<PAGE>2
As filed with the Securities and Exchange Commission on October 10, 1996
Commission File Number 33-97698
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT 4 TO FORM SB-2
REGISTRATION STATEMENT
Under The Securities Act of 1933
GLOBAL PACIFIC ENTERPRISES, INC.
Province of
British Columbia N/A
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdictions Classification Code Number) Identification Number)
of incorporation
or organization
906 West Broadway
Suite 202
Vancouver, B.C.
Telephone: 604-736-8636
(Address and telephone number of registrant's principal executive
offices and principal place of business.)
Jody M. Walker
7841 South Garfield Way
Littleton, Colorado 80122
Telephone: 303-850-7637
(Name, address and telephone number of agent for service.)
with copies to:
Jody M. Walker
Attorney At Law
7841 South Garfield Way
Littleton, Colorado 80122
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 133, check the following box: | |
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of each Proposed Proposed Amount of
class of Amount to be offering aggregate registration
securities registered price offering price fee
<S> <C> <C> <C> <C>
Common Stock 2,000,000 $2.00 $4,000,000(2) $1,379.31
$.10 par value
Common Stock(1) 344,367 $2.00 $688,734 $237.49
Total 2,344,367 $2.00 $4,688,734 $1616.80
</TABLE>
<PAGE>3
(1)Represents Common Stock to be registered on behalf of Selling
Shareholders.
(2) All funds raised in U.S. Dollars.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
PRELIMINARY PROSPECTUS DATED OCTOBER 10, 1996
SUBJECT TO COMPLETION
2,000,000 Common Shares
GLOBAL PACIFIC ENTERPRISES, INC.
Common Stock
($.10 Par Value)
The Company is offering up to a maximum of 2,000,000 Common Shares
at the purchase price of $2.00 per Common Share. There is no minimum
offering amount or minimum investment amount. The Company is
registering 344,367 common shares on behalf of its selling security holders.
Prior to the date hereof, there has been no trading market for the Common
Stock of the Company. There can be no assurance, however, that the
Common Stock will be quoted, that an active trading and/or a liquid market
will develop or, if developed, that it will be maintained.
THERE ARE MATERIAL RISKS IN CONNECTION WITH THE PURCHASE OF THE
SECURITIES. SEE RISK FACTORS, PAGE 10.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sales of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any state.
<PAGE>4
The Company shall engaged in the real estate development and business
management industries. The Company, through its trustee company,
Central Ocean International, Ltd., has signed an interim joint venture
agreement with China to develop a site in Chengdu, China upon which it
intends to build a commercial/residential/hotel complex.
<TABLE>
<CAPTION>
Price to Proceeds to
Public Commissions Corporation
<S> <C> <C> <C>
Per Common Share $2.00 $.20 $1.80
Maximum Offering(1)(2) $4,000,000 $400,000 $3,600,000
</TABLE>
(Footnotes on following page)
The date of the Prospectus is October 10, 1996
1The Common Shares are being offered on a "best efforts" basis by the
Company (employees, officers and directors) and possibly
selected broker-dealers. No sales commission will be paid for Common
Shares sold by the Company. Selected broker-dealers shall receive a sales
commission of up to 10% for any Common Shares sold by them. The
Company reserves the right to withdraw, cancel or reject an offer in whole
or in part. See "TERMS OF THE OFFERING - Plan of Distribution and
Offering Period." This Offering will terminate on or before December 31, 1996.
In the Company's sole discretion, the offering of Common Shares may be
extended for up to three Thirty day periods, but in no event later than March
31, 1997. There is no escrow account. Proceeds of the offering shall be
deposited directly into the operating account of the Company. See
"TERMS OF THE OFFERING - Plan of Distribution."
2The amount as shown in the preceding table does not reflect the deductions
of (1) general expenses payable by the Company; and (2) fees payable in
connection with legal and accounting expenses incurred in this Offering.
These expenses are estimated to be $34,616.80 if the total offering amount
is obtained.
<PAGE>5
ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS
Enforcement by investors of civil liabilities under the Federal securities laws
will not be affected by the fact the Company is located in British Columbia,
Canada, even though all but one of its officer and directors are residents of
Canada and all of the assets of the Company and of said persons are located
outside the United States. The appropriate foreign counts would enforce, in
original actions, liabilities against such persons predicated solely upon the
Federal securities laws. The laws of the Province of British Columbia permit
an action to be brought before a court of competent jurisdiction in British
Columbia to enforce a final and conclusive foreign judgment for a sum certain of
a court in the United States of America provided that (i) the court rendering
such judgment had jurisdiction over the judgment debtor as recognized by the
courts of British Columbia; (ii) such judgment was not obtained by a fraud
or in a manner contrary to natural justice and the enforcement thereof would
not be inconsistent with public policy or contrary to any order made by the
Attorney-General of Canada in respect of certain judgments; (iii) the
enforcement of such judgment does not constitute directly or indirectly, the
enforcement of foreign revenue, expropriatory or penal laws; (iv) no new
admissible evidence relevant to the action is discovered prior to the
rendering of judgment by the British Columbia court; (v) the judgment is
not founded upon an manifest error going to its root; and possibly (vi) such
judgment is founded upon a cause of action which is a known cause of
action in British Columbia.
Investors will be able to effect service of process within the United States,
especially in light of the fact that one of the directors of the Company is a
resident of the United States. For the purposes of enforcement of a
judgment granted in respect of the securities laws, a court in the Province of
British Columbia would not refuse to recognize the jurisdiction of the court
rendering such judgment on the basis that service of process on the
Company is validly effected, provided always that the Company in fact
receives such service of process. The opinions expressed herein are also
subject to the qualifications that (i) the remedies of creditors may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium, or other
similar laws relating to creditors' rights generally and by general principals
of equity, (ii) no court in Canada may make an order expressed in any
currency other than lawful money of Canada; and (iii) the remedy of specific
performance, injunctive relief or other equitable remedies may not be
available in any particular instance. The above is based on an opinion of
counsel from Godinho, Sinclair located in Vancouver, British Columbia.
REPORTS TO SECURITY HOLDERS
Although the Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, and in accordance therewith
will file reports and other information with the Securities and Exchange
Commission, the Company has not yet filed any reports with the Securities
and Exchange Commission. The reports and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission in Washington, D.C. and at the Chicago
<PAGE>6
Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511 and the New York Regional Office, 7 World
Trade Center, New York, New York 10048. Copies of such material can
be obtained from the Public Reference Section of the Commission,
Washington, D.C. 20549 at prescribed rates.
The Company will furnish to shareholders: (i) an annual report containing
financial information examined and reported upon by its certified public
accountants; (ii) unaudited financial statements for each of the first three
quarters of the fiscal year; and (iii) additional information concerning the
business and operations of the Company deemed appropriate by the Board
of Directors.
DOCUMENTS INCORPORATED BY REFERENCE
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (together with all amendments and
exhibits thereto, the "Registration Statement") under the Act with respect to
the securities offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the Rules and Regulations of the
Commission. For further information with respect to the Company and the
securities offered hereby, reference is made to the Registration Statement.
Copies of such materials may be examined without charge at, or obtained
upon payment of prescribed fees from, the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, DC 20549, at the Chicago Regional Office, Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and
the New York Regional Office, 7 World Trade Center, New York, NY 10048.
The Company will provide without charge to each person who receives a
prospectus, upon written or oral request of such person, a copy of any of
the information that was incorporated by reference in the prospectus (not
including exhibits to the information that is incorporated by reference unless
the exhibits are themselves specifically incorporated by reference).
Requests for copies of said documents should be directed to Alan Kwong,
President or Robin Young, Secretary, 906 W. Broadway, Suite 202,
Vancouver, B.C.; telephone: (604) 736-8636.
UNTIL _____ , 1996 (90 DAYS AFTER THE DATE OF THE PROSPECTUS), ALL
PERSONS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES,
WHETHER OR
NOT PARTICIPATING IN THE OFFERING, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF SUCH PERSONS
TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
<PAGE>7
NO DEALER, SALESMAN, AGENT OR ANY OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN
THOSE CONTAINED IN THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY,
OR THE UNDERWRITER, IF AN UNDERWRITER ASSISTS IN THE SALE OF THE
SECURITIES.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR A SOLICITATION
BY ANYONE TO ANY PERSON IN ANY STATE, TERRITORY, OR POSSESSION
OF THE UNITED
STATES IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED BY
THE LAWS
THEREOF, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR
SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR
IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.
<PAGE>8
<TABLE>
TABLE OF CONTENTS
<S> <C>
PROSPECTUS SUMMARY 9
RISK FACTORS 10
SELLING SECURITY HOLDERS 18
SOURCE AND USE OF PROCEEDS 19
DILUTION 21
THE COMPANY 21
PROPOSED ACTIVITIES 23
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION 30
Trends and Uncertainties
Capital and Source of Liquidity
Results of Operations
MANAGEMENT 32
Officers and Directors
Remuneration
Indemnification
CERTAIN TRANSACTIONS 34
PRINCIPAL SHAREHOLDERS 34
SHARES ELIGIBLE FOR FUTURE SALE 36
MARKET FOR REGISTRANT'S COMMON EQUITY 36
TERMS OF THE OFFERING 37
DESCRIPTION OF SECURITIES 38
LEGAL MATTERS 39
LEGAL PROCEEDINGS 39
EXPERTS 39
INTERESTS OF NAMED EXPERTS AND COUNSEL 39
</TABLE>
<PAGE>9
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information, financial statements and notes to the financial statements
including the notes thereto appearing elsewhere in this Prospectus.
The Company. The Company was incorporated in November 24, 1994 in
the Province of British Columbia. Pursuant to the Certificate of
Incorporation, the Company has the authority to issue an aggregate of
100,000,000 common shares, .10 par value.
The Company's executive offices of approximately 1,600 square feet are
located at 906 West Broadway Street, Suite 202, Vancouver, British
Columbia. The Company subleases its premises from an affiliate on a term
of three years expiring November 30, 1997 at a monthly rate of $1,300 per
month.
The Company shall engaged in the real estate development and business
management industries in China and other countries yet to be determined.
The Company, through its trustee company, Central Ocean International,
Ltd. has signed an interim China joint venture agreement to develop a site in
Chengdu, China upon which it intends to build a commercial/residential/hotel
complex.
<TABLE>
<S> <C>
The Offering. The Company hereby offers up to
2,000,000 Common Shares at
$2.00 per Common Share.
Common Shares outstanding
prior to Public Offering 3,443,667
Common Shares to be outstanding
after Offering 5,443,667
Percent of Common Shares owned by
current shareholders after Offering 63.26%
Gross Proceeds After Offering $4,000,000
Use of Proceeds. The Company intends to utilize
the sale of its Common Shares
mainly to offset its expenses
in obtaining additional funds
to finance strata-titled
residential and office units
for sale, retail/commercial units
for rental and a hotel tower
and for other administrative
expenses.
<PAGE>10
This Prospectus also relates to
securities being registered on
behalf of selling securityholders
and the Company will not receive
any cash or other proceeds in
connection with the subsequent
sale.
Certain Factors to be Considered See "Risk Factors."
Absence of Dividends; Dividend Policy The Company does not currently
intend to pay regular cash
dividends on its Common Stock;
such policy will be reviewed by
the Company's Board of Directors
from time to time in light of,
among other things, the Company's
earnings and financial position.
See "Risk Factors."
Transfer Agent Nevada Agency & Trust Company is
the Transfer Agent for the
Company's securities.
</TABLE>
RISK FACTORS
In analyzing this offering, prospective investors should read this entire
Prospectus and carefully consider, among other things, the following Risk
Factors:
Inability to Obtain Future Necessary Funding. The proceeds of
the offering will be used primarily to offset the Company's expenses in
obtaining additional funds for the project and for administrative expenses.
If insufficient funds are raised pursuant to this Offering, the Company will
attempt to obtain additional funds from private lenders, venture capital,
contractor subsidies or by mortgaging for all or part of the project. There
can be no assurance that the Company will be successful in obtaining funds
from any of these sources. The Company estimates that approximately
$52,000,000 will be needed in order complete the Chengdu project.
Alternatively, the Company could limit the scope of its project to building
just the residential tower. The Company estimates that approximately
$6,000,000 will be needed in order to build just the residential tower. Any
profit generated would then be used to complete the project. There can be
no assurance that adequate funds to complete just a portion of the project
could be obtained. In the event that the Company is unable to raise the
necessary funding for the project, the Company's agreement with Estate
Exploitation Corporation, a government owned development company
located in Jinniu District of Chengdu, (the "Joint Venture Partner") shall be
null and void, with no penalties to the Company.
<PAGE>11
Possible Restrictions on Foreign Corporation Doing Business
In China. Currently, China's policy regarding foreign corporations
doing business in China does not restrict the import and export of capital
and the remittance of dividends. However, there can be no assurance that
government policies concerning foreign joint ventures in China will not
change in the future to restrict such activities.
Possibility of Political Uncertainty in China. There may be
political upheaval with the death of China's paramount leader Deng Shiao
Ping. There can be no assurance that his successor will continue
supporting the current policies regarding economic and political reforms.
Serious criticism of the Communist Party and its national or international
politics openly is not welcome and individuals doing so may be detained for
questioning. There are no opposition parties and nationalism is still
emphasized.
