lost or Destroyed Certificates: (Section 104.8405)
The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed if the owner:
(a) so requests before the Corporation has notice that the shares have been acquired by a bona fide purchaser,
(b) files with the Corporation a sufficient indemnity bond; and
(c) satisfies such other requirements, including evidence of such loss. theft or destruction. as may be imposed by the Corporation.
Section 3 - Transfers of Shares: (Section 104.8401. 104.8406 & 104.8416)
NV Bylaws - 9
(a) Transfers or registration of transfers of shares of the Corporation shall be made on the stock transfer books of the Corporation by the registered holder thereof. or by his attorney duly authorized by a written power of attorney; and in the case of shares represented by certificates, only after the surrender to the Corporation of the certificates representing such shares with such shares properly endorsed. with such evidence of the authenticity of such endorsement, transfer, authorization and other matters as the Corporation may reasonably require, and the payment of all stock transfer taxes due thereon
(b) The Corporation shall be entitled to treat the holder of record of any share or shares as the absolute owner thereof for all purposes and, accordingly, shall not be bound to recognize any legal. equitable or other claim to, or interest in, such share or shares on the part of any other person. whether or not it shall have express or other notice thereof. except as otherwise expressly provided by law
Section 4 - Record Date: (Section 78.215 & 78.350)
(a) The Board of Directors may fix, in advance, which shall not be more than sixty days before the meeting or action requiring a determination of shareholders. as the record date for the deter-mination of shareholders entitled to receive notice of, or to vote at. any meeting of shareholders. or to consent to any proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividends, or allotment of any rights, or for the purpose of any other action If no record date is fixed, the record date for shareholders entitled to notice of meeting shall be at the close of business on the day preceding the day on which notice is given, or. if no notice is given, the day on which the meeting is held, or if notice is waived, at the close of business on the day before the day on which the meeting is held.
(b) The Board of Directors may fix a record date, which shall not precede the date upon which the resolution fixing the record date is adopted for shareholders entitled to receive payment of any dividend or other distribution or allotment of any rights of shareholders entitled to exercise any rights in respect of any change. conversion or exchange of stock, or for the purpose of any other lawful action.
(c) A determination of shareholders entitled to notice of or to vote at a shareholders' meeting is effective for any adjournment of the meeting unless the Board of Directors fixes a new record date for the adjourned meeting.
Section 5 - Fractions of Shares/Scrip: (Section 78.205) The Board of Directors may authorize the issuance of certificates or payment of money for fractions of a share, either represented by a certificate or uncertificated, which shall entitle the holder to exercise voting rights. receive dividends and participate in any assets of the Corporation in the event of liquidation, in proportion to the fractional holdings; or it may authorize the payment in case of the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined; or it may authorize the issuance. subject to such conditions as may be permitted by law. of scrip in registered or bearer form over the manual or facsimile signature of an officer or agent of the Corporation or its agent for that purpose, exchangeable as therein provided for full shares. but such scrip shall not entitle the holder to any rights of share-holder, except as therein provided. The scrip may contain any provisions or conditions that the Corporation deems advisable. If a scrip ceases to be exchangeable for full share certificates, the shares that would otherwise have been issuable as provided on the scrip are deemed to be treasury shares unless the scrip contains other provisions for their disposition.
NV Bylaws - 10
ARTICLE VII - DIVIDENDS (Section 78.215 & 78.288)
(a) Dividends may be declared and paid out of any funds available therefor, as often, in such amounts and at such time or times as the Board of Directors may determine and shares may be issued pro rata and without consideration to the Corporation's shareholders or to the shareholders of one or more classes or series.
(b) Shares of one class or series may not be issued as a share dividend to
shareholders of another class or series unless:
(i) so authorized by the Articles of Incorporation;
(ii) a majority of the shareholders of the class or series to be issued approve
the issue; or
(iii) there are no outstanding shares of the class or series of shares that
are authorized to be issued.
ARTICLE VIII - FISCAL YEAR
The fiscal y ear of the Corporation shall be fixed, and shall be subject to change by the Board of Directors from time to time, subject to applicable law.
ARTICLE IX - CORPORATE SEAL (Section 78.065)
The corporate seal, if any, shall be in such form as shall be prescribed and altered from time to time. by the Board of Directors. The use of a seal or stamp by the Corporation on corporate documents is not necessary and the lack thereof shall not in any way affect the legality of a corporate document.
ARTICLE X - AMENDMENTS
Section I - By Shareholders:
All Bylaws of the Corporation shall be subject to alteration or repeal, and new Bylaws may be made by a majority vote of the shareholders at the time entitled to vote in the election of Directors even though these Bylaws may also be altered, amended or repealed by the Board of Directors.
Section 2 - By Directors: (Section 78.120)
The Board of Directors shall have power to make, adopt, alter, amend and repeal, from time to time. By laws of the Corporation.
ARTICLE XI - WAIVER OF NOTICE: (Section 78.375)
Whenever any notice is required to be given by law, the Articles of
Incorporation or these
Bylaws. a written waiver signed by the person or persons entitled to such
notice, whether before or after the meeting by any person. shall constitute a
waiver of notice of such meeting
ARTICLE XII - INTERESTED DIRECTORS: (Section 78.140)
No contract or transaction shall be void or voidable if such contract or transaction is between The corporation and one or more of its Directors or Officers, or between the Corporation and any other corporation, partnership. association. or other organization in which one or more of its
NV Bylaws - 11
Directors or Officers. are directors or officers, or have a financial interest, when such Director or Officer is present at or participates in the meeting of the Board, or the committee of the shareholders which authorizes the contract or transaction or his, her or their votes are counted for such purpose if:
(a) the material facts as to his, her or their relationship or interest and
as to the contract or transaction are disclosed or are known to the Board of
Directors or the committee and are noted in the minutes of such meeting, and the
Board or committee in good faith authorizes the contract or transaction by
the affirmative votes of a majority of the disinterested Directors, even though
the disinterested Directors be less than a quorum; or
(b) the material facts as to his, her or their relationship or relationships
or interest or interests and as to the contract or transaction are
disclosed or are known to the shareholders entitled to vote thereon. and the
contract or transaction is specifically approved in good faith by vote of the
shareholders; or
(c) the contract or transaction is fair as to the Corporation as of the time
it is authorized, approved or ratified. by the Board of Directors, a
committee of the shareholders; or
(d) the fact of the common directorship, office or financial interest is not
disclosed or
known to the Director or Officer at the time the transaction is brought before
the Board of
Directors of the Corporation for such action.
Such interested Directors may be counted when determining the presence of a
quorum at the
Board of Directors' or committee meeting authorizing the contract or
transaction.
ARTICLE XIII - ANNUAL LIST OF OFFICERS. DIRECTORS AND REGISTERED AGENT:
(Section 78.150 & 78.165)
The Corporation shall. within sixty days after the filing of its Articles of
Incorporation with the
Secretary of State, and annually thereafter on or before the last day of the
month in which the anniversary date of incorporation occurs each year, file with
the Secretary of State a list of its president, secretary and treasurer and all
of its Directors, along with the post office box or street address, either
residence or business, and a designation of its resident agent in the state of
Nevada. Such list shall be certified by an officer of the Corporation.
NV Bylaws - 12
CONTRACT OF EMPLOYMENT
And
STATEMENT OF PARTICULARS OF TERMS OF EMPLOYMENT
For
Daniel S. Mckinney
1st September 1999
[GRAPHIC OMITED]
CONTENTS
Commencement of Employment
Description of Duties and Job Title
Other Interests
Travel and Working Overseas
Remuneration
Review of Remuneration
Bonus 6
Holidays
Sickness
Pension
Share Scheme
Car
Medical Insurance 7
Suspension
Accepting or Offering Improper Inducements
Termination
Confidential Information
Agreement To Make Deduction/Withhold Payment
Security
THE PARTIES
Name and address of employer: Asia Properties, Inc.
