Aside from whether "all pennies are unstable," I think it would be prudent for investors to review the recent (July 20, 1999) Form 10SB filing. It is available on the SEC web site. The idea is to get a complete and objective picture.
The whole report warrants attention. Some issues that should be considered are stated here.
Net losses for the prior two years ending March 31, 1999 are
$1,095,991 (1999) and $2,732,268 (1998).
The report indicates that current liabilities exceed current assets by $4,873,675.
The company also has litigation contingencies.
The accountant states that the financial report is the responsibility of management. He goes on to say, "My responsibility is to express an opinion of these consolidated financial statements based on my audits."
The auditors opinion: These factors, among others, raise substantial doubt as to the Company's ability to continue as a going concern.
Management intends to raise additional operating funds through equity and/or debt offerings. There is no assurance management will be successful in this endeavor. Verbal commitments have reportedly been made, but none in writing.
Among the litigation issues of concern is that a party in China sued Kunming Xinmao for breach of contract. An award of U.S. Dollars of $452,000 was won. During the fiscal year ending March 31, 1999, substantial physical assets of the company, including railway cars and trucks, were attached. A subsequent suit against the Plaintiff prevailed. However, the Plaintiff has appealed. According to the 10SB, the final resolution is uncertain.
Steve |