There can be no assurance that political upheaval will not occur and
negatively effect the project and will not materially impact the operations of
the Company.
Other Risks Related to Doing Business with Chinese Government. Although proper
contracts have been signed, there is no absolute guarantee that the Chinese
government will honor them to the minute details, if at all. There can be
no assurance that the Chinese government will not pass a bill or other form of
legislature to discontinue the various benefits that a China-foreign joint
venture project now enjoys such as free-from-profit taxes in the first three
years and 50% tax in the next two years, etc. There is also the risk that the
Chinese Government may, in the future, nationalize private industries.
Military and political maneuvers over the Taiwan issue and various border
disputes among neighboring countries heightens tension in everyday life
and in the investment climate. There is the risk that such tension will affect
all investments in China including the Sichuan Province.
There is a risk that the international arena of politics may change or a
situation could arise (such as human rights violations, etc.) where the
United States and Canada may boycott, place a trade embargo or prevent
their nationals from investing into China. . Additionally, there can be no
assurances that if foreign policies changed or relationships became strained,
China will not retaliate by nationalizing all foreign investments, by
preventing foreign profits from the leaving the country or by disallowing
further investment into China.
Risks Related to the Chinese Economy. The Chinese economy, as
China as a whole and in the Sichuan Province, is affected by the poor
economical climate. The extent to which specific areas are affected will
depend on the present affluence of the area governments, the various local
industries and working units, the residents and the availability of and the
demand of the living necessities to these areas. The City of Chengdu has a
population of over 13 million compared to Chongqing (population 17
<PAGE>12
million) and Shanghai (population 19 million). Shanghai is highly
developed with hundreds of completed projects similar to that proposed by
the Company. Chengdu will have only one such project. There can be no
assurance that the City of Chengdu will not be grossly affected by a poor
economy in other areas.
Risks Related to the Chinese Legal System. The legal system in
China is not as complete as that of more developed countries, There may be
many gray areas or areas which have not been addressed adequately in the
protection of foreign investors and their interests. Because the legal system
is still in its infantile stage pertaining to and involving international
trades, investments, foreigners, problems arising out of joint ventures, etc.,
there is the risk that litigation involving these issues may take a long period
of time to resolve, if at all. The risk is further magnified because such
litigation would be between a private foreign corporation or individuals and
official agents of the Chinese government. While the former has limited
financial resources, the latter has an abundance of funds to continue the legal
proceedings.
Currently Inadequate Transportation System and Infrastructure. Chengdu is
a transportation hub for travelers making connecting flights and rails to other
destinations inside and outside of the Province. The current transportation
system in Chengdu is inadequate to handle large number of daily visitors. there
can be no assurance that the transportation system and infrastructure will be
adequate for future needs of the general public in Sichuan Province or the
Company.
Exchange Rate Risks. Proceeds from the sale of real estate and income from
retail/commercial unit rentals and profit from hotel and business operations
will be a mixture of local currency and foreign currencies. However, the
majority of the income will be in the form of local currency. There is a
risk that the local currency will depreciate in value as it is being
converted into foreign currencies as the exchange rates are determined by the
central bank of China.
There are foreign exchange centers run by both the government and by
government approved organizations in most major cities in China. The
charge by the government ranges from 2% to 5%. There can be no
assurance that a certain exchange rate will remain stable for any period of
time or that the fees for foreign currency exchange will remain at current
prices.
Dependence on Joint Venture Partner for Successful Completion of the Project.
Estate Exploitation Corporation, a government owned development company located
in Jinniu District of Chengdu, (the "Joint Venture Partner") has already
expended its portion of the investment in appropriation of land, land use
contract, costs for relocating existing residents, development capital costs and
design and soil exploration. If the joint venture partner should back out of
the project, the project may be temporarily slowed down or halted until
additional funds are obtained to buy out the joint venture partner's interest.
There can be no assurance that the Company would be able to obtain the
<PAGE>13
additional necessary funds. The Company has estimated that an amount of
approximately US$10 million would be needed to buy out the Chinese joint venture
partner's interest. This amount is based on the actual amount of money
spent by the Chinese joint venture partner plus the interest losses and the
loss of future profit that the project may generate. In China, there are three
agreements which must be entered into before actual commencement of any
venture, the letter of intent, the interim joint venture agreement and the final
joint venture agreement. Due to the costs already expended by the Joint
Venture Partner and the fact that the Joint Venture Partner entered into the
letter of intent and then the interim joint venture agreement, the Company is
of the opinion that there is limited risks, if any, posed by the fact that the
final joint venture agreement has not yet been entered into. However, there
can be no assurance that the Joint Venture Partner will enter into the final
joint venture agreement.
The Chinese Government has approved and appropriated the said land for
the use of this Joint Venture Partner and the development project. The
Joint Venture Partner is required to find a foreign partner to develop this
project. The project is located in the downtown core of the City of
Chengdu. Land of approximately 6.6 acres has been appropriated, its
resident shave been relocated and rehoused in new buildings constructed by
the Joint Venture Partner and each relocated resident has been paid the
required amount of appropriation fees amounting to US$4,000 each,
aggregating over US$7 million. The Company is not required to contribute
to the relocation cost. The project has been well exposed and advertised
throughout the country. The project must go ahead to save credibility for
all the government officials involved such as the provincial premier, the city
mayors, various representatives of the central government and the Joint
Venture Partner. With so many people involved and so much money spent
on this project, particularly the Joint Venture Partner, it is not likely that
the original parties involved will now cease to support the project. Due to
over-lending and the default of several unsecured loans, on August 14,
1994, the general manager of the central banks ordered a halt to all lending
and recalled all of its outstanding loans and future lending from state banks
of any kind was restricted. This current economic restraint by the central
banks require a foreign investor in most projects, except infra-structure
projects where funds are allocated by the central government, since central
banks have discontinued extending loans to real estate projects. Mortgage
financing is not available through state banks of China. The mortgage
financing offered to purchasers are being arranged by foreign developers
and foreign banks outside of China.
It is unlikely that the Joint Venture Partner will back out. However, if the
Chinese Government withdraws support from the Joint Venture Partner,
i.e., reclaims the land and re-assigns it to another Chinese joint venture
partner, this new partner must likewise seek a foreign partner. The
Company would be the most logical choice due to its knowledge of the
project, its relationship with the Joint Venture Partner over the last four
years, the time it would take to locate another suitable joint venture partner
and renegotiate another joint venture agreement. There can be no
assurance, however, that the Company would, in fact, be chosen.
<PAGE>14
Risk of Utilizing Trustee Company as Signatory on Interim
Joint Venture Agreement. The interim joint venture agreement was
entered into through the use of a Hong Kong trustee company because, at
the time of negotiations, the Company had not been duly incorporated.
One of the principals of the Company controls the trustee company. The
Company has entered into a contract with the trustee company which
provides that the Company's name only shall be in the final joint venture
agreement. There may be the risk that the Joint Venture Partner will not
endorse the Company as its rightful partners. However, this risk is
minimal in that the signatory for the Company is the same as the signatory
for the trustee company in the interim joint venture agreement and the Joint
Venture Partner had been informed of such arrangements. There is no
written consent regarding the substitution, however, this issue has been
discussed with the Joint Venture Partner and the Chinese government and it
has been verbally agreed that the time of signing of the final joint venture
agreement, the appropriate name of the party may be substituted since the
major players on the joint venture are the same people.
Possible Regulatory Delays. The Company may experience delays
or other problems in the issuance of the necessary permits and/or licenses to
complete the joint venture project in Chengdu, China, including
environment issues, if any. There can be no assurance that the Company
will be able to obtain the necessary licenses or permits in a reasonable time.
Possible Contracting Delays. There may be delays in obtaining
suitable contractors for the construction of the buildings, however, the
Chinese government allows contractors from other provinces or cities to
help in any shortage. There are no labor unions in China. The developer
seeking outside work forces must submit a notice to the district
government's labor department that it is unable to hire local qualified
workers due to shortage and must seek workmen from other provinces.
These requests have not been turned down in the past. However, there can
be no assurance that the Company's request would be approved or that the
Company will be able to obtain suitable contractors in a reasonable time or
at a reasonable price.
Competition. Through a joint venture, the Company will compete in the
real estate development industry. Currently there are no 5-star hotels,
casinos, luxury strata-titled office rentals or sales and no strata-titled
retail/commercial units for sale in Chengdu and outlying areas.
Additionally, due to the fact that the City of Chengdu just opened its doors
for foreign joint ventures three years ago and, as such, major joint venture
project development is still in its infancy, there is little or no actual
competition to the Company's proposed operations. Chengdu's
population is over 13,000,000 people. The average space per person
allotted by the government is 30 square feet per person. Development such
as proposed by the Company is only the second one of its kind in Chengdu.
Additionally, statistics from the news media in China indicate that the
residents of the Sichuan Province on the average have a higher spending
power than the residents of Shanghai or Beijing. The only land developer
with available mortgage funding to the buyers is Toyan Group (Chengdu)
<PAGE>15
Real Estate Development Co. Ltd. with an "International Metropolitan"
residential project which is located 20 miles out of Chengdu. The project is
only residential and not a comprehensive development project as proposed
by the Company. There are other smaller real estate developers of both
local and foreign groups, however, to date, there has not been a
development of the proposed size and type other than the Toyan Group.
Mortgage financing is not available locally and has been introduced by
foreign developers. Small local developers do not have this facility.
There can be no assurance that other similar projects will not be commenced
in the future which will provide competition to the Company's proposed
operations. See "THE COMPANY - Competition."
Possible Inability to Obtain Mortgage Financing. The Company does not
currently have available mortgage funding. The Company has had
preliminary meetings with banking institutions in Hong Kong and
Singapore. Some of the banks expressed interest in providing the
mortgage funding to the potential purchasers. However, such interest was
expressed only verbally and there is a risk that such interest may not result
in actual commitments. See "THE COMPANY."
No Escrow Account and Possible Loss of Entire Investment.
There is no escrow account or minimum offering amount. Any and all
proceeds of this Offering received from the sale of the Company's common
stock shall be deposited immediately into the operating account of the
Company. Even in the event the Company sells the maximum number of
securities offered herein and raises additional capital, the investor may still
lose his entire investment, particularly in light of the fact that the Company
will need to raise approximately $50,000,000 in order to complete the
project. See "THE COMPANY" and "USE OF PROCEEDS."
Uncertainty of Future Financial Results. The Company has experienced
accumulated losses from research and development costs to date and future
financial results are uncertain. See "FINANCIAL STATEMENTS."
As such, there can be no assurance that the Company can be operated in a
profitable manner. Profitability depends upon many factors, including the
ability to obtain further financing, the maintenance or reduction of expense
levels and the success of the Company's business activities. To date, the
Company has accumulated losses from operations as of June 30, 1995 of
$(344,367) U.S. Dollars. Even with future profitable operations, the
Company will require additional capital. See "MANAGEMENT'S
DISCUSSION AND ANALYSIS" and "USE OF PROCEEDS."
Control of Current Shareholders and Management. The majority
shareholders and the officers and directors of the Company as a group will
own over 38% of all of the outstanding common shares of the Company
upon completion of the offering. As a result, these individuals may have
the ability to control the affairs of the Company. The operations of the
Company could be adversely affected by their control if key employees such
as a president, financial officer and reporting secretary with experience in
running a public company and a project manager, rental unit manager, etc.
<PAGE>16
for operations are not obtained and current management, which is
inexperienced, continued to run the operations of the Company. See
"MANAGEMENT" and "PRINCIPAL SHAREHOLDERS".
Dependence on Key Individuals. The future success of the Company
is highly dependent upon the Company's ability to attract and retain
qualified key employees in the management of the Company itself and in its
operation of the joint venture project. The inability to obtain and employ
these individuals would have a serious effect upon the business of the
Company. See "COMPANY - Employees" and "MANAGEMENT."
Experience of Officers and Potential Conflicts of Interests. The
financial success of the Company is dependent upon the management
expertise, judgment and experience of its officers. The death, disability or
resignation of such officers may adversely affect the financial performance
of the Company. The Company intends to apply for key man life insurance
of Alan Kwong, Ken Wong and Robin Young. The officers and directors
have the exclusive authority to manage and control and make all decisions
regarding the business and affairs of the Company. All of the officers
devote approximately 50% of their time to the affairs of the Company.
Some of the officers and directors of the Company are currently principals
of other businesses. Although none of the officers and directors are
principals of competing business, the officers and directors use their best
efforts to resolve equitably any time conflicts that might result from acting
as principals for a number of businesses, but there can be no assurance that
such other activities will not interfere with the officers' and directors'
ability to discharge their obligations herein.
No Assets or Record of Earnings or Operations. The Company
has no assets and no operating history, has not generated any operating
revenues to date and must be considered promotional in its early embryonic
and developmental stages embarking on a brand new business venture.
Potential investors should be made aware of the difficulties encountered by
a new enterprise in its embryonic stage. See "THE COMPANY".
