UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
þ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the
quarterly period ended March 31, 2012.
o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the
transition period from
to
.
Commission file number: 000-27735
ASIA8, INC.
(Exact name of registrant as specified in its charter)
Nevada
77-0438927
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
700 Lavaca Street, Suite 1400 Austin, Texas 78701
(Address of principal executive offices) (Zip Code)
(480) 505-0070
(Registrant’s telephone number, including area code)
n/a
(Former name, former address and former fiscal year, if changes since last report)
Indicate by check mark whether the registrant: (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
Yes þ No o.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web
site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-
accelerated filer, or a smaller reporting company as defined by Rule 12b-2 of the Exchange Act:
Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act): Yes o No þ
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest
practicable date. The number of shares outstanding of the issuer’s common stock, $0.001 par value (the only
class of voting stock), at May 13, 2012, was 24,411,360.
1
TABLE OF CONTENTS
PART 1- FINANCIAL INFORMATION
Item1.
Financial Statements:
Balance Sheets as of March 31, 2012 (unaudited) and December 31, 2011 (audited)
Unaudited Statements of Operations for the Three month periods ended March 31,
2012 and March 31, 2011
Unaudited Statements of Cash Flows for the Three month periods ended March 31,
2012 and March 31, 2011
Notes to Financial Statements
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
Item 4.
Controls and Procedures
PART II-OTHER INFORMATION
Item 1.
Legal Proceedings
Item 1A.
Risk Factors
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.
Defaults Upon Senior Securities
Item 4.
(Removed and Reserved)
Item 5.
Other Information
Item 6.
Exhibits
Signatures
Index to Exhibits
2
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
As used herein, the terms “Company,” “we,” “our,” and “us” refer to Asia8, Inc., a Nevada corporation,
and our subsidiaries and predecessors, unless otherwise indicated. In the opinion of management, the
accompanying unaudited financial statements included in this Form 10-Q reflect all adjustments
(consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations
for the periods presented. The results of operations for the periods presented are not necessarily indicative
of the results to be expected for the full year.
3
ASIA8, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31,
December 31,
2012
2011*
(Unaudited)
ASSETS
CURRENT ASSETS
Cash
$
346 $
391
Accounts receivable
81,000
Other current assets
5,094
5,094
Total Current Assets
86,440
5,485
FIXED ASSETS, Net
-
-
OTHER ASSETS
Investments
104,358
214,380
Total Other Assets
104,358
214,380
TOTAL ASSETS
$
190,798 $
219,865
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses
$
309,619 $
286,884
Total Current Liabilities
309,619
286,884
TOTAL LIABILITIES
309,619
286,884
STOCKHOLDERS' EQUITY
Preferred stock: 25,000,000 shares authorized;
$0.001 par value; 2,280 and 1,000 shares
issued and outstanding, respectively
2
2
Common stock: 100,000,000 shares authorized;
$0.001 par value; 24,411,360 and 24,156,078 shares
issued and outstanding, respectively
24,411
24,411
Additional paid-in capital
3,621,210
3,621,210
Accumulated deficit
(3,764,444)
(3,712,641)
Total Stockholders' Equity
(118,821)
(67,018)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $
190,798
$
219,865
* The Balance Sheet as of December 31, 2011 has been derived from the audited financial statements at that date.
The accompanying notes are an integral part of these financial statements
4
ASIA8, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
Three Months Ended
March 31, 2012
March 31, 2011
REVENUES
$
- $
-
COST OF GOODS SOLD
-
-
GROSS PROFIT
-
-
OPERATING EXPENSES
Depreciation and amortization
-
-
General and administrative
17,651
20,301
Total Operating Expenses
17,651
20,301
LOSS FROM OPERATIONS
(17,651)
(20,301)
OTHER INCOME (EXPENSES)
Preferred stock dividend
(5,130)
(5,130)
Loss from equity investment
(29,022)
(1,885)
Total Other Expenses
(34,152)
(7,015)
NET LOSS
$
(51,803) $
(27,316)
BASIC LOSS PER SHARE
$
(0.002) $
(0.001)
FULLY DILUTED LOSS PER SHARE
(0.002)
(0.001)
BASIC WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING
24,158,876
24,411,360
FULLY DILUTED WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING
24,158,876
24,411,360
NET LOSS
$
(51,803) $
(27,316)
OTHER COMPREHENSIVE INCOME (LOSS)
-
-
TOTAL COMPREHENSIVE LOSS
$
(51,803) $
(27,316)
The accompanying notes are an integral part of these financial statements
5
ASIA8, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31, 2012
March 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss
$
(51,803)
$
(27,316)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation expense
-
-
(Gain) Loss on disposition of assets
-
-
(Gain) Loss on equity investments
29,022
1,885
Loss on Investments
-
-
Changes in operating assets and liabilities
(Increase) decrease in receivables
(81,000)
-
(Increase) decrease in other current assets
-
(1,500)
Increase (decrease) in accounts payable and
accrued expenses
21,849
11,286
Net Cash Provided by (Used in) Operating Activities
(81,932)
(15,663)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investment
81,000
-
Net Cash Provided by (Used in) Investing Activities
81,000
-
CASH FLOWS FROM FINIANCING ACTIVITIES
Common and preferred stock issued for cash/debt
-
-
Increase(decrease) in note payable
887
(14,634)
Net Cash Used In Financing Activities
887
(14,634)
NET INCREASE (DECREASE) IN CASH
(45)
(30,297)
CASH AT BEGINNING OF PERIOD
391
35,066
CASH AT END OF PERIOD
$
346 $
4,769
The accompanying notes are an integral part of these financial statements
6
ASIA8, INC.