114 West Magnolia Street, #400-115
Bellingham, WA 98225
(the "Company") (API)
Name and address of employee: Daniel S. Mckinney
13978 Marine Drive
White Rock, B.C.Canada V4B1A5
(referred to in this contract as "you")
|
COMMENCEMENT OF EMPLOYMENT
Your employment with the Company will commence on 1st December 1999 and that is
the effective date of this contract.
For the purposes of your statutory rights: Your previous employment with Coldway Limited will be treated as part of your continuous period of employment. Accordingly the date of commencement of your continuous period of employment is 25th August 1998.
As from the effective date of this contract all other agreements or arrangements between you and the Company relating to your employment have ceased to have effect.
DESCRIPTION OF DUTIES AND JOB TITLE
Your job title is President & Chief Executive officer.
You will report to the Board, and hold a seat on the board.
Your main duties will be:
1. Identify Investment opportunities for the Company.
2. Manage the World wide operations of the company.
3. In addition to your main duties you will be required to carry out such
duties consistent with your status as the Company may from time to time require.
The Company may at any time, on giving you reasonable notice, require you to undertake any additional or different duties, which fall within your capabilities.
If required by the Company, you will undergo appropriate Company provided training to enable you to fulfil your duties (including any additional or different ones).
OTHER INTERESTS
It is understood that you are an outside Director of Entellium Corporation,
which is a company registered in Nevada. Your responsibilities, as outside
Director, take up a limited amount of your time. You will represent the
investment of Asia Properties, 11% interest in Entellium.
Apart from the above, you must devote your time, attention and abilities to your job duties during working hours, and to act in the best interests of the Company at all times. You must not, without the Company's written consent, be in any way directly or indirectly engaged or concerned in any other business where this is or is likely to be in conflict with the Company's interests or where this may adversely affect the efficient discharge of your duties. However, this does not preclude you holding, for investment purposes only, up to 5% of any shares or other class of securities in any public company, which is quoted on a recognised Stock Exchange.
TRAVEL AND WORKING OVERSEAS
You may be required to travel locally or internationally from time to time.
This may involve travelling outside normal business hours and at weekends or
public holidays should the need arise.
Reasonable expenses will be reimbursed for such travel.
REMUNERATION
For the year 1999, your basic salary is US$ 5,000.00 per month.
Your salary will be paid in equal monthly instalments in arrears on the last working day of each month directly into your bank account. Payment in respect of a period less than a month will be apportioned in proportion to the number of days worked as a proportion of the total number of working days in that month.
Your salary will be reviewed to US$ 7,000 per month as from 1st January 2000. Your salary will be reviewed to US$ 10,000 per month as from 1st January 2001.
Any outstanding salary or consultancy payments due to you under this agreement of any previous agreements will be paid to you when cashflow permits.
REVIEW OF REMUNERATION
After the year 2001, a review will be made of the basic salary at the end of
each year and will be renewed upwards by at least the Government quoted annual
inflation rate for the year just complete. Adjustments will be made in line with
generally accepted market trends, taking into account the senior level of the
employee.
BONUS
In addition to the basic salary you will be entitled to participate in the
Company's incentive bonus scheme, subject to the rules in force from time to
time. The Company reserves the right to amend or terminate this scheme at any
time, with or without replacement.
Your incentive bonus will be based on 0.5% of the increase in Net Asset Value of API over each calendar year.
The bonus will be paid in shares or cash (or a combination) as determined by the board.
HOLIDAYS
The Company's holiday year runs from 1st January to 31st December.
You are entitled to 28 days' holiday with pay in every holiday year exclusive of bank and other public holidays. Holidays can only be taken at times agreed in advance with the Company. You must give the Company a minimum of 7 days' notice of your intention to take any holiday. The Company reserves the right to require you to take any period of holiday at any time by giving you a minimum of 30 days' notice, except that the Company is not required to give you a minimum period of notice to take holiday if notice of termination of your employment is given (whether by you or the Company).
Any entitlement to holiday remaining at the end of any holiday year may be carried forward into the next holiday year but no further.
The amount of holiday pay in lieu of holidays at end of employment is calculated as follows:
(a) If, when your employment ends, the number of days of holidays which you
have taken in the relevant year differs from your entitlement (calculated at
1.25 days for each complete month of employment in the holiday year), then a
payment for the number of days' difference will be either paid to you or
refunded by you depending whether the amount actually taken is less or greater
than your entitlement. The amount paid or refunded will be the number of days
difference multiplied by the daily equivalent of your annual basic salary/wages
(on the basis of 365 days a year).
(b) You will not be entitled to a payment under (a) above if the Company is
entitled to and does terminate your employment summarily or if you refuse to
take any holiday entitlement during your notice period.
PENSION
The Company does not operate a pension scheme. But if a scheme is designed for
the staff, you will be entitled to join.
SHARE SCHEME
As a company employee, you will be eligible to participate in the Employee Stock
Option Plan.
CAR
You will be entitled to use a Company car for your business and private use.
The Company reserves the right to withdraw any such car from your possession in the event that:
(a) You are suspended from your duties in accordance with the Company's
disciplinary procedure.
(b) You are no longer in possession of a valid driver's licence.
The Company will be responsible for all servicing and maintenance costs, insurance premiums and the cost of the petrol that you purchase.
MEDICAL INSURANCE
The Company will provide you and your family with a first class worldwide
medical insurance covered by an internationally recognised insurance company.
SUSPENSION
The Company has the right to suspend all or any of your duties for such period
and on such terms as it considers appropriate, including a requirement that you
will not attend at the Company's premises or contact any of its customers,
suppliers or staff. The Company can exercise this right at any time (including
during a period of notice terminating your employment) and whether or not it is
in connection with a disciplinary investigation. Suspension will be on full pay
and your contractual benefits will continue to be provided unless it is a
sanction imposed at a disciplinary hearing (the sanction may be suspension,
without pay or on reduced pay as the Company may decide).
ACCEPTING OR OFFERING IMPROPER INDUCEMENTS
It is strictly forbidden to offer to any person who has or is likely to have a
business relationship with any company in the API group or accept any benefit
whether financial or in kind from any such person (other than your proper
remuneration from the Company).
TERMINATION
You are entitled to 40 weeks' notice in writing of termination of employment and
to an additional week's notice for each year of employment in excess of 3 years
up to a maximum of 52 weeks' notice in writing. The Company may make a payment
of your basic salary in lieu of the above notice entitlement.
The above is subject to the Company's right to terminate your employment at any time without notice:
(a) for any act of serious misconduct or of serious incompetence; or
(b) for repeated other material breach by you of your obligations to the
Company; or
(c) if you are guilty of any conduct which seriously prejudices or is likely
seriously to prejudice the Company;
(d) if you are convicted for an arrestable offence; or
(e) if you become bankrupt or make any arrangement or composition with your
creditors.
You are required to give the Company not less than 4 weeks' notice in writing to terminate your employment.
On termination of your employment you must immediately return to the Company, in accordance with any instructions which may be given to you, all items of property belonging to the Company in your possession or under your control. You must, if so required by the Company, confirm in writing that you have complied with your obligations under this provision.
CONFIDENTIAL INFORMATION
Except in the proper performance of your duties, you will not either during your
employment or at any time afterwards use or communicate to any person, and
during your employment you will use your best endeavours to prevent the
disclosure of, any information of a confidential nature concerning the business
of the Company or of any customer, supplier or other person having dealings with
the Company and which comes to your knowledge during the course of your
employment.
