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 September 30, 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 þNo 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 ofthe issuer’s common stock, $0.001 par value (the
only class of voting stock), at November 15, 2012, was 30,692,727.
1
TABLE OF CONTENTS
PART 1- FINANCIAL INFORMATION
Item1.
3
Balance Sheets as of September 30, 2012 (Unaudited) and December 31, 2011
4
(audited)
Unaudited Statements of Operations for the three and nine month periods ended
5
September 30, 2012 and September 30, 2011
Unaudited Statements of Cash Flows for the nine month periods ended September
6
30, 2012 and September 30, 2011
Notes to Unaudited Financial Statements
7
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of
11
Operations
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
16
Item 4.
Controls and Procedures
17
PART II-OTHER INFORMATION
Item 1.
Legal Proceedings
18
Item 1A.
Risk Factors
18
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
20
Item 3.
Defaults Upon Senior Securities
20
Item 4.
Mine Safety Disclosures
21
Item 5.
Other Information
21
Item 6.
21
22
Index to Exhibits
23
2
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
As used herein,the terms “Company,” “we,”“our,” and “us”refer toAsia8, 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-Qreflect 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.
Consolidated Balance Sheets
Unaudited
Audited
Sept. 30,2012
December 31, 2011
ASSETS
CURRENT ASSETS
Cash
$
500
$
391
Other current assets
7,594
5,094
Total Current Assets
8,094
5,485
OTHER ASSETS
Investments
42,360
214,380
Total Other Assets
42,360
214,380
TOTAL ASSETS
$
50,454 $
219,865
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses
$
9,293 $
286,884
Total Current Liabilities
9,293
286,884
TOTAL LIABILITIES
9,293
286,884
STOCKHOLDERS' EQUITY
Preferred stock: 25,000,000 shares authorized;
$0.001 par value; 0 and 2,800 shares
-
2
issued and outstanding,respectively
Common stock: 100,000,000 shares authorized;
$0.001 par value; 30,692,727 and 24,156,078 shares
issued and outstanding, respectively
30,692
24,411
Additional paid-in capital
3,762,212
3,621,210
Accumulated deficit
(3,751,743)
(3,712,641)
Total Stockholders' Equity
41,161
(67,018)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$50,454 $
219,865
The accompanying notes are an integral part of these financial statements
4
Asia 8, Inc
Consolidated Statements of Operations
Three months ended Sept. 30
Nine months ended Sept 30
Unaudited
Unaudited
Unaudited
Unaudited
2012
2011
2012
2011
REVENUES
$
- $
- $
- $
-
COST OF GOODS SOLD
-
-
-
-
GROSS PROFIT
-
-
-
-
OPERATING EXPENSES :
General and administrative
7,338
10,797
66,792
54,738
Depreciation and amortization
-
-
-
-
TOTAL OPERATING EXPENSES
7,338
10,797
66,792
54,738
LOSS FROM OPERATIONS
(7,338)
(10,797)
(66,792)
(54,738)
OTHER INCOME (EXPENSES)
Other income
-
-
16,500
-
Preferred stock dividend
-
(5,130)
(6,840)
(15,390)
Interest income
-
-
2
-
Income from equity investment
-
7,563
18,028
(674,352)
TOTAL OTHER INCOME (EXPENSES)
-
2,433
27,690
(689,742)
NET LOSS
(7,338)
(8,365)
(39,101)
(744,480)
BASIC INCOME (LOSS) PER SHARE
(0.00)
(0.00)
(0.00)
(0.03)
FULLY DILUTED INCOME (LOSS) PER
SHARE
(0.00)
(0.00)
(0.00)
(0.03)
BASIC WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING
30,692,727
24,156,078
30,692,727
24,156,078
FULLY DILUTED WEIGHTED AVERAGE
NUMBER OF SHARES OUTSTANDING
30,692,727
24,156,078
27,552,044
24,156,078
The accompanying notes are an integral part of these financial statements
5
Asia 8, Inc.
Statement of Cash Flows
For The Nine Months For The Nine Months
Ended Sept. 30,
Ended Sept. 30,
2012
2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)
$
(39,101) $
(744,480)
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
(18,028)
674,352
Changes in operating assets and liabilities
(Increase) decrease in receivables
-
-
(Increase) decrease in other current assets
(2,500)
(1,500)
Increase (decrease) in accounts payable and
accrued expenses
(191,597)
30,015
Net Cash Used in Operating Activities
$
(251,226)
(41,613)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investments
81,000
-
Debt settlement by issuance of equity investment
109,048
-
Net Cash Provided by (Used in)
Investing Activities
$
190,048
-
CASH FLOWS FROM FINANCING ACTIVITIES
Common and preferred stock issued for cash/debt
147,280
-
Increase(decrease) in note payable
(85,994)
5,391
Net Cash Provided by Financing Activities
$
61,286
5,391
NET INCREASE (DECREASE) IN CASH
$
108
(36,222)
CASH AT BEGINNING OF PERIOD
$
391
35,066
CASH AT END OF PERIOD
$
500
(1,156)
The accompanying notes are an integral part of these financial statements
6
ASIA8, INC.
