UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(Name of small business issuer in its charter)
Nevada 6770 11-3860760
(State or jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
347 Fifth Avenue, Suite 1507, New York, New York 10016 (212) 213-6908
(Address and telephone number of principal executive offices)
347 Fifth Avenue, Suite 1507, New York, New York 10016
(Address of Principal place of business or intended principal
place of business)
Joel Schonfeld, 63 Wall Street, Suite 1801, New York, NY (212) 344-1600
(Name, address, and telephone number of agent for service)
Copies to:
Schonfeld & Weinstein, L.L.P.
63 Wall Street, Suite 1801
New York, New York 10005
(212) 344-1600
Walter J. Gumersell, Esq.
Rivkin, Radler & Kremer, Esqs.
EAB Plaza
Uniondale, New York 11556-0111
(516-357-3125)
Approximate date of proposed sale to the public as soon as practicable after
the effective date of this Registration Statement and Prospectus.
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, as amended (the "Securities Act")
or until the registration statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
CALCULATION OF REGISTRATION FEE
No registration fee is due on a Reconfirmation Offering under Rule 419.
<PAGE>
Cross Reference Sheet
Showing the Location In Prospectus of
Information Required by Items of Form SB-2
Part I. Information Required in Prospectus
Item
No. Required Item Location or Caption
1. Front of Registration Statement Front of Registration
and Outside Front Cover of Statement and outside
Prospectus front cover of Prospectus
2. Inside Front and Outside Back Inside Front Cover Page
Cover Pages of Prospectus of Prospectus and Outside
Front cover Page of Prospectus
3. Summary Information and Risk Prospectus Summary;
Factors High Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Prospectus Summary -
Price Determination of Offering
Price; Risk Factors
6. Dilution Not Applicable
7. Selling Security Holders Not Applicable
8. Plan of Distribution Not Applicable
9. Legal Proceedings Legal Proceedings
10. Directors, Executive Officers, Management
Promoters and Control Persons
11. Security Ownership of Certain Principal Shareholders
Beneficial Owners and Management
Part I Information Required in Prospectus Caption in Prospectus
12. Description of Securities Description of Securities
13. Interest of Named Experts and Legal Opinions; Experts Counsel
14. Disclosure of Commission Position Statement as to
on Indemnification for Securities Indemnification
Act Liabilities
15. Organization Within Last Management, Certain
Five Years Transactions
16. Description of Business Business
17. Management's Discussion and Management's Discussion and
and Analysis or Plan of Analysis
Operation
18. Description of Property Not Applicable
19. Certain Relationships and Related Certain Transactions
Transactions
20. Market for Common Stock and Prospectus Summary
Related Stockholder Matters
21. Executive Compensation Executive Compensation
22.Financial StatementsFinancial Statements
<PAGE>
PROSPECTUS
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(a Nevada corporation)
RECONFIRMATION OFFER
This Prospectus relates to the Reconfirmation Offer of 3,000 shares of
common stock of Transpacific International Group Corp. ("Transpacific") sold
in Transpacific's initial public offering (the "Shares" or "Common Stock").
Pursuant to Rule 419 ("Rule 419") of the Securities Act of 1933, as amended
(the "Securities Act"), shareholders representing at least 80% of
Transpacific's maximum offering proceeds ($14,400) must elect to reconfirm
their investments (the "Reconfirmation Offer"). (See "INVESTORS RIGHTS AND
SUBSTANTIVE PROTECTION UNDER RULE 419"). Such shareholders will vote on the
Reconfirmation Offer, as described in the post-effective amendment to Form
SB-2. The 80% shall be measured 20 days from the effective date of this
Prospectus. Once an investor has sent his/her Letter of Reconfirmation to
Transpacific, such Letter of Reconfirmation may not be revoked.
Pursuant to an Agreement and Plan of Merger between Transpacific and
Coffee Holding Co., Inc., a corporation organized and existing under the
laws of State of New York ("Coffee" or the "Company), dated October 31, 1997
(the "Merger Agreement"), Coffee shall be merged into Transpacific with
Transpacific as the surviving entity (the "Merger") (the "Surviving Entity").
Thus on the Effective Date (as defined in the Merger Agreement), all Coffee
shareholders shall become shareholders of Transpacific as a result of the
Merger.
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" COMMENCING
AT PAGE .
THE TRANSPACIFIC SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Transpacific has filed with the Commission a Registration Statement on Form
SB-2 under the Securities Act with respect to the common shares subject to the
Reconfirmation Offer hereto. This Prospectus does not contain all the
information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information with respect to Transpacific and
the Shares, reference is made to the Registration Statement, exhibits and
schedules.
Additional information, as it relates to Transpacific is available upon
request from Schonfeld & Weinstein, L.L.P., 63 Wall Street, Suite 1801, New
York, New York 10005; and as it relates to Coffee, is available upon request
from Andrew Gordon, President, Coffee Holding Co., Inc., 4401 First Avenue,
Brooklyn, New York 11232.
No. Of Shares
sold in initial Price Per Gross Proceeds Proceeds paid Net Proceeds
public offering Share to the Company out for expenses in Escrow
3,000 $6.00 $18,000 $1,800(1) $16,200
(1)Only $1,015 of this amount has been expended. The remaining $785 remains
in a separate account.
The Date of this Prospectus is .
<PAGE>
The following are Transpacific's expenses for its initial public offering(1):
Escrow Fee.......................................................$ 250.00
Securities and Exchange Commission Registration Fee..............$ 100.00
Legal Fees.......................................................$ 20,000.00
Accounting Fees..................................................$ 3,000.00
Printing and Engraving...........................................$ 500.00
Blue Sky Qualification Fees and Expenses.........................$ 1,000.00
Miscellaneous....................................................$ 150.00
Transfer Agent Fee...............................................$ 300.00
TOTAL............................................................$ 25,300.00
The following are Transpacific's estimated expenses for the reconfirmation
offering:
Securities and Exchange Commission Registration Fee.............$ 0
Legal Fees......................................................$ 35,000.00(2)
Accounting Fees.................................................$ 15,000.00(2)
Printing and Engraving..........................................$ 2,500.00(2)
Miscellaneous...................................................$ 500.00(2)
Transfer Agent Fees.............................................$ 1,500.00(2)
TOTAL...........................................................$ 54,500.00
(1) Have been/will be paid by Transpacific
(2) Have been/will be paid by Coffee
<PAGE>
TABLE OF CONTENTS
Page #
PROSPECTUS SUMMARY
INVESTORS' RIGHTS AND SUBSTANTIVE PROTECTION
UNDER RULE 419
RISK FACTORS
MERGER
USE OF PROCEEDS
SELECTED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
BUSINESS
MANAGEMENT
CERTAIN TAX CONSIDERATIONS
DESCRIPTION OF SECURITIES
PRINCIPAL SHAREHOLDERS
CERTAIN TRANSACTIONS
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
TRANSPACIFIC INTERNATIONAL GROUP CORP. FINANCIAL
STATEMENTS
COFFEE HOLDING CO. INC. FINANCIAL STATEMENTS
TRANSPACIFIC INTERNATIONAL GROUP CORP. AND
COFFEE HOLDING CO., INC. PROFORMA CONDENSED
BALANCE SHEET
<PAGE>
PROSPECTUS SUMMARY
The following is a summary of certain information contained in this
Prospectus and is qualified by the more detailed information and consolidated
financial statements (including notes thereto) appearing elsewhere in this
Prospectus. Investors should carefully consider the information set forth
under the heading "Risk Factors". Unless otherwise indicated, the capital
structure, the number of shares outstanding and the per share data and
information in this Prospectus have been adjusted to give effect to the Merger
described herein.
Transpacific International Group Corp.
Transpacific International Group Corp. ("Transpacific") was incorporated
in the State of Nevada on October 9, 1995 for the sole purpose of acquiring or
merging with an unspecified operating business. Transpacific has no operating
assets and has not engaged in any business activities, other than to seek out
and investigate other businesses for potential merger or acquisition.
On August 12, 1996, Transpacific commenced a "blank check" offering
pursuant to Rule 419 ("Rule 419") promulgated under the Securities Act, which
generated $18,000 in gross proceeds from approximately 35 different investors
(the "Rule 419 Investors"). Pursuant to Rule 419, all of the gross proceeds
from that offering, less 10%, and the Transpacific Shares purchased by the
Rule 419 Investors, are being held in escrow pending (i) distribution of a
prospectus to each of them describing any prospective business acquisition by
Transpacific and (ii) the subsequent confirmation by the holders of at least
80% of the shares owned by the Rule 419 Investors that they elect to remain
investors. (See "INVESTORS RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE
419").
The executive offices of Transpacific are located at 347 Fifth Avenue,
Suite 1507, New York, New York 10016. The telephone number is (212) 213-6908.
Coffee Holding Co., Inc.
Coffee Holding Co., Inc. ("Coffee") was incorporated in the State of New
York on January 22, 1971. Coffee commenced operations in 1971, and began its
business trading green coffee. Since then, Coffee has diversified its
operations to include distribution of roasted and blended coffees, as well as
sales of green coffees. Coffee's business now incorporates many segments of
the coffee industry, including roasting and packaging their own line of
blended coffees, such as "Via Roma" and "Cafe Caribe," roasting and packaging
private label coffee for large supermarket chains, roasting and packaging
specialized blended "gourmet" coffees, selling or brokering green coffee to
small roasters or coffee shop operators, and operating their own warehouse
equipped with modern roasting and packaging machinery. (See "BUSINESS -
Coffee").
The executive offices of Coffee are located at 4401 First Avenue, Brooklyn,
New York 11232 . Coffee's phone number is (718) 832-0800.
Reconfirmation Offering Conducted in Compliance with Rule 419
Transpacific is a blank check company and, consequently, this
Reconfirmation Offering is being conducted in compliance with the Commission's
Rule 419. The Rule 419 Investors have certain rights and will receive the
substantive protection provided by the rule. To that end, the securities
purchased by investors and the funds received in Transpacific's initial public
offering are deposited and held in an escrow account established pursuant to
Rule 419 (the "Escrow Account"), and shall remain in the Escrow Account until
an acquisition meeting specific criteria is completed (hereinafter the
"Deposited Funds" and "Deposited Securities".) Before the acquisition can be
completed and before the Deposited Funds and Deposited Securities can be
released to Transpacific and the Rule 419 Investors, respectively,
Transpacific is required to update the Registration Statement with a
post-effective amendment, and within five days after the effective date
thereof, Transpacific is required to furnish the Rule 419 Investors with the
prospectus produced thereby containing the terms of a reconfirmation offer and
information regarding the proposed acquisition candidate and its business,
including audited financial statements. According to Rule 419, investors must
have no fewer than 20 and no more than 45 days from the effective date of the
post-effective amendment to decide to reconfirm their investment and remain an
investor or, alternately, require the return of their investment, minus
certain deductions. Each Rule 419 Investors shall have 20 days from the date
of this prospectus to reconfirm his/her investment in Transpacific. Any Rule
419 Investor not making any decision within said 20 day period will
automatically have his/her investment funds returned. The rule further
provides that if Transpacific does not complete an acquisition meeting the
specified criteria within 18 months of the effective date of its initial
public offering, all of the Deposited Funds in the Escrow Account must be
returned to Rule 419 Investors. (See "Investors' Rights and Substantive
Protection Under Rule 419 - - Reconfirmation Offering.")
Reconfirmation Offer
This prospectus relates to a reconfirmation by Transpacific shareholders
of their investments in Transpacific. Pursuant to Rule 419, the proceeds of
Transpacific's initial public offering and the securities purchased pursuant
thereto, both of which are currently held in the Escrow Account, will not be
released from the Escrow Account until (1)Transpacific executes an agreement
for an acquisition or merger meeting certain criteria; (2) a post-effective
amendment which includes the terms of the reconfirmation offer, as well as
information about the Merger Agreement and audited financial statements is
filed; and (3) Transpacific conducts a reconfirmation offer pursuant to which
shareholders representing 80% of Transpacific's initial public offering
proceeds elect to reconfirm their investments. This 80% shall be computed
twenty (20) days after the effective date of this post-effective amendment.
Once an investor has sent his/her Letter of Reconfirmation to Transpacific,
such Letter of Reconfirmation may not be revoked. In the event the Rule 419
Investors do not vote to reconfirm the offering, the Deposited Funds shall be
returned to investors on a pro rata basis. Such funds will be returned within
5 days of failure to approve the Merger.
Terms of the Merger Agreement
The terms of the Merger are set forth in the Merger Agreement and
consummation of the Merger is conditioned upon, among other things, the
acceptance of the Reconfirmation Offer by holders of at least 80% of the
shares owned by the Rule 419 Investors. (See "PROSPECTUS SUMMARY -
Reconfirmation Offer"). As a result of the consummation of the Merger, Coffee
will be merged into Transpacific, with Transpacific as the Surviving Entity.
Upon consummation of the Merger, (i) each shareholder who holds shares of
Transpacific's common stock registered pursuant to a registration statement
declared effective by the Securities and Exchange Commission on August 12,
1996 ("Registered Common Stock") prior to the Merger and who accepts the
Reconfirmation Offer shall continue to hold his or her share certificate(s)
representing Transpacific's Registered Common Stock; and (ii) each
stockholder of Registered Common Stock who rejects the Reconfirmation Offer
will be paid his or her pro rata share of the amount in the Escrow Account of
approximately $5.40 per share. In the event the escrowed funds exceed $16,200
at the consummation of the Merger, those funds shall be distributed on a pro
rata basis to those Transpacific shareholders who reject the reconfirmation
offering. Prior to execution of the Merger Agreement, certain inside
shareholders of Transpacific entered into an agreement with Andrew Gordon and
David Gordon, both officers, directors and shareholders of Coffee, as well as
other persons (the "Gordon Group"), pursuant to which the Gordon Group
purchased a total of 92,000 shares of Transpacific Common Stock at $.10 per
share. Both the stock and the proceeds of this sale are held in escrow with
Schonfeld & Weinstein, L.L.P., pending consummation of the Merger, at which
time the shares shall be transferred to the Gordon Group and the funds
released to those selling shareholders. Such shares shall bear legends
restricting their transfer. If the Merger is not consummated within the 18
month period proscribed by Rule 419, Schonfeld & Weinstein, L.L.P. shall
return the stock certificates to the Transpacific selling shareholders, and
the funds to the Gordon Group. At the Effective Date of the Merger, 100% of
the issued and outstanding shares of Coffee shall be canceled. Transpacific
common stock shall be split ten for one (10:1), after which 3,000,000 shares
shall be issued to Coffee shareholders after the Effective Date, current
Transpacific shareholders shall own 1,000,000 shares, representing 25% of the
Surviving Entity. This amount includes certain Transpacific shareholders who
are also shareholders of Coffee. (See "MERGER"- Terms and Conditions of
Merger, and "Certain Transactions")
Approval of the Merger Agreement
The Transpacific Board of Directors believes that the Merger
represents a good investment opportunity for Transpacific's shareholders and
recommends that the Rule 419 Investors elect to accept the Reconfirmation
Offering. Transpacific's Board of Directors recommends that Rule 419
Investors, when determining whether or not to reconfirm their investments,
also consider, Coffee's working capital and sales revenues (See "MERGER"-
Terms and Conditions of Merger).