Notes to the Condensed Financial Statements (Unaudited)
March 31, 2012
NOTE 1 - ORGANIZATION AND HISTORY
Asia8, Inc. (the “Company”) was incorporated in Nevada as “H&L Investments, Inc.” in September of
1996. On December 22, 1999 the Company changed its name to “Asia4sale.com, Inc.” on acquiring
Asia4Sale.com, Ltd., a Hong Kong registered software development company. The Company sold
Asia4Sale.com, Ltd. in January of 2005.
The Company acquired a 49% interest in World Wide Auctioneers, Inc., a Nevada registered corporation,
holding 100% of a British Virgin Island registered company World Wide Auctioneers, Ltd (“World
Wide”), an international equipment auction company on June 30, 2000. World Wide, based in the United
Arab Emirates (UAE) holds unreserved auctions on a consignment basis for the sale of construction,
industrial and transportation equipment. On August 8, 2003 World Wide Auctioneers, Inc. sold 100% of
World Wide to a Nevada registered company, WWA Group, Inc. (“WWA Group”) in a stock exchange
transaction. The stock exchange caused the Company to acquire a minority equity investment in WWA
Group which it accounts for using the equity method. WWA Group sold World Wide to Seven
International Holdings, Ltd. (“Seven”), a Hong Kong registered company, on October 31, 2010, in
exchange for Seven’s assumption of the assets and liabilities of World Wide subject to certain exceptions.
The disposition did not affect WWA Group’s interest in Asset Forum, LLC., its ownership of proprietary
on-line auction software or its equity interest and debt position in Infrastructure Developments Corp.
(“Infrastructure”). On November 21, 2011 WWA Group converted its debt position into 165,699,842
Infrastructure common shares equal to a 63.38% equity position. Since the debt conversion caused WWA
Group to become the controlling shareholder of Infrastructure it consolidated Infrastructure’s financials
with those of WWA Group at December 31, 2011.
The Company maintains the exclusive rights to distribute Unic Cranes, Atomix boats and Renhe Mobile
House products or “Wing Houses” in the UAE though it has since discontinued distribution efforts in
relation to the Unic Crane and Atomix boat products.
NOTE 2 – GOING CONCERN
The accompanying consolidated financial statements have been prepared on a going concern basis, which
contemplates the realization of assets and liabilities in the normal course of business. Accordingly, they
do not include any adjustments relating to the realization of the carrying value of assets or the amounts
and classification of liabilities that might be necessary should the Company be unable to continue as a
going concern. The Company has accumulated losses and working capital and cash flows from operations
are negative which raises doubt as to the validity of the going concern assumptions. These financials do
not include any adjustments to the carrying value of the assets and liabilities, the reported revenues and
expenses and balance sheet classifications used that would be necessary if the going concern assumption
were not appropriate; such adjustments could be material.
7
ASIA8, INC.
Notes to the Condensed Financial Statements (Unaudited)
March 31, 2012
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Presentation
The accompanying consolidated financial statements include our accounts and the accounts of our
subsidiaries. All intercompany accounts and transactions have been eliminated.
Our interim financial statements have been prepared in accordance with generally accepted accounting
principles in the United States (“U.S.GAAP”) for interim financial information and the rules and
regulations of the Securities and Exchange Commission (the “SEC”) for interim financial statements and
accounting policies, consistent, in all material respects with those applied in preparing our audited
consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2011. Accordingly, they do not include all of the information and footnotes required by
U.S. generally accepted accounting principles for complete financial statements. In our opinion, all
adjustments, consisting of only normal recurring adjustments considered necessary for fair presentation,
have been included.
Operating results for the three months ended March 31, 2012 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2012 or any future period.
b. Basic Loss per Share
For the Three Months Ended March 31, 2012
Income
Shares
Per-Share
(Numerator)
(Denominator)
Amount
$
(51,803)
24,158,876
$
(0.00)
For the Three Months Ended March 31, 2011
Income
Shares
Per Share
(Numerator)
(Denominator)
Amount
$
(27,316)
24,411,360
$
(0.00)
The computations of basic loss per share of common stock are based on the weighted average number of
shares outstanding at the date of the financial statements. There are no common stock equivalents
outstanding.
8
ASIA8, INC.