Notes to the Condensed Financial Statements (Unaudited)
September 30, 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,
industrialand 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 accounted 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 March 26, 2012, the Company sold 3,240,000 shares from its investment in WWA
Group at a price of $0.025 per share, for a net amount of $81,000. At September 30, 2012 the Company
did not own substantial shareholding in WWA Group and therefore did not record its share in the profit
and loss of WWA Group for the period ended September 30, 2012.
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)
September 30, 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 and nine months ended September 30, 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 September 30, 2012
Income
Shares
Per-Share
(Numerator)
(Denominator)
Amount
$(7,338)
30,692,727
$ (0.00)
For the Three Months Ended September 30, 2011
Income
Shares
Per Share
(Numerator)
(Denominator)
Amount
$
(8,365)
24,156,078 $(0.03)
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)
September 30, 2012
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES, Continued
c. Recent Accounting Pronouncements
We have examined all recent accounting pronouncements and believe that none of them will have a
material impact on the financial statements of Asia8, Inc.
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. At December 31,
2011 the Company owned 32% of the issued and outstanding shares 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.As on April 15, 2012 the company transferred 2,412,408 shares
out of its investment in WWA group shares to settle $109,049 in various debts. As of September 30, 2012
the Company does not own a substantial shareholding in WWA Group and therefore no longer records its
share in the profit and loss of WWA Group for the period ended September 30, 2012.
NOTE 5- EQUITY TRANSACTIONS
In 2012, the Company issued 4,152,000 shares of common stock to retire 2,280 preferred shares series
1comprised of $228,000 in principal and $83,400 in interest valued at $0.075 a share. Further the
Company issued 2,129,367 shares of common stock by converting notes payable and other payables into
equity at $0.03 per share.
.
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. Further, the Company issued 1,280
shares of preferred stock for cash at $100 per share.
In 2007, the Company issued 1,000 shares of preferred stock at $100 per share. Each share of preferred
stock was convertible to 400shares of common stock. The Series 1 preferred shares had a coupon rate of
9% interest per annum, with no redemption provision.
9
ASIA8, INC.
Notes to the Condensed Financial Statements (Unaudited)
September 30, 2012
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 do not include any Notes Payable to related party.
NOTE 9 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date through the date the financial
statements were issued and is unaware of any subsequent events which would require recognition or
disclosure in the financial statements.
10
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition andResults 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
the three and nine month periods ended Septembers 30, 2012.Our fiscal year end is December 31.
Discussion and Analysis
General
The Company’s current focus is to work towards our acquisition of Emerging Market Property Advisors
Ltd. (“EMP”). On May 16, 2012 our board of directors caused us to enter into a Share Exchange
Agreement to acquire all of the issued and outstanding shares of EMP in exchange for a forty nine percent
(49%) interest in the Company’s common stock. The transaction is subject to shareholder approval and
requires us to obtain audited financial statements for EMP, which accounts are currently in process.
EMP is involved in the internet marketing of a wide range of international real estate investment
opportunities through lead generation, email marketing campaigns and property showings to buyers
around the world. Sellers are also offered assistance with corporate identity, web development and
enhanced graphics to build awareness of the opportunities presented.
Despite the decrease in our equity interest in WWA Group Inc. (“WWA Group”) and its agreement to be
acquired by Summit Digital, Inc., we continue to work with WWA Group and InfrastructureDevelopment
Corporation (“Infrastructure”) 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 downturnin the global economyhas decreased demand for our products that
depend on the vitality of the construction sector industry.
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 effortsthough
demand for this type of housing has receded.Infrastructuremay 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
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 business support to WWA Group as necessary to help grow the value of
our remaining equity interest, and to provide us opportunities generated by WWA Group.
Infrastructure
11
Even though WWA Group no longer maintains a consolidated equity interest in Infrastructure, we
continue to believe that despite competitive pricing pressures, a significant number of projects will 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 Infrastructure shares common management with the Company 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. We expect to continue to 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 has signed a Share Exchange Agreement to acquire EMP, 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 the Company
will acquire EMP as a wholly owned subsidiary that will continue to operate as an autonomous unit. Due
to delays associated with obtaining the requisite financial information we do not expect to close the
anticipated transaction until the 1st quarter of 2013 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.
Results of Operations
During the period ending September 30, 2012, the Company failed to realize revenues from the sale of its
products, 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
12
Revenue for the three and nine month periods ended September, 2012 and September 30, 2011was $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 global markets, and a broadening of Infrastructure’s business, which we
expect will create an “in house” demand for Wing Houses and the acquisition of EMP.