Substantial and Immediate Dilution. As a result of this Offering, the
Company will have up to 5,443,667 outstanding Common Shares. The
Corporation may issue additional preferred and common shares in private
business transactions or pursue an additional public offering. In addition,
due to the fact that the currently outstanding Common Shares were issued
by the Corporation for only $344,367, the investors in this Offering may
experience immediate dilution of $1.35 or 67.5% (from an offering price of
$2.00 per Common Share to a net tangible book value after the offering of
$.65) upon completion of the maximum offering of Common Shares. See
"DILUTION" and "FINANCIAL STATEMENTS."
Future Sales of and Market for the Shares. Upon successful
completion of the Offering of Common Shares herein the Company will
have 5,443,667 common shares outstanding, of which 2,344,367 Common
Shares will be freely tradable without restriction or further registration under
the Securities Act of 1933 (the "Securities Act") Note, this does not include
<PAGE>17
any Common Shares being issued on behalf of Selling Shareholders. No
assurance can be given that the availability of such Common Shares for sale
will not have an adverse impact on the market price of the Company's
Common Shares. Additionally, in light of the fact that the Common Shares
will be traded in the "pink sheets", difficulty in determining the market price
of the Common Shares may occur. Further, management of the Company
cannot predict to what extent a secondary market in the Shares will develop
and provide liquidity for holders of the Common Shares.
Lack of Public Market. Prior to this Offering, there has been no
public market for the securities of this Company. Management of the
Company cannot predict to what extent a secondary market in the Shares
will develop and provide liquidity for holders of the Common Shares. See
"SALE OF SHARES PURSUANT TO RULE 144" and "MARKET INFORMATION ON
COMMON SHARES."
"Penny" Stock Regulation of Broker-Dealer Sales of Company Securities.
The Company intends to list its Common Shares on NASDAQ upon
meeting the requirements for a NASDAQ listing, if ever. Upon completion
of this offering, the Company will not meet the requirements for a
NASDAQ listing. Until the Company obtains a listing on NASDAQ, if
ever, the Company's securities may be covered by a Rule 15g-9 under the
Securities Exchange Act of 1934 that imposes additional sales practice
requirements on broker-dealers who sell such securities to persons other
than established customers and institutional accredited investors (generally
institutions with assets in excess of $5,000,000 or individuals with net
worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse). For transactions covered by the rule,
the broker-dealer must furnish to all investors in penny stocks, a risk
disclosure document required by Rule 15g-2 of the Securities Exchange Act
of 1934, make a special suitability determination of the purchaser and have
received the purchaser's written agreement to the transaction prior to the
sale. In order to approve a person's account for transactions in penny
stock, the broker or dealer must (i) obtain information concerning the
person's financial situation, investment experience and investment
objectives; (ii) reasonably determine, based on the information required by
paragraph (i) that transactions in penny stock are suitable for the person and
that the person has sufficient knowledge and experience in financial matters
that the person reasonably may be expected to be capable of evaluating the
rights of transactions in penny stock; and (iii) deliver to the person a written
statement setting forth the basis on which the broker or dealer made the
determination required by paragraph (ii) in this section, stating in a
highlighted format that it is unlawful for the broker or dealer to effect a
transaction in a designated security subject to the provisions of paragraph
(ii) of this section unless the broker or dealer has received, prior to the
transaction, a written agreement to the transaction from the person; and
stating in a highlighted format immediately preceding the customer signature
line that the broker or dealer is required to provide the person with the
written statement and the person should not sign and return the written
statement to the broker or dealer if it does not accurately reflect the person's
financial situation, investment experience and investment objectives and
<PAGE>18
obtain from the person a manually signed and dated copy of the written
statement. A penny stock means any equity security other than a security
(i) registered, or approved for registration upon notice of issuance on a
national securities exchange that makes transaction reports available
pursuant to 17 CFR 11Aa3-1 (ii) authorized or approved for authorization
upon notice of issuance, for quotation in the NASDAQ system; (iii) that has
a price of five dollars or more or . . . . (iv) whose issuer has net tangible
assets in excess of $2,000,000 demonstrated by financial statements dated
less than fifteen months previously that the broker or dealer has reviewed
and has a reasonable basis to believe are true and complete in relation to the
date of the transaction with the person. Consequently, the rule may affect
the ability of broker-dealers to sell the Company's securities and also may
affect the ability of purchasers in this Offering to sell their shares in the
secondary market. See "Market for Registrant's Common Equity and
Related Stockholder Matters - Broker-Dealer Sales of Company's Securities."
Lack of Dividends. There can be no assurance that the continued
operations of the Company will result in any revenues or will be profitable.
To date, the Company has not paid a dividend to its shareholders. At the
present time, the Company intends to use any earnings which may be
generated to finance the growth of the Company's business. Accordingly,
while payment of dividends rests within the discretion of the Board of
Directors, the Company does not presently intend to pay dividends and
there can be no assurance that dividends will ever be paid. See
"DIVIDEND POLICY."
Vulnerability to Fluctuations in Economy. Demand for the
Company's proposed operations is dependent on, among other things,
general economic conditions in China and other countries which are cyclical
in nature. Prolonged recessionary periods may be damaging to the
Company's ability to attract investors for future funding and lease holders
for its commercial and residential portions of its joint venture properties.
Benefit to Management. Although currently, the officers and directors
have received no compensation and common shares for their services, the
Company may, in the future, compensate the Company's management with
salaries and other benefits. Even though no compensation plan has been
proposed or agreed upon, the payment of future salaries, and the costs of
these benefits, may be a burden on the Company and may prevent the
Company from achieving profitable operations in the future. See
"MANAGEMENT - Remuneration."
SELLING SECURITY HOLDERS
The Company shall register pursuant to this prospectus 344,367 Common
Shares currently outstanding for the account of the following individuals or
entities. The percentage owned prior to and after the offering reflects all of
the then outstanding common shares. The amount and percentage owned
after the offering assumes the sale of all of the Common Shares being
registered on behalf of the selling shareholders.
<PAGE>19
<TABLE>
Name and Amount Total Number % Owned Number of % Owned
Being Registered Owned Prior to Shares Owned After
Currently Offering After Offering Offering
<S> <C> <C> <C> <C>
C.L. Ng - 7,600 76,000 2.21% 68,400 1.26%
Kam Ping Lui - 1,200 12,000 .35% 10,800 .25%
Brenda Kayi Kong - 4,000 40,000 1.16% 36,000 .66%
Alan Kwong(1) - 60,542 605,417 17.58% 544,875 10.01%
Mok Wah Keung - 3,000 30,000 .87% 27,000 .50%
Tsang Hung Po - 3,000 30,000 .87% 27,000 .50%
T.C. Lee - 3,000 30,000 .87% 27,000 .50%
Paul Yu - 3,000 30,000 .87% 27,000 .50%
Phillip Ee - 3,000 30,000 .87% 27,000 .50%
Dr. Kay Ho - 6,000 60,000 1.74% 54,000 .99%
Violet Ho - 6,000 60,000 1.74% 54,000 .99%
Kong Beng Wong - 6,000 60,000 1.74% 54,000 .99%
Jap Chong Young(2) - 60,486 604,858 17.56% 544,372 10.00%
Weymann Cheng - 7,856 78,559 2.30% 70,703 1.29%
David Darren Young - 5,000 50,000 1.45% $45,000 .83%
Landtek Properties, Inc.-7,642 76,417 2.22% 68,775 1.26%
Margaret Wong - 6,000 60,000 1.74% 54,000 .99%
Sin Ming Chiu - 9,000 90,000 2.61% 81,000 1.49%
Robin Y. Young(3) - 47,021 546,625 15.87% 491,962 9.04%
Ken K. Wong(4) - 44,021 516,625 15.00% 464,962 8.54%
Fred R. Umayam - 10,000 100,000 2.90% 90,000 1.65%
Mark Alan Mannhalt - 6,000 60,000 1.75% 54,000 .99%
Donald Tom Prechitt - 3,000 30,000 .87% 27,000 .50%
Huan Wa Xu - 8,000 80,000 2.32% 72,000 1.32%
Pollysol Investments, Ltd
- 10,000 100,000 2.90% 90,000 1.65%
He Rong Hui - 2,000 20,000 .58% 18,000 .33%
Lee Shick Por - 2,000 20,000 .58% 18,000 .33%
William Lo - 10,000 100,000 2.90% 90,000 1.65%
</TABLE>
(1)Mr. Alan Kwong has been President of the Company since inception.
(2)Mr. Jap Chong Young has been a Director of the Company since March
25, 1995.
(3)Mr. Robin Young has been Secretary and a Director of the Company
since inception.
(4)Mr. Wong has been Vice-President of the Company since inception.
SOURCE AND USE OF PROCEEDS
Net Proceeds. The net proceeds to be received by the Company from the
sale of the Common Shares offered hereby, are estimated to be $3,559,567
after expenses and commissions if the maximum number of Units are sold.
There is no minimum offering amount. This assumes expenses of
approximately $40,433 and commissions of $400,000. See "TERMS OF
THE OFFERING".
<PAGE>20
Principal Purposes. The principal purposes for which the proceeds of this
Offering will be utilized are as follows:
<TABLE>
<S> <C>
Gross Proceeds of Offering $4,000,000
Less: Commissions
400,000
Offering Expenses
40,433
Net Proceeds of Offering $3,559,567
Application of Proceeds
Obtaining Additional Funds(1) $1,000,000
Certificate of Deposit(2) 1,000,000
Project travel and field expenses 150,000
Legal & Accounting costs of project 100,000
Office upgrade 50,000
Contingency fund(3) 1,000,000
Working Capital 259,567
Total Application of Proceeds $3,559,567
</TABLE>
(1)includes commissions and expenses which may be incurred to obtain the
balance of the funds needed to complete the project.
(2)The certificate of deposit will be put into the lawyer's trust account to
signify that the Company has the funds and fully intends to complete the
joint venture agreement with China.
(3)Will be invested in certificates of deposit, short term (6 months or less)
government obligations and money market funds until needed.
Given the above use of proceeds, management is of the opinion that the
maximum offering proceeds will satisfy cash requirements for at least
twelve months during which the Company shall pursue additional
financing. In the event that less than the maximum offering proceeds is
obtained, the Company will seek other types of financing such as private
equity funding, loans from private lenders, contractor subsidies or financing
and mortgages, etc. Even in the event the Company obtains the maximum
proceeds of the offering, the Company will still need to obtain substantial
additional financing before it can begin construction on even a small portion
of the proposed project.
The figures set forth above are estimates and cannot be precisely calculated.
However, there are no material amounts of funds which will be utilized by
the Company in conjunction with the net proceeds of this Offering other
than for the purposes enumerated above. To the extent additional funds are
necessary for operation of the Company's business or the expansion of the
additional equity financing, there can be no assurance that such additional
financing with be available or that, if available, it can be obtained on terms
which management deems reasonable and any debt financing could require
the Company to mortgage, pledge or hypothecate its assets.
<PAGE>21
Securities are also being registered on behalf of the selling securityholders
and the Company will not receive any cash or other proceeds in connection
with the subsequent sale.
DILUTION
Dilution. Assuming completion of maximum offering amount, there will
be a total of 5,443,667 Common Shares outstanding. The following table
illustrates the per Share dilution as of the date of this Prospectus, which
may be experienced by investors upon reaching the maximum offering.
Offering price
$2.00
Net tangible book value per
Share before offering $0.00
Increase per Share .65
attributable to investors
Pro forma net tangible
book value per Common
Share after offering .65
-----
Dilution to investors 1.35
Dilution as a percent of
offering price 67.5%
Comparative Per Common Share Data.
<TABLE>
Total Price
Number of Paid Per Consider-
Shares % Share ation Paid %
<C> <S> <S> <S> <S> <S>
Existing Shareholders 3,443,667 63.26% $.10 $344,367 7.93%
New Investors
of Common Shares 2,000,000 36.74% $2.00 $4,000,000
92.07%
</TABLE>
Further Dilution. The Company may issue additional restricted
Common Shares pursuant to private business transactions. Any sales under
Rule 144 after the applicable holding period may have a depressive effect
upon the market price of the Company's Common Shares and investors in
this offering upon conversion. See "SALES OF STOCK PURSUANT TO RULE 144."
THE COMPANY
The Company. The Company was incorporated on November 24, 1994
under the name of Global Pacific Enterprises, Inc. Pursuant to the Articles
of Incorporation, the Company has the authority to issue an aggregate of
100,000,000 common shares, .10 par value.
<PAGE>22
The Company owns no real property and leases all of its facilities. The
Company's executive offices of approximately 1,600 square feet are located
at 906 West Broadway, Suite 202, Vancouver, British Columbia.
Telephone: (604) 736-8636. The Company's lease is for a term of three
years expiring November 30, 1997 at a monthly rate of $1,300 per month.
The Company shall engage in the real estate development and business
management industries. On July 20, 1994, the Company, through its
trustee company, Central Ocean International, Ltd. (which holds all rights
for the Company prior to the proper registration of the Company in British
Columbia, Canada) has signed a foreign China interim joint venture
agreement to develop a site in Chengdu, China upon which it intends to
build a commercial/residential/hotel complex. One of the principals of the
Company controls the Central Ocean International, Ltd. The Company
shall enter into a final joint venture agreement. The Company has entered
into an agreement with Central Ocean International, Ltd. which states that
the Company's name only shall be in the final joint venture agreement. The
Chinese Government has been aware of this agreement. Upon the effective
date of this registration statement, the Company intends to go to Chengdu to
sign the final joint venture agreement.