Notes to the Condensed Financial Statements (Unaudited)
March 31, 2012
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES, Continued
c. Recent Accounting Pronouncements
In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income, Presentation of
Comprehensive Income and in December 2011, the FASB issued ASU No. 2011-12, Deferral of the
Effective Date for Amendments to the Presentation of Reclassification of Items out of Accumulated Other
comprehensive Income in ASU 2011-05 to increase the prominence of items reported in other
comprehensive income. Specifically, the new guidance allows an entity to present components of net
income or other comprehensive income in one continuous statement, referred to as the statement of
comprehensive income, or in two separate, but consecutive statements. The new guidance eliminates the
current option to report other comprehensive income and its components in the consolidated statement of
shareholders' equity. While the new guidance changes the presentation of comprehensive income, there
are no changes to the components that are recognized in net income or other comprehensive income under
current accounting guidance. This new guidance is effective for fiscal years and interim periods beginning
after December 15, 2011. We adopted this guidance on January 1, 2012 and have presented a new
financial statement titled Condensed Consolidated Statement of Comprehensive Income for the three
month periods ending March 31, 2012 and April 2, 2011.
9
ASIA8, INC.
Notes to the Condensed Financial Statements (Unaudited)
March 31, 2012
NOTE 4- EQUITY INVESTMENT
In August 2000 the Company paid $970,000 cash to acquire 49% of World Wide Auctioneers, Inc., a
Nevada registered company holding 100% of British Virgin Island registered company World Wide
Auctioneers, Ltd. (“World Wide”). In August 2003 World Wide Auctioneers, Inc., sold 100% of World
Wide to WWA Group in a stock for stock transaction whereby the stock of WWA Group was issued
directly to owners of World Wide Auctioneers, Inc. The Company was issued 7,525,000 shares of WWA
Group in 2003, comprising 47.5% of the issued and outstanding stock of WWA Group. On March 26,
2012, the Company sold 3,240,000 out of its investment in WWA Group shares at a price of $0.025 per
share, for a net amount of $81,000. At March 31, 2012, the Company
owned 16% of the issued and outstanding WWA Group common stock.
Condensed financial information of WWA Group:
As at March 31,
2012
2011
Cash
$
27,879
$ 49,010
Pre-paid expenses
24,073
32,406
Other current assets
21,151
14,719
Goodwill
141,061
181,250
Total Assets
$ 214,164
$ 277,386
Accounts payables
$ 45,260
$ 27,856
Accrued expenses
115,919
170,563
Short-term debt
414,239
361,840
Common stock
22,592
22,592
Additional paid-in capital
4,449,080
4,449,080
Retained earnings
(4,692,644)
(4,650,299)
Non-controlling interest
(140,282)
(104,247)
Total Liabilities and Stockholders' Equity
$ 214,164
$ 227,386
Condensed financial information of WWA Group:
For the three months Ended
March 31,
2012
2011
Net revenues
56,300
0
Direct costs
(61,186)
(0)
Operating expenses
(4,886)
(0)
Other income (expense)
(60,809)
(1,716,837)
Income taxes
-
-
Net Income (Loss)
$
(65,695)
$ (1,716,837)
10
ASIA8, INC.
Notes to the Condensed Financial Statements (Unaudited)
March 31, 2012
NOTE 5- EQUITY TRANSACTIONS
In 2009, the Company issued 255,282 shares of common stock for cash at $0.16 per share. In 2008, the
Company issued 1,084,243 shares of common stock by converting notes payables into equity at $0.16 per
share. In 2007, the Company issued 2,124,250 shares of common stock for cash at prices ranging from
$0.08 to $0.16 per share for a total value of $304,800.
During the year ended December 31, 2008 the Company issued 1,280 shares of preferred stock for cash at
$100 per share. During the year ended December 31, 2007, the Company issued 1,000 shares of preferred
stock at $100 per share. The each share of preferred stock is convertible to 400 shares of common stock.
The Series 1 preferred shares have a coupon rate of 9% interest per annum, with no redemption provision.
NOTE 6 - ADDITIONAL FOOTNOTES INCLUDED BY REFERENCE
Except as indicated in the Note 1 through Note 5, above, there have been no other material changes in the
information disclosed in the notes to the financial statements included in the Company’s Form 10-K for
the year-ended December 31, 2011. Therefore, those footnotes are included herein by reference.
NOTE 7 – USE OF ESTIMATES
The preparation of the financial statements in conformity with generally accepted accounting principles in
United States of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
NOTE 8 – ACCOUNTS PAYABLE TO RELATED PARTY
Accounts Payable and Accrued Expenses include $67,514 of Notes Payable to related party. The notes
bear no interest and are payable on demand.
NOTE 9 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date through May 13, 2012, and
determined there are no events to disclose.
11
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other
parts of this quarterly report contain forward-looking statements that involve risks and uncertainties.
Forward-looking statements can be identified by words such as “anticipates,” “expects,” “believes,”
“plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees of future
performance and our actual results may differ significantly from the results discussed in the forward-
looking statements. Factors that might cause such differences include but are not limited to those
discussed in the subsection entitled Forward-Looking Statements and Factors That May Affect Future
Results and Financial Condition below. The following discussion should be read in conjunction with our
financial statements and notes thereto included in this report. All information presented herein is based on
our period ended March 31, 2012. Our fiscal year end is December 31.