AGREEMENT TO MAKE DEDUCTION/WITHHOLD PAYMENT
At any time during your employment, or on its termination (however arising), the
Company shall be entitled to deduct from salary or any other payments due to you
in respect of your employment any monies due from you to the Company. If at any
time you are requested to return to the Company property belonging to it and you
fail to do so the Company shall, without prejudice to any other remedy, be
entitled to withhold any monies due to you from the Company.
SECURITY
As part of its general security procedures, the Company reserves the right to
carry out searches of your workplace at any time. It also reserves the right to
search you and your personal belongings, including the contents of lockers,
bags, briefcases and vehicles. Refusal to co-operate with the Company's
reasonable request to search in the furtherance of general security will be a
serious disciplinary offence which could lead to summary dismissal.
Searches will only be carried out by authorised personnel.
In the event of stock/monetary loss, you may be required to participate in the Company's investigations and co-operate where necessary with auditors and other third parties at the direction of the Company.
Your signature below will constitute your agreement to the terms set out above.
date:
Signed for the Company
date:
Signed by the employee
ASIA PROPERTIES, INC.
STOCK OPTION PLAN
1. GRANT OF AWARDS GENERALLY
In accordance with the provisions hereinafter set forth in this stock option plan, the name of which is the ASIA PROPERTIES, INC. STOCK OPTION PLAN (the "Plan"), the Board of Directors (the "Board") or, the Compensation Committee (the "Committee") of ASIA PROPERTIES, INC. (the "Company") is hereby authorized to issue from time to time on the Corporation's behalf to any one or more Eligible Persons, as hereinafter defined, Awards to acquire shares of the Company's $0.001 par value common stock (the "Stock").
2. TYPE OF AWARDS
(a) The Board and the Committee are authorized under this Plan to enter into any type of arrangement with a Participant that is not inconsistent with the provisions of this Plan and that, by its terms, involves or might involve the issuance of (i) shares of Stock, or (ii) a Derivative Security (as such term is defined in Rule 16a-1 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as such Rule may be amended from time to time) with an exercise or conversion privilege at a price related to the Stock or with a value derived from the value of the Stock. The entering into of any such arrangement is referred to herein as the "grant" of an "Award".
(b) Awards are not restricted to any specified form or structure and may include, without limitation, sales or bonuses of stock, restricted stock, stock options (including options which meet the requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), Incentive Stock Options ("ISOs") and options which are not ISOs, Non-qualified Stock Options (NSOs), reload stock options in accordance with Paragraph 8 herein ("Reload Options"), stock purchase warrants, other rights to acquire stock, securities convertible into or redeemable for stock, stock appreciation rights, limited stock appreciation rights, phantom stock, dividend equivalents, performance units or performance shares, and an Award may consist of one such security or benefit, or two or more of them in tandem or in the alternative.
(c) Stock and Derivative Securities may be issued pursuant to an Award for any lawful consideration as determined by the Board or the Committee, including, without limitation, services rendered by the recipient of such Award.
3. AMOUNT OF STOCK
The aggregate number of shares of Stock which may be purchased pursuant to the exercise of Awards shall be 1,000,000 shares of Stock. Of this amount, the Board or the Committee shall have the power and authority to designate whether any options so issued shall be ISOs or NSOs, subject to the restrictions on ISOs contained elsewhere herein. If an Award ceases to be exercisable, in whole or in part, the shares of Stock underlying such option shall continue to be available under this Plan. Further, if shares of Stock are delivered to the Corporation as payment for shares of Stock purchased by the exercise of an Award granted under this Plan, such shares of Stock shall also be available under this Plan. If there is any change in the number of shares of Stock on account of the declaration of stock dividends, recapitalization resulting in stock split-ups, or combinations or exchanges of shares of Stock, or otherwise, the number of shares of Stock available for purchase upon the exercise of Awards, the shares of Stock subject to any Award and the exercise price of any outstanding Awards shall be appropriately adjusted by the Board or the Stock Option Committee. The Board or the Stock Option Committee shall give notice of any adjustments to each Eligible Person granted an Award under this Plan, and such adjustments shall be effective and binding on all Eligible Persons. If because of one or more recapitalizations, reorganizations or other corporate events, the holders of outstanding Stock receive something other than shares of Stock then, upon exercise of an Award, the Eligible Person will receive what the holder would have owned if the holder had exercised the Award immediately before the first such corporate event and not disposed of anything the holder received as a result of the corporate event.
4. ELIGIBLE PERSONS
(a) With respect to ISOs, an Eligible Person means any individual who has been employed by the Corporation or by any subsidiary of the Corporation for a continuous period of at least thirty (30) days.
(b) With respect to all other forms of Awards, an Eligible Person means (i) any individual who has been employed by the Corporation or by any subsidiary of the Corporation, for a continuous period of at least thirty (30) days, (ii) any director of the Corporation or any subsidiary of the Corporation (iii) any member of the Corporations advisory board or of any of the Corporation's subsidiary(ies), or (iv) any consultant of the Corporation or by any subsidiary of the Corporation.
5. GRANT OF AWARDS
The Board or the Committee has the right to issue the Awards established by this Plan to Eligible Persons. The Board or the Committee shall follow the procedures prescribed for it elsewhere in this Plan. A grant of Awards shall be set forth in a writing signed the Board or by a majority of the members of the Committee. The writing shall identify whether the Award being granted includes ISOs and shall set forth the terms which govern the Awards. The terms shall be determined by the Board or the Committee, and may include, among other terms, the number of shares of Stock that may be acquired pursuant to the exercise of the Awards, when the Awards may be exercised, the period for which the Award is granted and the expiration date, the effect on the Awards if the Eligible Person terminates employment, and whether the Eligible Person may deliver shares of Stock to pay for the shares of Stock to be purchased by the exercise of the Award. However, no term shall be set forth in the writing which is inconsistent with any of the terms of this Plan. The terms of an Award granted to an Eligible Person may differ from the terms of an Award granted to another Eligible Person, and may differ from the terms of an earlier Option granted to the same Eligible Person.
6. EXERCISE PRICE
The exercise price per share shall be determined by the Board or the Committee at the time any Award is granted, and shall be not less than (i) in the case of an ISO, the fair market value, (ii) in the case of an ISO granted to a ten percent or greater stockholder, shall be determined by the Board, or (iii) in the case of all other Awards, not less than 90% of the fair market value (but in no event less than the par value) of one share of Stock on the date the Award is granted, as determined by the Board or the Committee. Fair market value as used herein shall be:
(a) If shares of Stock shall be traded on an exchange or over-the-counter market, the closing price or the closing bid price of such Stock on such exchange or over-the-counter market on which such shares shall be traded on that date, or if such exchange or over-the-counter market is closed or if no shares shall have traded on such date, on the last preceding date on which such shares shall have traded, or such other value as determined by the Board or the Committee.
(b) If shares of Stock shall not be traded on an exchange or over-the-counter market, the value as determined by the Board or the Committee.
7. PAYMENT OF EXERCISE PRICE
Except as otherwise provided below, payment of the exercise price for the
number of shares of Stock being purchased pursuant to any Award shall be made
(i) in cash, by certified check, or bank draft, (ii) by tender to the
Corporation of shares of Stock owned by the holder of the Award having a Fair
Market Value (as determined by the Corporation without regard to any
restrictions on transferability applicable to such stock by reason of federal or
state securities laws or agreements with an underwriter for the Corporation) not
less than the exercise price, (iii) by the assignment of the proceeds of a sale
or loan with respect to some or all of the shares being acquired upon the
exercise of the Award, (iv) by the holder of the Award's promissory note in a
form approved by the Board or the Committee, (v) by such other consideration as
may be approved by the Board or the Committee from time to time to the extent
permitted by applicable law, or (vi) by any combination thereof. The Board or
the Committee may at any time or from time to time, by adoption of or by
amendment to the standard forms of Awards described in Section 7, or by other
means, grant Awards which do not permit all of the foregoing forms of
consideration to be used in payment of the exercise price or which otherwise
restrict one or more forms of consideration.