There are presently outstanding 3,443,667 Common Shares. See "DESCRIPTION OF
SECURITIES".
Employees. In addition to management, the Company currently
employs no full time employees and three part time employees. Upon
receipt of funding, the Company shall hire employees and independent
contractors as necessary to complete the project.
Competition. Through a joint venture, the Company will compete in the
real estate development industry. Currently there are no 5-star hotels,
casinos, luxury strata-titled office rentals or sales and no strata-titled
retail/commercial units for sale in Chengdu and outlying areas.
Additionally, due to the fact that the City of Chengdu just opened its doors
for foreign joint ventures three years ago and, as such, major joint venture
project development is still in its infancy, there is little or no actual
competition to the Company's proposed operations. The only land
developer with available mortgage funding to the buyers is Toyan Group
(Chengdu) Real Estate Development Co. Ltd. with an "International
Metropolitan" residential project which is located 20 miles out of Chengdu.
The project is only residential and not a comprehensive development project
as proposed by the Company. There are other smaller real estate developers
of both local and foreign groups, however, to date, there has not been a
development of the proposed size and type other than the Toyan Group.
Mortgage financing is not available locally and has been introduced by
foreign developers. Small local developers do not have this facility.
There can be no assurance that other similar projects will not be commenced
in the future which will provide competition to the Company's proposed
operations.
<PAGE>23
Seasonal Nature of Business Activities. The Company's business
activities are not seasonal.
PROPOSED ACTIVITIES
General Background. As a provincial capital, Chengdu is the political,
economic and cultural center of Sichuan Province. In 1990, the city was
given provincial-level economic powers. In 1992, the Central
Government of China granted "open coastal cities" status to the City of
Chengdu, Sichuan Province, in the People's Republic of China. This
status allows the city to invite foreign participation in joint ventures with
local government agencies, to grant special tax incentives, to allow an
agreed percentage of the products to be marketed domestically and to
guarantee joint venture rights and privileges such tax incentives on profits
applied and imported plants and equipment at no tax or at a discount. In
March, 1994, the central government commissioned Chengdu to be a pilot
city to test out the impact of total reform in the areas of finance, taxes,
wages, habitation, Medicare, education, technology, administrative
structures, stocks and shares, contracting, land use rights and transfers,
pawning and auctioning, etc., and has dedicated Chengdu as a middle-class
well-to-do model city by the year 2,000.
With a population of 130 million and land area of 570,000 square
kilometers, Sichuan province accounts for approximately 9.4% of China's
population and 5.9% of its total land area, ranking first and fifth
respectively among all provinces. Lying in the upper reaches of the
Yangtze River, Sichuan Province will benefit from the Three Gorges dam
project, which is projected to increase China's electricity by 84 billion
KWH per year.
At present, four major railways link Sichuan with other provinces. This
inadequacy in rail transport constitutes a major constraint in Sichuan
province's economic development. To increase rail transport capacity,
several projects have started. Of these, three new railways will link
Chengdu to other cities in the province. At the end of 1992, Sichuan's
road network totaled about 10,000 km, of which just over 100 km was first
grade highways. A World Bank loan is being used to finance the
construction of a 340 km highway between Chengdu and Chongqing, the
other major city in the province. When completed, these two cities will be
less than four hours apart.
The total mileage of air freight increased by 33% to 80 million km. In
1992, plans to improve air links included expansion of Chengdu's airport
and construction or renovation of airports in most localities. Chengdu's
international airport is one of the busiest in the country with as many as six
flights daily to Beijing and Guangzhou. Direct flights to Hong Kong,
Singapore, Bangkok and Hiroshima are available. Sichuan Province's
access to sea is via Shanghai, Hong Kong and Beihai, China's major sea
ports.
<PAGE>24
In recent years, communication facilities have improved rapidly in Sichuan
province. By the end of 1992, more than 378,400 telephone lines have
been installed, direct dialing to major Chinese cities, Hong Kong and
overseas countries are available in Chengdu and Chongqing. In Chengdu
alone, there are an estimated 80,000 registered users of pages and cellular
phones.
With its many scenic spots and significant historic areas and local cuisine,
Chengdu is a popular tourist destination. In 1992, overseas tourist arrivals
topped 300,000. By 1994, this figure has almost doubled to 500,000.
The city is the starting point for traveling to Juizhaigou and Emei mountain.
Because of its central location and the availability, though inadequate, rail
and air links, the city is also a major stopover for tourists for Tibet, Xian
and other tourist attractions in the Sichuan Province. This inadequacy of
the current transportation system will improve as the number of railways
and highways that are currently under construction are put into the existing
network.
Benefits permitted by the central government as listed in the foreign-China
joint venture rules and regulations are in general termsl Details of benefits
could be precisely stipulated in the joint venture contract. Examples of
benefits achieved could be (I) no development charges for water, sewer,
roadwork and electricity connections; (ii) required water, electricity, raw
material, freight and communication facilities, etc., charged similar to local
developers and given top priority; (iii) concession on property taxes such as
free for four years or at a reduced rate, etc.; (iv) exemption from revenue
taxes for three years beginning from the first profit year. Thereafter fifty
(50) percent on revenue taxes for the next two years; (v) if the investor
utilizes his profits to re-invest into projects involving export products, hi-
tech industries, etc., the goverment will refund the remitted taxes to the
investor in full. Other similar benefits may be negotiated between the joint
venture partners under the guidelines of th ejoint venture rules and
regulations.
There may be political upheaval with the death of China's paramount leader
Deng Shiao Ping. There can be no assurance that his successor will
continue supporting the current policies regarding economic and political
reforms. The political reforms have allowed limited democracy within the
communism. Minor degree of political discussions and criticism are
tolerated. More freedom of speech is allowed to the general public in
respect to civil matters. Serious criticism of the Communist Party and its
national or international politics openly is not welcome and individuals
doing so may be detained for questioning. There are no opposition parties
and nationalism is still emphasized. However, provincial public servants
(including the provincial premier, ministers of different ministries down to
department heads) are not openly recruited based on qualifications. The
maximum term of these offices is now 7 years. Formerly, these positions
were appointed with no time limit as to the terms of office. Also, more
power has been passed down to lower levels of government in respect to
operating state-owned businesses and in approving civic projects.
Formerly, projects over US$2 million required central government approval
and now only projects over US$10 million require such approval.
<PAGE>25
The economic reforms have allowed freedom of enterprise to individuals
and corporations except in areas deemed by the government as detrimental
to the country's security and economic stability. There are now many
businesses in all sectors of the industries owned and operated by private
individuals and corporations at a more profitable level than those previously
operated by the State. Many government owned and operated businesses
have been sold to private corporations in the form of negotiations or in
auctions. Some are contracted out to individuals to run for a fixed annual
income. Any profit earned from the operations in excess of the fixed
annual income and operating expenses belongs to the individuals operating
the business. Before 1990, the State regulated and rigidly controlled the
domestic market prices of consumer goods. After 1990, the government
has allowed a free domestic market where prices are self-regulating and
adjust in accordance with prevailing market conditions. Goods and
merchandise may be freely exported or imported, except for items deemed
by the government to be strategic. The government is currently working
on having its own currency (Reminbi) link up with the United States
Dollars. This would prevent large fluctuations and depreciation of the
Reminbi. At the present, the currency floats free as to its exchange rate
where previously, the government controlled the exchange rate in the
international market. The entire country is now opened to foreign
investments. Different localities will have different tax incentives to the
foreign investors. In the last three years, a few stock exchanges have been
established and successfully operated. These are currently exchanges in
Shenzen, Shanghai and Beijing. Other major cities are contemplating
setting up similar exchanges. The State has relaxed its control on real estate
developments. Mortgages have been introduced into the country. As
reported in Chinese newspapers in Hong Kong and North America in the
advertisements for Chinese residential condominium projects in Hong
Kong, Hong Kong and Shanghai Bank have mortgage financing of up to
70% of the value, while local banks in Shenzhen have allowed financing of
up to 75% of the value. According to daily news reports emanating from
China, Hong Kong and local television and radio stations as well as
periodic articles from Chinese language newspapers attainable locally, most
developers now arrange mortgage financing for purchasers buying either
residential properties or buying retail/commercial properties. East Asian
Bank has allowed mortgages for the secondary real estate market. While
most infra-structures owned by the government are 100% financed by the
State, larger infra-structure projects, such as subway systems in major cities
such as Guangzhou, Shanghai and Beijing; highway networks connecting
developing cities, airports and power plants, are now financed by issuing
government bonds and debentures or through underwritten public offerings.
The Central Government, the Provincial Government and the City
Government have announced through the local news media that it supported
the Chengdu project as a necessary contribution to the modernization of
Chengdu. Although it is doubtful that any political changes will affect the
Chengdu project to any great extent due to the fact that development is a
necessary contribution to the modernization of the Chengdu that the Central
Government has supported, there can be no assurance that political upheaval
will not occur and negatively effect the project. Although China's
<PAGE>26
governing central committee has repeatedly stated through its official
government and local newspapers communications as well as through its
Hong Kong and Macaus Affairs office in Hong Kong that current policies
will not be changed, there can be no assurance that political uncertainty will
not materially impact the operations of the Company.
Proposed Business Activities. The Company, through its trustee
company, Central Ocean International, Ltd of Hong Kong, has entered into
an interim joint venture agreement with a government owned development
company, Estate Exploitation Corporation, Jinniu District of Chengdu, to
develop a site in the City of Chengdu, China upon which it intends to build
a commercial/residential/hotel complex to be known as the "Royal Plaza",
on a 6.6 acre parcel in the heart of Chengdu.
In China, there are three agreements which must be entered into before
actual commencement of any venture, the letter of intent, the interim joint
venture agreement and the final joint venture agreement. Due to the costs
already expended by the Joint Venture Partner and the fact that the Joint
Venture Partner entered into the letter of intent and then the interim joint
venture agreement, the Company is of the opinion that there is limited risks,
if any, posed by the fact that the final joint venture agreement has not yet
been entered into. However, there can be no assurance that the Joint
Venture Partner will enter into the final joint venture agreement. There
will be some expenses in signing the final joint venture agreement. These
costs would include travel expenses and costs relating to arrangements of
the signing ceremony and the ceremonial banquet that customarily follows
such formal signing. The Company intends to go to Chengdu to enter into
the final joint venture agreement upon the effective date of this registration
statement.
The interim joint venture agreement states that certain amounts were to be
deposited into the project by the parties within a limited time frame. To
date, the amounts stipulated in the interim joint venture agreement were not
deposited by the joint venture parties. The Company was verbally informed
by the Joint Venture Partner that it had contacted the Hong Kong based
Linjin Syndication (previously a party to the interim joint venture
agreement) and that Linjin is considered as voluntarily withdrawn from the
joint venture due to its inability to make any deposits or to communicate
with the Joint Venture Partner. The Company has been in continuous
communication with the Joint Venture Partner regarding the status of this
registration statement. The Joint Venture Partner has verbally agreed that
the fact the Company was not able to deposit the required funds into the joint
venture within the required time period will not affect the validity of the
interim joint venture agreement or the Company's relationship with the Joint
Venture Partner.
The Company shall receive a 80% distribution of all profits in the joint
venture. The Royal Plaza shall consist of one 3- story hotel tower, one 30
story office tower, one 28 story service apartment, two 28 story residential
towers, one 15 story multi-functional tower, four levels of shopping arcade
and two levels of basement parking. This is the largest real estate
<PAGE>27
development project in the 2300 year history of the City of Chengdu totaling
175,000 square meters of floor area. The joint venture will sell the two 28
story residential towers, the 28 story service apartment tower, the 15 story
multi-functional tower (three stories of the 15 story multi-functional tower
must be given to the government as compensation for expropriating the
government building when assembling the site) and ten stories of the 30
story officer tower to pay off the initial investment for the project. The
remaining buildings, the four level shopping arcade, 20 stories of the office
tower and the 30 story hotel tower shall remain as the joint venture
holdings. The joint venture will also hold the "right of use" to the 6.6
acres of land for a period of 70 years. All land in China is state-owned. An
entity can acquire only the "right of use" for a period of time. The price for
the land is derived from the length of this "right of use".
The estimated cost of the project as of mid 1995 is $52,000,000. The
Company is required to deposit US$6,000,000 into the joint venture. The
Company intends to obtain the necessary funds through the sale of its
securities, both publicly and privately, private loans, contractor
loans/subsidies and mortgages on the project. The Company has no
commitments for any funds and there can be no assurance that it will obtain
the necessary funding.
The Company, through the joint venture, intends to pre-sell the two
residential and one service apartment tower to a minimum of 80% prior to
the actual construction of these towers. Mortgage funding of up to 60% of
the retail cost of the units will be available through the Company's
arrangements with financing banks. The apartment owners will be required
to make a deposit of the remaining 40% of the retail costs. Currently, the
Company has had preliminary dialogues with banking institutes located in
Hong Kong and Singapore. One of the banks, Far East Bank, has
expressed interest in providing the necessary mortgage financing to
prospective apartment buyers. However, no written commitment will be
issued from the Far East Bank prior to the Company obtaining sufficient
funds to start on the construction of that part of the project which requires
such mortgage financing. There is no guarantee that the Far East Bank will
continue to show interest in providing the proposed mortgage financing.