Discussion and Analysis
General
The Company’s current focus is to work together with WWA Group and Infrastructure to increase the
value of its investment and to leverage those relationships to develop the distribution of Wing House
mobile shelter systems. We anticipate that we will require additional capital to market this business and
recognize that the economic downturn in the global economy has decreased demand for our products that
depend on the vitality of the construction sector industry in the Gulf Region.
Distribution Rights
We are displaying and using Wing House office units on the internet and in a yard in Thailand while
actively marketing the units by email. We are offering the units for sale or rental on a 60 day delivery
schedule from order date. We are negotiating financing with the manufacturer to spur sales efforts though
demand for this type of housing has receded. Infrastructure may continue to tender contracts in Asia that
may lead to more “in house” created demand for the units. The Company and Infrastructure will share
gross profits made on any sales or rentals generated by Infrastructure’s efforts.
WWA Group Equity Interest
WWA Group’s auctions developed a significant customer base that achieved consistent revenue and
profits that led to a dominant market share in Dubai, its primary operating market. The Company invested
in WWA in 2000, anticipating potential future value appreciation in that investment, and possible
synergies with our management’s experience in Asian product sourcing and WWA’s core auction and
selling business. WWA Group sold WWA to Seven on October 31, 2010.
Since the relationship between the Company and WWA Group is one of common management control,
we benefit from the contacts and business development opportunities generated by its business activities.
We intend to provide additional financial and business support to WWA Group as necessary to help grow
the value of our equity interest, and to provide us opportunities that are related to and generated by WWA
Group.
12
Infrastructure
WWA Group maintains a consolidated 57.6% equity interest in Infrastructure, a project management
company due to the conversion of a promissory note due into shares of Infrastructure on November 21,
2011. We believe that despite competitive pricing pressures, a significant number of projects fall within
the criteria expressed by Infrastructure and that alternative fuel conversions will become widespread as
fuel prices rise and fueling infrastructure becomes available.
Since each of WWA Group and Infrastructure share common management we believe that there exists an
opportunity to utilize our international presence and existing relationships to assist Infrastructure in
procuring new projects and managing existing ones. Management recognizes that Infrastructure’s success
is critical to any gain on its investment. The effect being we work with Infrastructure on an as needed
basis to provide any assistance that might be required and within our ability to assist.
Asset Forum LLC.
On May 1, 2012 WWA Group abandoned efforts to commercialize the operations of Asset Forum LLC.
due to a lack of sufficient resources to develop the site and intense completion in the online auction space.
Expansion Plans into other Businesses
The Company is currently targeting operating businesses and assets that are priced at current market
levels that do not rely on expanding economies to generate profit. Since the Company’s ability to raise
capital for acquisitions is limited our current intention is to rely on stock for stock exchange transactions
as a means by which to expand into new business opportunities.
The Company has signed a memorandum of agreement to acquire Emerging Market Property Advisors, a
UK limited liability company in a stock for stock exchange transaction that is involved in the marketing
of international real estate opportunities to prospective investors through the internet. EMP offers lead
generation, email marketing campaigns and property showings to a variety of clients that are intent on
presenting a wide array of real estate investment options to international investors. Clients are also
offered assistance with corporate identity, web development and enhanced graphics to build awareness of
the opportunities presented. Since 2005 EMP has consistently increased its revenue stream, grown gross
profit margins, and established a loyal customer base. The transaction is intended as a stock exchange
whereby Asia8 will acquire EMP as a wholly owned subsidiary that will continue to operate as an
autonomous unit. We are on the verge of signing a definitive agreement and expect to proceed with the
transaction in the 2nd quarter of 2012 subject to shareholder approval.
Financial Condition and Business Development Risks
Our financial condition and results of operations will depend primarily on prospective income generated
from our investments and/or expansion businesses. Meanwhile, our continued operation is tied to our
ability to realize debt or equity financing. Since the Company is currently without income it can provide
no assurance that income will be forthcoming or in the event income is realized that such return will
provide sufficient cash flows to sustain our operations.
Our business development strategy is prone to significant risks and uncertainties which are having an
immediate impact on our efforts to realize net cash flow. We have a limited history of generating income.
Should we be unable to generate income, the Company’s ability to continue its business operations will
be in jeopardy.
13
Results of Operations
During the period ending March 31, 2012, the Company failed to realize revenues from the sale of its
products or income from its equity investment, which failure resulted in a continuation of net losses for
the period. Nevertheless, the Company remains optimistic that Wing Houses are in demand, and that a
global economic recovery in 2012 alongside the efforts of Infrastructure will generate sales of Wing
Houses.
Revenue
Revenue for the three month periods ended March 31, 2012 and March 31, 2011 was $0. The lack of
revenues over the comparative periods can be primarily attributed to the effect that a global recession has
had on the demand for Wing Houses. We expect revenue in future periods with a return to economic
normalization in the global markets and a broadening of Infrastructure’s business which we expect will
create an “in house” demand for Wing Houses.
Operating Expenses
Operating expenses for the three month period ended March 31, 2012, were $17,651 as compared to
$20,301 for the three month period ended March 31, 2011. The decrease in expenses over the
comparative periods can be attributed to a decrease in general and administrative expenses. We expect
that operating expenses will decrease until such time as the capital becomes available to us to expand our
marketing efforts.