(b) Notwithstanding the foregoing, an Award may not be exercised by tender to the Corporation of shares of Stock to the extent such tender of Stock would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Corporation's stock. Unless otherwise provided by the Board or the Committee, an Award may not be exercised by tender to the Corporation of shares of Stock unless such shares either have been owned by the holder for more than six (6) months or were not acquired, directly or indirectly, from the Corporation.
(c) The Corporation reserves, at any and all times, the right, in the Corporation's sole and absolute discretion, to establish, decline to approve or terminate any program or procedures for the exercise of Awards.
(d) No promissory note shall be permitted if the exercise of an Award using a promissory note would be a violation of any law. Any permitted promissory note shall be on such terms as the Board or Committee shall determine. The Board and the Committee shall have the authority to permit or require the Award holder to secure any promissory note used to exercise an Award with the shares of Stock acquired upon the exercise of the Award or with other collateral acceptable to the Board or the Committee. Unless otherwise provided by the Board or the Committee, if the Corporation at any time is subject to the regulations promulgated by the Board of Governors of the Federal Reserve System or any other governmental entity affecting the extension of credit in connection with the Corporation's securities, any promissory note shall comply with such applicable regulations, and the Award holder shall pay the unpaid principal and accrued interest if any, to the extent necessary to comply with such applicable regulations.
(d) The Corporation shall have the right, but not the obligation, to deduct from the shares of Stock issuable upon the exercise of any Award Option, or to accept from the Award holder the tender of, a number of whole shares of Stock having a Fair Market Value, as determined by the Corporation, equal to all or any part of the federal, state, local and foreign taxes, if any, required by law to be withheld by the Corporation with respect to such Award or the shares acquired upon the exercise thereof. Alternatively or in addition, in its sole discretion, the Corporation shall have the right to require the Award holder, through payroll withholding, cash payment or otherwise, including by means of a Cashless Exercise, to make adequate provision for any such tax withholding obligations of the Corporation arising in connection with the Awards or the shares of Stock acquired upon the exercise thereof. The Corporation shall have no obligation to deliver share of Stock or to release shares of Stock from an escrow established pursuant to the Award until the Corporation's tax withholding obligations have been satisfied by the Award holder.
(e) To the extent that an Option is exercisable, Options may be exercised in full at one time or in part from time to time, by giving written notice, signed by the person or persons exercising the Option, to the Company, stating the number of shares with respect to which the Option is being exercised, accompanied by payment in full for such shares as provided in Section 7 hereof. No exercise of an Option may be made for fewer than 100 full shares of Common Stock unless such exercise is made for the entire fractional amount of a share remaining to be purchased pursuant to such Option. Upon such exercise, delivery of a certificate for paid-up, non-assessable shares shall be made by the Company to the person or persons exercising the Option within 20 business days after receipt of such notice by the Company.
8. GRANT OF RELOAD OPTIONS
In granting stock options under this Plan, the Board or the Committee may, but shall not be obligated to, include a Reload Option provision therein, subject to the provisions set forth in Paragraphs 20 and 21 herein. A Reload Option provision provides that if the Eligible Person pays the exercise price of shares of Stock to be purchased by the exercise of an Award (the "Original Option") by delivering to the Corporation shares of Stock already owned by the Eligible Person (the "Tendered Shares"), the Eligible Person shall receive a Reload Option which shall be a new Option to purchase shares of Stock equal in number to the tendered shares. The terms of any Reload Option shall be determined by the Board or the Committee consistent with the provisions of this Plan.
9. COMMITTEE
The Committee may be appointed from time to time by the Board. The Board may from time to time remove members from or add members to the Committee. The Committee shall be constituted so as to permit the Plan to comply in all respects with the provisions set forth in Paragraph 20 herein. The members of the Committee may elect one to its members as its chairman. The Committee shall hold its meetings at such time and places as its chairman shall determine. A majority of the Committee's members present in person shall constitute a quorum for the transaction of business. All determinations of the Committee will be made by the majority vote of the members constituting the quorum. The members may participate in a meeting of the Committee by conference telephone or similar communications equipment by means of which all members participating in the meeting can hear each other. Participation in a meeting in that manner will constitute presence in person at the meeting. Any decision or determination reduced to writing and signed by all members of the Committee will be effective as if it had been made by a majority vote of all members of the Committee at a meeting which is duly called and held.
10. ADMINISTRATION OF PLAN
In addition to granting Awards and to exercising the authority granted to it elsewhere in this Plan, the Board or the Committee is granted the full right and authority to interpret and construe the provisions of this Plan, promulgate, amend and rescind rules and procedures relating to the implementation of the Plan and to make all other determinations necessary or advisable for the administration of the Plan, consistent, however, with the intent of the Corporation that Awards granted or awarded pursuant to the Plan comply with the provisions of Paragraph 20 and 21 herein. All determinations made by the Board or the Committee shall be final, binding and conclusive on all persons including the Eligible Person, the Corporation and its stockholders, employees, officers and directors and consultants. No member of the Board or the Committee will be liable for any act or omission in connection with the administration of this Plan unless it is attributable to that member's willful misconduct.
11. PROVISIONS APPLICABLE TO ISOs
The following provisions shall apply to all ISOs granted by the Board or the Committee and shall be incorporated by reference into any writing granting an ISO:
(a) An ISO may only be granted within ten (10) years from September 30, 1998, the date that this Plan was originally adopted by the Board.
(b) An ISO may not be exercised after the expiration of ten (10) years from the date the ISO is granted.
(c) The option price may not be less than the fair market value of the Stock at the time the ISO is granted.
(d) An ISO is not transferable by the Eligible Person to whom it is granted except by will, or the laws of descent and distribution, and is exercisable during his or her lifetime only by the Eligible Person.
(e) If the Eligible Person receiving the ISO owns at the time of the grant stock possessing more than ten (10%) percent of the total combined voting power of all classes of stock of the employer corporation or of its parent or subsidiary corporation (as those terms are defined in the Code), then the option price shall be at least 100% of the fair market value of the Stock, and the ISO shall not be exercisable after the expiration of five (5) years from the date the ISO is granted.
(g) This Plan was adopted by the Corporation on September 30, 1998 by virtue of its approval by the Board.
12. DETERMINATION OF FAIR MARKET VALUE
In granting ISOs under this Plan, the Board or the Committee shall make a good faith determination as to the fair market value of the Stock at the time of granting the ISO in accordance with the provisions of Section 6 above.
13. RESTRICTIONS ON ISSUANCE OF STOCK
The Corporation shall not be obligated to sell or issue any shares of Stock pursuant to the exercise of an Award unless the Stock with respect to which the Award is being exercised is at that time effectively registered or exempt from registration under the Securities Act of 1933, as amended, and any other applicable laws, rules and regulations. The Corporation may condition the exercise of an Award granted in accordance herewith upon receipt from the Eligible Person, or any other purchaser thereof, of a written representation that at the time of such exercise it is his or her then present intention to acquire the shares of Stock for investment and not with a view to, or for sale in connection with, any distribution thereof; except that, in the case of a legal representative of an Eligible Person, "distribution" shall be defined to exclude distribution by will or under the laws of descent and distribution. Prior to issuing any shares of Stock pursuant to the exercise of an Award, the Corporation shall take such steps as it deems necessary to satisfy any withholding tax obligations imposed upon it by any level of government.