In a densely populated city like Chengdu, the average two-bedroom
apartment unit will be approximately 570 square feet while a three bedroom
unit will be approximately 670 square feet. The former will have 3 to 4
working adults and the latter will most likely house 4 working adults and 1
or 2 children. The market price for the two bedroom will be approximately
US$31,000 and the three bedroom with be US$36,000. There will also be
larger units to cater to the more affluent entrepreneur. There are many of
this type of people in cities "opened" for foreign investments. For these
people, income of several thousands a month is not uncommon. For the
average working family, with 4 working adults, their combined income is
approximately US$700 per month. Additionally, an average worker
receives about $200 per year bonus. With a 60% mortgage of
US$21,600, the monthly debt service charge is about US$110. If the
principal were to be repaid in five years, the total monthly debt will be
<PAGE>28
approximately US$470. A family in China pays about US$6.00 per
month in rent, $100 a month for food and miscellaneous expenses. It also
receives free medicare and subsidies in food and traveling. Savings are
encouraged in China. After payment of all related living expenses, the
average worker has over $550 per month or $6,840 per year for savings.
As the family income increases every year and together with their annual
bonuses (which depends on the annual profit of the companies worked for)
the average working family should not have difficulty serving this debt.
The 40% downpayment for the units will be approximately US$14,400.
Chengdu has the highest Gross Domestic Products ("GDP") in the
Province. Its GDP is 50% higher than the neighboring city of Chongqing
which has a population of over 17 million. Since Chengdu acquired "open
city" status from the Central Government, the GDP has increased
significantly. The skilled labor and educated workers in most interior cities
now earn approximately US$180-250 per month.
The office tower and shopping arcade are to be leased and managed by
professional management teams under strict control by the joint venture
partners. The hotel tower shall also be managed by internationally
recognized names such as Hilton, Sheraton, Hyatt, Four Seasons, etc. To
date, no agreements have been reached with any of these entities and there
can be no assurance that such agreements will ever be obtained. The joint
venture also intends to develop a casino. The casino, with entry by means
of passports, has been proposed to relevant government officials and met
with wide support. Similarly, the Company has approached several casino
operators who are interested in financing the casino operation for a portion
of the profits. Currently, there are no 5-star luxury hotels or casinos in the
city of Chengdu and there are no known proposals to build any such facilities in
the city of Chengdu.
Marketing Plan. Currently there is a similar project (residential and
shops only) with approximately 560 dwelling units underway at a location
20 miles west of the city. The developer, Toyan Group (Chengdu) Real
Estate Development Co. Ltd. from Hong Kong ("Toyan"), introduced 60%
mortgage financing for those purchasers who needed it. The project was
marketed through newspaper advertising three days before the actual public
sale. Limiting the public offer between July 20, 1994 to July 28, 1994, a
total of 9 days, 95% of the 560 units were pre-sold.
Similar to Toyan, mortgage financing will be provided to allow the
purchaser, after the down payment, to make subsequent payments regularly
over a five year period. The Company has received preliminary approval
from Far East Bank located in Hong Kong and China. However, no
written commitment will be issued from the Far East Bank prior to the
Company obtaining sufficient funds to start on the construction of that part
of the project which requires such mortgage financing. There is no
guarantee that the Far East Bank will continue to show interest in providing
the proposed mortgage financing.
<PAGE>29
The Company will utilize similar marketing techniques employed by the
Toyan Group to sell its dwelling units. The joint venture will also pre-sell
the units on a limited time basis and will require a 20% down payment with
another 20% due within twelve months after a purchase agreement has been
entered into. Additionally, however, the Company intends to extend the
marketing endeavor to include cities such as Hong Kong, Singapore, Kuala
Lumpur, Jarkata, Manila, London England, Vancouver Canada or other
major cities where a large Chinese population and a large China trade
business exist. The extent of such marketing will be dependent on how
easily the units sell and the success of obtaining the necessary marketing
and development funds.
Model units will be set up at the site prior to the public offering of the
units. There will be four suite types ranging from two bedrooms to four
bedrooms and areas from approximately 58 to 125 square meters.
The remainder of the complex, namely, the 30 story hotel tower, the 20
stories of the office tower and the four levels of retail space are to be leased
and maintained for cashflow purposes.
Time Schedule. The following is the preliminary time table of when the
Company believes the various parts of the Chengdu complex will be
completed and when the Company intends to begin leasing space in its
office tower and retail space. Year 0 commences after financing for the
entire development is obtained and design drawings and permits are
completed and issued. Pre-selling and pre-renting of the units will not
begin until financing is in place. All of the following is contingent upon the
Company's ability to obtain the necessary financing.
<TABLE>
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
<S> <C> <C> <C> <C> <C> <C>
Hotel Construction -----------------------------
Recruiting Operator ----------
Design, Decor,
Outfitting --------------------
Install Support
Facilities --------------------
Finishing/Landscaping ----------
Test Run ----------
Grand Opening -------
Continuous Business ----------------------------
Office Tower Construction
--------------------
Sale/Rental of strata units ----------------------------
Installation/Finishing -----------
Grand Opening -------
Continuous Business ----------------------------
<PAGE>30
Residential Tower
Construction --------------------
Rental/Sale
of strata units -----------------------------
Finishing/Landscaping -----------
Retail/Commercial
Construction. -------------------------------
Retail/Sale
of strata units ------------------------------------
Finishing/Protection
during Construction --------------------------
Prepare for Business ----------------------------
</TABLE>
If the minimum of US$6,000,000 is raised, either one residential tower or
the retail/commercial complex may commence activities in Year 0, the
former, proceeding to pre-sell and the latter proceeding to construction. If
only the minimum amount ($6,000,000) is raised, it is not probable that the
Company will start pre-selling the residential tower right away as this
portion of the project will tie up the least amount of capital. However, the
decision will be dependent on the residential market conditions then
prevailing. If, at that time, there is a higher demand for retail/commercial
facilities than residential units, the joint venture partners may then decide to
start on the retail/commercial portion first. The $6,000,000 includes
$1,000,000 to $1,500,000 to be raised in this offering.
All of the above information was extracted from statistics issued by the
Administration Department of the People's Government of the City of
Chengdu, various newspaper articles from "Wenhui Pao" of Hong Kong
and "Chengdu Evening Post" of the City of Chengdu and the "Market
Report on Sichuan Province" by The Hong Kong Trade Development
Council, August, 1993, pp. 1-28.
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Trends and Uncertainties. There can be no assurance that this
Offering will be successful and the Company can finance, with its joint
venture partner, the Royal Plaza project. The Company will attempt to
reduce the major variables of interest rates and operating expense.
However, as the Company has little or no control as to the demand for its
products and services, inflation, governmental intervention and changing
prices could have a material effect on the future profitability of the
Company.
<PAGE>31
Capital Resources and Source of Liquidity. To date, the Company
has not yet commenced operations. The Company shall be dependent upon
the proceeds of this offering, future private equity offerings and debt
financing to fund its proposed joint venture project and begin to receive
revenues. Short term liquidity has been achieved through the capital
contributions of the current officers and directors.
On a long term basis, liquidity is dependent on revenues from operations
and additional infusions of capital and debt financing. The Company
believes that additional capital and debt financing in the short term will allow
the Company to move forward with its joint venture and thereafter result in
revenue and greater liquidity in the long term. However, there can be no
assurance that the Company will be able to obtain additional equity or debt
financing in the future, if at all.
Plan of Operations. The Company intends to continue fundraising efforts
through the sale of its securities, both publicly and privately, private loans,
contractor loans/subsidies and mortgages on the project. The Company
shall approach private lenders for loans based on the merit of the project.
Said loans shall be repaid through equity funding and/or future revenues, if
any. The Company shall also approach various venture capitalists or large
construction firms to be equity partners. The Company shall also attempt to
raise funds through pre-sales of its units and construction mortgages. The
Company has no commitments for any funds and there can be no assurance
that it will obtain the necessary funding.
The Company shall conduct seminars on the Company's project to increase
awareness. The Company shall search for and recruit individuals to join the
management team of the Company and its Board of Directors to upgrade the
Company's public perception of the Company's credibility.
The Company shall travel to the project site to obtain up-to-date status of
current economic and political information and then revise as necessary the
Company's plan of operation to reflect the changes. Consequently, the
priority of various parts of the project may change. One building may need
to be built first while others may need to be re-scheduled for a later date to
compromise for local conditions prevailing at that time.
The Company shall establish a firm commitment with the joint venture
partner prior to commencement of construction of the project, taking into
account thorough research with current data. The Company shall then
update and finalize all terms and conditions of the Interim and Final Joint
venture Agreement.
The Company anticipates that the proceeds of the offering will be sufficient
to cover the expenses described above as well as general and administrative
expenses for a twelve month period.
Results of Operations. The Company has not yet commenced
operations. The expenditures for the research and development which
resulted in the choice of the property and project in Chengdu, China were
paid for by current shareholders of the Company. These cash transactions
<PAGE>32
have been recorded by the Company and the current shareholders were
issued Common Shares at the average price of $.10 per Common Shares.
MANAGEMENT
Officers and Directors. Pursuant to the Bylaws, each Director shall
serve until the annual meeting of the stockholders, or until his successor is
elected and qualified. It is the intent of the Company to support the election
of a majority of "outside" directors at such meeting. The Company's basic
philosophy mandates the inclusion of directors who will be representative of
management, employees and the minority shareholders of the Company.
Directors may only be removed for "cause". The term of office of each
officer of the Company is at the pleasure of the Company's Board.
The principal executive officers and directors of the Company are as
follows:
<TABLE>
<CAPTION>
Name Position Term(s) of Office
<S> <C> <C>
Alan Kwong, age 35 President From Inception
Director to present
Ken Wong, age 40 Vice-President From Inception
Director to present
Robin Young, age 55 Secretary/Treasurer From Inception
Director to present
Jap Chong Young, age 86 Director From March 25, 1995
to present
</TABLE>
Family Relationships. There are no family relationships between any
director or executive officer or person nominated or chosen by the Company
to become a director or executive officer.
Business Experience. The following is a brief account of the business
experience during at least the past five years of the directors and executive
officers, indicating their principal occupations and employment during that
period, and the names and principal businesses of the organizations in
which such occupations and employment were carried out.
Alan Kwong. Mr. Kwong is currently President and a Director of the
Company. He received a Bachelor of Arts degree in fine arts from the State
University of New York in 1985. He studied advertising design at the
Fashion Institute of Technology in New York and also received a master's
degree in computer graphics from the New York Institute of Technology in
1987. Mr. Kwong is currently a 60% owner of Central Ocean
International, Ltd. which is acting as the trustee company. From May 1985
to October 1987, Mr. Kwong was Operation Manager for AM-CALL
COMMUNICATIONS. From October 1987 to December 1994, Mr.
<PAGE>33
Kwong was the President of PACIFIC STAR INT'L INC. which engaged
in project research and development. Mr. Kwong has also been involved
in various China trades in the form of imports and exports.
Ken Wong. Mr. Wong is currently Vice President and a Director of the
Company. He received a degree in architecture from the University of
British Columbia in 1984, a B.I.D. degree in interior design from the
University of Manitoba in 1979. Mr. Wong is an associate member of
Ontario Association of Architects and is a registered member of the
Association of Registered Interior Designers of Ontario and Interior
Designers of Canada. Mr. Wong has over Fifteen (15) years of
architectural design and building construction. Mr. Wong has been a
principal of Insite Architects, Inc. since 1985. Mr. Wong is also a
cofounder of Landtek Properties, Inc., a land development company in
Vancouver BC which was incorporated in 1990.
Robin Young. Mr. Young is currently the Secretary/Treasurer and a
Director of the Company. He received a B.A.Sc. degree in Civil
Engineering from the University of British Columbia in 1963. He
conducted his post graduate studies at Concordia University and received a
Master's Degree in Civil and Structural Engineering in 1970. Mr. Young
has taken various advancement studies in subject matters such as business
management, negotiation skills, computers, China trades, import and
export, etc. Mr. Young is a member of the Association of Professional
Engineers and Geologists of British Columbia, the American Society of
Civil Engineers, the Canadian Society of Civil Engineers and the
Engineering Institute of Canada. Since 1975, Mr. Young has been a
principal of Young Engineering Corporation. He was the Principal of
Coreng Construction Ltd. from 1976 to 1990 and co-founder and managing
director of Landtek Properties, Inc. from 1994 to present.
Jap Chong Young. Mr. Young is currently a Director of the Company.
Mr. Young retired in August, 1987. From 1949 to 1987, Mr. Young
managed and owned a retail produce business, Young Produce, in
Vancouver, British Columbia. Prior to that, from 1939 to 1949, Mr.
Young worked in the import and export business.
Identification of Certain Significant Employees. The Company does not
employ any other persons who make or are expected to make significant
contributions to the business of the Company.
Directorships. Mr. Ken Wong is a director of Affiance, Inc., a public
company which is subject to the requirements of Section 15(d) of the
Securities Act of 1933. No other director or nominee holds a directorship
in any other company with a class of securities registered pursuant to
Section 12 of the Securities Exchange Act of 1934 or subject to the
requirements of Section 15(d) of such Act or any company registered as an
investment company under the Investment Company Act of 1940. There
are no nominees for director at this time.
