By: frisky
Reply To: None Thursday, 6 Apr 2000 at 7:35 PM EDT
Post # of 18818
If you have read the 10sb version 3 and compared it with the 10sb version 4, you are going to be in shock. ZSUN claimed that Both 10sb had been audited by Jones & Jensen who followed Generally Accepted Auditing Standards. Jones & Jensen issued unqualified opinions for both statements and affirmed that the financial statements followed Generally Accepted Accounting Principles. Yes, I know that the new version has the audited figures for entire year of 1999, but let me just focus the figures of 1998.
I found out that the 1998 sales figure in version 3 was $2,289,158. However in version 4, the figure was $760,529. The net income in version 3 was $1,152,210. The net income of 1998 in version 4 was $769,320. The 1998 diluted EPS was reported as $.11 in version 3 but it was reported as $.04 in version 4. As matter of fact, none of the figures in income statement in version 3 matched with the figures in version 4.
If you check the cash flow statement for 1998 in version three and version 4, you will be in shock again. Both statements reported complete different figures. However, the ending cash balances of both statements are the same. Is this a miracle?
If you check the new 10qsb, you are going to find out that the total shares used for calculating the diluted EPS for nine-month ended as of 9/30/99 was 21,675,834+75,000+5,000,00 or 26,750,834 shares. The 75,000 shares were the exercisable options to Allen Hardman at $2.00 per share. The 5,000,000 shares were the restricted shares to former OIA shareholders. If you had read the OIA merger agreement, you would have fully understood. If you check the new 10sb, you will find out that the total shares used for calculating the diluted EPS for twelve-month ended as of 12/31/99 were 1,769,583+75,000+3,847,917+103,500 or 25,796,000 (page 68). 75,000 shares was the exercisable options to Allen Hardman; 3,847,917 was the weighted shares to reward former OIA shareholders and 103,500 is the equivalent shares for a convertible note. I believe that the 5,000,000 restricted shares were omitted in the calculation. Let us assume it was an honest mistake. The diluted EPS should be just $.20.
Which figures should we believe?
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