Frisky the Forensic Internet Accountant speaks about Ziasun;
By: frisky $$$
Reply To: 23335 by Frank_Ching $$$ Saturday, 1 Jul 2000 at 11:49 PM EDT
Post # of 23368
Who are the liars? Who have repeatedly issued false and misleading information to the public?
According to the final version of 10sb version 7, ZSUN reported that its 1998 revenues were $760,529, basic EPS was $.05 and diluted EPS was $.04. In fact, if ZSUN had not report a realized gain on marketable securities of $532,801 and an unrealized gain on marketable securities of $712,438, ZSUN would have had an operating loss of $478,919 or loss per share of $.025. Moreover, the realized gain and unrealized gain of marketable securites came from exchanging its own shares with its related parties: DDD, LCAI, TMOT. If ZSUN issued its own shares to the public, it must have recorded the gain as additional paid-in capital. In other words, it would report a loss. By exchanging its own shares with the related parties, ZSUN shifted the capital to the income statement. Hence, the EPS was inflated.
Let us revisit ZSUN’s press releases in 1999:
(a) Feb, 8, 1999:
Monday February 8, 1:43 pm Eastern Time
ZiaSun Subsidiary Announces Record Revenues and Earnings in 1998
SAN DIEGO, Calif., Feb. 8 /PRNewswire/ -- ZiaSun Technologies, Inc. (OTC Bulletin Board: ZSUN - news; www.ziasun.com) has released preliminary 1998 financial results for Momentum Asia Inc., a wholly-owned subsidiary, which reported earnings of $950,000 on revenues of $2,400,000.
``We are extremely pleased that Momentum Asia has sustained its excellent growth rate and substantially exceeded its revenue and earnings projections,'' commented ZiaSun President and CEO, Anthony L. Tobin.
``Momentum Asia provides vital support services for our Internet products, and we expect the company to continue to be a substantial contributor to ZiaSun's bottom line,'' he said.
Momentum Asia's results show substantial increases in revenues, earnings, and assets. Earnings for 1997 totaled $140,000, increasing to $180,000 in the first half of 1998 and $770,000 in the second half, for an annual growth rate of over 600%. Year-end net assets increased from $800,000 at the end of 1997 to $3 million at the end of 1998. The company carries no debt of any kind.
``We are undergoing a new audit, and expect to release full 1998 consolidated results for ZiaSun by March 1,'' Mr. Tobin added. ``With this contribution from Momentum Asia, we are confident that earnings per share will exceed the projected $.11.'' …
(b) March 3, 1999:
Wednesday March 3, 12:50 pm Eastern Time
ZiaSun Announces 1998 Results for Internet Subsidiary
SAN DIEGO, Calif., March 3 /PRNewswire/ -- ZiaSun Technologies Inc (OTC Bulletin Board: ZSUN - news; www.ziasun.com) has announced 1998 operating results for Momentum Internet Inc. (www.momentumplus.com), its wholly owned subsidiary, which achieved net profit of $325,355 on revenues of $1,013,267.
``We are extremely pleased that Momentum Internet has achieved these results in its first full year of operation,'' said Mr Anthony L Tobin, President and CEO of ZiaSun.
``Achieving profitability in the first year is a rare achievement in any technology-related company, and we feel that this is a very positive reflection on our products and services.''
ZiaSun expects to release consolidated audits by the end of March, and confidently anticipates that earnings will exceed projections of $.11 per share....
(c)April 19, 1999:
Monday April 19
ZiaSun Announces Audited 1998 Earnings of $0.11 Per Share, and a 2 for 1 Forward Stock Split
SAN DIEGO, CA. April 19, 1999. ZiaSun Technologies Inc (OTC BB: ZSUN) (www.ziasun.com) today announced the completion of the consolidated audit of the 1998 financial statements of the company and its subsidiaries.
Combined net income was $1,152,210 on revenues of $3,537,397. Net income equates to $0.11 per fully diluted share at the end of 1998. Complete audited financial statements will be made public in due course.
The company also announced authorization of a 2 for 1 forward stock split.
Mr Anthony L Tobin, President and CEO, said, "We are pleased with the profitable performance of the company and its subsidiaries in 1998, but we are more excited about the significant increases in revenues and profits being generated by the company in the first and second quarters of 1999.
"It is rare for small Internet related companies to show profits in their early stages, and even large, established names in the industry are still trying to achieve profitability. We have built a very solid financial foundation on which to build the future," said Mr Tobin.
"For a newly formed company we are delighted to have achieved these results, which help establish us as a dominant player in the Asian marketplace and sets the stage internationally for an exciting 1999," added Mr Tobin. …
(d) May 12, 1999:
Wednesday May 12
ZiaSun’s Audited 1998 Financial Statement Available
SAN DIEGO, CA. May 11, 1999. ZiaSun Technologies Inc (OTC BB: ZSUN) (www.ziasun.com) today released the consolidated audited financial statements for the year ended 1998 for the company and its subsidiaries.
Combined net income was $1,152,210 on sales and other net revenues of $3,537,397. The basic income on the weighted average number of shares outstanding during fiscal year 1998 was $0.47 cents per share.
This equates to a net income of $0.11 cents per share based on a total of 10,465,000 shares issued and outstanding at year end 1998.
The audit was conducted by Jones, Jensen & Company, LLC, of Salt Lake City, Utah, a member of RSM International.
The full financial statements are published on the ZiaSun website at www.ziasun.com. Printed copies are available from our Investor Relations Department at 1-800-773-7317.
Comment:
ZSUN repeatedly lied its financial results of 1998 through its press releases. In fact, it continuously lied the 1998 financial results in 10sb version 1, 2, 3. The company did not make significant changes until 10sb version 4 filed on April 5, 2000. ZSUN did not issue a press release to clarify the changes. Worse, Jones & Jensen has issued unqualified opinions for all different versions of financial statements for the same year.
In the press releases, ZSUN did not explain that the profits were from realized and unrealized gain of marketable securities. ZSUN did not tell the public that those securities were DDD, LCAI and TMOT, ZSUN’s related parties. It did not tell the public that it exchanged its own shares with those related parties. It did not tell the public that it had shifted the capital raising activities to BB stock trading activities. It misled the public to believe that ZSUN’s profits were from Internet related businesses.
IMHO, ZSUN might have violated Section 17(a) of Securities Act of 1933, rule 10b-5 thereunder, Section 10 of Securities Act of 1934, Section 18 of Securities Act of 1934.
Messing up the earnings report is a very serious crime. On June 14, 2000 three former Cendant executives pleaded guilty on inflating Cendaunt's earnings. Cendant agreed to pay $2.83 billion to shareholders to settle the class action lawsuits.
Frank Ching, ZSUN is a publicly held company. Like it or not, it cannot call itself whatever it wants. It cannot call itself as an Internet holding company while it is still losing its shirts in the net business. It cannot call itself as an Internet holding company while 90% of current revenues and all the profits are from OIA, a daytrading seminar company. It cannot mislead the public to believe that it is making money in Internet related business |