Depreciation and amortization expenses for the three month period ended March 31, 2012 and March 31,
2011 were $0 and $0 respectively. Depreciation and amortization expenses are expected as we acquire
additional assets in the process of expanding our distribution activities.
Other Expenses
Other expenses for the three month period ended March 31, 2012, were $34,152 as compared to $7,015
for the three month period ended March 31, 2011. Other expenses are attributed to the loss on equity
investments tied to our interest in WWA Group and a preferred stock divided. We expect to continue to
realize other expenses related to the business operations of WWA Group in the near term.
Net Losses
Net losses for the three month period ended March 31, 2012, were $51,803 as compared to $27,316 for
the three month period ended March 31, 2011. The increase in net losses in the current period can be
attributed to an increase in losses on our equity investments over the comparative periods. We expect to
continue to realize net losses until such time as our operations produce revenue and our equity investment
provides us a return on investment.
Capital Expenditures
The Company did not spend any significant amounts on capital expenditures during the three month
period ended March 31, 2012.
14
Income Tax Expense (Benefit)
The Company may have an income tax benefit resulting from net operating losses to offset any future
operating profit. However, the Company has not recorded this benefit in the financial statements because
it cannot be assured that it will utilize the net operating losses carried forward in future years.
Impact of Inflation
The Company believes that inflation has had a negligible effect on operations over the past three years.
Liquidity and Capital Resources
As of March 31, 2012, the Company had a working capital deficit of $223,179. Our current assets were
$86,440 consisting of $346 in cash, $81,000 in accounts receivable and $5,094 in other assets. Our total
assets were $190,798 consisting of our current assets and our equity investments totaling $104,358. At
March 31, 2012, our current and total liabilities were $309,619.
Cash flow used in operating activities for the period ended March 31, 2012, was $81,932 as compared to
cash flow used in operating activities of $15,663 for the period ended March 31, 2011. Cash flow used in
operating activities in the current period can be attributed to net losses, current assets and receivables
offset by a loss on our equity investment. We expect that cash flow used in operating activities will
decrease as net losses decrease.
Cash flow provided by investing activities for the periods ended March 31, 2012 and March 31, 2011,
was $81,000 and $0 respectively. Cash flow provided by investing activities in the period ended March
31, 2012 can be attributed to the sale of 3,240,000 shares of WWA Group, Inc stock at $0.025. We expect
to use cash flow in investing periods in future periods as capital becomes available to expand our
marketing operations.
Cash flow provided in financing activities for the period ended March 31, 2012, was $887 as compared to
$14,634 in cash flow used in financing activities for the period ended March 31, 2011. Cash flow
provided by financing activities in the current period can be attributed to a decrease in a note payable. We
expect to continue to have cash flow provided by financing activities in the near term in order to finance
operations.
The Company owns shares of WWA Group as an equity investment. The shares are restricted common
stock in a publicly traded company with a face market value (average of the bid and ask price on May 11,
2012) of $104,120. We could sell a portion of these shares, subject to the limitations imposed by Rule
144, as a source of operating funds.
The Company’s current assets are insufficient to conduct its business operations over the next twelve (12)
months. We will have to seek at least $100,000 in debt or equity financing over the next twelve months to
fund our marketing efforts for our Wing Houses and to evaluate other business opportunities. The
Company has no current commitments or arrangements with respect to, or immediate sources of this
funding. Further, no assurances can be given that funding is available. The Company’s shareholders are
the most likely source of new funding in the form of loans or equity placements though none have made
any commitment for future investment and the Company has no agreement formal or otherwise. The
Company’s inability to obtain sufficient funding will have a material adverse affect on its ability to
continue business operations.
15
The Company does not expect to pay cash dividends in the foreseeable future.
The Company had no lines of credit or other bank financing arrangements.
The Company has no defined benefit plan or contractual commitment with any of its officers or directors.
The Company has no current plans for the purchase or sale of any plant or equipment.
The Company has no current plans to make any changes in the number of employees.
Off Balance Sheet Arrangements
As of March 31, 2012, the Company has no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources
that is material to stockholders.
Critical Accounting Policies
In the notes to the audited financial statements for the year ended December 31, 2011 included in our
Form 10-K, the Company discussed those accounting policies that are considered to be significant in
determining the results of operations and our financial position. The Company believes that the
accounting principles we utilized conform to accounting principles generally accepted in the United
States of America.
The preparation of financial statements requires our management to make significant estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and expenses. By their nature,
these judgments are subject to an inherent degree of uncertainty. On an on-going basis, we evaluate
estimates. We base our estimates on historical experience and other facts and circumstances that are
believed to be reasonable, and the results form the basis for making judgments about the carrying value of
assets and liabilities. The actual results may differ from these estimates under different assumptions or
conditions. With respect to revenue recognition, we apply the following critical accounting policies in the
preparation of our financial statements.