The Merger Agreement was approved by the directors and shareholders of
Coffee by written consent dated October 31, 1997. The Merger Agreement was
confirmed by the unanimous consent of the directors of Transpacific on October
31, 1997.
Accounting Treatment
Although Transpacific is the legal surviving corporation, for accounting
purposes, the Merger is treated as a purchase business acquisition of
Transpacific by Coffee (a reverse acquisition) and a recapitalization of
Coffee. Coffee is the acquirer for accounting purposes because the former
Coffee stockholders received the larger portion of the common stockholder
interests and voting rights retained by the former Transpacific stockholders.
High Risk Factors
Investments in the securities of Transpacific are highly speculative,
involve a high degree of risk, and only persons who can afford the loss of
their entire investment should vote to reconfirm their investments. (See
"RISK FACTORS.")
Use of Proceeds
In its initial public offering, Transpacific generated $18,000 in
proceeds. 10% ($1,800) of the Deposited Funds was released to Transpacific
prior to this Reconfirmation Offering. (See "Investors' Rights and
Substantive Protection Under Rule 419 - Reconfirmation Offering.")
Transpacific intends to use this sum for expenses incurred in the offering,
including, but not limited to, accounting expenses, transfer agent fees,
printing fees, certificate of good standing. The remaining $16,200 will
remain in the non-interest-bearing escrow account maintained by Atlantic
Liberty Savings Bank, which bank acts as escrow agent pursuant to Rule 419 of
Regulation C. No portion of the Deposited Funds has been or will be expended
to merge Coffee into Transpacific. The Deposited Funds will be transferred
to Transpacific pursuant to the Merger Agreement if and when a business
combination is effected. (See "USE OF PROCEEDS.")
Certain Income Tax Consequences
In management's opinion, the Merger is intended to qualify as a "tax-free
reorganization" for purposes of the United States federal income tax so that
stockholders of Transpacific and Coffee subject to United States tax will not
recognize gain or loss from the transaction. In addition, the transaction is
not intended to result in the recognition of gain or loss to either Coffee or
Transpacific in the respective jurisdictions where each of them is subject to
taxation. NO OPINION OF COUNSEL NOR A RULING FROM THE INTERNAL REVENUE
SERVICE HAS BEEN OBTAINED IN REFERENCE TO THE FOREGOING. THE FOREGOING IS
FOR GENERAL INFORMATION ONLY AND TRANSPACIFIC STOCKHOLDERS SHOULD CONSULT
THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES OF THE MERGER
TRANSACTION TO THEM.
INVESTORS' RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE 419
Deposit of Offering Proceeds and Securities
Rule 419 requires that in a blank check offering, offering proceeds,
after deduction for underwriting commissions, underwriting expenses and dealer
allowances, and the securities purchased by investors in such an offering, be
deposited into an escrow or trust account governed by an agreement which
contains certain terms and provisions specified by the rule. Under Rule 419,
the Deposited Funds and Deposited Securities will be released to Transpacific
and to the 419 Investors, respectively, only after Transpacific has met the
following three basic conditions. First, Transpacific must execute an
agreement(s) for an acquisition or merger meeting certain prescribed
criteria. Second, Transpacific must file a post-effective amendment to its
registration statement which includes the terms of a reconfirmation offer that
must contain conditions prescribed by the rule. The post-effective amendment
must also contain information regarding the acquisition or merger candidate(s)
and its business(es), including audited financial statements. Third,
Transpacific must conduct the reconfirmation offer and satisfy all of the
prescribed conditions, including the condition that a certain minimum number
of investors must elect to remain investors. After Transpacific submits a
signed representation to the escrow agent that the requirements of Rule 419
have been met, and after the acquisition or merger is consummated, the escrow
agent can release the Deposited Funds and Deposited Securities.
Accordingly , Transpacific has entered into an escrow agreement with
Atlantic Liberty Savings Bank (the "Escrow Agent") which provides that:
(1) The proceeds are to be deposited into the Escrow Account maintained
by the Escrow Agent promptly upon receipt. Rule 419 permits 10% of the
Deposited Funds to be released to Transpacific prior to the reconfirmation
offering. The Deposited Funds and any dividends or interest thereon, if any,
are to be held for the sole benefit of the investors and can only be invested
in bank deposits, in money market mutual funds or federal government
securities or securities for which the principal or interest is guaranteed by
the federal government.
(2) All securities issued in connection with the offering and any other
securities issued with respect to such securities, including securities issued
with respect to stock splits, stock dividends or similar rights are to be
deposited directly into the Escrow Account promptly upon issuance. The
identity of the investors are to be included on the stock certificates or
other documents evidencing the Deposited Securities. The Deposited Securities
held in the Escrow Account are to remain as issued and are to be held for the
sole benefit of the investors' who retain the voting rights, if any, with
respect to the Deposited Securities held in their names. The Deposited
Securities held in the Escrow Account may not be transferred, disposed of nor
any interest created therein other than by will or the laws of descent and
distribution, or pursuant to a qualified domestic relations order as defined
by the Internal Revenue Code of 1986 or Table 1 of the Employee Retirement
Income Security Act.
Prescribed Merger Criteria
Rule 419 requires that before the Deposited Funds and the Deposited
Securities can be released, Transpacific must first execute an agreement to
acquire an acquisition candidate(s) or merge with a merger candidate(s)
meeting certain specified criteria. The agreement(s) must provide for the
acquisition(s), merger(s) of a business(es) or assets for which the fair value
of the business represents at least 80% of the maximum offering proceeds. The
agreement(s) must include, as a condition precedent to their consummation, a
requirement that the number of investors representing 80% of the maximum
offering proceeds must elect to reconfirm their investment. For purposes of
the offering, the fair value of the business(es) or assets to be acquired must
be at least $14,400 (80% of $18,000). Based on its audited financial
statements, Coffee has a fair value in excess of $14,400. (See "Coffee
Holding Co., Inc. Financial Statements.")
Post-Effective Amendment
Once the agreement(s) governing the acquisition(s), merger(s) of a
business(es) meeting the above criteria has been executed, Rule 419 requires
Transpacific to update the registration statement with a post-effective
amendment. The post-effective amendment must contain information about the
proposed acquisition candidate(s) and its business(es), including audited
financial statements, the results of this Reconfirmation Offering and the use
of the funds disbursed from the Escrow Account. The post-effective amendment
must also include the terms of the reconfirmation offer mandated by Rule
419. The reconfirmation offer must include certain prescribed conditions
which must be satisfied before the Deposited Funds and Deposited Securities
can be released from the Escrow Account.
Reconfirmation Offering
The reconfirmation offer must commence after the effective date of the
post-effective amendment. Pursuant to Rule 419, the terms of the
reconfirmation offer must include the following conditions:
(1) The prospectus contained in the post-effective amendment will be sent
to each Rule 419 Investor whose securities are held in the Escrow Account
within 5 days after the effective date of the post-effective amendment.
(2) Each investor will have no fewer than 20 and no more than 45 days
from the effective date of the post-effective amendment to notify Transpacific
in writing that the investor elects to remain an Rule 419 Investor. The 80%
vote will be measured 20 days from the Effective Date. Rule 419 Investors who
submit their Letter of Reconfirmation to Transpacific shall not have the right
to revoke such letter.
(3) If Transpacific does not receive written notification from an
investor within 20 days following the Effective Date, the pro rata portion of
the Deposited Funds (and any related interest or dividends) held in the Escrow
Account on such Rule 419 Investor's behalf will be returned to the investor
within 5 days by first class mail or other equally prompt means.
(4) The acquisition(s) will be consummated only if a minimum number of
Rule 419 Investors representing 80% of the maximum offering proceeds equaling
$14,400 elect to reconfirm their investment.
(5) If a consummated acquisition has not occurred by February 12, 1998
(18 months from the date of original prospectus), the Deposited Funds held in
the Escrow Account shall be returned to all Rule 419 Investors on a pro rata
basis within 5 days by first class mail or other equally prompt means.
Release of Deposited Securities and Deposited Funds
The Deposited Funds and Deposited Securities may be released to
Transpacific and the Rule 419 Investors, respectively, after:
(1) The Escrow Agent has received a signed representation from
Transpacific and any other evidence acceptable by the Escrow Agent that:
(a) Transpacific has executed an agreement for the acquisition of
or merger with a target business for which the fair market value of the
business represents at least 80% of the maximum offering proceeds and has
filed the required post-effective amendment;
(b) The post-effective amendment has been declared effective, the
mandated reconfirmation offer having the conditions prescribed by Rule 419 has
been completed and that Transpacific has satisfied all of the prescribed
conditions of the reconfirmation offer.
(2) The acquisition of, or merger with, a business (including shareholder
approval of the merger or acquisition) with the fair value of at least 80% of
the maximum proceeds.
RISK FACTORS
Investment in the securities offered hereby involves a high degree of
risk. Prospective investors should carefully consider, together with the
other information appearing in this Prospectus, the following factors, among
others, in evaluating Coffee and its business before or reconfirming their
investments in Transpacific.
Lack of Diversification
If this Merger is consummated, Transpacific will be involved in no other
business combination. This lack of diversification may subject Transpacific
shareholders to economic fluctuations within those industries in which Coffee
conducts business.
Coffee's business is centered around essentially one product: coffee. To
date, Coffee's operations have been limited to several segments of the Coffee
industry: sales of green coffee; roasting, blending, packaging and
distributing proprietary blends of coffee; roasting, blending, packaging and
distributing private label coffee; roasting and distributing gourmet coffee.
Any decrease in demand for coffee would have a material adverse effect on
Coffee's business, operating results and financial condition.
Reliance on Key Existing and Future Personnel
Coffee's success will depend to a large degree upon the efforts and abilities
of its officers and key management employees, Andrew Gordon, President,
Treasurer, and Chief Executive Officer, and David Gordon, Coffee's Executive
Vice President-Operations and Secretary. The loss of the services of one or
more of its key employees could have a material adverse effect on Coffee's
business prospects and potential earning capacity. Coffee has not entered into
employment agreements with either Andrew Gordon or David Gordon. Coffee has
no key person life insurance on either Andrew Gordon or David Gordon. Coffee
will need to continue to recruit and retain additional members of senior
management to manage anticipated growth, but there can be no assurance that
Coffee will be able to recruit or retain additional members of senior
management on terms suitable to Coffee. (See "Management - Directors,
Executive Officers and Other Key Employees.")
Growth Strategy
The Company is pursuing an aggressive growth strategy, the success of which
will depend in large part upon its ability to expand its client base and enter
new segments of the coffee industry through acquisitions of existing
companies. Even if the Company is successful in enhancing profitability after
acquiring additional companies, there can be no assurance as to how long a
period of time accomplishing such profitability will take or the levels of
future profitability that can be achieved. Acquisitions involve a number of
risks, including, the diversion of management's attention, issues related to
the assimilation of the operations and personnel of the acquired businesses,
and potential adverse effects on the Company's operating results. There can
be no assurance that the Company will find attractive acquisition candidates
in the future, that acquisitions can be consummated on acceptable terms, that
any acquired companies can be integrated successfully into the Company's
operations or that any such acquisitions will not have an adverse effect on
the Company's financial condition or results of operations.
Successful achievement of the Company's expansion plans will depend in part
upon its ability to: (i) select and compete successfully in new markets; (ii)
hire, train and retain qualified personnel; (iii) expand roasting facilities.
The Company may incur significant start-up costs in connection with entering
new markets. There can be no assurance that the Company will achieve its
planned expansion goals on a timely basis, if at all, or manage its growth
effectively. Failure to expand or manage its growth could have a material
adverse effect on the Company's financial condition or results of operations.
See "Business - Growth Strategy," and "Management's Discussion and Analysis of
Financial Conditions and Results of Operations".
Control of Transpacific
After consummation of the Merger, including the Stock Split, the current
shareholders of Coffee will control the vote of 88.5% of Transpacific's issued
and outstanding common shares. As a result, the former Coffee shareholders
will have the ability to control the outcome of substantially all issues
submitted to Transpacific's shareholders. (See "PRINCIPAL SHAREHOLDERS" and
"MERGER- Terms and Conditions of the Merger Agreement")
Dilution
The holders of the restricted common shares of Transpacific have acquired
their interest in Transpacific at an average cost per share which was
significantly less than that which the public investors paid for their
securities. Consequently, the public investors will bear the majority of the
risk of any loss that may be incurred in Transpacific's operations. A
confirmation of the investment in the Common Stock will result in an immediate
substantial dilution of the investor's investment.
Lack of Public Market for Securities/Probable Inability to Resell Securities
Prior to the closing of the Merger, there will have been no public
trading market for Transpacific's Common Stock. Given the small size of the
initial public offering, the relatively minimal public float, and lack of
participation of a professional underwriter, there is only a very limited
likelihood of any active and liquid public trading market developing for the
shares. If such a market does develop, the price of Transpacific's common
stock may be volatile. Thus, investors run the risk that they will never be
able to sell their Shares. In any event, there are additional state
securities laws preventing resale transactions. No potential market makers
have been solicited by Transpacific. There can be no assurances that any
broker will ever agree to make a market in Transpacific's securities. (See
"DESCRIPTION OF SECURITIES")
Need for Additional Financing
In order to achieve and maintain Coffee's planned growth rate, Coffee
believes that it may have to obtain bank financing or sell additional debt or
equity (or hybrid) securities in public and private financing. In addition,
Coffee may incur debt or issue equity securities in order to finance
acquisitions. Any such financing could dilute the interests of current
shareholders in this offering. There can be no assurance that any such
additional financing will be available or, if it is available, that it will be
in such amounts and on such terms as will be satisfactory to Coffee.
Competition
The market for coffee is fragmented and highly competitive, and competition is
increasing substantially. Coffee competes with other suppliers and
distributers of green coffee, whole bean and roasted coffees; its whole bean
coffees compete directly against specialty coffees sold at retail through
supermarkets and a growing number of specialty coffee stores. Coffee's
private labels compete with many other well known brand names. Additionally,
its gourmet coffees compete with coffee sold in a growing number of espresso
stands, carts, and gourmet coffee stores. Both Coffee's whole bean coffees
and its processed coffee compete indirectly against all other brands on the
market. The coffee industry is dominated by several large companies such as
Kraft General Foods, Inc., Proctor & Gamble Co., and Nestle, S.A., many of
which have begun marketing gourmet coffee products in addition to non-gourmet
coffees. Other competitors, some of which may have greater financial and
other resources than Coffee, may also enter the markets in which Coffee
currently operates or intends to expand. There can be no assurance that
Coffee will be able to compete successfully against these competitors.
Fluctuations in Availability and Cost of Green Coffee
Coffee is the world's second largest traded commodity and its supply and
price are subject to volatility beyond the control or influence of Coffee.
Supply and price can be affected by many factors such as weather, politics and
economics in the producing countries.