14. EXERCISE IN THE EVENT OF DEATH OF TERMINATION OR EMPLOYMENT
(a) If an Award holder shall die (i) while an employee of the Corporation or a Subsidiary or within three months after termination of his employment with the Corporation or a Subsidiary because of his disability, or retirement or otherwise, his Awards may be exercised, to the extent that the Award holder shall have been entitled to do so on the date of his death or such termination of employment by the person or persons to whom the Award holder's right under the Award pass by will or applicable law, or if no such person has such right, by his executors or administrators, at any time, or from time to time. In the event of termination of employment because of his death while an employee or because of disability, his Awards may be exercised not later than the expiration date specified in Paragraph 5 or one year after the Award holder's death, whichever date is earlier, or in the event of termination of employment because of retirement or otherwise, not later than the expiration date specified in Paragraph 5 hereof or one year after the Award holder's death, whichever date is earlier.
(b) If an Award holder's employment by the Corporation or a Subsidiary shall terminate because of his disability and such Award holder has not died within the following three months, he may exercise his Awards, to the extent that he shall have been entitled to do so at the date of the termination of his employment, at any time, or from time to time, but not later than the expiration date specified in Paragraph 5 hereof or one year after termination of employment, whichever date is earlier.
(c) If an Award holder's employment shall terminate by reason of his retirement in accordance with the terms of the Corporation's retirement plans or with the consent of the Board or the Committee or involuntarily other than by termination for cause, and such Award holder had not died within the following three months, he may exercise his Award to the extent he shall have been entitled to do so at the date of the termination of his employment, at any time and from time to time, but not later than the expiration date specified in Paragraph 5 hereof.
(d) If an Award holder's employment shall terminate for cause, all right to exercise his Awards shall terminate at the date of such termination of employment.
15. CORPORATE EVENTS
In the event of the proposed dissolution or liquidation of the Corporation, a proposed sale of all or substantially all of the assets of the Corporation, a merger or tender for the Corporation's shares of Stock, the Board or the Committee shall declare that each Award granted under this Plan shall terminate as of a date to be fixed by the Board; provided that not less than thirty (30) days written notice of the date so fixed shall be given to each Eligible Person holding an Award, and each such Eligible Person shall have the right, during the period of thirty (30) days preceding such termination, to exercise his Award as to all or any part of the shares of Stock covered thereby, including shares of Stock as to which such Award would not otherwise be exercisable. Nothing set forth herein shall extend the term set for purchasing the shares of Stock set forth in the Award.
16. NO GUARANTEE OF EMPLOYMENT
Nothing in this Plan or in any writing granting an Award will confer upon any Eligible Person the right to continue in the employ of the Eligible Person's employer, or will interfere with or restrict in any way the right of the Eligible Person's employer to discharge such Eligible Person at any time for any reason whatsoever, with or without cause.
17. NONTRANSFERABILITY
No Award granted under the Plan shall be transferable other than by will or by the laws of descent and distribution. During the lifetime of the Award holder, an Award shall be exercisable only by him, or by his guardian or legal representative.
18. NO RIGHTS AS STOCKHOLDER
No Award holder shall have any rights as a stockholder with respect to any shares subject to his Award prior to the date of issuance to him of a certificate or certificates for such shares.
19. AMENDMENT AND DISCONTINUANCE OF PLAN
The Board may amend, suspend or discontinue this Plan at any time. However,
no such action may prejudice the rights of any Eligible Person who has prior
thereto been granted Awards under this Plan. Further, no amendment to this Plan
which has the effect of (a) increasing the aggregate number of shares of Stock
subject to this Plan (except for adjustments pursuant to Paragraph 3 herein), or
(b) changing the definition of Eligible Person under this Plan, may be effective
unless and until approval of the stockholders of the Corporation is obtained in
the same manner as approval of this Plan is required. The Board is authorized to
seek the approval of the Corporation's stockholders for any other changes it
proposes to make to this Plan which require such approval, however, the Board
may modify the Plan as necessary, to effectuate the intent of the Plan as a
result of any changes in the tax, accounting or securities laws treatment of
Eligible Persons and the Plan, subject to the provisions set forth in this
Paragraph 19, and Paragraphs 20 and 21.
20. COMPLIANCE WITH RULE 16B-3
This Plan is intended to comply in all respects with Rule 16b-3 ("Rule 16b-3") promulgated by the Securities and Exchange Commission under the Exchange Act, with respect to participants who are subject to Section 16 of the Exchange Act, and any provision(s) herein that is/are contrary to Rule 16b-3 shall be deemed null and void to the extent appropriate by either the Committee or the Board.
21. COMPLIANCE WITH CODE
The aspects of this Plan dealing with ISOs are intended to comply in every respect with Section 422 of the Code and the regulations promulgated thereunder. in the event any future statute or regulation shall modify the existing stature, the aspects of this Plan on ISOs shall be deemed to incorporate by reference such modification. Any stock option agreement relating to any ISO granted pursuant to this Plan outstanding and unexercised at the time any modifying statute or regulation becomes effective shall also be deemed to incorporate by reference such modification and no notice of such modification need to be given to optionee.
If any provision of the aspects of this Plan dealing with ISOs is determined to disqualify the shares purchasable pursuant to the ISOs granted under this Plan from the special tax treatment provided by Code Section 422, such provision shall be deemed null and void and to incorporate by reference the modification required to qualify the shares for said tax treatment.
22. COMPLIANCE WITH OTHER LAWS AND REGULATIONS
The Plan, the grant and exercise of Awards thereunder, and the obligation of the Corporation to sell and deliver Stock under such Awards, shall be subject to all applicable federal and state laws, rules, and regulations and to such approvals by any government or regulatory agency as may be required. Moreover, no option may be exercised if its exercise or the receipt of Stock pursuant thereto would be contrary to applicable laws.
23. DISPOSITION OF SHARES
In the event any share of Stock acquired by an exercise of an Award granted under the Plan shall be transferable other than by will or by the laws of descent and distribution within two years of the date such Award was granted or within one year after the transfer of such Stock pursuant to such exercise, the Award holder shall give prompt written notice thereof to the Board or the Committee.
24. NAME
The Plan shall be known as the "ASIA PROPERTIES, INC. Stock Option Plan."
25. NOTICES
Any notice hereunder shall be in writing and sent by certified mail, return receipt requested or by facsimile transmission (with electronic or written confirmation of receipt) and when addressed to the Corporation or to the Option Committee shall be sent to it at its office at 114 Magnolia Street, Suite 400-115, Bellingham, WA 98225 subject to the right of either party to designate at any time hereafter in writing some other address, facsimile number or person to whose attention such notice shall be sent.
26. HEADINGS
The headings preceding the text of Sections and subparagraphs hereof are inserted solely for convenience of reference, and shall not constitute a part of this Plan nor shall they affect its meaning, construction or effect.
27. EFFECTIVE DATE
The Plan, was adopted by the Board on September 30, 1998. This date shall be the effective date of the Plan.
ASIA PROPERTIES, INC.
By: /s/ Daniel McKinney
Daniel Mckinney, President and Director
|
By:
Director
By:
Director
THIS AGREEMENT is made as of the 4th day of March, 2003,
BETWEEN:
ASIA PROPERTIES INC.,
a company incorporated pursuant to the laws of the State Nevada with a mailing address of 14 Magnolia Street, Suite 400-115, Bellingham, WA 98225
(the "Company")
OF THE FIRST PART
AND:
WORLD WEB PUBLISHING.COM CORP.
a company incorporated pursuant to the laws of the State Nevada with a mailing address of 250 H Street - #123, Blaine WA 98230
(the "Consultant")
OF THE SECOND PART
WHEREAS
A. The Company is engaging the Consultant to provide the services contemplated by this Agreement.
B. The Consultant has agreed to provide the services on the terms and subject to the conditions of this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the sum of ten ($10.00) dollars now paid by the Company to the Consultant, the receipt and sufficiency whereof is hereby acknowledged by the Consultant, and of the promises and mutual covenants, conditions and agreements hereinafter set out, the parties hereto agree as follows:
Consultant Services
The Consultant will provide the following services to the Company as consulting services:
(i) The Consultant will assist the Company with the preparation of a Form SB-2 Registration Statement required by the United States Securities and Exchange Commission (SEC).