<PAGE>34
Remuneration. Since inception and as of the date of filing this report, no
compensation has been paid. Compensation arrangements or plans to
compensate for services in the past or future shall be determined by the
Board of Directors at a later date.
Compensation Pursuant to Plans. The Company has no plan pursuant to
which cash or non-cash compensation was paid or distributed during the
last fiscal year, Compensation to be paid or distributed in the future, to the
individuals and group described above in this Item shall be determined by
the Board of Directors at a later date when it deems necessary.
Compensation of Directors. Directors of the Company who are not
employees of the Company may receive a fee of $25 per meeting for their
attendance at meetings of the Company's Board of Directors, and are
entitled to reimbursement for reasonable travel expenses.
Termination of Employment and Change of Control Arrangement. Except
as noted in the next paragraph, the Company has no compensatory plan or
arrangements, including payments to be received from the Company, with
respect to any individual named above for the latest or the next preceding
fiscal year, if such plan or arrangement results or will result from the
resignation, retirement or any other termination of such individual's
employment with the Company, or from a change in control of the
Company or a change in the individual's responsibilities following a change
in control.
CERTAIN TRANSACTIONS
Changes in Control. There are no arrangements, known to the Company,
including any pledge by any person of securities of the Company, the
operation of which may at a subsequent date result in a change of control of
the Company.
Sublease from Affiliate. The Company currently subleases its premises
from an affiliate at a rate of $1,300 per month. Management is of the
opinion that the terms of the sublease are as favorable as could be obtained
by a nonaffiliate.
PRINCIPAL SHAREHOLDERS
There are currently 3,443,667 Common Shares outstanding. The following
tabulates holdings of shares of the Company by each person who, subject to
the above, at the date of this Memorandum, holds of record or is known by
Management to own beneficially more than 5.0% of the Common Shares
and, in addition, by all directors and officers of the Company individually
and as a group.
<PAGE>35
Shareholdings at Date of
This Prospectus
<TABLE> Amount
Name and Address Amount of
of of Common Shares
Beneficial Owner Common Shares Owned After
Currently Owned Percent Offering Percent
<S> <C> <C> <C> <C>
Alan Kwong
16793 NE 35th Street
Bellevue, WA 605,417 17.58% 544,875 10.01%
Ken Wong(1)
6257 Yew Street
Vancouver, BC 516,625 15.00% 464,962 8.54%
Robin Young(2)
757 Howard Avenue
Burnaby, BC 546,625 15.87% 491,962 9.04%
Jap Chong Young
21112 - 123rd Avenue
Maple Ridge, BC 604,858 17.56% 544,372 10.00%
All Directors & Officers
as a group (4) 2,297,108(3) 66.71% 2,046,171 37.59%
</TABLE>
Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared
voting power (including the power to vote or direct the voting) and/or sole
or shared investment power (including the power to dispose or direct the
disposition) with respect to a security whether through a contract,
arrangement, understanding, relationship or otherwise. Unless otherwise
indicated, each person indicated above has sole power to vote, or dispose or
direct the disposition of all shares beneficially owned, subject to applicable
community property laws.
(1)Includes Landtek Properties, Inc. (76,417 common shares), and Ken
Wong (440,208 common shares), a cofounder of Landtek Properties, Inc.,
who together constitute a "group", as that term is defined in Section 13D of
the Securities Exchange Act of 1934, as amended.
(2)Includes Landtek Properties, Inc. (76,417 common shares), and Robin
Young (470,208 common shares), a cofounder of Landtek Properties, Inc.,
who together constitute a "group," as that term is defined in Section 13D of
the Securities Exchange Act of 1934, as amended.
(3)Includes all of the directors and officers solely owned common shares
and the 76,417 common shares held by Landtek Properties, Inc.
<PAGE>36
SHARES ELIGIBLE FOR FUTURE SALE
The Company currently has 3,443,667 shares of Common Stock
outstanding. Other securities may be issued, in the future, in private
transactions pursuant to an exemption from the Securities Act are "restricted
securities" and may be sold in compliance with Rule 144 adopted under the
Securities Act of 1933, as amended. Rule 144 provides, in essence, that a
person who has held restricted securities for a period of two years may sell
every three months in a brokerage transaction or with a market maker an
amount equal to the greater of 1% of the Company's outstanding shares or
the average weekly trading volume, if any, of the shares during the four
calendar weeks preceding the sale. The amount of "restricted securities"
which a person who is not an affiliate of the Company may sell is not so
limited: Nonaffiliates may each sell without limitation shares held for three
years. The Company will make application for the listing of its Shares in the
over-the-counter market. Sales under Rule 144 may, in the future, depress
the price of the Company's Shares in the over-the-counter market, should a
market develop. Prior to this offering there has been a limited public
market for the Common Stock of the Company. The effect, if any, of a
public trading market or the availability of shares for sale at prevailing
market prices cannot be predicted. Nevertheless, sales of substantial
amounts of shares in the public market could adversely effect prevailing
market prices.
MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
Prior to this Offering, there has been no market for the Company's common
stock. Upon successful completion of this offering, the Company intends
to apply to have its common stock traded in the over-the-counter market and
listed on the OTC Bulletin Board.
Holders. The approximate number of holders of record of the Company's
.10 par value common stock, as of June 30, 1995 was twenty-eight (28).
Dividends. Holders of the Company's common stock are entitled to
receive such dividends as may be declared by its Board of Directors.
Broker-Dealer Sales of Company Securities. Upon successful
application for the trading of its securities on the over-the-counter market
and until the Company successfully obtains a listing on the NASDAQ
quotation system, if ever, the Company's securities may be covered by Rule
15g-2 under the Securities Exchange Act of 1934 that imposes additional
sales practice requirements on broker-dealers who sell such securities to
persons other than established customers and accredited investors (generally
institutions with assets in excess of $5,000,000 or individuals with net
worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse). For transactions covered by the rule,
the broker-dealer must make a special suitability determination of the
purchaser and have received the purchaser's written agreement to the
transaction prior to the sale. In order to approve a person's account for
<PAGE>37
transactions in designated securities, the broker or dealer must (i) obtain
information concerning the person's financial situation, investment
experience and investment objectives; (ii) reasonably determine, based on
the information required by paragraph (i) that transactions in designated
securities are suitable for the person and that the person has sufficient
knowledge and experience in financial matters that the person reasonably
may be expected to be capable of evaluating the rights of transactions in
designated securities; and (iii) deliver to the person a written statement
setting forth the basis on which the broker or dealer made the determination
required by paragraph (ii) in this section, stating in a highlighted format that
it is unlawful for the broker or dealer to effect a transaction in a designated
security subject to the provisions of paragraph (ii) of this section unless the
broker or dealer has received, prior to the transaction, a written agreement to
the transaction from the person; and stating in a highlighted format
immediately preceding the customer signature line that the broker or dealer
is required to provide the person with the written statement and the person
should not sign and return the written statement to the broker or dealer if it
does not accurately reflect the person's financial situation, investment
experience and investment objectives and obtain from the person a manually
signed and dated copy of the written statement. A designated security
means any equity security other than a security (i) registered, or approved
for registration upon notice of issuance on a national securities exchange
that makes transaction reports available pursuant to 17 CFR 11Aa3-1 (ii)
authorized or approved for authorization upon notice of issuance, for
quotation in the NASDAQ system; (iii) that has a price of five dollars or
more or . . . (iv) whose issuer has net tangible assets in excess of
$2,000,000 demonstrated by financial statements dated less than fifteen
months previously that the broker or dealer has reviewed and has a
reasonable basis to believe are true and complete in relation to the date of the
transaction with the person. Consequently, the rule may affect the ability
of broker-dealers to sell the Company's securities and also may affect the
ability of purchasers in this Offering to sell their shares in the secondary
market.
TERMS OF OFFERING
Plan of Distribution. The Company hereby offers up to 2,000,000
Common Shares at the purchase price of $2.00 per Common Share. The
Common Shares are being offered on a "best efforts" basis by the Company
(employees, consultants, officers and directors) and possibly selected
broker-dealers. No sales commission will be paid for Common Shares sold
by the Company. Selected broker-dealers shall receive a sales commission
of up to 10% for any Common Shares sold by them. The Company reserves the
right to withdraw, cancel or reject an offer in whole or in part. The
Common Shares offered hereby will not be sold to insiders, control persons,
or affiliates of the Company.
Determination of Offering Price. The offering price and other terms
of the Common Shares were arbitrarily determined by the Company after
considering the total offering amount needed and the possible dilution to
existing and new shareholders.
<PAGE>38
Offering Procedure. This Offering will terminate on or before
December 31, 1996. In the Company's sole discretion, the offering of
Common Shares may be extended for up to three Thirty day periods, but in
no event later than March 31, 1997.
Subscription Procedure. The full amount of each subscription will be
required to be paid with a check payable to the Company in the amount of
the subscription. Such payments are to be remitted directly to the Company
by the purchaser or by the soliciting broker/dealer before 12:00 noon, on the
following business day, together with a list showing the names and
addresses of the person subscribing for the offered Common Shares or
copies of subscribers confirmations. The gross proceeds shall be deposited
directly into the operating account of the Company.
No Escrow Account. There is no minimum amount of this Offering
and, as a result, any and all offering proceeds will be deposited directly into
the operating account of the Company.
DESCRIPTION OF SECURITIES
Qualification. The following statements constitute brief summaries of the
Company's Certificate of Incorporation and Bylaws, as amended. Such
summaries do not purport to be complete and are qualified in their entirety
by reference to the full text of the Certificate of Incorporation and Bylaws.
The Company's articles of incorporation authorize it to issue up to
100,000,000 Common Shares, .10 par value. The currently outstanding
3,443,667 Common Shares are fully paid and non-assessable.
Common Stock. Holders of Common Shares of the Company are
entitled to cast one vote for each share held at all shareholders meetings for
all purposes, excluding the election of directors (see "Cumulative Voting"
below), and to share equally on a per share basis in such dividends as may
be declared by the Board of Directors out of funds legally available therefor.
Upon liquidation or dissolution, each outstanding Common Share will be
entitled to share equally in the assets of the Company legally available for
distribution to shareholders after the payment of all debts and other
liabilities. Common Shares are not redeemable, have no conversion rights
and carry no preemptive or other rights to subscribe to or purchase
additional Common Shares in the event of a subsequent offering. All
outstanding Common Shares are, and the shares offered hereby will be
when issued, fully paid and non-assessable.
Cumulative Voting. The Common Shares have cumulative voting rights.
Cumulative voting is a method that improves minority shareholders'
chances of naming representatives to the board of directors. Each
shareholder is entitled to vote none, a portion or all of its Common Shares
for each director.
<PAGE>39
Dividends. There are no limitations or restrictions upon the rights of the
Board of Directors to declare dividends out of any funds legally available
therefor. The Company has not paid dividends to date and it is not
anticipated that any dividends will be paid in the foreseeable future. The
Board of Directors initially may follow a policy of retaining earnings, if
any, to finance the future growth of the Company. Accordingly, future
dividends, if any, will depend upon, among other considerations, the
Company's need for working capital and its financial conditions at the time.
Transfer Agent. Nevada Agency & Trust Company acts as its transfer
agent for the securities of the Company.
LEGAL MATTERS
The due issuance of the Common Shares offered hereby will be opined
upon for the Company by Godinho, Sinclair in which opinion Counsel will
rely on the validity of the Certificate of Incorporation issued by the Province
of British Columbia and the representations by the management of the
Company that appropriate action under Canadian law has been taken by the
Company.
LEGAL PROCEEDINGS
The Company is not involved in any legal proceedings as of the date of this
Prospectus.
EXPERTS
The audited financial statements included in this Prospectus have been so
included in reliance on the report of Thomas J. Harris, Certified Public
Accountants, on the authority of such firm as experts in auditing and
accounting.
INTERESTS OF NAMED
EXPERTS AND COUNSEL
None of the experts or counsel named in the Prospectus are affiliated with
the Company.
<PAGE>40
Global Pacific Enterprises, Inc.
(A Development Stage Company)
Balance Sheet
For the Nine Months Ended July 31, 1996 and 1995
Unaudited
<TABLE>
Assets
<CAPTION>
1996 1995
--------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash on Hand $ -0- $ -0-
TOTAL CURRENT ASSETS $ -0- $ -0-
PROPERTY & EQUIPMENT:
TOTAL FIXED ASSETS $ -0- $ -0-
OTHER ASSETS
TOTAL ASSETS $ -0- $ -0-
========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Due to Shareholders $ -0- $ 151,583
Loans Payable -0- $ 192,784
---------- ----------
TOTAL LIABILITIES $ -0- $ 344,367
Stockholder's Equity:
Common Stock, $.10 par value;
100,000,000 shares authorized and
3,443,367 shares issued $344,367 $ -0-
Deficit accumulated during the
development stage (344,367) (344,367)
---------- -----------
TOTAL STOCKHOLDER'S EQUITY $ -0- $ -0-
---------- -----------
TOTAL LIABILITIES &
STOCKHOLDER'S EQUITY $ -0- $ -0-
========== ===========
</TABLE>
It is the opinion of management that all necessary adjustments have been
made to the interim statements so that they are not misleading.