Coffee prices are extremely volatile. Coffee believes that increases in
the cost of its purchased coffee can, to a certain extent, be passed through
to its customers in the form of higher prices for beans and processed coffee
sold by Coffee stores. Coffee believes that its customers will accept
reasonable price increases made necessary by increased costs. Coffee's
ability to raise prices, however, may be limited by competitive pressures if
other major coffee wholesalers and retailers do not raise prices in response
to increased coffee prices. Coffee's inability to pass through higher coffee
prices in the form of higher retail prices for beans and beverages could have
a material adverse effect on Coffee. Alternatively, if coffee prices remain
too low, there could be adverse impacts on the level of supply and quality of
coffees available from producing countries, which could have a material
adverse effect on the Company. Since the early 1980's, Coffee has been
selling higher quality gourmet coffee, such as espresso. Although most coffee
trades in the commodity market, gourmet coffee tends to trade on a negotiated
basis at a substantial premium above commodity coffee pricing, depending upon
the origin, supply and demand at the time of purchase.
No Dividends and None Anticipated
Transpacific has not paid any dividends and does not contemplate or
anticipate paying any dividends on its common stock in the foreseeable
future.
Arbitrary Offering Price
The price at which the Transpacific's Shares had been offered to the
public in Transpacific's initial public offering has been arbitrarily
determined by Transpacific. There is no relationship between the initial
offering price of the Shares to Transpacific's assets, book value, net worth
or other economic or recognized criteria of value. In no event should the
offering price be regarded as an indication of any future market price of the
securities.
Possible Future Rule 144 Sales
There are currently 97,000 Transpacific restricted common shares issued
and outstanding. These shares are "restricted securities" as defined by Rule
144 of the Securities Act. Under Rule 144, restricted securities which have
been beneficially owned for at least one year may be sold in brokers'
transactions or directly to market makers, subject to certain quantity and
other limitations. Generally, under Rule 144 a person may sell, in any
three-month period, an amount equal to the greater of (i) the average weekly
trading volume, if any, of the common stock during the four calendar weeks
preceding the sale or (ii) 1% of the company's outstanding common stock.
After the Merger, and subsequent Stock Split (See "Merger") Transpacific will
have outstanding 4,000,000 shares of Common Stock, including 30,000 shares
held in escrow (3,000 before the Stock Split) (See "MERGER-Terms and
Conditions of Merger Agreement"). Shares beneficially owned for two years by
non-affiliates of the Company may be sold without regard to these quantity or
other limitations. As of the date hereof, 5,000 shares may be sold pursuant
to Rule 144. The possibility of sales of substantial amounts of such stock
could have a depressive effect on the price of the common stock in any market
which may develop.
Conflicts of Interest
Transpacific's officers and directors are engaged in various business
ventures. Thus, there may be conflicts of interest in the allocation of time
between Transpacific's business and such other businesses. These activities
may conflict with the interests of Transpacific. As a result of their other
interests, they may personally benefit from decisions or recommendations made
with respect to the business of Transpacific. Whereas conflicts may arise,
management is aware of its fiduciary duty to Transpacific and will act in good
faith and endeavor on an equitable basis to resolve any conflicts which may
arise, on an equitable basis.
Caution to Public Investors
For all of the aforesaid reasons, and others set forth herein, these
securities involve a high and substantial degree of risk. Any public investor
considering reconfirming his/her investment in Transpacific should be aware of
these and other factors as set forth in this Prospectus. No public investor
considering reconfirming his/her investment in Transpacific should do so if
he/she anticipates a need for immediate return on his investment.
Reconfirmation should only be made by investors who can afford to absorb a
total loss and have no need for immediate return on their investments.
Dependence on Qualified Personnel and Key Individuals
Upon completion of the Merger, Transpacific's officers and directors will
resign, and new officers and directors will be appointed. Neither
Transpacific nor Coffee can assure current Transpacific shareholders of the
qualifications of such persons to run a publicly owned company. Coffee is
dependent on certain key officers, employees and directors. The loss of the
services of any of such persons during this period could adversely affect
Transpacific's prospects. See, "MANAGEMENT - Directors and Executive
Officers."
Determination of the Ratio of Shares in the Merger Transaction; No Independent
Valuation
The number of Transpacific shares to be issued pursuant to the Merger
Agreement was determined by negotiation between Coffee and Transpacific and
does not necessarily bear any relationship to Coffee's asset value, net worth
or other established criteria of value and should not be considered indicative
of the actual value of Coffee. Furthermore, neither Coffee nor Transpacific
has obtained either an appraisal of Coffee's or Transpacific's securities or
an opinion that the Merger is fair from a financial perspective.
Failure of Sufficient Number of Investors to Reconfirm Investment
The Merger cannot be consummated unless, in connection with the
reconfirmation offering required by Rule 419, the Rule 419 Investors
representing 80% of the maximum offering proceeds elect to reconfirm their
investments. Rule 419 Investors must affirmatively elect to reconfirm their
investments; no response within the twenty day period Transpacific must grant
its shareholders to reconfirm will be viewed as a vote not to reconfirm. If,
after completion of the reconfirmation offering being conducted pursuant
hereto, a sufficient number of Rule 419 Investors do not reconfirm their
investment, the Merger will not be consummated. In such event, none of the
deposited securities held in escrow will be issued and the deposited funds
will be returned to Rule 419 Investors on a pro rata basis. As a consequence,
since Transpacific expects to use the 10% allowed to it pursuant to Rule 419,
the Rule 419 Investors will be returned only 90% of their invested funds.
Penny Stock Regulation
Broker-dealer practices in connection with transactions in "penny-stock"
are regulated by certain penny stock rules adopted by the Securities and
Exchange Commission. Penny stocks generally are equity securities with a
price of less than $4.00 (other than securities registered on certain national
securities exchanges or quoted on the NASDAQ system, provided that current
price and volume information with respect to transactions in such securities
is provided by the exchange or system). The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt
from the rules, to deliver a standardized risk disclosure regarding penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account. In addition,
the penny stock rules require that prior to a transaction in a penny stock not
otherwise exempt from such rules the broker-dealer must make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser's written agreement to the transaction. These
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for a stock that becomes subject to the penny
stock rules. If Transpacific's Common Stock becomes subject to the penny
stock rules, investors in this offering may find it more difficult to sell
their shares.
MERGER
Background of the Merger Agreement
Transpacific was organized on October 9, 1995 under the laws of the State
of Nevada in order to provide a vehicle to acquire or merge with a business or
company. On August 12, 1995, Transpacific commenced a "blank check" offering
pursuant to Rule 419 ("Rule 419") promulgated under the Securities Act. The
purpose of the offering was to cause Transpacific to become a publicly held
reporting company under the Securities Exchange Act of 1934, as amended. The
offering was successful in raising $18,000 in gross proceeds from Rule 419
Investors. Pursuant to Rule 419, $14,400 of the net proceeds from that
offering, the 97,000 restricted shares of common stock and 3,000 Transpacific
shares purchased by the Rule 419 Investors, were placed in escrow pending (i)
distribution of a prospectus to each of the Rule 419 Investors describing any
prospective business acquisition by Transpacific and (ii) the subsequent
reconfirmation by the holders of at least 80% of the shares owned by the Rule
419 Investors that they have elected to remain investors.
In the event approval of the Merger is not obtained from at least 80% of
the Rule 419 Investors, then the shares deposited in the Rule 419 Escrow will
not be released to the Rule 419 Investors. Instead, the $16,200 net offering
proceeds in the Rule 419 Escrow will be released to the Rule 419 Investors in
proportion to their investment, at approximately $5.40 per share. In the
event the escrowed funds exceed $16,200 at the consummation of the Merger, the
excess funds shall be returned on a pro rata basis to those registered common
shareholders rejecting the reconfirmation offer. The Rule 419 Investors paid
$6.00 per share in Transpacific's initial public offering.
Pursuant to Rule 419, the value of Coffee must represent at least 80% of
the maximum offering proceeds, or $14,400. Based upon independent audited
financial statements, Coffee has a business value of not less than $14,400.
(See "Coffee Holding Co., Inc. Financial Statements.")
Terms and Conditions of Merger Agreement
STOCKHOLDERS OF TRANSPACIFIC WISHING TO OBTAIN A COPY OF THE MERGER AGREEMENT,
WHICH IS INCORPORATED INTO THIS PROSPECTUS BY REFERENCE, MAY OBTAIN ONE
WITHOUT CHARGE BY WRITING TO SCHONFELD & WEINSTEIN, L.L.P. ATTENTION: JOEL
SCHONFELD, 63 WALL STREET, SUITE 1801, NEW YORK, NEW YORK 10005.
Pursuant to the Merger Agreement, Coffee will be merged into
Transpacific. Consummation of the transaction contemplated by the Merger
Agreement (the "Merger") is conditioned upon, among other things,
reconfirmation by holders of least 80% of the shares owned by the Rule 419
Investors. Upon consummation of the Merger, (i) Transpacific shall institute
a ten for one (10:1) Stock Split (the "Stock Split"), after which 3,000,000
shares of common stock shall be issued to former Coffee shareholders. Each
shareholder who holds shares of Transpacific Common Stock registered pursuant
to a registration statement declared effective by the Securities and Exchange
Commission on August 12, 1996 ("Registered Common Stock") prior to the Merger
and who accepts the Reconfirmation Offer shall, after consummating of the
Merger and subsequent Stock Split, hold ten (10) shares for every one (1)
share held prior to the Merger and subsequent Stock Split. Coffee will merge
into Transpacific with Transpacific as the Surviving Entity. The Merger is
intended to be consummated in such a manner as to be tax-free to all parties
involved under Internal Revenue Code Section 368(a)(1)(A); (ii) each Rule 419
investor who rejects the Reconfirmation Offer will be paid his or her pro rata
share of the amount in the Escrow Account of approximately $5.40 per share;
(iii) holders of Transpacific common stock, the resale of which is restricted
under United States Securities laws ("Restricted Common Stock") prior to the
Merger shall continue to hold his/her share certificate representing
Transpacific Restricted Common Stock, which stock shall be subject to the ten
for one (10:1) Stock Split. Consummation of the Merger is not subject to any
governmental approvals.
As a result of the Stock Split, the 3,000 shares currently held in escrow
shall become 30,000 shares of Transpacific Registered Common Stock, and the
97,000 Restricted Common Stock shall become 970,000.
The result of the Merger, assuming that 80% of the Transpacific
stockholders reconfirm their investments, is that former Coffee shareholders
shall own 88.5% of the Surviving Entity while current Transpacific
shareholders, including those Transpacific shareholders who are also
shareholders of Coffee, shall own 25% of Transpacific. (See "Certain
Transactions")
Stockholders of Transpacific desiring to accept the Reconfirmation Offer
are directed to sign the enclosed Letter of Reconfirmation form and return it
to Schonfeld & Weinstein, Attention: Joel Schonfeld, Esq., 63 Wall Street,
Suite 1801, New York, New York 10005, who will forward each Letter of
Reconfirmation to the Atlantic Liberty Savings, Transpacific's escrow agent.
Any Transpacific stockholder who fails to return his or her form so that it is
received by Mr. Schonfeld by (20 days from the date
hereof) will be deemed to have rejected the Reconfirmation Offer and will
automatically be sent a check representing his or her pro rata share of the
funds in the Escrow Account for the benefit of the Rule 419 Investors.
Certain Income Tax Consequences
The Merger is intended to qualify as a "tax-free reorganization" for
purposes of the United States federal income tax so that stockholders of
Transpacific and Coffee will not recognize gain or loss from the transaction.
In addition, the transaction is not expected to result in the recognition of
gain or loss to either Transpacific or Coffee in the respective jurisdictions
where each of them is subject to taxation. NO OPINION OF COUNSEL NOR A RULING
FROM THE INTERNAL REVENUE SERVICE HAS BEEN OBTAINED IN REFERENCE TO THE
FOREGOING. THE FOREGOING IS FOR GENERAL INFORMATION ONLY AND BRIAN
STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX
CONSEQUENCES OF THE MERGER TO THEM.
Fees and Expenses
Shareholders of Coffee shall bear all costs and expenses incurred in
connection with the Merger and the Reconfirmation Offering, since the only
funds available to Transpacific are the $14,400 in cash held in escrow
pursuant to Rule 419, none of which may be used by either Transpacific or
Coffee prior to the consummation of the Merger.
USE OF PROCEEDS
The gross proceeds of Transpacific's initial public offering was
$18,000. Pursuant to Rule 15c2-4 under the Securities Exchange Act of 1934
(the "Exchange Act"), all of those proceeds must be held in escrow until all
of the shares are sold. Pursuant to Rule 419 under the Securities Act, after
all of the Shares are sold, 10% of the Deposited Funds ($1,800) may be
released from escrow to Transpacific. Transpacific requested the release of
this 10%. To date, $785 has been expended for accounting fees with the
remaining $1,015 being held in a separate account. Upon the consummation of
the Merger and the reconfirmation thereof, which reconfirmation offering must
precede such consummation, pursuant to Rule 419, $18,000 (plus any interest or
dividends received, but less any portion disbursed to Transpacific pursuant to
Rule 419(b)(2)(C)(vi) and any amount returned to investors who did not
reconfirm their investment pursuant to Rule 419 or approximately $16,200) will
be released to Coffee.
SELECTED FINANCIAL DATA
(All amounts expressed in US$)
Transpacific International Group Corp.:
10/9/95 to 10/1/96 to
9/30/96 6/30/97
Net Income from Operations $ 0 $ 0
Total Current Assets 2,730 783
Other Assets 0 0
Total Assets 2,730 783
Total Current Liabilities 0 0
Long-term Liabilities 0 0
Dividends 0 0
Total Stockholders equity 0 0
Coffee Holding Co., Inc. 10/31/95 to 10/31/96 to
10/31/96 07/31/97
Net Income from Operations 499,517 1,256,757
Total Current Assets 3,912,386 4,606,567
Other Assets 1,340,464 63,927
Total Assets 5,252,840 5,958,690
Total Liabilities 4,531,468 4,093,561
Total Current Liabilities 3,403,051 3,002,344
Dividends 0 0
Total Stockholders equity 721,372 1,865,129
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
TRANSPACIFIC INTERNATIONAL GROUP CORP.
General
Transpacific was organized under the laws of the State of Nevada on
October 9, 1995. Since inception, the primary activity of Transpacific has
been directed to organizational efforts, and obtaining initial financing and
conducting its initial public offering pursuant to which Transpacific offered
and sold 3,000 shares of common stock at $6.00 per share. Pursuant to Rule
419, the proceeds of Transpacific's initial public offering ($18,000) less 10%
($1,800) have been placed in escrow pending consummation of a merger or
acquisition. (See "INVESTORS' RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE
419"). In the event no merger or acquisition is consummated within eighteen
(18) months from the effective date of Transpacific's initial public offering
(February 12, 1998). Transpacific shall return investors' money, less $1,800,
on a pro rata basis.
Transpacific was organized for the purposes of creating a corporate vehicle to
seek,
investigate and, if such investigation warranted, engaging in Business
combinations presented to it by persons or firms who or which desire to employ
Transpacific's funds in their business or to seek the perceived advantages of
a publicly-held corporation. Transpacific's principal business objective is
to seek long-term growth potential in a Business combination venture rather
than to seek immediate, short-term earnings.
