*#*#*#* BUILDING UP OIA's WEALTH? D.D ZSUN *#*#*#*
By: frisky
Reply To: 13913 by onewhoknows Wednesday, 24 Nov 1999 at 10:04 PM EST
Post # of 14032
If you read OIA's financial statements as of December 1998 (page 108-110 in the new 10sb), you will see that OIA's shareholders set up an accrued expense of $716,000. The result caused OIA to incur an operating loss of 475,221. Since IRS disallowed the deduction, OIA had to pay income tax. The difference between the tax in the tax return and no tax on the financial statements was recorded as a deferred tax asset. Of course, it did not make any difference, when OIA was a privately held company. However, after OIA merged with ZSUN, ZSUN acquired all OIA's assets as well as the liabilities. As of December 31, 1998, OIA had tangible assets of $330,143, liabilities of $925,915. After the merger, the liabilities would be paid ZSUN. This means that ZSUN had to come up at least $506,940 to pay OIA's liabilities. At the time of the merger, Scott Elder, Ross Jardine et al received $400,000 cash plus the invisible net liabilities of $506,940(may be more or less by March 31, 1999) plus 6,000,000 shares of ZSUN plus additional one share for every dollar of OIA profit over $2.5 million from April 1, 1999 through March 31, 2000. They have made a killing in the deal.
Based on ZSUN's own valuation, the whole deal was worth about $15,19600. If you choose the closing price of ZSUN on March 31, the deal was worth about $37 million) Why did ZSUN offer so much to OIA's shareholders? The answer is very simple: ZSUN was anxious to portrait itself as a profitable "Internet company," The $2,995 seminar is an easy way to generate the profit as long as suckers are willing to pay so much.
BTW, ZSUN has not made a dime in Asia4sale yet as of November 15, 1999.
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