Revenue Recognition
The Company intends to generate revenue through the sale of its products on a private, commercial, and
industrial basis. Revenue from product sales is recognized at the time the product is shipped and invoiced
and collectability is reasonably assured. The Company believes that certain revenue should be recognized
as title passes to the customer at the time of shipment.
16
Going Concern
The Company’s auditors have expressed an opinion as to the Company’s ability to continue as a going
concern as a result of an accumulated deficit of $3,712,641 as of December 31, 2011 which increased to
$3,764,444 as of March 31, 2012. The Company’s ability to continue as a going concern is subject to the
ability of the Company to realize a profit and/or obtain funding from outside sources. Management’s plan
to address the Company’s ability to continue as a going concern includes: (i) obtaining funding from the
private placement of debt or equity; and (ii) realizing revenues from the sale of Wing Houses or
additional business opportunities. Management believes that it will be able to obtain funding to allow the
Company to remain a going concern through the methods discussed above, though there can be no
assurances that such methods will prove successful.
Forward Looking Statements and Factors That May Affect Future Results and Financial Condition
The statements contained in the section titled Management’s Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this current report, with the exception of historical
facts, are forward looking statements. Forward looking statements reflect our current expectations and
beliefs regarding our future results of operations, performance, and achievements. These statements are
subject to risks and uncertainties and are based upon assumptions and beliefs that may or may not
materialize. These statements include, but are not limited to, statements concerning:
• our anticipated financial performance;
• the sufficiency of existing capital resources;
• our ability to fund cash requirements for future operations;
• uncertainties related to the growth of our business and the acceptance of our products and
services;
• our ability to achieve and maintain an adequate customer base to generate sufficient revenues to
maintain and expand operations;
• the volatility of the stock market; and,
• general economic conditions.
We wish to caution readers that our operating results are subject to various risks and uncertainties that
could cause our actual results to differ materially from those discussed or anticipated including the factors
set forth in the section entitled Risk Factors included elsewhere in this report. We also wish to advise
readers not to place any undue reliance on the forward looking statements contained in this report, which
reflect our beliefs and expectations only as of the date of this report. We assume no obligation to update
or revise these forward looking statements to reflect new events or circumstances or any changes in our
beliefs or expectations, other than as required by law.
Stock-Based Compensation
The Company has adopted Accounting Standards Codification Topic (“ASC”) which addresses the
accounting for stock-based payment transactions in which an enterprise receives employee services in
exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the
enterprise’s equity instruments or that may be settled by the issuance of such equity instruments.
The Company has no outstanding stock options or related stock option expense.
17
We account for equity instruments issued in exchange for the receipt of goods or services from other than
employees in accordance with ASC 505. Costs are measured at the estimated fair market value of the
consideration received or the estimated fair value of the equity instruments issued, whichever is more
reliably measurable. The value of equity instruments issued for consideration other than employee
services is determined on the earliest of a performance commitment or completion of performance by the
provider of goods or services.
Recent Accounting Pronouncements
Please see Note 3 to our financial statements for recent accounting pronouncements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this report on Form 10-Q, an evaluation was carried out by the Company’s
management, with the participation of the chief executive officer and the chief financial officer, of the
effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934 (“Exchange Act”)) as of March 31, 2012. Disclosure controls and
procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the
Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the
Commission’s rules and forms, and that such information is accumulated and communicated to management,
including the chief executive officer and the chief financial officer, to allow timely decisions regarding required
disclosures.
Based on that evaluation, the Company’s management concluded, as of the end of the period covered by this
report, that the Company’s disclosure controls and procedures were effective in recording, processing,
summarizing, and reporting information required to be disclosed, within the time periods specified in the
Commission’s rules and forms, and such information was accumulated and communicated to management,
including the chief executive officer and the chief financial officer, to allow timely decisions regarding required
disclosures.
Changes in Internal Controls over Financial Reporting
During the period ended March 31, 2012, there has been no change in internal control over financial reporting that
has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.
18
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is currently not a party to any legal proceedings.
ITEM 1A. RISK FACTORS
The Company’s operations and securities are subject to a number of risks. Below we have identified and
discussed the material risks that we are likely to face. Should any of the following risks occur, they will
adversely affect our operations, business, financial condition and/or operating results as well as the future
trading price and/or the value of our securities.
Risks Related to the Company’s Business
IF THE COMPANY DOES NOT GENERATE CASH FLOW FROM OPERATIONS AND IS UNABLE TO
OBTAIN CAPITAL TO OPERATE ITS BUSINESS, IT MAY NOT BE ABLE TO EFFECTIVELY CONTINUE
OPERATIONS
As of March 31, 2012, the Company had a working capital deficit of $223,179. We will have to obtain working
capital from debt or equity placements to continue operations. Although, we have a commitment for the provision
of working capital, this commitment may prove to be insufficient. Should we be unable to secure capital, such
condition would cause us to reduce expenditures which would have a material adverse effect on our business.
MARKET ACCEPTANCE OF THE PRODUCTS WE HAVE DISTRIBUTION RIGHTS TO IS CRITICAL TO OUR
GROWTH
The Company expects to generate revenue from the sale of mobile shelters though results to date do not indicate a
willingness to pay for our product. Since market acceptance of our products is critical we can offer no assurance
that revenue will be generated from the sale of Wing Houses. Should be unable to procure customers for our
products our results of operations will continue to be negatively impacted.