Transpacific does not currently engage in any business activities which
provide any cash flow. Transpacific's business is sometimes referred to as a
"blank check" company because investors entrust their investment monies to
Transpacific's management before they have a chance to analyze any ultimate
use to which their money may be put. Although substantially all of the
Deposited Funds of this offering are intended to be utilized generally to
effect a Business combination, such proceeds are not otherwise being
designated for any specific purposes. Pursuant to Rule 419, prospective
investors who invest in Transpacific will have an opportunity to evaluate the
specific merits or risks of only the Business combination management decides
to enter into.
Management anticipates that it may be able to effect only one potential
Business combination, due primarily to Transpacific's limited financing.
Results of Operations
Transpacific's public offering was declared effective on August 12,
1996. Transpacific offered a total of 3,000 shares (par value $.0001) at an
offering price of $6.00 per share, for an aggregate of $18,000.00. On
February 10, 1997 , Transpacific closed on 3,000 shares for a total gross
proceeds of $18,000.00. Pursuant to Rule 419 of the Securities Act, net
proceeds of $16,200.00 together with all securities issued are being held in
escrow pending the consummation of an acquisition or merger.
After the closing of the Merger, the business of Transpacific will be the
business of Coffee. (See "BUSINESS - Coffee"). The resources of Coffee will
be the resources available to Transpacific to fulfill the business purpose of
marketing, manufacturing and distributing coffee. Coffee believes the
combined cash resources and available credit of Coffee and Transpacific will
be sufficient to run operations for one year.
At June 30, 1997, Transpacific's current assets amounted to $783, while
current liabilities amounted to $-0-. In addition, Transpacific's
organization costs amounted to $- 0- for the period ended June 30, 1997.
In the event approval of the Merger is not obtained from at least 80% of
the Rule 419 Investors, then the shares deposited in the Rule 419 Escrow will
not be released to the Rule 419 Investors. Instead, the $14,400 net offering
proceeds in the Rule 419 Escrow will be released to the Rule 419 Investors in
proportion to their investment, at approximately $5.40 per share. In the
event the escrowed funds exceed $14,400 at the consummation of the Merger, the
excess funds shall be returned on a pro rata basis to those registered common
shareholders rejecting the reconfirmation offer. The Rule 419 Investors paid
$6.00 per share in Transpacific's initial public offering.
COFFEE HOLDING CO., INC.
The Company is engaged in several aspects of the coffee industry, including
wholesales of green coffee beans, roasting, packaging and distributing
proprietary and private brands of coffee, as well as gourmet coffee. (See
"BUSINESS - Coffee").
Year Ended October 31, 1996 compared to Year Ended October 31, 1995
Year Ended
October 31,
1996 1995
Net Sales $21,162,100 $23,923,561
Cost of Sales $18,775,383 $22,881,314
Operating Expenses $ 1,878,672 $ 1,470,084
Net Income (loss) $ 499,517 $ ( 429,062)
Net Sales for the year ended October 31, 1996 were $21,161,100 compared
to $23,923,561, a decrease of $2,761,461 (13%). This decrease was a result of
fluctuations in the price of green coffee. In fiscal year 1995, coffee sold
at approximately $1.30 lb., as compared to an approximate price of $1.05 lb.
in Coffee's fiscal year 1996. Although Coffee experienced a decrease in
revenues, its sales volumes increased. However, despite sales increase in
fiscal year 1996, lower coffee prices resulted in decreased sales revenues.
Cost of sales decreased $4,105,931 (17.9%) from $22,881,314 in 1995 to
$18,775,383 in 1996. Cost of sales as a percentage of sales decreased from
95.6% in 1995 to 88.7% in 1996. This decrease is due to fluctuation in the
price of green coffee.
Coffee is a commodity traded on the Commodities and Futures Exchange.
Coffee prices fluctuate according to various factors, including supply and
demand. Over the past ten years, the average price per pound of coffee ranged
from $.80 to $1.50. However, within the past ten years, prices have varied
from a low of $.49 per pound in 1991 to a high of $3.18 in May 1997. The $.49
per pound price occurred when there was a perceived glut on the market which
drove the future price down to an unnatural low, while the $3.18 per pound in
May was the result of panic purchasing, which drove the price of coffee beans
up to an unnatural high. These panic lows and highs usually last for but a
short period of time when rumors or news affects the future market.
The present price for coffee beans on the commodities market is $1.44 per
pound. Management believes that coffee prices will remain stable for the
foreseeable future.
The Company enters into contracts with its customers to supply them with
coffee; either raw beans or ground, blended and packaged coffees, depending on
its clients' needs. To protect itself from the varying price of green
coffee, the Company enters into the futures market. The Company will purchase
coffee beans on the present market when it believes the price is low, and
immediate delivery to the Company's clients is required. To fulfil future
contracts, the Company buys futures which will insure that the Company can
obtain coffee beans at a designated price at a later date. This enables the
Company to stabilize its pricing with its customers for the finished product.
By purchasing futures, the Company can lock in a good price for its coffee,
stabilizing the prices for future purchase. The company further uses the
method of stabilizing its cost of beans by purchasing puts and calls on the
coffee commodities exchange. By doing this the company can obtain a coffee
future by exercising a call or can divest of a coffee future by exercising a
put. This method allows the Company to keep an even and constant flow of
coffee at a regulated price so as to avoid wide and varied differences in the
price of its coffee from one season to the next. The price of the coffee on
the futures market as well as the current market is a reflection of the
quantity and quality of coffee crops, as well as anticipated crops. Coffee
crops are effected by weather conditions and extreme temperature
fluctuations.
Global consumption of coffee has increased approximately 2% per year over
the past 7 years. Management believes that this increase in the consumption
of coffee at that rate is likely to continue for the foreseeable future.
The Company is engaged in a concerted effort to increase its sales
revenues and production. Since 1995, the Company has refurbished and
improved all of its existing equipment to prepare for in increase in
production. As part of this effort, the Company recently purchased a new
roaster which will go into operation in January 1998. The Company believes
that the new roaster will enable the Company to increase its production of
roasted beans by two times its present capacity. The Company has also begun
efforts to increase its sales through private label contracts with
supermarkets and other chain stores. One of the Company's largest clients is
ShopRite. The Company believes that its improved equipment will allow it to
increase its capacity and successfully serve its growing customer base.
Additionally, the Company has increased its work force from eight to its
present twenty-two full time employees. The Company is further working to
increase sales of its proprietary brand coffees, through increase sales and
marketing efforts.
Liquidity and Capital Resources. The Company currently has a line of
credit from Finova Capital Corporation ("Finova"), pursuant to which Finova
will forward the Company up to $2,500,000. This line of credit, combined
with the Company's existing cash flow, allows the Company to meet its
capital requirements on an on-going basis for its exisitng operations, and
operations over the next twelve (12) months. Additionally, the Company has
received a committment to increase its credit facility for another
$2,500,000 for a potential total credit line of $5,000,000.
Operating Expenses for 1996 were $1,878,672 and $1,470,084 in 1995, an
increase of $408,588 (27.8%) while interest expenses remained consistent
($310,000 in 1996 compared to $313,953 in 1995, a decrease of $3,953 or 1.3%),
selling and administrative expenses increased from $911,103 in 1995 to
$1,154,341 in 1996 an increase of $243,238 or 26.67%. However, selling and
administrative expenses were 61.44% of operating expenses and 61.98% in 1995.
Additionally, salaries increased to $413,740 in 1996 from $245,028 in 1995, an
increase of $168,712 (68.89%). Salaries as a percentage of operating expenses
increased from 16.67% in 1995 to 22.02% in 1996. Operating expenses as a
percentage of net sales increased from 6.14% in 1995 to 8.88% in 1996. This
increase was a result of increased maintenance of Coffee's facility, including
a new roaster and other new machinery, as well as increased utilities required
for the increase in volume of coffee processed and packaged by Coffee.
Additionally, as Coffee's volume increases, so do other of its operating
costs, such as packaging and trucking.
As a result of all of the above, Coffee generated net income of $499,517 in
1996, and a net loss of $(429,062) in 1995.
Nine Month Period Ended July 31, 1997 as
Compared to Nine Month Period Ended July 31, 1996
Nine Month Period
Ended July 31,
1997 1996
Net Sales $18,547,105 $15,014,380
Cost of Sales $15,586,862 $13,514,933
Operating Expenses $ 1,703,486 $ 1,204,138
Net Income (loss) $ 1,143,757 $ 312,819
Net sales for the nine month periods ended July 31, 1997 and July 31, 1996,
were $18,547,105 and $15,014,380, respectively, resulting in an increase of
$3,532,725 (23.5%). This increase is a result of an increase in sales
volumes, due to Coffee's efforts to expand its business. Higher prices of
green coffee contributed to this increase. Cost of sales increased from
$13,514,933 to $15,586,862, a $2,071,929 (15.3%) increase. The increase in
cost of sales is due to additional expenses associated with the greater sales
volumes, such as higher packaging costs, higher trucking costs, higher utility
costs, and additional pay roll costs. The cost of sales as a percentage of
net sales decreased from 90% for the nine month period ended July 31, 1997 to
84% for the nine month period ended July 31, 1996.
Operating expenses for the nine month periods ended July 31, 1997 and 1996
were $1,703,486 and $1,204,138, respectively. This increase of $499,348
(41.5%) was due to an increase in selling and administrative expenses and
interest expenses. Selling and administrative expenses increased from
$819,548 to $1,221,400 (and increase of $401,852 or 49%). This increase is a
result of costs involved with the increase in volume of coffee roasted,
blended and packaged by Coffee. However, as a percentage of operating
expenses, selling and administrative expenses increased from 68.1% to only
71.7%. Interest expenses increased $97,496 (48.5%) from $200,819 to $298,315,
as a result of fluctuations in Coffee's line of credit. Interest expenses as
a percentage of operating expenses increased from 16.7% this period in 1996 to
17.5% this period in 1997.
As a result of the above, net income increased from $312,819 for the nine
month period ended July 31, 1996 to $1,143,757 for the nine month period ended
July 31, 1997.
BUSINESS
TRANSPACIFIC INTERNATIONAL GROUP CORP.
General
Transpacific was organized under the laws of the State of Nevada on
October 9, 1995. Since inception, the primary activity of Transpacific has
been directed to organizational efforts, and obtaining initial financing and
conducting its initial public offering pursuant to which Transpacific offered
and sold 3,000 shares of common stock at $6.00 per share. Pursuant to Rule
419, the proceeds of Transpacific's initial public offering ($18,000) less 10%
($1,800) have been placed in escrow pending consummation of a merger or
acquisition. (See "INVESTORS' RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE
419"). In the event no merger or acquisition is consummated within eighteen
(18) months from the effective date of Transpacific's initial public offering
(February 12, 1998). Transpacific shall return investors' money, on a pro
rata basis.
Transpacific was organized for the purposes of creating a corporate vehicle to
seek,
investigate and, if such investigation warranted, engaging in Business
combinations presented to it by persons or firms who or which desire to employ
Transpacific's funds in their business or to seek the perceived advantages of
publicly-held corporation. Transpacific's principal business objective is to
seek long-term growth potential in a Business combination venture rather than
to seek immediate, short-term earnings.
Transpacific does not currently engage in any business activities which
provide any cash flow. Transpacific's business is sometimes referred to as a
"blank check" company because investors entrust their investment monies to
Transpacific's management before they have a chance to analyze any ultimate
use to which their money may be put. Although substantially all of the
Deposited Funds of this offering are intended to be utilized generally to
effect a Business combination, such proceeds are not otherwise being
designated for any specific purposes. Pursuant to Rule 419, prospective
investors who invest in Transpacific will have an opportunity to evaluate the
specific merits or risks of only the Business combination management decides
to enter into.
Management anticipates that it may be able to effect only one potential
Business combination, due primarily to Transpacific's limited financing.
COFFEE HOLDING CO., INC.
General
Coffee Holding Co., Inc. was incorporated pursuant to the laws of the
State of New York on January 22, 1971. Coffee began operations in 1971 as a
wholesaler of green coffee, purchasing green coffee from commodities houses
and suppliers, and selling to coffee roasters. In 1975, Coffee began roasting
and selling coffee under proprietary labels such as Via Roma. Currently,
Coffee roasts, grinds, blends and sells coffee under labels such as Cafe
Caribe,Don Manuel, and Fifth Avenue. Coffee owns the registered trademarks
for these brands.
In the early 1980's, Coffee began to expand expanding its operations,
and began selling gourmet coffee, which is higher quality coffee, such as
espresso. These coffee's are sold to higher end coffee bars, and specialty
stores. Gourmet coffee is sold in whole beans, or grounded and blend.
Coffee's business is divided into four (4) categories:
(1) Wholesale green coffee; (2) Roasting, grinding, blending and
packaging proprietary brand coffee; (3) Roasting, grinding, blending and
packaging private label coffee; and (4) Roasting and packaging specialized
"gourmet" coffee.
Wholesale Green Coffee
Coffee sells or brokers green gourmet beans to many smaller roasters and
gourmet coffee shop operators located throughout the Continental United
States. Coffee purchases green coffee from approximately ten (10) suppliers
located primarily in the tri-state area. These suppliers supply Coffee with
beans from countries around the world including Columbia, Zimbabwe, Brazil and
Ethiopia, among others. Coffee carries over fifty (50) different types of
coffee. Green gourmet beans are sold (unroasted) direct from the warehouses
to small roasters and gourmet bean stores. These stores and roasters will
roast the beans themselves. Such wholesales account for approximately 35% of
Coffee's gross revenues.
This end of the business represents the fastest growing segment of the
industry as gourmet coffee houses are increasing all over the United States.
Currently, Coffee has over 190 customers in this category with profits ranging
from $.04 to over $1.00 per pound, depending upon the size of the customers,
the size of the offer, type of coffee.
Roasting, Grinding, Blending and Packing Proprietary Line of Branded Coffees
Coffee roasts, grinds and blends coffee in its factory located at 4401
First Avenue, Brooklyn, New York. These coffees are packaged at Coffee's
facilities, as well, and shipped directly from the premises.
Since 1975, Coffee has acquired trademark registration rights for several
name brands of coffee. There names include Cafe Caribe, Cafe Supremo, Via
Roma, Don Manuel and Fifth Avenue. Coffee roasts, grinds, blends these beans
according to Coffee recipes, then sells the coffees packaged in its
proprietary brands labels to supermarkets, wholesalers and individually owned
stores throughout the United States.
Each of Coffee's proprietary brands is aimed at a particular segment of
the coffee market. Coffee distributes "Cafe Caribe" in regular, decaffeinated
and instant forms, and "Fifth Avenue" in regular and decaffeinated. The
average profit margin n these items under normal conditions is approximately
28%. Sales of Coffee's proprietary brands comprise approximately 15% of
Coffee's sales revenues.
All of Coffee's roasted and ground blends are available in cans and brick
packs.
Roasting, Grinding, Blending and Packing Private Label Coffee
45% of Coffee's sales revenues comes from sales of coffees which Coffee
roasts, grinds, blends and packs under private labels. Currently, Coffee
roasts and packs coffee for some of the largest supermarket chains east of the
Mississippi River, including ShopRite. Private label coffee is a highly
competitive end of the business with profit margins between 8% and 15%.
However, the volume of private label coffee that Coffee distributes can be as
much as five (5) times as grand as its proprietary brands.