(ii) The Consultant will assist the Company with the preparation and maintenance of all internal corporate documentation for the Company relating to the preparation and submission of the Form SB-2 Registration Statement. This documentation includes but is not limited to: the preparation of directors resolution documents, the preparation minutes for director and shareholder meetings.
(iii) The consultant will assist the Company with the preparation of all required response letters from the SEC resulting from the filing of the aforesaid Form SB-2 Registration Statement and the preparation of any and all required amendments to the Form SB-2 Registration Statement until such time as the Form SB-2 Registration Statement is accepted as effective by the SEC.
(iv) The Consultant will also perform additional duties and responsibilities to the Company at the reasonable instruction of the President of the Company or his designee, provided that such additional duties and responsibilities are within the scope of services contemplated by this Agreement and further set out in SCHEDULE "A" hereto.
The Consultant will not engage in any activity that will interfere or conflict with the Consultant's duties and responsibilities to the Company or that interfere or conflict with the business and objectives of the Company.
The Consultant will not make any misrepresentation of the Company or its business, operations or financial condition to any party in the performance of the services required by this Agreement.
Fees
The Consultant will be paid a fee of US$5,000 for the services to be provided in accordance with this Agreement as follows:
Expenses
The Consultant will be paid for all expenses and other disbursements to be reasonably incurred on behalf of the Company in providing the services incurred in accordance with this Agreement, including, mailing, and long distance telephone costs, travel expenses if required, other communication costs and other sundry expenses incurred in the ordinary course of business. The Consultant will not incur any expense(s) without the prior written consent of the Company. Upon receipt of the Consultant's expense reports with supporting receipts, the Consultant will be reimbursed for those disbursements reasonably made on behalf of the Company within seven (7) business days of receipt of the expense report.
Additional Compensation
Shares: The Company will deliver to the consultant 10,000 common shares of the Company's stock, (hereafter ("Consultant Shares"). The shares will have piggy back registration rights.
Options: Fifty thousand options exercisable at US$1.00 for 24 months will be delivered to the consultant.
Reporting Procedure
The Consultant will take directions from the President of the Company or his designee as to its functions and methods of implementation to perform to achieve the corporate goals.
7. Term
This Agreement will expire upon acceptance of the Company's Registration Statement by the SEC as effective.
On termination of this Agreement for any reason, all rights and obligations of each party that are expressly stated to survive termination or continue after termination will survive termination and continue in full force and effect as contemplated in this Agreement.
Confidential Information
Except as contemplated by this Agreement, the Consultant agrees not to disclose to any person any confidential information concerning the business or affairs of the Company which the Consultant may have acquired in the course of or incidental to providing the services required by this Agreement and the Consultant will not directly or indirectly use (whether for its own benefit or the detriment or intended detriment of the Company) any confidential information it may acquire with respect to the business and affairs of the Company. All obligations with respect to confidential information will survive termination.
The Consultant will coordinate with the President of the Company or his designee as to the information regarding the business and affairs of the Company that may be disclosed by the Consultant in the provision of the services required by this Agreement. The Consultant will not disclose any more information than that approved by the President of the Company or his designee.
General Provisions
(i) This Agreement shall be governed by and interpreted in accordance with the laws of the State of Nevada.
(ii) This Agreement shall enure to the benefit of, and be binding upon, the
parties hereto and their respective heirs, executors, administrators, successors
and assigns. This Agreement is not assignable by the Consultant without the
prior written consent of the Company, which consent may not be unreasonably
withheld.
(ii) Time shall be of the essence of this Agreement.
(iii) The Consultant will at all times be an independent contractor and the Consultant will not be deemed to be an employee of the Company. The Consultant will be responsible for payment of any income taxes, source deductions, withholding taxes, fringe benefits, insurance and similar items resulting from the payment of the Consultant Fee or resulting from the sale or other disposal of the Consultant Shares or Options.
(iv) This Agreement constitutes the entire Agreement between the parties hereto and there are no representations, warranties, terms or conditions, expressed or implied, statutory or otherwise and no agreements collateral hereto other than or expressly set forth or referred to herein.
IN WITNESS WHEREOF, the Company and the Consultant have executed this Agreement all as of the day and year first above written.
ASIA PROPERTIES INC.,
by its authorised signatory:
/s/ Daniel Mckinney Signature of Authorised Signatory Daniel Mckinney Name of Authorised Signatory |
President
Position of Authorised Signatory
WORLD WEB PUBLISHING.COM CORP.
by its authorised signatory:
/s/ Geoffrey J. Armstrong Signature of Authorised Signatory Geoffrey J. Armstrong Name of Authorised Signatory |
President
Position of Authorised Signatory
SCHEDULE "A"
To the BUSINESS CONSULTANT SERVICES AGREEMENT made as of the 4th day of March, 2003,
Contractor: World Web Publishing.com Corp. Geoff Armstrong: President
Responsible to ASIA PROPERTIES INVESTMENTS INC.,. for:
1. Liaison with corporate attorneys and Management Committee respecting regulatory filing documents; and
2. Preparation of required of the From SB-2 Registration Statement(s); and
3. Ongoing assistance with responses to all comment letters relating to the Form SB-2 submission to the Securities and Exchange Commission until the Form SB-2 is accepted as cleared by the SEC.
4. Preparation of all internal corporate documents including corporate resolutions, minutes, changes and amendments to corporate documents relating to Item 2 above if required; and
5. The consultant will assist the Company with the preparation of all required response letters from the SEC resulting from the filing of the aforesaid Form SB-2 Registration Statement and the preparation of any and all required amendments to the Form SB-2 Registration Statement until such time as the Form SB-2 Registration Statement is accepted as cleared by the SEC.
6. Overseeing the proper maintenance of all required legal and regulatory filings related to the forgoing documents; and
7. The Consultant will also perform additional duties and responsibilities to the Company at the reasonable instruction of the President of the Company or his designee, provided that such additional duties and responsibilities are within the scope of services contemplated by this Agreement.
THE SECURITIES DESCRIBED IN THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.
SUBSCRIPTION AGREEMENT
This Subscription Agreement is made by and between Entellium Investments Ltd., a British Virgin Islands Company (the "Company") and Asia Properties, Inc., a Nevada corporation (the "Investor").
The parties hereto agree as follows:
Article 1 The Securities
Section 1.01. The Securities. The securities offered hereby shall consist of two million (2,000,000) Ordinary Shares (the "Shares") of the Company at a purchase price of $0.01 per share. Company and the Investor both acknowledge and agree that the purchase price for the Shares will be paid (i) US $15,000 paid in September 2002, (ii) US $2,500 paid to Speechforms, Inc., on behalf of the Company, in September 2002, and (iii) US $2,500 to be paid by Investor to the Company in accordance with a Note dated as of the date hereof.
Section 1.02. Legends; Registration Under the Securities Act of 1933. The Shares have not been registered under the Securities Act of 1933, as amended (the "Act"). The certificate representing the Shares shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.
This offering is not a public offering and is intended to be made pursuant to Section 4(2) of the Act and Regulation D as promulgated by the Securities and Exchange Commission ("SEC") under the Act. This offering is also intended to be exempt from the registration requirements of various state securities laws. A substantial number of state securities commissions and securities industry associations have established investor suitability standards for marketing private offerings of securities within their respective jurisdictions. Some have also established minimum dollar levels for purchases in their states.
Section 1.03. Expenses. Irrespective of whether the Closing is effected, the Company shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery, and performance of this Agreement and the transactions contemplated hereby, including without limitation, the cost of any required filings under the Act, the Exchange Act or any "blue sky" laws, rules and regulations.