<PAGE>41
GLOBAL PACIFIC ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Earnings (Deficit) and Retained Deficit
For the Nine Months Ended July 31, 1996 and 1995
and Accumulated during the development stage
Unaudited
<TABLE>
Accumulated
During the
Development
1996 1995 Stage
<CAPTION>
<S> <C> <C> <C>
REVENUE $ -0- $ -0- $ -0-
EXPENSES:
Research and Development Costs $ -0- $ 344,367 $ 344,367
---------- ---------- -----------
NET LOSS FOR THE PERIOD $ -0- $(344,367) $(344,367)
Retained Deficit
Balance beginning of period $ (344,367) $ -0- $ -0-
---------- ---------- ----------
Balance end of period $ (344,367) $(344,367) $(344,367)
========== ========== ==========
</TABLE>
It is the opinion of management that all necessary adjustments have been
made to the interim statements so that they are not misleading.
<PAGE>42
GLOBAL PACIFIC ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Stockholders' Equity
For the Nine Months Ended July 31, 1996 and 1995
And Accumulated during the development stage
Unaudited
<TABLE>
Common Stock Deficit
----------------- Accumulated
Number Additional during the
of Shares Paid-in Development
Issued Amount Capital Stage
----------- ---------- --------- -----------
<S> <C> <C> <C> <C>
Totals October 31, 1994 -0- $ -0- $ -0-
=============================================================
Totals July 31, 1995 -0- $ -0- $ (344,367)
=============================================================
Totals October 31, 1995 3,444,367 $344,367 $ (344,367)
=============================================================
Totals July 31, 1996 3,444,367 $344,367 $ (344,367)
=============================================================
</TABLE>
It is the opinion of management that all necessary adjustments have been
made to the interim statements so that they are not misleading.
<PAGE>43
GLOBAL PACIFIC ENTERPRISES, INC.
(A Development Stage Company)
Statement of Cash Flows
For the Nine Months Ended July 31, 1996 and 1995
and Accumulated during the development stage
Unaudited
<TABLE>
Accumulated
During the
Development
1996 1995 Stage
------------- ------------- --------------
<S> <C> <C> <C>
Operating Activities
Net Income (Loss) $ -0- $ (344,367) $ (344,367)
Cash Provided (used)
by Operations $ -0- $ (344,367) $ (344,367)
---------------- ---------------- --------------
Investing Activities
Net Cash Provided (used)
by Investing Activities $ -0- $ -0- $ -0-
Financing Activities
Shareholder loans $ -0- $ 151,583 $ 151,583
Loans payable $ -0- 192,784 192,784
---------------- ---------------- --------------
Net Cash provided (used) by
Financing Activities $ -0- $ 344,367 $ 344,367
---------------- ---------------- --------------
Increase (Decrease)
in Cash $ -0- $ -0- $ -0-
Cash Balance Beginning $ -0- $ -0- $ -0-
---------------- ---------------- ----------------
Cash Balance Ending $ -0- $ -0- $ -0-
================ ================
================
</TABLE>
It is the opinion of management that all necessary adjustments have been
made to the interim statements so that they are not misleading.
<PAGE>44
GLOBAL PACIFIC ENTERPRISES, INC.
(A Development Stage Company)
Notes to Financial Statements
For the Nine Months Ended July 31, 1996 and 1995
and Accumulated during the Development Stage
Unaudited
Note A - Summary of Significant Accounting Policies
BUSINESS ACTIVITY
GLOBAL PACIFIC ENTERPRISES, INC. was incorporated November
24, 1994 in the Province of British Columbia, Canada and has elected an
October 31, fiscal year end. The Company, through its trustee company,
Central Ocean International Ltd. of Hong Kong has signed an interim
foreign-China joint venture agreement to develop a site in Chengdu, China
upon which it intends to build a commercial/residential/hotel complex.
Most of the predevelopment has been done and the company is attempting to
obtain financing in order to begin construction.
The company has expended approximately $345,000 US in the research and
project development in the form of site and project selections which resulted
in the choice of the property and project in Chengdu, China. This amount
has been expensed on these financial statements because until the financing
for the project is completed there is little value in these expenditures.
Since it is anticipated that the costs expended above will either be capitalized
or written off with no future benefit, no deferred tax asset has been
computed per FAS #109.
NOTE B - RELATED PARTY TRANSACTIONS
The expenditures for the research and development which resulted in the
choice of the property and project in Chengdu, China were paid for by
shareholders of the company. These transactions have been recorded by
the company and the shareholders have been issued shares of common
stock, at a rate of $.10 per common share, its par value. It was assumed
that the par value approximates fair value.
NOTE C - INCOME TAXES
The company may have unused net operating loss carry forwards to use in
future years assuming it will have profitable operations in those years, if not
used these loss carry forwards will expire in 2009 and 2010. No deferred
tax assets have been computed because the valuation allowance would
eliminate the amount accrued.
<PAGE>45
NOTE D - RESEARCH AND DEVELOPMENT COSTS
The research and development costs consisted of the following:
<TABLE>
<S> <C>
Special Consultants $ 87,500
Advances* 217,233
Travel 34,478
Office 3,127
Auto 1,365
Promotion 664
------------
Total $ 344,367
============
</TABLE>
*Payments and costs advanced toward acquisition of the property.
Since acquisition of the property will not be probable until after financing is
secured per SFAS 67 the costs have been expensed and not capitalized.
The company intends to account for research and development costs in
accordance with SFAS 67.
NOTE E - CASH TRANSACTIONS
Since none were actually paid by the company and were paid by the
shareholders, there are no cash receipts or disbursements shown on these
financial statements.
NOTE F - JOINT VENTURE
The Interim Joint Venture Agreement was signed between the Company's
trustee company, Central Ocean International Ltd. of Hong Kong acting on
the Company's behalf and the Chinese Party, Real Estate Exploitation
Corporation Jinniu District. The terms are that the foreign party shall
inject 80% of the registered capital and be responsible for raising the
necessary funds for the development of the project all for 0% of the joint
venture shares. The Chinese Party, which has spent $2,320,000 toward
appropriation costs, relocation costs, leasehold fees, design and soil
explorations, development capital costs, advertising and promotion costs,
shall retain 20% of the share of the joint venture company.
The Company, with consent of the Chinese counterpart, intends to
commission an independent accounting firm to structure accounting policy
suitable for a joint venture project. This firm shall remain on site until the
project is completed and the joint venture's proposed business is well on
track. This firm shall also be responsible for training an able accounting
team for the joint venture. The joint venture will be accounted for using the
equity method.
<PAGE>46
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
GLOBAL PACIFIC ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
Vancouver, BC Canada
We have audited the accompanying balance sheet of Global Pacific
Enterprises, Inc. (A Development Stage Company) as of October 31, 1995
and the related statements of earnings (deficit) and retained deficit and cash
flows for the period from inception November 24, 1994 to October 31,
1995. These financial statements are the responsibility of management.
Our responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Global Pacific Enterprises,
Inc., as of October 31, 1995, and the results of its operations and cash
flows for the periods then ended, in conformity with generally accepted
accounting principles.
/s/ Thomas J. Harris
March 14, 1996
<PAGE>47
Global Pacific Enterprises, Inc.
(A Development Stage Company)
Balance Sheet
October 31, 1995
Assets
<TABLE>
1995
--------------
<S> <C>
CURRENT ASSETS
Cash on Hand $ -0-
TOTAL CURRENT ASSETS $ -0-
PROPERTY & EQUIPMENT:
TOTAL FIXED ASSETS $ -0-
OTHER ASSETS
TOTAL ASSETS $ -0-
==========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
TOTAL CURRENT LIABILITIES $ -0-
----------
TOTAL LIABILITIES $ -0-
Stockholder's Equity:
Common Stock, $.10 par value;
100,000,000 shares authorized and
3,443,367 shares issued $344,367
Deficit accumulated during the
development stage (344,367)
----------
TOTAL STOCKHOLDER'S EQUITY $ -0-
----------
TOTAL LIABILITIES &
STOCKHOLDER'S EQUITY $ -0-
==========
</TABLE>
See accompanying notes and accountants' report
<PAGE>48
GLOBAL PACIFIC ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Earnings (Deficit) and Retained Deficit
For the Period From Inception November 24, 1994 to October 31, 1995
and Accumulated during the Development Stage
<TABLE>
1995 Accumulated
during the
development
stage
<S> <C> <C>
REVENUE $ -0- $ -0-
EXPENSES:
Research and Development Costs $ 344,367 $ 344,367
----------- -----------
NET LOSS FOR THE PERIOD $(344,367) $(344,367)
Retained Deficit
Balance beginning of period $ -0- $ -0-
----------- -----------
Balance end of period $(344,367) $(344,367)
=========== ===========
</TABLE>
See accompanying notes and accountants' report
<PAGE>49
GLOBAL PACIFIC ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Stockholders' Equity
For the Periods From Inception November 24, 1994 to October 31, 1995
And Accumulated during the development stage
<TABLE>
Common Stock Deficit
------------------- Accumulated
Additional
Number during the
of Shares Paid-in Development
Issued Amount Capital Stage
--------- ---------- --------- ------------
<S> <C> <C> <C> <C>
Shares issued at par
June, 1995 to
reimburse expenses 2,568,667 $256,867
Shares issued at par
June, 1995 to reimburse
expenses for special
consultants 875,000 $ 87,500
Totals July 31, 1995 875,000 $ 87,500
Net Loss $(344,367)
-------------------------------------------------
Totals October 31, 1995 3,444,367 $344,367 $(344,367)
================================================
</TABLE>
See accompanying notes and accountants' report
<PAGE>50
GLOBAL PACIFIC ENTERPRISES, INC.
(A Development Stage Company)
Statement of Cash Flows
For the Period From Inception November 24, 1994 to October 1995 and
Accumulated during the Development Stage
<TABLE>
Accumulated
During the
Development
1995 Stage
------------- ------------
<S> <C> <C>
Operating Activities
Net Income (Loss) $ -0- $ -0-
Cash Provided (used)
by Operations $ -0- $ -0-
------------ -----------
Investing Activities
Net Cash Provided (used) by Investing
Activities $ -0- $ -0-
Financing Activities
Net Cash provided (used) by Financing
Activities $ -0- $ -0-
----------- -----------
Increase (Decrease) in Cash $ -0- $ -0-
Cash Balance Beginning $ -0- $ -0-
----------- -----------
Cash Balance Ending $ -0- $ -0-
=========== ===========
</TABLE>
See accompanying notes and accountants' report
<PAGE>51
GLOBAL PACIFIC ENTERPRISES, INC.
(A Development Stage Company)
Notes to Financial Statements
For the Nine Months Ended July 31, 1996 and 1995
and Accumulated during the Development Stage
Unaudited
Note A - Summary of Significant Accounting Policies
BUSINESS ACTIVITY
GLOBAL PACIFIC ENTERPRISES, INC. was incorporated November
24, 1994 in the Province of British Columbia, Canada and has elected an
October 31, fiscal year end. The Company, through its trustee company,
Central Ocean International Ltd. of Hong Kong has signed an interim
foreign-China joint venture agreement to develop a site in Chengdu, China
upon which it intends to build a commercial/residential/hotel complex.
Most of the predevelopment has been done and the company is attempting to
obtain financing in order to begin construction.
The company has expended approximately $345,000 US in the research and
project development in the form of site and project selections which resulted
in the choice of the property and project in Chengdu, China. This amount
has been expensed on these financial statements because until the financing
for the project is completed there is little value in these expenditures.
Since it is anticipated that the costs expended above will either be capitalized
or written off with no future benefit, no deferred tax asset has been
computed per FAS #109.
NOTE B - RELATED PARTY TRANSACTIONS
The expenditures for the research and development which resulted in the
choice of the property and project in Chengdu, China were paid for by
shareholders of the company. These transactions have been recorded by
the company and the shareholders have been issued shares of common
stock, at a rate of $.10 per common share, its par value. It was assumed
that the par value approximates fair value.
NOTE C - INCOME TAXES
The company may have unused net operating loss carry forwards to use in
future years assuming it will have profitable operations in those years, if not
used these loss carry forwards will expire in 2009 and 2010. No deferred
tax assets have been computed because the valuation allowance would
eliminate the amount accrued.
<PAGE>52
NOTE D - RESEARCH AND DEVELOPMENT COSTS
The research and development costs consisted of the following:
<TABLE>
<S> <C>
Special Consultants $87,500
Advances* 217,233
Travel 34,478
Office 3,127
Auto 1,365
Promotion 664
------------
Total $344,367
============
</TABLE>
*Payments and costs advanced toward acquisition of the property.
Since acquisition of the property will not be probable until after financing is
secured per SFAS 67 the costs have been expensed and not capitalized.
The Company intends to account for research and development costs in
accordance with SFAS 67.
NOTE E - CASH TRANSACTIONS
Since none were actually paid by the company and were paid by the
shareholders, there are no cash receipts or disbursements shown on these
financial statements.
NOTE F - JOINT VENTURE
The Interim Joint Venture Agreement was signed between the Company's
trustee company, Central Ocean International Ltd. of Hong Kong acting on
the Company's behalf and the Chinese Party, Real Estate Exploitation
Corporation Jinniu District. The terms are that the foreign party shall inject
80% of the registered capital and be responsible for raising the necessary
funds for the development of the project all for 0% of the joint venture
shares. The Chinese Party, which has spent $2,320,000 toward
appropriation costs, relocation costs, leasehold fees, design and soil
explorations, development capital costs, advertising and promotion costs,
shall retain 20% of the share of the joint venture company.