Roasting and Packing Gourmet Coffee
The most recent end of Coffee's business is roasting and packing
specialized blended and flavored coffees for the food service/ office coffee
service end of the business. As with private label coffees, roasted and
packed gourmet coffee is sensitive to fluctuations in coffee prices. Margins
for this segment of Coffee's business run approximately 15%.
Intellectual Property
Coffee holds trademarks for all of its proprietary name coffee brands.
The trademark for "Cafe Caribe" was originally registered with the U.S.
Department of Commerce, United States Patent and Trademark Office on November
9, 1954 for twenty (years). It was renewed on November 9, 1974 for twenty
(20) years, and renewed on July 18, 1995 for ten (10) years from the date the
registration was due to expire (November 9, 2004).
The trademark for "Via Roma" was registered with the United States Patent
and Trademark office on August 10, 1976 for a twenty (20) year period. It was
renewed on August 10, 1996 for a ten (10) year period.
Coffee holds the trademark "Sterling's Deluxe", which was registered with
the United States Patent and Trademark Office on July 25, 1967 for a twenty
(20) year period, and renewed on June 7, 1988 for a twenty (20) year period,
to expire July 25, 2007. This trademark was originally held by M. & S. Gordon
Co., Inc. and assigned to Coffee. On January 23, 1996, Coffee granted The
Quaker Oats Company the right to use the name "Sterling" on a coffee product.
Coffee no longer distributes "Sterling Deluxe" coffee.
Coffee holds the trademark for "Fifth Avenue". This trademark was first
issued on December 16, 1988. Coffee filed a Declaration under Sections 8 and
15 on October 17, 1997, which will keep the "Fifth Avenue" trademark in full
force until August 11, 2002.
The trademark for "Don Manuel" is held by the Company. It was originally
registered on August 1, 1967, and renewed on June 7, 1988 for a twenty (20)
year period to expire August 1, 2007.
Competition
Coffee is engaged in a business whereby it competes with similar
businesses which sell, roast and distribute coffee. Additionally, Coffee's
proprietary brand coffees compete with the many other brand coffees available
in supermarket and specialty stores. Currently, the coffee market is
dominated by several large companies, such as Kraft General Foods, Inc.,
Proctor & Gamble Co., and Nestle S.A. Other of Coffee's competitors, such as
Chock Full of Nuts, Mother Parker, Teatly and Continental Coffee Co., have
greater access to capital, are more familiar with the industry, and are more
widely recognized by potential consumers.
Legal Proceedings
Coffee is not a party to any legal proceedings which Coffee could
materially effect its business.
Employees
Coffee currently has 22 full time and 5 part time employees. Coffee's
employees do not belong to any unions. Management of Coffee enjoys good
working relationships with its employees.
Property
Coffee leases its executive offices and plant located at 4401-05 First
Avenue, Brooklyn, New York, from the New York City Industrial Development
Agency ("IDA"). In 1989, Coffee effectively purchased the property through
the IDA when the IDA issued bonds for the purchase of the property.
Coffee also leases as warehouse located at 4425a First Avenue, Brooklyn,
New York. The warehouse is 7,500 square feet. Coffee pays $3,900 per month
rent for this warehouse. This lease expires August 31, 2002.
Coffee's facilities are adequate for its current operations.
MANAGEMENT
Directors and Executive Officers
Set forth below is certain information regarding the directors and
executive officers of Transpacific and Coffee. The officers and directors of
Transpacific are expected to resign upon consummation of the Merger.
TRANSPACIFIC
Set forth below is information regarding the officers and directors of
the Transpacific.
Name Age Position with Transpacific
Ho Cheong Chio 46 President, Chairman of the Board
The Bank of America Building of Directors
27/F-A-D Avenida
Doutor Mario
Soares, Macau
David Chang 42 Secretary, Treasurer,
116 Pinehurst Ave., #L21 Director
New York, NY 10033
Christian Constantinov 41 Director
922 Old Post Rd.
Bedford, NY 10506
____________________
(1) May be deemed "Promoters" of Transpacific, as that term is defined under
the Securities Act.
BIOGRAPHY
Ho Cheong Chio, 46, has been President and Chairman of the Board of Directors
of Transpacific since Transpacific's Company's organization. Since 1982,
Mr. Chio has been the owner and manager of Far East Trading Co., a trading
company located in Hong Kong. Mr. Chio graduated from South China Normal
University High School, located in Canton, China.
David Chang, 42, has been Secretary, Treasurer and a director of Transpacific
since its organization. Mr. Chang is a certified public accountant, and has
had his own accounting and tax practice since 1992. From 1989 to 1992, Mr.
Chang was employed as a certified public accountant with James D. Miller, P.C.,
in New York. Mr. Chang received his M.S. in Accounting and Taxation from
American University, and his B.A. in English Literature from Zhongshan
University, Canton, China.
Christian Constantinov, 41, has been a director of Transpacific since December
4, 1995. Since 1991, Mr. Constantinov has been a professor at McGill
University in Montreal, Canada. From 1990 to 1995, he was a vice president of
Sony Classical Production, Inc. Mr. Constantinov received his M.A. in Piano
from the Conservatory of Sofia in Sofia, Bulgaria, and is a graduate of the
Graduate School of Engineering in Sofia.
COFFEE
Set forth below is information regarding the officers and directors of
Coffee:
Name Age Position with the Company
David Gordon 33 Executive Vice President - Operations
22 Barclay Road
Secretary, Director
Scarsdale, NY 10538
Andrew Gordon 36 President, CEO, Treasurer, Director
251 Meiser Avenue
Staten Island, NY 10306
Gerard DeCapua 36 Director
1771 Burnett Street
Brooklyn, NY 11242
Biography
David Gordon, 33, has been Executive Vice President - Operations and Secretary
since October 28, 1997. Mr. Gordon was Vice President, as well as Operating
Manager of Coffee from 1983 until October 28, 1997. He has been a director of
Coffee since 1983. As Executive Vice President - Operations, Mr. Gordon is
responsible for Coffee's sales, and plant operations. Mr. Gordon attended
Baruch College in New York City. He is the brother of Andrew Gordon,
President, CEO, Treasurer and a director of Coffee.
Andrew Gordon, 36, has been President, Chief Executive Officer and Treasurer
since October 28, 1997. He was a Vice President from 1981 to October 28,
1997. Mr. Gordon has been a director of the Company since 1981. Mr. Gordon
is responsible for the purchase of green coffee, as well as for trading
coffee. Mr. Gordon received a BBA degree from Emory University in Atlanta,
Georgia. He is the brother of David Gordon, Executive Vice President -
Operations, Secretary and a director of Coffee.
Gerard DeCapua, 36, has been a director of Coffee since October 28, 1997. Mr.
DeCapua has had his own law practice located in Rockville Centre, New York
since 1985. He received his law degree from Pace University School of Law.
Executive Compensation
Transpacific
Transpacific has not compensated any officers, directors or employees to
date.
Coffee
The following summary compensation table sets forth compensation
information for services performed during each of the three (3) fiscal years
ended October 31, 1997, 1996, 1995 by Coffee's executive officers.
SUMMARY COMPENSATION TABLE
Name and Principal Fiscal Annual
Position(3) Year Compensation (1)
David Gordon 1997(2) $ 95,513
Executive -Vice President - 1996 $160,932
Operations, Secretary 1995 $ 92,297
Andrew Gordon 1997(2) $100,810
President, CEO 1996 $168,180
Treasurer 1995 $ 99,545
Sterling Gordon 1997(2) $ 52,966
Former President 1996 $ 73,928
1995 $ 52,966
Rachelle Gordon 1997(2) $ 29,455
Former Secretary 1996 $ 38,435
and Treasurer 1995 $ 27,970
(1) Includes salary, bonus, medical, pension and housing allowance.
(2) Estimated.
(3) On October 28, 1997, Sterling Gordon and Rachelle Gordon resigned from
their respective positions. On October 28, 1997, Andrew Gordon became
President, Treasurer and CEO of Coffee, and David Gordon became Executive Vice
President - Operations and Secretary.
DESCRIPTION OF SECURITIES
TRANSPACIFIC
Common Stock
Transpacific is authorized to issue twenty million (20,000,000) shares of
common stock, $.0001 par value per share, of which 100,000 shares were issued
and outstanding as of the date of this prospectus. This number includes the
3,000 shares of Registered Common Stock subject to the Reconfirmation
Offering. Each outstanding share of common stock of Transpacific is entitled
to one vote, either in person or by proxy, on all matters that may be voted
upon by the owners thereof at meetings of the stockholders.
The holders of Transpacific common stock (i) have equal ratable rights to
dividends from funds legally available therefor, when, as and if declared by
the Board of Directors of Transpacific; (ii) are entitled to share ratably in
all of the assets of Transpacific available for distribution to holders of
common stock upon liquidation, dissolution or winding up of the affairs of
Transpacific; (iii) do not have preemptive, subscription or conversion rights,
or redemption or sinking fund provisions applicable thereto; and (iv) are
entitled to one non-cumulative vote per share on all matters on which
stockholders may vote at all meetings of stockholders.
All shares of registered Common Stock which are the subject of this
Reconfirmation Offering, when issued, will be fully paid for and
non-assessable, with no personal liability attaching to the ownership
thereof. The holders of shares of common stock of Transpacific do not have
cumulative voting rights, which means that the holders of more than 50% of
such outstanding shares voting for the election of directors can elect all of
the directors of Transpacific if they so choose and, in such event, the
holders of the remaining shares will not be able to elect any of
Transpacific's directors. At the completion of the Reconfirmation Offering,
the present officers and directors and present shareholders of Transpacific,
including those Transpacific shareholders who are also shareholders of Coffee,
will beneficially own 25% of the then outstanding shares, with the former
Coffee shareholders in possession of 88.5% of Transpacific's stock. (See
"MERGER-Terms and Conditions of Merger" and "Certain Transactions").
Reports to Stockholders
Transpacific intends to continue to furnish its stockholders with annual
reports containing audited financial statements as soon as practicable at the
end of each fiscal year. Transpacific's fiscal year ends on September 30.
Non-Cumulative Voting
The holders of shares of Transpacific Common Stock do not have cumulative
voting rights, which means that the holders of more than 50% of such
outstanding shares, voting for the election of directors, can elect all of the
directors to be elected, if they so chose. In such event, the holders of the
remaining shares will not be able to elect any of Transpacific's directors.
Transpacific's current shareholders, including those Transpacific shareholders
who are also shareholders of Coffee, will own 25% of the common shares
outstanding after the Merger. (See "Certain Transactions.")
Dividends
Transpacific was only recently organized, has no earnings, and has paid
no dividends to date. Since Transpacific was formed as a blank check company
with its only intended business being the search for an appropriate Business
combination, Transpacific does not anticipate having any earnings until such
time that a Business combination is reconfirmed by the stockholders. However,
there are no assurances that upon the consummation of a Business combination,
Transpacific will have earnings or issue dividends. Therefore, it is not
expected that cash dividends will be paid to stockholders until after a
Business combination is reconfirmed.
Transfer Agent
Transpacific has appointed Oxford Transfer Co., 115 North Maryland
Avenue, Suite 130, Glendale, California as the Transfer Agent for
Transpacific.
COFFEE
Common Stock
Coffee is authorized to issue two hundred (200) shares of common stock,
no par value, of which 100 shares were issued and outstanding as of the date
of this prospectus. Each outstanding share of common stock of Transpacific
is entitled to one vote, either in person or by proxy, on all matters that may
be voted upon by the owners thereof at meetings of the stockholders.
The holders of shares of Coffee Common Stock do not have cumulative
voting rights, which means that the holders of more than 50% of such
outstanding shares, voting for the election of directors, can elect all of the
directors to be elected, if they so chose. In such event, the holders of the
remaining shares will not be able to elect any of Coffee's directors.
Coffee's current shareholders will own 88.5% of the common shares outstanding
after the Merger.
Dividends
Coffee has paid no dividends to date.
Transfer Agent
Coffee intends to appoint Oxford Transfer Co., 115 North Maryland Avenue,
Suite 130, Glendale, California, as its Transfer Agent after the Merger.
<PAGE>
PRINCIPAL SHAREHOLDERS
TRANSPACIFIC
The following table sets forth certain information regarding the
beneficial ownership of the Transpacific's Common Stock as of the date of this
Prospectus by (i) each person known to Transpacific to beneficially own 5% or
more of Transpacific's Common Stock, (ii) each director of Transpacific and
(iii) all directors and executive officers of Transpacific as a group. All
information with respect to beneficial ownership has been furnished to
Transpacific by the respective director, executive officer or 5% shareholder,
as the case may be.
Amount and Nature of Amount and Nature of
Beneficial Ownership Beneficial Ownership
Prior to the Merger(1) After the Merger (2)
Number Percent Number Percent
Beneficial Owners of Shares of Class of Shares of Class
Ho Cheong Chio (1) 0 0 0 0
The Bank of China Building
27/F-A-D Avenida
Doutor Mario
Soares, Macau
David Chang (1) 0 0 0 0
116 Pinehurst Ave., #L21
New York, NY 10033
Christian Constantinov (1) 0 0 0 0
922 Old Post Rd.
Bedford, NY 10506
Thomas Geisel(5) 8,982 9.0% 89,820 2.2%
89 Summit Avenue
Suite 222
Summit, NJ 07901
Mark Russo(5) 8,982 9.0% 89,820 2.2%
89 Summit Avenue
Suite 222
Summit, NJ 07901
David Gordon(3)(4)(5) 27,020 27.0% 270,200 6.8%
22 Barclay Road
Scarsdale, NY 10538
Andrew Gordon(3)(4)(5) 27,020 27.0% 270,200 6.8%
251 Meiser Avenue
Staten Island, NY 10306
Juemin Chu 9,000 9.0% 90,000 2.3%
67-113 Dartmouth Street
Forest Hills, NY 11375
Total Officers
and Directors
as a group 0 0 0 0
Total Officers
and Directors
(3 persons)
_________________________
(1) May be deemed "Promoters" of Transpacific, as that term is defined under
the Securities Act.
(2) Based on 4,000,000 shares outstanding; after the ten for one (10:1) Stock
Split.
(3) Does not include any shares to be distributed to Andrew Gordon or David
Gordon at the Merger.
(4) Andrew Gordon and David Gordon are officers and directors of Coffee (See
"MANAGEMENT - Coffee")
(5) Represents shares previously owned by shareholders of Transpacific and
purchased in a private transaction for $.10 per share. (See "Certain
Transactions").
None of the current stockholders have received or will receive any extra
special benefits that were not shared equally (pro rata) by all holders of
shares of Transpacific's stock.
COFFEE
The following table sets forth certain information regarding the
beneficial ownership of the Coffee's Common Stock as of the date of this
Prospectus by (i) each person known to Coffee to beneficially own 5% or more
of Coffee's Common Stock, (ii) each director of Coffee and (iii) all directors
and executive officers of Coffee as a group. All information with respect to
beneficial ownership has been furnished to Coffee by the respective director,
executive officer or 5% shareholder, as the case may be.