Operating Expenses
Operating expenses for the three month period ended September 30, 2012, were $7,338 as compared to
$10,797 for the three month period ended September 30, 2011. Operating expenses for the nine month
period ended September 30, 2012 were $66,792 as compared to $54,738 for the nine month period ended
September 30, 2011. The increase in expenses over the comparative nine month period can be attributed
to an increase in general and administrative expenses. We expect that operating expenses will increase as
we move forward with our acquisition of EMP.
Depreciation and amortization expenses for the three and nine month periods ended September 30,
2012and September 30, 2011 were $0. Depreciation and amortization expenses are anticipated in future
periods.
Other Income (Expenses)
Other income for the three month period ended September 30, 2012, was $0 as compared to other income
of $2,433 for the three month period ended September 30, 2011. Other income for the nine month period
ended September 30, 2012 was $27,690 as compared to other expenses of $689,742 for the nine month
period ended September 30, 2011. The transition toward other come from other expenses in the current
periods can be primarily attributed to the losses recognized in the prior comparative periods from our
equity investment in WWA Group. We expect to continue recognize other income in future periods.
Net Losses
Net Loss for the three month period ended September 30, 2012, were $7,338 as compared to a net loss of
$8,365 for the three month period ended September 30, 2011. Net losses for the nine month period ended
September 30, 2012 were $39,101 as compared to $744,480 for the nine month period ended September
30, 2011. The decrease in net losses over the comparative three month periods can be attributed to the
decrease in general and administrative expenses. The decrease in net losses over the comparative nine
month periods can be attributed to the realization of other income and income from equity investment in
the current nine month period that offset the increase in general and administrative expenses. We expect
to continue to realize net losses until such time as our operations produce revenue.
Capital Expenditures
The Company did not spend any significant amounts on capital expenditures during the three month
period ended September 30, 2012.
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
13
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 September 30, 2012, the Company had a working capital deficit of $1,199. Our current assets were
$8,094 consisting of $500 in cash, and $7,594 in other current assets. Our total assets were $50,454
consisting of current assets and our equity investments totaling $42,360. At September 30, 2012, our
current and total liabilities were $9,293.
Cash flow used in operating activities for the period ended September 30, 2012, was $251,226 as
compared to cash flow used in operating activities of $41,613 for the period ended September 30, 2011.
Cash flow used in operating activities in the current period can be primarily attributed to losses associated
with an equity investment and a decrease in amounts payable. 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 September 30, 2012 and September 30,
2011, was $190,048 and $0 respectively. Cash flow provided by investing activities in the period ended
September 30, 2012 can be attributed to the sale of a portion of the Company’s interest in WWA Group
and debt settlements that utilized shares of the Company’s interest in WWA Group. We expect cash flow
to be provided by investing activities in future periods as the Company may determine to liquidate its
remaining equity interest in WWA Group.
Cash flow provided in financing activities for the period ended September 30, 2012, was $61,286 as
compared to $5,391 in cash flow provided financing activitiesfor the period ended September 30, 2011.
Cash flow provided by financing activities in the current period can be attributed to the issuance of
common shares for debt offset by 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’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 marketing efforts for our Wing Houses and to integrate the operations of EMP into our own. 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.
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.
14
Off Balance Sheet Arrangements
As of September 30, 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.
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
$3,751,743 as of September 30, 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
prospectively from the operations of EMP. 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 andResults 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
15
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.
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.
16
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 September 30, 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 ineffective 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 not 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 September 30, 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.
17
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 COMPANYDOES NOTGENERATE CASH FLOW FROM OPERATIONS AND IS UNABLE TOOBTAIN
CAPITAL TO OPERATE ITS BUSINESS, IT MAY NOT BE ABLE TO EFFECTIVELY CONTINUE
OPERATIONS
As of September 30, 2012, the Company had a working capital deficit of $1,199 which amount is insufficient to
continue operations. We will have to obtain additionalworking capital from debt or equity placements to continue
operations for which we have no commitments. Should we be unable to secure capital, such condition would
cause us to reduce operations which would have a material adverse effect on our business.
MARKET ACCEPTANCE OF THE PRODUCTSWE HAVE DISTRIBUTION RIGHTS TO IS CRITICAL
TOOURGROWTH
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 COMPETEWITH 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.
18
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. His varied responsibilities may
compromise the Company’s ability to successfully conduct its business operations.
THE COMPANY’SSUCCESS DEPENDS ON ITSABILITY 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.
OURBUSINESS 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
THE COMPANY INTENDS TO APPLY TO HAVE ITS STOCKQUOTEDON 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.
19
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:
•
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-OXLEY ACT OF 2002, WHICH
EXPENSES MAY CONTINUE 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.
THE COMPANY DOES 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.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIESAND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS ON SENIOR SECURITIES
None.
20
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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
23 of this Form 10-Q, and are incorporated herein by this reference.
21
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
November 15, 2012
By: Eric Montandon
Its: Chief Executive Officer, Chief Financial Officer,
Principal Accounting Officer and Director
22
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.
23