The Company, with consent of the Chinese counterpart, intends to
commission an independent accounting firm to structure accounting policy
suitable for a joint venture project. This firm shall remain on site until the
project is completed and the joint venture's proposed business is well on
track. This firm shall also be responsible for training an able accounting
team for the joint venture. The joint venture will be accounted for using the
equity method.
<PAGE>53
PART II
INFORMATION NOT REQUIRED BY PROSPECTUS
Item 24. Indemnification of Officers and Directors.
The By-laws of the Corporation provides that a director of the registrant
shall have no personal liability to the Registrant or its stockholders for
monetary damages for breach of a fiduciary duty as a director, except for
liability (a) for any breach of the director's duty of loyalty to the Registrant
or its stockholders, (b) for acts and omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, and (c)
pursuant to Canadian law for any transaction form which the director
derived an improper personal benefit. Registrant's By-laws exculpates and
indemnifies the directors, officers, employees, and agents of the registrant
from and against certain liabilities. Further the By-laws also provides that
the Registrant shall indemnify to the full extent permitted under Canadian
law any director, officer employee or agent of Registrant who has served as
a director, officer, employee or agent or the Registrant or, at the
Registrant's request, has served as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise.
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE
CORPORATION FOR
LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE
AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE
COMMISSION AND IS
THEREFORE UNENFORCEABLE.
Item 25. Other Expenses of Issuance and Distribution.
Other expenses in connection with this offering which will be paid
by Global Pacific Enterprises, Inc. (hereinafter in this Part II referred to as
the "Corporation") are estimated to be substantially as follows:
<TABLE>
Amount
Payable
Item By Corporation
<S> <C>
S.E.C. Registration Fees $ 1,616.80
State Securities Laws (Blue Sky) Fees and Expenses 3,500.00
Printing and Engraving Fees 7,500.00
Legal Fees 15,000.00
Accounting Fees and Expenses 5,500.00
Transfer Agent's Fees 1,500.00
$ 34,616.80
</TABLE>
<PAGE>54
Item 26. Recent Sales of Unregistered Securities.
Since inception, the Corporation has issued common shares at $.10 to the
following individuals for cash (aggregating $344,367). These issuances
were made in reliance on Section 4(2) by Registrant's management and no
commissions or other remuneration was paid.
<TABLE>
Name Date Issued Total Number
Issued of Shares Consideration
<S> <C> <C> <C>
C.L. Ng 5/13/94 76,000 $7,600
Kam Ping Lui 5/13/94 12,000 $1,200
Brenda Kayi Kong 5/13/94 40,000 $4,000
Alan Kwong 8/13/93 605,417 $60,417
Mok Wah Keung 12/2/94 30,000 $3,000
Tsang Hung Po 12/2/94 30,000 $3,000
T.C. Lee 12/2/94 30,000 $3,000
Paul Yu 12/2/94 30,000 $3,000
Phillip Ee 12/2/94 30,000 $3,000
Dr. Kay Ho 12/2/94 60,000 $6,000
Violet Ho 12/2/94 60,000 $6,000
Kong Beng Wong 12/2/94 60,000 $6,000
Jap Chong Young 5/13/94 604,858 $60,486
Weymann Cheng 12/2/94 78,559 $7,856
David Darren Young 6/19/94 50,000 $5,000
Landtek Properties, Inc. 12/2/94 76,417 $7,642
Margaret Wong 12/2/94 60,000 $6,000
Sin Ming Chiu 12/2/94 90,000 $9,000
Robin Y. Young 8/13/93 546,625 $47,021
Ken K. Wong 8/13/93 516,625 $44,021
Fred R. Umayam 3/9/94 100,000 $10,000
Mark Alan Mannhalt 3/9/94 60,000 $6,000
Donald Tom Prechitt 6/19/94 30,000 $3,000
Huan Wa Xu 6/19/94 80,000 $8,000
Pollysol Investments, Ltd. 8/15/94 100,000 $10,000
He Rong Hui 6/19/94 20,000 $2,000
Lee Shick Por 6/19/94 20,000 $2,000
William Lo 8/15/94 100,000 $10,000
</TABLE>
<TABLE>
Item 27. Exhibit Index. Page
<S> <C>
(1) Not Applicable
(2) Not Applicable
(3) Certificate of Incorporation incorporated
by reference to Form SB-2
filed October 3, 1995 - File No. 33-97698
(3.1)Bylaws - to be filed by amendment
<PAGE>55
(4) Specimen certificate for Common Stock incorporated by
reference to Form SB-2 filed October 3, 1995 - File
No. 33-97698
(5) Consent and Opinion of Godinho, Sinclair regarding
legality of securities registered under this
Registration Statement and to the references to such
attorney in the Prospectus filed as part of this
Registration Statement 58
(6) Not Applicable
(7) Not Applicable
(8) Not Applicable
(9) Not Applicable
(10.1) Trustee Agreement Between the Company and Central
International, Ltd. incorporated by reference to Amendment 1
to Form SB-2 filed December 28, 1995 - File No. 33-97698
(10.2) Interim Agreement on the Joint Venture to Develop "Royal
Plaza" incorporated by reference to Amendment 1 to Form SB-2
filed December 28, 1995 - File No. 33-97698
(11) Not Applicable
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
(17) Not Applicable
(18) Not Applicable
(19) Not Applicable
(20) Not Applicable
(21) Not Applicable
(22) Not Applicable
(23) Not Applicable
(24) Consent of Thomas J. Harris, Certified Public Accountant 62
(25) Not Applicable
(26) Not Applicable
(27) Financial Data Schedule 63
(28) Not Applicable
(99) Lease between Landtek, International Corporation
and MSU Chen incorporated by reference to Form SB-2
filed on October 3, 1995 - File No. 33-97698
(99.1) Sublease Agreement between the Corporation and Landtek
International Corporation incorporated by reference to
Form SB-2 filed on October 3, 1995 - File No. 33-97698
</TABLE>
Item 28. Undertaking.
The undersigned registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
<PAGE>56
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the formation set forth in the Registration Statement.
(iii) To include any additional or changed material information on the
plan of distribution.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) Delivery of Certificates.
The undersigned registrant hereby undertakes to provide to the
Transfer Agent at the closing, certificates in such denominations and
registered in such names as are required by the Transfer Agent to permit
prompt delivery to each purchaser.
(c) Indemnification.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions set forth in the Corporation's
Articles of Incorporation or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of ay action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
<PAGE>57
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of
Vancouver, in the Province of British Columbia, Canada on the 10th day
of October, 1996.
Global Pacific Enterprises, Inc.
/s/ Alan Kwong
--------------------------------
By: Alan Kwong, President
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities
and on the dates stated.
<TABLE>
Signature Capacity Date
<S> <C> <C>
/s/ Alan Kwong Chairman of the Board of Directors 10/10/96
- ------------------- Authorized Representative in the
Alan Kwong United States
/s/ Ken Wong Principal Executive Officer 10/11/96
- ------------------- Principal Financial Officer
Ken Wong Controller/Director
/s/ Robin Young Director 10/11/96
- -------------------
Robin Young
</TABLE>
<PAGE>58
GODINHO, SINCLAIR
Business Lawyers*
10th Floor, Montreal Trust Centre
*Associated in the practice 510 Burrard Street
of law. Some lawyers are Vancouver, British Columbia, V6C 3A8
practicing as law corporations. Telephone (604) 689-9930
Direct Line (604) 687-8800
Reply Attention of Bruce Bragagnolo Facsimile (604) 689-9940
October 10, 1996
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Dear Sirs:
Re: OPINION RE: LEGALITY AND CONSENT OF COUNSEL
TO USE OF NAME IN REGISTRATION STATEMENT ON FORM SB-2
OF GLOBAL PACIFIC ENTERPRISES, INC.
We are the special securities counsel in the Province of British Columbia,
Canada for the above mentioned corporation. We hereby consent to the
inclusion and reference to our name in the Registration Statement on Form
SB-2 for Global Pacific Enterprises, Inc., dated October 10, 1996.
Yours very truly,
GODINHO, SINCLAIR
Per:
Bruce Bragagnolo
<PAGE>59
GODINHO, SINCLAIR
Business Lawyers*
10th Floor, Montreal Trust Centre
*Associated in the practice 510 Burrard Street
of law. Some lawyers are Vancouver, British Columbia, V6C 3A8
practicing as law corporations. Telephone (604) 689-9930
Direct Line (604) 687-8800
Reply Attention of Bruce Bragagnolo Facsimile (604) 689-9940
October 10, 1996
GLOBAL PACIFIC ENTERPRISES, INC.
Suite 202 - 906 West Broadway
Vancouver, British Columbia
Dear Sirs:
Re: Global Pacific Enterprises, Inc.
We have acted as special British Columbia counsel to Global Pacific
Enterprises, Inc. (the "Company") in connection with the offering by the
Company of 344,367 previously issued common shares (the "Shares")
pursuant to a Form SB-2 Registration Statement (the "Statement") filing for
the registration of the Shares and two million (2,000,000) common shares
at US $2.00 per share. We hereby consent to the inclusion and reference to
our name in the Statement.
In connection with the opinion set forth herein, we have examined the draft
of the Statement dated October 10, 1996 and a certified true copy of the
resolution of the directors of the Company dated June 26, 1995 authorizing
the issuance of the Shares (the"Resolution").
In reviewing the foregoing documents, we have assumed:
(a) the genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity to authentic or
original documents of all documents submitted to us as certified, true or
photostatic copies;
(b) the authority of all persons signing the Statement and the
Resolution;
(c) that the Company is and has at all relevant times hereto been a
subsisting corporation with the requisite power and capacity to execute,
deliver and perform its obligations under the Statement;
In rendering this opinion, we have considered such questions of law as we
have considered relevant and necessary as a basis for the opinions
hereinafter set forth. We are members of the Law Society of British
Columbia and are not permitted to practice in any other province in Canada
<PAGE>60
and are not experts in the laws of other provinces of Canada or of any other
jurisdiction. This opinion is rendered solely with respect to the laws of the
Province of British Columbia, and the federal laws of Canada applicable
therein.
Based upon and subject to the qualifications herein expressed, we are of the
opinion that:
1. All necessary corporate action has been taken by the Company to issue
the Shares registered with the Securities and Exchange Commission
pursuant to the Statement, and such Shares have been legally issued as fully
paid and non-assessable shares.
2. The laws of the Province of British Columbia permit an action to be
brought before a court of competent jurisdiction in British Columbia to
enforce a final and conclusive foreign judgment for a sum certain of a court
in the United States of America provided that:
2.1 the court rendering such judgment had jurisdiction over the judgment
debtor as recognized by the courts of British Columbia;
2.2 such judgment was not obtained by a fraud or in a fraud or in a
manner contrary to natural justice and the enforcement thereof would not be
inconsistent with public policy or contrary to any order made by the
Attorney-General of Canada in respect of certain judgments (as therein
defined):
2.3 the enforcement of such judgment does not constituted, directly or
indirectly, the enforcement of foreign revenue, expropriatory or penal laws;
2.4 no new admissible evidence relevant to the action is discovered prior
to the rendering of judgment by the British Columbia court; and
2.5 the judgment is not founded upon a manifest error going to its root;
and, possibly, further provided that:
2.6 such judgment is founded upon a cause of action which is known
cause of action in British Columbia.
3. For the purposes of enforcement of a judgment granted in respect of the
Statement, a court in the Province of British Columbia would not refuse to
recognize the jurisdiction of the court rendering such judgment on the basis
that service of process on the Company is validly effected, provided always
that the Company in fact receives such service of process.
4. If the foreign judgment referred to in paragraph 2 is in a currency other
than the currency of Canada, the sum; certain of the foreign judgment would
be converted to the equivalent of that sum in the currency of Canada.
<PAGE>61
The opinions expressed herein are also subject to the qualifications that:
(a) the remedies of creditors may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other similar laws relating to
creditors' rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding at equity or at law);
(b) no court in Canada may make an order expressed in any currency
other than lawful money of Canada;
(c) the remedy of specific performance, injunctive relief or other
equitable remedies may not be available in any particular instance.
This opinion may not be or relied upon for any purpose other than as
specified herein.
Yours very truly,
GODINHO, SINCLAIR
Per:
Bruce Bragagnolo
<PAGE>62
THOMAS J. HARRIS Certified Public Accountant
=============================================================
=================
3901 Stone Way North, Suite 202, Seattle, Washington 98103
(206) 547-6050
INDEPENDENT AUDITOR'S CONSENT
I, Thomas J. Harris, CPA, of 3901 Stone Way North, Suite # 202,
Seattle, Wa. 98103, do hereby consent to the use of my report dated March
14, 1996 on the financial statements Global Pacific Enterprises, Inc. as of
October 31, 1995 included in and made part of the amendment to the
registration statement of Global Pacific Enterprises, Inc. dated October 10,
1996.
Date this 10th day of October, 1996
/s/ Thomas J. Harris
Thomas J. Harris
Certified Public Accountant
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