Amount and Nature of Amount and Nature of
Beneficial Ownership Beneficial Ownership
Prior to the Merger After the Merger (1)(4)
Number of Percent of Number of Percent of
Beneficial Owners Shares Class Shares(5) Class
David Gordon(2)(4) 20.833 21% 900,200 22.5%
22 Barclay Road
Scarsdale, NY 10538
Andrew Gordon(2)(4) 20.833 21% 900,200 22.5%
251 Meisher Avenue
Staten Island, NY 10306
Rachelle Gordon 58.340 58% 1,740,000 43.5%
Grantor Retained
Annuity Trust(3)
Gerard DeCapua 0 0 0 0
1771 Burnett Street
Brooklyn, NY 11242
Total officers and
directors as a Group (3)
persons 41.666 42% 1,800,400 45%
(1) Based on 4,000,000 shares to be outstanding after the merger; after
the ten for one (10:1) Stock Split.
(2) Andrew Gordon and David Gordon are also shareholders of
Transpacific. (See "Certain Transactions").
(3) The trustees of this trust are Andrew Gordon and David Gordon,
officers, directors and shareholders of Coffee. The beneficiaries are the
estates of Andrew Gordon and David Gordon, respectively.
(4) Computation of shares to be held after the Merger includes shares of
Transpacific currently held by Coffee shareholders.
(5) The 3,000,000 post-Stock Split shares of Transpacific to be issued
upon consummation of the Merger shall be distributed to current Coffee
shareholders on a pro-rata basis.
CERTAIN TRANSACTIONS
Transpacific International Group Corp. was incorporated in Nevada on
October 9, 1995. On November 29, 1995, Transpacific issued 97,000 shares of
common stock, par value $.0001. On August 12, 1995, Transpacific's initial
public offering was declared effective by the Securities and Exchange
Commission. Pursuant to this offering, 3,000 shares of common stock were
offered at $6.00 per share on a "best efforts, all or nothing basis." As a
result of the public offering, $18,000.00 was raised. This offering closed on
February 10, 1996.
On October 27, 1997, Ho Cheong Chio, Hong Cao, Weng I. Ip and Po Wa Lee
sold their shares of Transpacific to the following people:
Thomas Geisel 8,982 shares
Mark Russo 8,982 shares
Bill Walsh 1,996 shares
David Gordon 27,020 shares
Andrew Gordon 27,020 shares
Juemin Chu 9,000 shares
Rose-Marie Fox 3,925 shares
Cavendish Ltd. 2,000 shares
Andreas O. Tobler 1,925 shares
Mordechai Book 750 shares
Rene Kunz 200 shares
Phillip Levy 100 shares
Renato Strauss 100 shares
These shares were purchased for $.10 per share for a total of $9,200. The
shares and the $9,200 are being held in escrow with Schonfeld & Weinstein,
L.L.P., Transpacific's counsel, pursuant to an agreement dated October 27,
1997. The funds shall be released to the shareholders, and the stock
certificates released to the purchasers upon consummation of the Business
combination, i.e., the Securities and Exchange Commission's declaration of
effectiveness of Transpacific's post-effective amendment and successful
reconfirmation offering as proscribed in Rule 419. In the event the Business
combination is not consummated, the shares shall be returned to Messrs. Ho,
Hong, Weng and Po, and the funds released to the purchasers.
As of July 31, 1997 Sterling Gordon and Rachelle Gordon, former officers of
Coffee, held subordinated loans to Coffee, in the amounts of $77,147.49 and
$60,317,87, respectively. These loans bear interest at the rate of 10% per
annum.
INFORMATION CONCERNING TRANSPACIFIC
Transpacific has heretofore filed the following with the Commission
pursuant to the Securities Act:
(1) Annual Report on Form 10-KSB for the fiscal year ended September 30,
1996;
(2) Quarterly Report on Form 10-QSB for the quarterly period ended
December 31, 1996;
(3) Quarterly Report on Form 10-QSB for the quarterly period ended March
31, 1997; and
(4) Quarterly Report on Form 10-QSB for the quarterly period ended June
30, 1997.
LEGAL MATTERS
An opinion as to the validity of the securities offered hereby has
been passed upon for Transpacific by Schonfeld & Weinstein, L.L.P., 63 Wall
Street, Suite 1801, New York, New York, counsel to Transpacific. The
Principals of Schonfeld & Weinstein, L.L.P., Joel Schonfeld and Andrea I.
Weinstein, are both shareholders of Transpacific, owning 666 and 334 shares,
respectively. No proceeds of Transpacific's initial public offering were paid
to Schonfeld & Weinstein, L.L.P.
EXPERTS
The financial statements of Coffee included in this prospectus have
been audited by Ira D. Ganzfriend & Company, Certified Public Accountants, 260
Fifth Avenue, New York, New York 10007, independent auditors, and are
included in reliance upon the reports of such firm given upon their authority
as experts in accounting and auditing. The financial statements of
Transpacific for the years ended September 30, 1996 included in this
Prospectus have been so included in reliance on the report of German W.
Chacon, 79 Euclid Avenue, Ardsley, New York, Certified Public Accountant,
given on the authority of said firms as an expert in accounting and
auditing.
LITIGATION
Transpacific knows of no litigation pending, threatened or contemplated,
or unsatisfied judgements against it, or any proceedings in which it is a
party. Transpacific knows of no legal actions pending or threatened or
judgements entered against Transpacific's officer and directors in their
capacity as such.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Articles of Incorporation of Transpacific provide indemnification of
directors and officers and other corporate agents to the fullest extent
permitted pursuant to the laws of Nevada. The Articles of Incorporation also
limit the personal liability of Transpacific's directors to the fullest
extent permitted by the Nevada Revised Statutes. The Nevada Revised Statutes
contain provisions entitling directors and officers of Transpacific to
indemnification from judgments, fines amounts paid in settlement and
reasonable expenses, including attorney's fees, as the result of an action or
proceeding in which they may be involved by reason of being or having been a
director or officer of Transpacific, provided said officers or directors acted
in good faith.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling
Transpacific pursuant to the foregoing provisions, or otherwise, Transpacific
has been informed 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
Transpacific of expenses incurred or paid by a director, officer or
controlling person of Transpacific in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, Transpacific 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.
FURTHER INFORMATION
Transpacific is subject to the reporting requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith will
file periodic reports, proxy statements and other information with the
Securities and Exchange Commission (the"Commission"). Such periodic reports,
proxy statements and other information filed by Transpacific can be inspected
without charge at the Public Reference Room maintained by the Commission at
450 Fifth Street, NW, Washington, D.C. 20549 or at the Commission's web site:
www.sec.gov. Copies of such material can be obtained at prescribed rates upon
request from the Public Reference Section of the Commission at 450 Fifth
Street, NW, Washington, D.C. 20549.
Transpacific has filed with the Commission in Washington, D.C., a
Registration Statement under the Securities Act with respect to the Common
Stock offered by this Prospectus. 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 Transpacific and this offering,
reference is made to the Registration Statement, including the exhibits filed
therewith, copies of which may be obtained at prescribed rates from the
Commission at the public reference facilities maintained by the Commission or
at the Commission's web site: www.sec.gov. Descriptions contained in this
Prospectus as to the contents of any contract or other document filed as an
exhibit to the Registration Statement are not necessarily complete and each
such description is qualified by reference to such contract or document.
<PAGE>
Transpacific International Group Corp.
Financial Statements
(A development stage company)
For the periods October 9, 1995 (date of inception)
To September 30, 1996 (audited), and October 1, 1996 to
June 30, 1997 (audited)
<PAGE>
TABLE OF CONTENT
Page #
Report of Independent Auditor
Balance sheet - as of September 30, 1996
Statement of operations & retained earnings
Period October 9, 1995 (Date of Inception)
to September 30, 1996
Statement of change in stockholders' equity
Period October 9, 1995 (Date of Inception)
to September 30, 1996
Statement of cash flows
Period October 9, 1995 (Date of Inception)
to September 30, 1996
Notes to the financial statements
Schedule 1
<PAGE>
German W. Chacon 78 Euclid Ave - Ardsley, N.Y. 10502
Certified Public Accountant Tel (914) 693-5029 Fax (914) 693-5030
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
AUDITOR'S REPORT ON FINANCIAL STATEMENTS
For the period from October 9, 1995 (Date of Inception)
to September 30, 1996
Independent Auditor's Report
The Stockholders
Transpacific International Group, Corp.
We have audited the accompanying balance sheet of Transpacific International
Group Corp. (a development stage company) as of September 30, 1996 and the
related statements of operations, retaining earnings, and cash flows for the
period then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on my audit.
We have conducted my 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 my audit provides a reasonable basis
for my opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Transpacific International
Group Corp. as of September 30, 1996, and the results of their operations and
cash flows for the period then ended, in conformity with generally accepted
accounting principles.
German Chacon
December 16, 1996
New York, New York 10502
<PAGE>
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
BALANCE SHEET
AS OF SEPTEMBER 30, 1996
ASSETS
CURRENT ASSETS
Cash 2,730
Total Current Assets 2,730
OTHER ASSETS
Organization costs 0
Deferred offering costs 0
Total Other Assets 0
TOTAL ASSETS 2,730
CURRENT LIABILITIES
Accounts payable 0
Total Current Liabilities 0
STOCKHOLDER'S EQUITY
Common Stock $.0001 par value, 20 million
shares authorized, $97,000
shares issued and outstanding 10
Paid in Capital (Note 2) 24,997
Deficit accumulated during
the development stage (22,276)
2,730
Total Liabilities and Equity 2,730
See accompanying independent accountant's report
and notes to the financial statements
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
STATEMENT OF OPERATIONS & DEFICIT ACCUMULATED
DURING THE DEVELOPMENT STATE
PERIOD FROM OCTOBER 9, 1995 (Date of Inception)
TO SEPTEMBER 30, 1996
Operating Income:
Revenues 0
Interest Income 189
Cost of revenues 0
Gross profit 189
Operating expenses:
General & administrative expenses 0
Professional fees(Schedule 1) 22,465
Operating income (loss) (22,276)
Non operating (income) expenses:
Depreciation 0
Amortization 0
Interest & bank charges 0
Income (loss) before taxes (22,276)
Provision for income taxes 0
Net income (loss) (22,276)
Deficit accumulated during
development stage beginning/end (22,276)
# of common shares outstanding
from date of inception 97,000
See accompanying independent accountant's report
and notes to the financial statements
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
STATEMENT OF CHANGE IN STOCKHOLDERS' EQUITY
PERIOD FROM OCTOBER 9, 1995 (Date of Inception)
TO SEPTEMBER 30, 1996
Common Stock
Additional Total
Paid-in Stockholders'
Shares Amount Capital Equity
Issuance of common stock
Nov-29-1995 86,000 9 22,162 22,171
Issuance of common stock
Nov-29-1995 11,000 1 2,835 2,836
97,000 10 24,997 25,007
Deficit accumulated during the
development stage for amounts
applicable to the statement of
operations (22,276) (22,276)
97,000 10 2,721 2,730
See accompanying independent accountant's report
and notes to the financial statements
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
PERIOD FROM OCTOBER 9, 1995 (Date of Inception)
TO SEPTEMBER 30, 1996
Operating activities:
Net income (loss) (22,276)
Non cash charges (credit to earnings):
Depreciation and amortization 0
Changes in operating assets and liabilities: 0
Net cash provided (used) in operating activities (22,276)
Cash provided by (used) in investing activities:
Equity increase (decrease) (25,007)
Net cash provided (used) in investing activities (25,007)
Financing activities:
Net cash provided (used) in financing activities 0
Net increase (decrease) in cash 0
Cash at October 9, 1995 (date of inception) 0
Cash at September 30, 1996 0
Supplemental disclosure of cash flow information:
Interest paid, net of amount capitalized 0
Income taxes paid 0
See accompanying independent accountant's report
and notes to the financial statements
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
PERIOD FROM OCTOBER 9, 1995 (Date of Inception)
TO SEPTEMBER 30, 1996
1.NATURE OF THE BUSINESS
Transpacific International Group Corp. (A Development Stage Company), was
organized in 1995, as a blank check company which plans to look for a suitable
business to merge with or acquire. Operations since October 9, 1995 have
consisted primarily of the first capital contribution by the insiders, and
coordination activities with the law firm regarding the SEC registration of
the company.
2.STOCKHOLDERS' EQUITY
The company was duly organized under the laws of the State of Nevada. The
company authorized twenty million (20,000,000) shares of Common Stock at
$.0001 par value. The company raised $25,007, in 1995, through a Subscription
Agreement. (See the statement of changes in stockholders' equity.)
3.RELATED PARTY TRANSACTIONS
Joel Schonfeld, attorney at law, is a legal firm whose partners are
stockholders of Transpacific International Group Corp. During 1995, the
company advanced Joel Schonfeld $20,000 representing legal fees. It is
estimated that the company will pay Joel Schonfeld an additional $5,000 in
1996 upon completion of the SEC Securities Registration Agreement.
4.STATEMENT OF CASH FLOWS
Cash Equivalents - The Company recognizes cash deposited in its bank account
as cash equivalents for purposes of the Statement of Cash Flows.
5.RULE 419 REQUIREMENTS
Rule 419 requires that offering proceeds after deduction for underwriting
commissions, underwriting expenses and dealer allowances issued be deposited
into an escrow or trust account (the "Deposited Funds" and "Deposited
Securities," respectively) governed by an agreement which contains certain
terms and provisions specified by the Rule. Under Rule 419, the Deposited
Funds and Deposited Securities will be released to the Company and to the
investors, respectively, only after the Company has met the following three
basic conditions. First, the Company must execute an agreement(s) for an
acquisition(s) meeting certain prescribed criteria. Second, the Company must
file a post-effective amendment to the registration statement which includes
the terms of a reconfirmation offer that must contain conditions prescribed by
the rules. The post-effective amendment must also contain information
regarding the acquisition candidate(s) and its business(es), including audited
financial statements. The agreement(s) must include, as a condition precedent
to their consummation, a requirement that the number of investors representing
80% of the maximum proceeds must elect to reconfirm their investments. Third,
the Company must conduct the reconfirmation offer and satisfy all of the
prescribed conditions, including the condition that investors representing 80%
of the Deposited Funds must elect to remain investors. The post-effective
amendment must also include the terms of the reconfirmation offer mandated by
Rule 419. The reconfirmation offer must include certain prescribed conditions
which must be satisfied before the Deposited Funds and Deposited Securities
can be released from escrow. After the Company submits a signed
representation to the Escrow Agent that the requirements of Rule 419 have been
met and after the acquisition(s) is consummated, the Escrow Agent can release
the Deposited Funds and Deposited Securities. Investors who do not reconfirm
their investments will receive the return of a pro-rata portion thereof; and
in the event investors representing less than 80% of the Deposited Funds
reconfirm their investments, the Deposited Funds will be returned to the
investors on a pro-rata basis.
<PAGE>
Schedule 1
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
GENERAL & ADMINISTRATION EXPENSES
PERIOD FROM OCTOBER 9, 1995 (Date of Inception)
TO SEPTEMBER 30, 1996
Legal fees 20,000
Other professional fees 2,465
Total General & administrative expenses 22,465
See accompanying independent accountant's report
and notes to the financial statements
<PAGE>
TRANSPACIFIC INTERNATIONAL GROUP CORP.