Article II
Representations and Warranties
Section 2.01. Investor Representations and Warranties. The Investor hereby makes each and every one of the following representations and warranties:
(a) Investor has the full right, power and authority to enter into this Agreement and to carry out and consummate the transactions contemplated herein. This Agreement constitutes the legal, valid and binding obligation of the Investor.
(b) Investor is an "Accredited Investor" as that term is defined in Section 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the "Act").
(c) The Investor meets one or more of the following requirements:
PLEASE CHECK AS MANY BOXES THAT APPLY:
He or she is a natural person whose individual net worth, or joint net worth with such investor's spouse, exceeds $1,000,000 and either he or she is able to bear the economic risk of investment in the proposed investments or the proposed investments will not exceed 10% of his or her net worth or joint net worth with such investor's spouse;
He or she is a natural person who had individual income in excess of $200,000 in each of the two most recent years, or joint income with such investor's spouse in excess of $300,000 in each of those years and reasonably expects to reach the same income level in the current year, and either such investor is able to bear the economic risk of investment in the proposed investments or the proposed investments will not exceed 10% of his or her net worth or joint net worth with such investor's spouse;
It is an organization described in 501(c)(3) of the Internal Revenue Code of 1986 as amended, (i.e., tax exempt entities), corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the proposed investments, with total assets in excess of $5,000,000;
It is a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the proposed investments, whose purchases are directed by a sophisticated person as described under the first alternative above;
It is a bank as defined in 3(a)(2) of the Securities Act of 1933, or a savings and loan association or other institution as defined in 3(a)(5)(A) of the Securities Act of 1933 whether acting in its individual or fiduciary
capacity;
It is a broker registered pursuant to 15 of the Securities Exchange
Act of 1934;
It is an insurance company as defined in 2(13) of the Securities Act
of 1933;
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It is an investment company registered under the Investment Company Act of 1940 or a business development company as defined in 2(a)(48) of that Act;
It is a Small Business Investment Company licensed by the U.S. Small Business Administration under 301 (c) or (d) of the Small Business Investment Act of 1958;
It is a private business development company as defined in 202(a)(22) of the Investment Advisers Act of 1940;
It is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are Accredited Investors as described above;
He or she is a director or executive officer of the Company;
It is an entity in which all the equity owners are Accredited Investors since they are all described above.
(d) Investor has reviewed this Subscription Agreement hereto.
(e) Investor has the financial ability to bear the economic risk of Investor's investment, can afford to sustain a complete loss of such investment, has adequate means of providing for Investor's current needs and personal contingencies and has no need for liquidity in Investor's Investment in the Company.
(f) Investor will acquire the Shares for Investor's own account for investment and not with a view to the sale or distribution thereof or the granting of any participation therein, and Investor has no present intention of distributing or selling to others any of such interest or granting any participation therein, other than pursuant to an effective registration statement under the Act.
(g) Investor has been given the opportunity to ask questions of and to receive answers from persons acting on the Company's behalf concerning the terms and conditions of this transaction and also has been given the opportunity to obtain any additional information which the Company possesses or can acquire without unreasonable effort or expense. As a result, the Investor is cognizant of the financial condition, capitalization, use of proceeds from this bridge financing and the operations and financial condition of the Company, has available full information concerning its affairs and has been able to evaluate the merits and risks of the investment in the Shares.
(h) The Investor understands and agrees that the Shares have not been registered under the Securities Act of 1933, as amended (the "Act") or any state or foreign securities laws and are restricted securities within the meaning of Rule 144 of the General Rules and Regulations under the Act and under applicable state statutes.
Article III Notices
Section 3.01. Notices. All notices provided for in this Agreement shall be in writing signed by the party giving such notice, and delivered personally or sent by overnight courier or messenger or sent by registered or certified mail (air mail if overseas), return receipt requested, or by telex, facsimile transmission, telegram or similar means of communication. Notices shall be deemed to have been received on the date of personal delivery, telex, facsimile transmission, telegram or similar means of communication, or if sent by overnight courier or messenger, shall be deemed to have been received on the next delivery day after deposit with the courier or messenger, or if sent by certified or registered mail, return receipt requested, shall be deemed to have been received on the third business day after the date of mailing. Notices shall be sent to the addresses set forth below:
If to the Company:
Entellium Investments Ltd.
No., 45 Block A, 3rd Floor
Medan Setia 1, Plaza Damansara, Bukit Damansara
50490 Kuala Lumpur, Malaysia
If to the Investor:
114 West Magnolia Street
#400-114
Bellingham, WA 98225
USA
Article IV
Miscellaneous
Section 4.01.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY THEREIN, WITHOUT GIVING EFFECT TO THE RULES OF CONFLICTS OF LAW.
(b) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
(c) This Agreement represents the entire agreement between the parties relating to the subject matter hereof, superseding any and all prior to contemporaneous oral and prior written agreements and understandings. This Agreement may not be modified or amended nor may any right be waived except by a writing signed by the party against whom the modification or waiver is sought to be enforced.
(c) The captions and headings contained herein are solely for convenience of reference and do not constitute a part of this Agreement.
(d) Each of the Exhibits attached hereto is hereby incorporated herein as if each of such Exhibits were fully set forth herein in its entirety. Each of such Exhibits is hereby expressly made a part of this Agreement.
(e) The terms of the offering and of Shares may only be amended or modified by the agreement of Investor.
(f) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
[Signature Follows on Next Page]
IN WITNESS WHEREOF, intending to be legally bound, the parties hereto have executed this Agreement as of the 1st day of August, 2002.
ENTELLIUM INVESTMENTS LTD.
Name:
Title:
ASIA PROPERTIES, INC.
Name:
Title:
This Agreement is made as of July __, 2003, by and between KANAN, CORBIN, SCHUPAK & ARONOW, INC. ("KCSA"), with an address at 800 Second Avenue, New York, NY 10017, on the one hand, and ASIA PROPERTIES, INC. ("API"), with an address at 114 Magnolia Street, Suite 400-115, Bellingham, WA 98225.
W I T N E S S E T H
WHEREAS, pursuant to the agreement between API and KCSA, dated May 23, 2001 (the "Agreement"), in satisfaction of an unpaid amount owed by API to KCSA for services rendered by KCSA, API conveyed to KCSA 58,000 shares of common stock in API, represented by certificate No. 229 (the "KCSA Shares"); and
WHEREAS, the KCSA Shares were subject to a restriction prohibiting their sale or transfer by KCSA within two (2) years of the date of the Agreement; and
WHEREAS, KCSA wishes to have the opportunity to sell, transfer or otherwise convey the KCSA Shares; and
WHEREAS, API wishes to grant KCSA the right to convey the KCSA Shares, subject to certain limitations.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. API shall instruct its transfer agent, Computershare Trust Co. ("Computershare"), by letter substantially in the form annexed hereto as Exhibit A, to issue to KCSA, or its designee, a new share certificate representing 58,000 shares of common stock of API free of any restrictions or limitations on transfer upon receipt of share certificate No. 229.
2. KCSA agrees that neither it nor its designee shall offer the KCSA Shares for sale at a price less than eighty-five percent (85%) of the last sale of API stock made on the previous business day.
3. KCSA further agrees to provide, or have its designee provide, trade confirmations or other reports to API evidencing the sales of the KCSA Shares via facsimile transmission within three (3) business days of the settlement of any trade, with a back-up copy to be provided by mail.
4. In consideration of the foregoing,KCSA and each of KCSA's successors, heirs, executors, administrators, agents, representatives, partners, employees, assigns and licensees hereby release and forever discharge API and each of API' successors, heirs, executors, administrators, agents, representatives, partners, employees and assigns from any and all actions, causes of action, suits, debts, damages, claims, demands, obligations, losses, expenses, attorneys' fees and/or liabilities of any kind, nature and description, known or unknown, suspected or claimed, existing prior to or after the effective date of this Settlement Agreement and Release, based on, arising out of or in connection with the Agreement.