WE COMPETE WITH LARGER AND BETTER-FINANCED CORPORATIONS
Competition within the international market for mobile shelters is intense. While the products we are entitled to
distribute are distinguished by next-generation innovations that are more sophisticated, flexible and cost effective
than many competitive products currently in the market place, a number of entities offer mobile shelters and new
competitors may enter the market in the future. Some of our existing and potential competitors have longer
operating histories, greater name recognition, larger customer bases and significantly greater financial, technical
and marketing resources than we do, including well known multi-national corporations.
AS A DISTRIBUTOR WE DEPEND ON THE PERFORMANCE OF A THIRD PARTY MANUFACTURER
The Company relies on Renhe Manufacturing China to procure Wing House mobile shelters for distribution. Our
business plan is reliant on the delivery of products from this manufacturer, which reliance reduces the level of
control we have and exposes us to significant risks such as inadequate capacity, late delivery, substandard quality
and higher prices, all of which could adversely affect our results.
19
OUR CHIEF EXECUTIVE OFFICER DOES NOT OFFER HIS UNDIVIDED ATTENTION TO THE COMPANY
DUE TO HIS VARIED RESPONSIBILITIES
Our chief executive officer does not offer his undivided attention to our business as he also serves as the chief
executive officer of WWA Group and as a director of Infrastructure. His responsibilities cause him to divide his
time, the majority of which is dedicated to the management of WWA Group. The division of time however does
not necessarily indicate a division of interests as the Company owns approximately 18% of the outstanding shares
of WWA Group. Nonetheless, his varied responsibilities may compromise the Company’s ability to successfully
conduct its business operations.
THE COMPANY’S SUCCESS DEPENDS ON ITS ABILITY TO RETAIN KEY PERSONNEL
The Company’s future success will depend substantially on the continued services and performance of Eric
Montandon. The loss of the services of Eric Montandon could have a material adverse effect on our business
prospects, financial condition and results of operations. Our future success also depends on the Company’s ability
to identify, attract, hire, train, retain and motivate technical, managerial and sales personnel. Competition for such
personnel is intense, and we cannot assure that we will succeed in attracting and retaining such personnel. Our
failure to attract and retain the necessary technical, managerial and sales personnel would have a material adverse
effect on our business prospects, financial condition and results of operations.
OUR BUSINESS IS SUBJECT TO GOVERNMENTAL REGULATIONS
International, national and local standards set by governmental regulatory authorities set the regulations
by which products are certified across respective territories. Further, climate change legislation and
greenhouse gas regulation is becoming increasingly ubiquitous. The products which we intend to
distribute are subject to such regulation in addition to national, state and local taxation. Although we
believe that we can successfully distribute our products within current governmental regulations it is
possible that regulatory changes could negatively impact our operations and cause us to diminish or cease
operations.
Future Risks Related to the Company’s Stock
HE COMPANY INTENDS TO APPLY TO HAVE ITS STOCK QUOTED ON THE OTCBB
The Company has no public trading market for its shares, and we cannot represent to you that a market will ever
develop. Nonetheless, we do intend to seek a quotation on the OTCBB. However, there can be no assurance that
we will obtain a quotation on the OTCBB or that obtaining a quotation will generate a public trading market for
our shares. Further, if we obtain a quotation on the OTCBB, this may limit our ability to raise money in an equity
financing since many institutional investors do not consider OTCBB stocks for their portfolios. Therefore, an
investors’ ability to trade our stock might be restricted as only a limited number of market makers quote OTCBB
stock Trading volumes in OTCBB stocks are historically lower, and stock prices for OTCBB stocks tend to be
more volatile, than stocks traded on an exchange or the NASDAQ Stock Market. We may never qualify for
trading on an exchange or the NASDAQ Stock Market.
THE COMPANY’S STOCK PRICE COULD BE VOLATILE
Should a public market for our shares develop, the future market price could be subject to significant volatility
and trading volumes could be low. Factors affecting our market price will include:
20
•
perceived prospects;
•
negative variances in our operating results, and achievement of key business targets;
•
limited trading volume in shares of our common stock in the public market;
•
sales or purchases of large blocks of our stock;
•
changes in, or our failure to meet, earnings estimates;
•
changes in securities analysts’ buy/sell recommendations;
•
differences between our reported results and those expected by investors and securities analysts;
•
announcements of new contracts by us or our competitors;
•
announcements of legal claims against us;
•
market reaction to any acquisitions, joint ventures or strategic investments announced by us;
•
developments in the financial markets;
•
general economic, political or stock market conditions.
In addition, our future stock price may fluctuate in ways unrelated or disproportionate to our operating
performance. General economic, political and stock market conditions that may affect the market price of our
common stock are beyond our control. The market price of our common stock at any particular time may not
remain the market price in the future. In the past, securities class action litigation has been instituted against
companies following periods of volatility in the market price of their securities. Any such litigation, if instituted
against us, could result in substantial costs and a diversion of management’s attention and resources.