Financial Statements for the Period Ending
June 30, 1997
TABLE OF CONTENT
Report of Independent Auditor
Balance sheet - as of June 30, 1997
Statement of operations & deficit accumulated
during the development stage
Six months ended June 30, 1997
and the Period October 9, 1995 (Date of Inception)
to June 30, 1997
Statement of change in stockholders' equity
Six months ended June 30, 1997
and the Period October 9, 1995 (Date of Inception)
to June 30, 1997
Statement of cash flows
Six months ended June 30, 1997
and the Period October 9, 1995 (Date of Inception)
to June 30, 1997
Notes to the financial statements
General and administrative expenses
Six months ended June 30, 1997
and the Period October 9, 1995 (Date of Inception)
to June 30, 1997
<PAGE>
German W. Chacon 78 Euclid Ave - Ardsley, N.Y. 10502
Certified Public Accountant Tel (914) 693-5029 Fax (914) 693-5030
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
AUDITOR'S REPORT ON FINANCIAL STATEMENTS
For the period from October 9, 1995 (Date of Inception)
to June 30, 1997
Independent Auditor's Report
The Stockholders
Transpacific International Group, Corp.
We have audited the accompanying balance sheet of Transpacific International
Group Corp. (a development stage company) as of June 30, 1997, and the related
statements of operations, retaining earnings, and cash flows for the period
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted the 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 my audit provides a reasonable basis
for my opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Transpacific International
Group Corp. as of June 30, 1997, and the results of their operations and cash
flows for the six months then ended, in conformity with generally accepted
accounting principles.
German W. Chacon
July 24, 1997
New York, New York 10502
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
BALANCE SHEET
AS OF JUNE 30, 1997
ASSETS
CURRENT ASSETS
Cash 783
Total Current Assets 783
OTHER ASSETS
Organization costs 0
Deferred offering costs 0
Total Other Assets 0
TOTAL ASSETS 783
CURRENT LIABILITIES
Accounts payable 0
Total Current Liabilities 0
STOCKHOLDER'S EQUITY
Common Stock $.0001 par value, 20 million shares
authorized, 97,000 shares issued and
outstanding 10
Paid in Capital (Note 2) 24,997
Deficit accumulated during
the development stage (24,224)
783
Total Liabilities and Equity 783
See accompanying independent accountant's report
and notes to the financial statements
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
STATEMENT OF OPERATIONS & DEFICIT ACCUMULATED
DURING THE DEVELOPMENT STAGE
Six Months ended June 30, 1997, and
the Period from October 9, 1995 (Date of Inception)
to June 30, 1997
Six months
Ended
June 30,
1997
Operating Income:
Revenues 0
Interest Income 15
Cost of revenues 0
Gross profit 15
Operating expenses:
General & administrative expenses 0
Professional fees(Sch 1) 1,965
Operating income (loss) ( 1,950)
Non operating (income) expenses:
Depreciation & Amortization 0
Interest & Bank Charges 11
Income (loss) before taxes ( 1,961)
Provision for income taxes 0
Net income (loss) ( 1,961)
Deficit accumulated during development stage
beginning through June 30, 1997 (22,263)
Deficit accumulated during development stage
beginning through June 30, 1997 (24,224)
# of common shares outstanding
from date of inception 97,000
See accompanying independent accountant's report
and notes to the financial statements
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
STATEMENT OF CHANGE IN STOCKHOLDERS' EQUITY
Six months ended June 30, 1997, and
the Period from October 9, 1995 (Date of Inception)
to June 30, 1997
Additional Total
Paid-in Stockholders'
Shares Capital Equity
Issuance of common stock
Nov-29-1995 86,000 22,171 22,171
Issuance of common stock
Nov-29-1995 11,000 2,836 2,836
97,000 25,007 25,007
Deficit accumulated during the
development stage for amounts
applicable to the statement of
operations (24,224) (24,224)
97,000 783 783
See accompanying independent accountant's report
and notes to the financial statements
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Six Months ended June 30, 1997, and
the Period from October 9, 1995 (Date of Inception)
to June 30, 1997
Six Months
Ended
June 30,
1997
Operating activities:
Net income (loss) (1,961)
Non cash charges (credit to earnings):
Depreciation and amortization 0
Changes in operating assets and liabilities: 0
Net cash provided (used) in operating activities (1,961)
Cash provided by (used) in investing activities:
Equity increase (decrease) 0
Net cash provided (used) in investing activities 0
Financing activities:
Net cash provided (used) in financing activities 0
Net increase (decrease) in cash (1,961)
Cash at October 9, 1995 (date of inception) 2,744
Cash at June 30, 1997 783
Supplemental disclosure of cash flow information:
Interest paid, net of amount capitalized 11
Income taxes paid 0
See accompanying independent accountant's report
and notes to the financial statements
<PAGE>
German W. Chacon 78 Euclid Ave - Ardsley, N.Y. 10502
Certified Public Accountant Tel (914) 693-5029 Fax (914) 693-5030
AUDITOR'S REPORT ON SUPPLEMENT INFORMATION
Our audit of the basic financial statements of Transpacific International
Group Corp. for the six months ending June 30, 1997, were made primarily to
form an opinion on such financial statements taken as a whole. The
supplementary information contained in the following pages is presented for
the propose of additional analysis and, although not required for a fair
presentation of financial position, results of operations, and changes in
financial position, was subjected to the procedures applied in the audits of
the basic financial statements. In our opinion, the supplementary information
is fairly presented in all material respects in relation to the basic
financial statements.
German W. Chacon
New York, N.Y.
July 24, 1997
<PAGE>
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD OCTOBER 9, 1995 (Date of Inception)
TO JUNE 30, 1997
A.NATURE OF THE BUSINESS
Transpacific International Group Corp. (A Development Stage Company), was
organized in 1995, as a blank check company which plans to look for a suitable
business to merge with or acquire. Since October 9, 1995, operations have
consisted primarily of the first capital contribution by the insiders, and
coordination activities with the law firm regarding the SEC registration of
the company.
B.STOCKHOLDERS' EQUITY
The company was duly organized under the laws of the State of Nevada. The
company authorized twenty million (20,000,000) shares of Common Stock at
$.0001 par value. The company raised $25,007, in 1995, through a Subscription
Agreement. (See the statement of changes in stockholders' equity.)
C.RELATED PARTY TRANSACTIONS
Joel Schonfeld, attorney at law, is a legal firm whose partners are
stockholders of Transpacific International Group Corp. During 1995, the
company advanced Joel Schonfeld $20,000, representing legal fees, for the
completion of the SEC Securities Registration Agreement.
D.STATEMENT OF CASH FLOWS
Cash Equivalents - The Company recognizes cash deposited in its bank account
as cash equivalents for purposes of the Statement of Cash Flows.
<PAGE>
E. RULE 419 REQUIREMENTS
Rule 419 requires that offering proceeds after deduction for underwriting
commissions, underwriting expenses and dealer allowances issued be deposited
into an escrow or trust account (the "Deposited Funds" and "Deposited
Securities," respectively) governed by an agreement which contains certain
terms and provisions specified by the Rule. Under Rule 419, the Deposited
Funds and Deposited Securities will be released to the Company and to the
investors, respectively, only after the Company has met the following three
basic conditions. First, the Company must execute an agreement(s) for an
acquisition(s) meeting certain prescribed criteria. Second, the Company must
file a post-effective amendment to the registration statement which includes
the terms of a reconfirmation offer that must contain conditions prescribed by
the rules. The post-effective amendment must also contain information
regarding the acquisition candidate(s) and its business(es), including audited
financial statements. The agreement(s) must include, as a condition precedent
to their consummation, a requirement that the number of investors representing
80% of the maximum proceeds must elect to reconfirm their investments. Third,
the Company must conduct the reconfirmation offer and satisfy all of the
prescribed conditions, including the condition that investors representing 80%
of the Deposited Funds must elect to remain investors. The post-effective
amendment must also include the terms of the reconfirmation offer mandated by
Rule 419. The reconfirmation offer must include certain prescribed conditions
which must be satisfied before the Deposited Funds and Deposited Securities
can be released from escrow. After the Company submits a signed
representation to the Escrow Agent that the requirements of Rule 419 have been
met and after the acquisition(s) is consummated, the Escrow Agent can release
the Deposited Funds and Deposited Securities. Investors who do not reconfirm
their investments will receive the return of a pro-rata portion thereof; and
in the event investors representing less than 80% of the Deposited Funds
reconfirm their investments, the Deposited Funds will be returned to the
investors on a pro-rata basis.
<PAGE>
Schedule 1
TRANSPACIFIC INTERNATIONAL GROUP CORP. Six months
(A Development Stage Company) Ended
GENERAL & ADMINISTRATION EXPENSES June 30,
Six Months ended June 30, 1997, and 1997
the period from October 9, 1995 (Date of Inception)
to June 30, 1997
Legal fees 0
Other professional fees 1,965
Total General & administrative expenses 1,965
See accompanying independent accountant's report
and notes to the financial statements
<PAGE>
COFFEE HOLDING CO., INC.
FINANCIAL STATEMENTS
AND AUDITORS' REPORT
YEARS ENDED OCTOBER 31, 1996 AND 1995
CONTENTS
Page
AUDITORS' REPORT
FINANCIAL STATEMENTS
Balance Sheets
Statements of Income and Retained Earnings
Statement of Cash Flows
Notes to Financial Statements
SUPPLEMENTARY INFORMATION
Report on Supplementary Information
Cost of Sales
Selling and Administrative Expenses
<PAGE>
IRA D. GANZFRIED & COMPANY
Certified Public Accountants
260 Fifth Avenue
New York, New York 10001
(212) 686-9310
Fax: (212) 686-4489
Board of Directors
Coffee Holding Co., Inc.
We have audited the accompanying balance sheets of Coffee
Holding Co., Inc. as at October 31, 1996 and 1995, and the related statements
of income, retained earnings, and cash flows for the years then ended. These
financial statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally
accepted auditing standards. These 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 audits provide
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
Coffee Holding Co., Inc. as at October 31, 1996 and 1995, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
IRA D. GANZFRIED & COMPANY
December 19, 1996
New York, New York
<PAGE>
COFFEE HOLDING CO., INC.
BALANCE SHEET
ASSETS
(Pledged - Note 5)
For the years ended
October 31,
1996 1995
CURRENT ASSETS:
Cash $ 33,430 $ 24,402
Due From Broker 123,977 51,707
Accounts Receivable (Note 2) 2,849,916 3,168,157
Inventories (Note 1 and 3) 875,261 817,075
Prepaid Expenses And Other
Current Assets 29,802 29,792
Total Current Assets 3,912,386 4,091,133
PROPERTY AND PLANT EQUIPMENT:
At Cost, Less Accumulated Depreciation
of $1,294,816 and $1,090,735
(Notes 1,4 and 6) 1,263,623 1,408,716
DEFERRED AND OTHER ASSETS: (Note 4) 76,831 85,102
TOTAL ASSETS $5,252,840 $5,584,951
========== ==========
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Mortgage Payable-Current Portion
(Note 6) $ 50,000 $ 50,000
Due To Factor (Note 7) 1,998,175 -0-
Notes Payable - Bank -0- 1,816,545
Current Portion Lease Obligation -0- 9,203
Accounts Payable And Accrued Expense 1,354,876 2,308,484
Total Current Liabilities 3,403,051 4,184,232
OTHER LIABILITIES:
Mortgage Payable-Noncurrent Portion
(Note 6) 629,167 679,167
Loans Payable-Officers/Shareholder
(Note 9) 499,250 499,697
Total Other Liabilities 1,128,417 1,178,864
SHAREHOLDER'S EQUITY:
Common Stock, No Par Value, 200 Shares
Authorized, 100 Shares Issued And
Outstanding 460,000 460,000
Retained Earnings 261,372 (238,145)
Total Shareholder's Equity 721,372 221,855
TOTAL LIABILITIES AND
SHAREHOLDER'S EQUITY $5,252,840 $5,584,951
========== ==========
The accompanying notes are an integral part of the financial statements.
<PAGE>
COFFEE HOLDING CO., INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
For the years ended
October 31,
1996 1995
Net Sales $21,162,100 $23,923,561
Cost of Sales 18,775,383 22,881,314
Gross Profit 2,386,717 1,042,247
Operating Expenses:
Selling And Administrative 1,154,341 911,103
Salaries - Officers 413,740 245,028
Interest 310,591 313,953
Total Operating Expenses 1,878,672 1,470,084
Income (Loss) Before Local Income Taxes 508,045 (427,837)
Local Income Taxes 8,528 1,225
Net Income 499,517 (429,062)
Retained Earnings - Beginning (238,145) 190,917
Retained Earnings - Ending $ 261,372 $ (238,145)
=========== ===========
The accompanying notes are an integral part of the financial statements.
<PAGE>
COFFEE HOLDING CO., INC.
STATEMENT OF CASH FLOWS
Increase (Decrease) In Cash And Cash Equivalents
For The Year Ended
October 31,
1996 1995
Cash Flows From Operating Activities:
Cash Received From Customers $21,408,071 $23,777,867
Cash Paid To Suppliers And Employees (21,146,027) (23,671,237)
Interest Paid (310,591) (313,953)
Income Taxes ( 8,528) (1,225)
Net Cash Provided By (Used In)
Operating Activities (57,075) (208,548)
Cash Flow From Investing Activities:
Capital Expenditure (58,988) (123,253)
(Increase) Decrease In Deposits And
Other Assets 3,111 9,632
Net Cash Provided By
(Used In) Investing Activities (55,877) (113,621)
Cash Flow From Financing Activities:
Borrowings (Repayments) Under Lease
Obligation (9,203) (56,049)
Borrowings (Repayments) Under Factor
Arrangements 1,998,175 -0-
Increase (Decrease) In Notes Payable-Bk (1,816,545) 430,480
Decrease In Long Term Debt
And Mortgage (50,000) (50,000)
Increase (Decrease) In Loans
Payable-Officers/Shareholder (447) (200)
Net Cash Provided By (Used In)
Financing Activities $ 121,980 $ 324,231
Net Increase (Decrease) In Cash And
Cash Equivalents 9,028 2,062
Cash And Cash Equivalents At
Beginning of Year 24,402 22,340
Cash And Cash Equivalents At End
Of Year $ 33,430 $ 24,402
=========== ===========
The accompanying notes are an integral part of financial statements.
<PAGE>
Cont.
COFFEE HOLDING CO., INC.
STATEMENT OF CASH FLOWS
Reconciliation of Net Income (Loss) To Net Cash Provided
By (Used In) Operating Activities:
For Year Ended
October 31,
1996 1995
Net Income $ 499,517 $ (429,062)
Adjustments To Reconcile Net Income(LOSS)
To Net Cash Provided By
(Used In) Operating Activities:
Depreciation & Amortization 209,243 196,593
(Increase) Decrease In Accounts
Receivable 318,239 (212,602)
(Increase) Decrease In Due From Broker (72,270) 89,204
(Increase) Decrease In Inventory (58,186) 101,582
(Increase Decrease In Prepaid
Expenses And Current Assets (10) (576)
Increase (Decrease) In Accounts
Payable And Other Current Liabilities (953,608) 46,313
Net Cash Provided By (Used In)
Operating Activities $ (57,075) $ (208,548)
============ ==========
The accompanying notes are an integral part of the financial statements.