5. API and each of API's respective successors, heirs, executors, administrators, agents, representatives, partners, employees, assigns and licensees hereby release and forever discharge KCSA and each of KCSA's successors, heirs, executors, administrators, agents, representatives, partners, employees and assigns from any and all actions, causes of action, suits, debts, damages, claims, demands, obligations, losses, expenses, attorneys' fees and/or liabilities of any kind, nature and description, known or unknown, suspected or claimed, existing prior to or after the effective date of this Settlement Agreement and Release, based on, arising out of or in connection with the Agreement.
6. In the event that KCSA breaches its obligations as set forth in paragraph 2, API shall be entitled to liquidated damages in an amount equal to the difference between the proceeds of any sale at a price less than eighty-five percent (85%) of the last sale of API stock made on the previous business day and thirty-seven thousand dollars multiplied by the ratio the numerator of which is the number of shares sold at such price and the denominator of which is fifty-eight thousand. The parties agree that this liquidated damages provisions shall not be construed as a penalty under the law.
7. Each party hereto represents and warrants to each of the other parties hereto, that it has the full right, authority and capacity to enter into this Agreement and grant the rights granted herein.
8. The agreements contained herein and any other consideration herein are being made and provided by way of resolution of claims which are denied by API, and are not an admission of any liability, responsibility, breach, wrongful conduct or bad faith by API and shall not be interpreted or enforced as such by any court or tribunal.
9. Each of the parties hereto shall bear their own costs and attorneys' fees in connection with the negotiation of this Agreement. Each of the parties hereto agrees that it will, upon request, execute any further documents and do all acts reasonably necessary or desirable to fully effectuate the terms of this Agreement.
10. This Agreement shall be deemed to have been made in the State of New York, and its validity, construction and effect shall be governed by the laws of the State of New York applicable to agreements wholly performed therein. Any action brought under this Agreement shall be filed in the courts of the County of New York, State of New York and the parties hereto hereby submit themselves to the exclusive jurisdiction of such courts. In the event any provision of this Agreement shall be found to be invalid in any respect, the validity of the remaining provisions shall not in any way be impaired thereby.
11. This Agreement shall be binding upon and for the benefit of the parties hereto, their respective successors, devisees, executors, affiliates, representatives, assigns, officers, directors, shareholders, attorneys, agents and employees.
12. This Agreement constitutes the entire agreement, written and oral, between the parties relating to the subject matter hereof. There are no representations, warranties, promises, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein, and it is expressly understood and agreed that this Agreement may not be amended or modified, nor may any provision be waived, in any respect, except by a writing duly executed by the party(ies) to be charged thereby.
13. This Agreement may be executed simultaneously in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Any signed copy of this Agreement or of any other document or agreement referred to herein, or copies or counterparts thereof, delivered by facsimile transmission, shall for all purposes be treated as if it were delivered containing an original manual signature of the party whose signature appears in the facsimile and shall be binding upon such party in the same manner as though an originally signed copy had been delivered.
IN WITNESS WHEREOF, the parties hereto have duly executed this Settlement Agreement and General Release on the year and date first above written.
KANAN, CORBIN, SCHUPAK ASIA PROPERTIES, INC.
& ARONOW, INC.
By: By:
ASIA PROPERTIES, INC.
114 Magnolia Street
Suite 400-115
Bellingham, WA 98225
Tel: (360) 392-2841
Fax: (604) 535-8456
VIA FACSIMILE (303.262.0604 OR 5) JULY 14, 2003 Computershare Trust Co. 350 Indiana Street Suite 800 Golden, CO 80401 |
Dear Sir/Madam:
This is to inform you of the following:
1. KCSA is not at present, and has not been during the preceeding three (3)
months, an "affiliate" of Asia Properties, Inc. as that term is defined in Rule
144 of the Securities Act of 1933; and
2. KCSA acquired and provided full consideration for 58,000 shares of common
stock of Asia Properties, Inc., represented by share certificate No. 229 on May
23, 2001.
Accordingly, upon the tender of share certificate No. 229 by UBS Paine Webber,
the designated of KCSA, please provide to them a certificate, or equivalent,
representing 58,000 shares of common stock of Asia Properties, Inc. free of any
restrictions or limitations.
The undersigned represents that the information furnished above is correct and
complete to the best of my knowledge, information and belief.
Please feel free to contact me if you have any questions.
Sincerely,
ASIA PROPERTIES, INC.
By:
Daniel S. McKinney, President
Cc: Wayne M. Josel, Esq. (via fax 914.698.7850) Howard Schur, UBS PaineWebber (via fax 914.287.6021)
Asia Properties, Inc.
USA: 114 W. Magnolia St, Suite 400-115, Bellingham, WA 98225
Telephone: (360) 392-2841 Fax: (604) 535-8456
Homepage: www.asiaprop.com
----------------
Symbol: ASPZ
AGREEMENT BETWEEN KCSA WORLDWIDE AND ASIA PROPERTIES, INC.
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It is noted that Asia Properties, Inc. has had an outstanding bill with KCSA since late 1999 for $25, 659 that has gone unpaid. KCSA has agreed to take 58,000 shares of restricted stock in Asia Properties, Inc. in settlement of this bill.
The two firms further agree as follows:
1. That Asia Properties, Inc. may redeem the 58,000 shares within 12 months
of this date by paying in cash $25, 659 to KCSA.
2. That if the shares have not been redeemed by Asia Properties, Inc. within
12 months, that the company will register the 58,000 shares in it's next
registration statement and cause them to become free trading.
For and on the behalf of Asia Properties, Inc. For and on the behalf of KCSA
Daniel S. Mckinney Dan Stepanek President Managing Director
SUBSIDIARIES:
Asia Properties, International (Thailand) Co. Ltd. Incorporated in Thailand
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Daniel S. McKinney, certify that:
1. I have reviewed this Registration Statement on Form 10-SB of Asia Properties, Inc.
2. Based on my knowledge, this Registration Statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Registration Statement.
3. Based on my knowledge, the financial statements, and other financial information included in this Registration Statement, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Registration Statement.
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a. Designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this Registration Statement is being prepared;
b. Evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing of this Registration Statement (the "Evaluation Date"); and
c. Presented in this Registration Statement my conclusions about the effectiveness of the disclosure controls and procedures based on my evaluation as of the Evaluation Date.
5. I have disclosed, based on my most recent evaluation, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
a. All significant deficiencies in the design or operation of internal controls that could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and
b . Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls.
6. I have indicated in the Registration Statement, whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: November 26, 2004 By: /s/ Daniel S. Mckinney
Daniel S. McKinney
President, Chief Executive Officer,
Principal Accounting Officer and
Director (Principal Executive,
Financials and Accounting
Officer)
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CERTIFICATION PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
This certification is being filed pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This certification is included solely for the purpose of complying with the provisions of Section 906 of the Sarbanes-Oxley Act and is not to be used for any other purpose. In connection with the accompanying Registration Statement on Form 10-SB of Asia Properties, Inc., I, Daniel S. Mckinney, hereby certify in my capacity as an officer of Asia Properties, Inc. that to my knowledge:
1. The Registration Statement on Form 10-SB of Asia Properties, Inc. complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The Registration Statement on Form 10-SB of Asia Properties, Inc. fairly presents, in all material respects, the financial condition and results of operations of Asia Properties, Inc.
Date: November 26, 2004 By: /s/ Daniel S. Mckinney
Daniel S. McKinney
President, Chief Executive Officer,
Principal Accounting Officer and
Director (Principal Executive,
Financials and Accounting
Officer)
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