By: frisky
Reply To: None Wednesday, 5 Apr 2000 at 1:28 PM EDT
Post # of 18779
ZSUN filed the 3rd quarter of 1999 amendment 10qsb and 10sb statement today. It has done a much better job to disclose the facts than the past. It has pretty much confirmed what I have said before. Let me highlight some of the new disclosures.
(1) Changed the reward to OIA shareholders from one share per dollar EBITD to two shares per EBITD. I think they took care the split-adjustment in this filing.
(2) Changed the reward to Global Marketing from 75,000 shares to 150,000 shares.
(3) Admitted that Asia4sale.com Ltd. did not reach the positive cash flow as of 4/5/2000.
(4) Admitted that OIA was the largest revenue producer which constituted 81% of ZSUN's revenues as of 6/30/1999. My estimate of 85% of ZSUN's revenues as of December 31, 1999 would be very close.
(5) Momentum Internet accounted for 11% of ZSUN's revenues as of 6/30/1999.
(6) Momentum Asia's Internet business accounted for 5% of ZSUN's revenues. Its printing and direct marketing business accounted for 3% of ZSUN's revenue as of June 30, 1999. I think that the 1% difference is the rounding error.
(7) Disclosed that OIA charges $1,995 for home-study kit, $2,995 or $3995 for attending live seminars.
(8) Disclosed the diluted EPS for 1999 for $.24. I like to warn the readers that the denominator is weighted-average outstanding diluted shares. Since the acquisition of OIA was on March 31, 1999 and the acquisition on Asia4sale was on March 25, 1999. The restricted shares issued to former shareholders carried 3/4 of the weight. The additional reward to former OIA shareholders was accounted for 3,847,917 weighted shares. Those shares were exercisable in the fourth quarter. Meaning, it only carried 1/4 of the weight. In other words, the former OIA shareholders would receive 15,391,368 shares on March 31, 2000. The closing price of ZSUN on March 31, 2000 was $11 3/8. Meaning, it is worth about $170,000,000. There are many more shares to come in the first quarter of 2000. This implies that the diluted EPS in 2000 will be very ugly.
(9) ZSUN did not classify the reward to former OIA shareholders as options. I am not sure that IRS will like it.
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