WE INCUR SIGNIFICANT EXPENSES AS A RESULT OF THE SARBANES-OXLEYACT OF 2002, WHICH
EXPENSES MAYCONTINUE TO NEGATIVELY IMPACT OUR FINANCIAL PERFORMANCE.
We incur significant legal, accounting and other expenses as a result of the Sarbanes-Oxley Act of 2002, as well
as related rules implemented by the Commission, which control the corporate governance practices of public
companies. Compliance with these laws, rules and regulations, including compliance with Section 404 of the
Sarbanes-Oxley Act of 2002, as discussed in the following risk factor, has substantially increased our expenses,
including legal and accounting costs, and made some activities more time-consuming and costly.
OUR INTERNAL CONTROLS OVER FINANCIAL REP ORTING MAYNOT BE CONSIDERED EFFECTIVE IN
THE FUTURE, WHICH CONCLUSION COULD RESULT IN A LOSS OF INVESTOR CONFIDENCE IN OUR
FINANCIAL REPORTS AND IN TURN HAVE AN ADVERSE AFFECT ON SHAREHOLDER PERCEPTION.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 we are required to furnish a report by our
management on our internal controls over financial reporting. Such report must contain, among other matters, an
assessment of the effectiveness of our internal controls over financial reporting as of the end of the year, including
a statement as to whether or not our internal controls over financial reporting are effective. This assessment must
include disclosure of any material weaknesses in our internal controls over financial reporting identified by
management. If we are unable to continue to assert that our internal controls are effective, our shareholders could
lose confidence in the accuracy and completeness of our financial reports, which in turn could have an adverse
affect on shareholder perception.
THE COMPANYDOES NOT PAY DIVIDENDS.
The Company does not pay dividends. We have not paid any dividends since inception and have no intention of
paying any dividends in the foreseeable future. Any future dividends would be at the discretion of our board of
directors and would depend on, among other things, future earnings, our operating and financial condition, our
capital requirements, and general business conditions. Therefore, shareholders should not expect any type of cash
flow from their investment.
21
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS ON SENIOR SECURITIES
None.
ITEM 4. (REMOVED AND RESERVED)
Removed and reserved
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on page
24 of this Form 10-Q, and are incorporated herein by this reference.
22
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
Asia8, Inc.
Date
/s/ Eric Montandon
May 13, 2012
By: Eric Montandon
Its: Chief Executive Officer, Chief Financial Officer,
Principal Accounting Officer and Director
23
INDEX TO EXHIBITS
Exhibit
Description
3(i)(a)*
Articles of Incorporation dated September 23, 1996 (incorporated by reference to the
Form 10-12G filed with the Commission on October 20, 1999).
3(i)(b)*
Amended Articles of Incorporation dated July 9, 1999 (incorporated by reference from
Form 10-QSB filed with the Commission on October 20, 1999).
3(i)(c)*
Amended Articles of Incorporation dated December 22, 1999 (incorporated by reference
from Form 10-QSB filed with the Commission on May 15, 2007).
3(i)(d)*
Amended Articles of Incorporation dated April 20, 2007 (incorporated by reference from
Form 10-QSB filed with the Commission on May 15, 2007).
3(ii)(a)*
Bylaws dated May 6, 1999 (incorporated by reference Form 10-12G filed with the
Commission on October 20, 1999).
3(ii)(b)*
Amended Bylaws dated January 22, 2007 (incorporated by reference to the Form 8-K
filed with the Commission on January 29, 2007).
10(i)*
Share Purchase Agreement dated June 2000 between the Company (formerly
Asia4Sale.com, Inc.) and World Wide Auctioneers, Inc. (incorporated by reference to the
Form 8-K filed with the Commission on October 3, 2007).
10(ii)*
Unic Distribution Agreement dated May 1, 2007 between the Company and Peter
Prescott (incorporated by reference to the Form 8-K filed with the Commission on
October 3, 2007).
10(iii)*
Atomix Distribution Agreement dated May 1, 2007 between the Company and Peter
Prescott (incorporated by reference to the Form 8-K filed with the Commission on
October 3, 2007).
14*
Code of Ethics (Code of Conduct) (incorporated by reference to the Form 8-K filed
with the Commission on October 3, 2007).
21*
Subsidiaries of the Company (incorporated by reference to the Form 10-K filed with the
Commission on April 16, 2012).
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule
13a-14 of the Securities and Exchange Act of 1934, as amended, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (attached).
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 (attached).
101. INS
XBRL Instance Document†
101. PRE
XBRL Taxonomy Extension Presentation Linkbase†
101. LAB
XBRL Taxonomy Extension Label Linkbase†
101. DEF
XBRL Taxonomy Extension Label Linkbase†
101. CAL
XBRL Taxonomy Extension Label Linkbase†
101. SCH
XBRL Taxonomy Extension Schema†
*
Incorporated by reference from previous filings of the Company.
†
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed
“furnished” and not “filed” or part of a registration statement or prospectus for purposes
of Section 11 or 12 of the Securities Act of 1933, or deemed “furnished” and not “filed”
for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise is
not subject to liability under these sections.
24
1