<PAGE>
COFFEE HOLDING CO., INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1996 AND 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COMPANY'S ACTIVITIES
Coffee Holding Co., Inc. is a distributor of coffee to the wholesale
trade. The company roast the coffee beans, grinds and packs the coffee. The
company also sells green coffee.
INVENTORIES
Inventories are valued at cost.
PROPERTY, EQUIPMENT AND DEPRECIATION
Property and equipment is stated at cost. Major
expenditures for property and those which substantially increase useful lives
are capitalized. Maintenance, repairs, and minor renewals are expensed as
incurred. When assets are retired or otherwise disposed of, their costs and
related accumulated depreciation are removed from the accounts and resulting
gains or losses are included in income. Depreciation is provided for by the
straight-line method over the estimated useful lives of the assets.
FUTURES CONTRACTS AND OPTIONS
The Company trades coffee futures contracts and options in the coffee futures
market. These contracts are stated at market value at the balance sheet
date. The realized and unrealized net gains and losses on these transactions
are included in Cost of Sales.
INCOME TAXES
Federal and state income taxes have not been provided for because the
shareholder has elected to treat the Company as a small business corporation
for income tax purposes as provided in the Internal Revenue Code and the
applicable state statutes. As such, the corporation income or loss and
credits are passed through to the shareholder, and combined with her other
personal income and deductions to determine taxable income on her individual
return. Local income tax has been provided for herein based on applicable
rates, and availability of a net operating loss carry over.
2. ACCOUNTS RECEIVABLE
For the year ended October 31, 1996, the company recognized bad debt
expense in the amount of $65,186. For the year ended October 31, 1995, no
bad debt expense was recognized.
3. INVENTORIES
Inventories, at cost, are summarized as follows:
1996 1995
Packed Coffee $ 225,110 $ 254,665
Green Coffee 509,131 451,387
Packaging Supplies 141,020 111,023
Total Cost $ 875,261 $ 817,075
=========== ===========
4. PROPERTY AND EQUIPMENT
Major classes of property and equipment consist of the
following:
Estimated
useful life
years 1996 1995
Building and
Improvements 31.5 $1,055,665 $1,054,842
Machinery and
Equipment 7 1,247,159 1,193,540
Transportation
Equipment 5 37,551 37,551
Furniture and
Fixture 7 77,064 72,518
2,417,439 2,358,451
Less: accumulated depreciation 1,294,816 1,090,735
1,122,623 1,267,716
Land 141,000 141,000
Net property and equipment $1,263,623 $1,408,716
========== ==========
Depreciation for the years 1996 and 1995 was $204,081 and $191,432
respectively.
<PAGE>
COFFEE HOLDING CO., INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1996 AND 1995
5. DEPOSITS AND OTHER ASSETS
In 1989, the company acquired its own building through a
mortgage financing arrangement. In connection with the
securing of a mortgage, fees and legal expense were incurred
in the amount of $105,395. These mortgage costs are being
amortized over the life of the mortgage. For the year 1995
and 1994 $5,162 of the above amount was amortized each year.
Deferred and other assets consist of the following:
1996 1995
Unamortized Bond Cost $ 67,109 $ 72,271
Security Deposits 9,032 12,141
Sundry Investment 690 690
Total $ 76,831 $ 85,102
========== ==========
6. MORTGAGE PAYABLE
On June 1, 1989 the company financed through New York City
Industrial Development Agency a mortgage on land and
building in the amount of $1,050,000. The agreement
provides for monthly payments in the amount of $4,166.67
plus interest based on a weekly variable rate set by Bear
Stearns & Co. Final payment on the notes is due November
1, 2009. Payment of the bonds are secured by a title
insured first mortgage on land and building. As of
statement date the total due on the mortgage is $ 679,167
Portion considered current 50,000
Non current portion $ 629,167
==========
7. DUE TO FACTOR
The Company has entered into a factoring arrangement to provide
working capital. As of statement date the factor has advanced
$1,998,175 to the company. The company has given a security
interest in accounts receivable, inventory and machinery and
equipment. The stockholder has personally guaranteed up to
$200,000 of the advances.
<PAGE>
COFFEE HOLDING CO., INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1996 AND 1995
8. LOANS PAYABLE - OFFICERS/SHAREHOLDER
Loans payable - officers/shareholder for the years end 1996 and
1995 were $499,250 and $499,697 respectively. The loans bear
interest at 10% and have maturity dates in excess of one year.
(See Note 6). Interest has been provided for in these statements.
9. MORTGAGE LOAN AGREEMENT
Under the provision of the Letter of Credit Reimbursement Agreement
dated October 31, 1996, the Corporation is required to maintain the
following covenants.
Minimum Working Capital $ 300,000
Minimum Current Ratio 1.25:1
Minimum Net Worth 850,000
Maximum Leverage 3.75.1
Maximum Capital Expediture 50,000
At October 31, 1996, the Covenant were as follows:
Working Capital 509,000
Current Ratio 1.15:1
Net Worth 1,220,622
Leverage Ratio 2.19:1
Capital Expediture were approximately 10,000 above the Covenant.
If the Company continues to maintain this level of
profitability, it will come into compliance with all
covenants.
We have classified the Mortgage according to its short
term and long term portions because of the probability
of compliance within the next twelve months.
In addition, Officers and Stockholder's have subordinated
$490,000 of their loans.
<PAGE>
IRA D. GANZFRIED & COMPANY
Certified Public Accountants
260 Fifth Avenue
New York, New York 10001
(212) 686-9310
Fax: (212) 686-4489
AUDITOR'S REPORT ON SUPPLEMENTARY INFORMATION
Board of Directors
Coffee Holding Co., Inc.
Our audits of the basic financial statements were made primarily to form an
opinion on such financial statements taken as a whole. The supplementary
information contained in the following pages is presented for the purpose of
additional analysis and, although not required for a fair presentation of
financial position, results of operations and cash flows, was subjected to the
audit procedures applied in the audit of the basic financial statements. In
our opinion, the supplementary information is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
IRA D. GANZFRIED & COMPANY
New York, New York
December 19, 1996
<PAGE>
COFFEE HOLDING CO., INC.
ADDITIONAL INFORMATION
For the Years Ended
October 31,
1996 1995
COST OF SALES
Inventories - Beginning $ 817,075 $ 918,657
Purchases 18,178,624 22,153,607
Freight-In 215,979 254,635
Payroll-Packaging 231,864 182,817
Depreciation of Machinery & Building Imp. 196,190 179,332
Real Estate Tax 10,914 9,341
$19,650,646 $23,698,389
Less: Inventories - Ending 875,261 817,075
Total Cost Of Sales $18,775,385 $22,881,314
=========== ===========
SELLING AND ADMINISTRATIVE EXPENSES
Salaries - Office $ 40,577 $ 30,000
Payroll Taxes 37,858 37,850
Advertising and Promotion 103,335 54,459
Auto Expenses 4,588 5,241
Brokerage 82,398 55,534
Contributions 2,525 1,550
Depreciation - Furniture 7,891 12,099
Dues and Subscriptions 7,344 5,858
Freight Out 301,752 308,371
Insurance 166,021 134,358
Office Supplies, Services 33,434 31,615
Professional Fees 22,977 19,652
Repairs and Maintenance 74,124 44,707
Telephone 32,588 31,970
Travel and Entertainment 64,824 51,516
Miscellaneous 3,089 679
Utilities 98,668 80,482
Bad Debt Expense 65,186 -0-
Amortized Mortgage Cost 5,162 5,162
Total Selling And Administrative
Expenses $ 1,154,341 $ 911,103
=========== ===========
See auditor's report on supplementary information.
<PAGE>
COFFEE HOLDING CO., INC.
FINANCIAL REPORT
JULY 31, 1997
IRA D. GANZFRIED & COMPANY
Certified Public Accountants
260 Fifth Avenue
New York, New York 10001
(212) 686-9310
Fax: (212) 686-4489
To The Board of Directors
Coffee Holding Co., Inc.
4401 First Avenue
Brooklyn, NY 11236
We have reviewed the accompanying balance sheet of Coffee Holding Co.,
Inc. as at July 31, 1997, and the related statement of income and retained
earnings and cash flows for the nine months then ended. All information
included in these financial statements is the representation of the
management of Coffee Holding Co., Inc.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit in
accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
The Company, with the consent of its shareholders, has elected under the
Internal Revenue Code to be an "S" Corporation. In lieu of corporation income
taxes, the shareholders of an "S" Corporation are taxed on their proportionate
share of the Company's taxable income. Therefore, no provision or liability
for federal income taxes has been included in these financial statements.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements in order for them to
be in conformity with generally accepted accounting principles.
IRA D. GANZFRIED & COMPANY
September 22, 1997
New York, New York
............................
<PAGE>
COFFEE HOLDING CO., INC.
BALANCE SHEET
AS AT JULY 31, 1997
A S S E T S
CURRENT ASSETS:
Cash $ 84,684
Due From Broker 840,332
Accounts Receivable 2,504,387
Inventories 1,137,960
Prepaid Expenses And Other Current
Assets 39,204
Total Current Assets $ 4,606,567
PROPERTY AND EQUIPMENT:
At Cost (Less Accumulated Depreciation
of $1,400,777) 1,288,196
DEFERRED AND OTHER ASSETS 63,927
TOTAL ASSETS $ 5,958,690
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Mortgage Payable - Current Portion $ 50,000
Due to Factor 1,925,254
Accounts Payable And Accrued Expenses 1,027,090
Total Current Liabilities $3,002,344
OTHER LIABILITIES:
Mortgage Payable - Non Current Portion 591,967
Loans Payable - Officers/Stockholder 499,250
Total Other Liabilities 1,091,217
STOCKHOLDERS' EQUITY:
Common Stock, No Par, 200 Shares
Authorized, 100 Shares Issued And
Outstanding 460,000
Retained Earnings 1,405,129
Total Stockholders' Equity 1,865,129
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,958,690
===========
See Accountants' Review Report
COFFEE HOLDING CO., INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE NINE MONTHS ENDED JULY 31, 1997
NET SALES $18,547,105
COST OF SALES 15,586,862
GROSS PROFIT 2,960,243
OPERATING EXPENSES:
Selling And Administrative $1,221,400
Salaries - Officers 183,771
Interest 298,315
Total Operating Expenses 1,703,486
INCOME BEFORE LOCAL INCOME 1,256,757
LESS: LOCAL TAXES 113,000
NET INCOME 1,143,757
RETAINED EARNINGS - BEGINNING 261,372
RETAINED EARNINGS - ENDING $ 1,405,129
===========
See Accountants' Review Report
<PAGE>
COFFEE HOLDING CO., INC.
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED JULY 31, 1997
Increase (Decrease) In Cash And Cash Equivalents
Cash Flow From Operating Activities:
Cash Received From Customers $ 18,176,279
Cash Paid To Suppliers And Employees (17,433,998)
Interest Paid (298,315)
Taxes Paid (113,000)
Net Cash Provided By (Used In)
Operating Activities $ 330,966
Cash Flow From Investing Activities:
Capital Expenditure (182,495)
Decrease In Deposits and
Other Assets 12,904
Net Cash Provided By (Used In)
Investing Activities (169,591)
Cash Flow From Financing Activities:
Decrease In Long Term Debt
And Mortgage (37,200)
Decrease In Loans Payable
Officers -0-
Decrease In Equipment Loan -0-
Decrease in Factor Borrowings (72,921)
Net Cash Provided By (Used In)
Financing Activities (110,121)
Net Increase (Decrease) In Cash And
Cash Equivalents 51,254
Cash And Cash Equivalents Beginning 33,430
Cash And Cash Equivalents Ending $ 84,684
==========
See Accountants' Review Report
<PAGE>
Cont.
COFFEE HOLDING CO., INC.
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED JULY 31, 1997
Reconciliation Of Net Income To Net Cash Provided By (Used In)
Operating Activities:
Net Income (Loss) $1,143,757
Adjustments To Reconcile Net Income (Loss) To Net Cash
Provided By (Used In) Operating Activities:
Depreciation $ 159,751
(Increase) Decrease In Accounts
Receivable (370,826)
(Increase) Decrease In Inventory (262,699)
(Increase) Decrease In Prepaid Expenses
And Current Assets (9,402)
Increase (Decrease) In Accounts Payable
And Other Current Liabilities (329,615)
Total Adjustments (812,791)
Net Cash Provided By (Used In)
Operating Activities $ 330,966
==========
See Accountants' Review Report
COFFEE HOLDING CO., INC.
ADDITIONAL INFORMATION
FOR THE NINE MONTHS ENDED JULY 31, 1997
COST OF SALES:
Inventory - Beginning $ 875,261
Purchases 15,229,463
Freight - In 229,254
Payroll - Packaging 232,621
Real Estate Tax 8,208
Depreciation of Machinery & Building & Improvements 150,015
16,724,822
Less: Inventory - Ending 1,137,960
Total Cost Of Sales $ 15,586,862
============
SELLING AND ADMINISTRATIVE EXPENSES:
Salaries - Other $ 22,500
Payroll Taxes 41,999
Advertising And Promotion 74,020
Automobile Expense 14,041
Brokerage 175,399
Contributions 2,018
Depreciation - Furniture 5,865
Dues & Subscriptions 4,344
Freight - Out 215,152
Insurance 110,978
Office Supplies, Services 20,068
Professional Fees 17,876
Repairs And Maintenance 80,041
Telephone 21,918
Travel And Entertainment 55,641
Utilities 105,669
Amortized Mortgage Cost 3,871
Provision For Bad Debts 250,000
Total Selling And Administrative Expenses $ 1,221,400
============
See Accountants' Review Report
COFFEE HOLDING CO., INC.
NOTES AND COMMENTS
JULY 31, 1997
NOTES 1 - INVENTORIES:
Inventories shown are as submitted by management.
NOTES 2 - PROPERTY AND EQUIPMENT:
Major classes of property and equipment consist of
the following:
Building & Improvements $1,101,443
Machinery And Equipment 1,374,875
Transportation Equipment 39,592
Furniture And Fixtures 84,024
2,599,934
Less: Accumulated Depreciation 1,452,738
1,147,196
Land 141,000
Net Property And Equipment $1,288,196
==========
NOTES 3 - DUE TO FACTOR:
The company has entered into a factoring arrangement to
provide working capital. As of statement date, the
factor has advanced $1,925,254 to the company. The
company has given a security interest in accounts
receivable, inventory and machinery and equipment. The
stockholder has personally guaranteed up to $200,000 of
the advances.
NOTE 4 - MORTGAGE PAYABLE:
On June 1, 1989 the company financed through New York
City Industrial Development Agency a mortgage on land
and building in the amount of $1,050,000. The
agreement provides for monthly payments in the amount
of $4,166.67 plus interest based on a weekly variable
rate set by Bear, Stearns & Co. Final payment on the
notes is due November 1, 2009.
COFFEE HOLDING CO., INC.
NOTES AND COMMENTS
JULY 31, 1997
NOTE 4 - MORTGAGE PAYABLE (CONTINUED):
Payment of the notes are secured by a title insured
first mortgage on land and building. As of statement
date the total due on the mortgage is $641,967
Portion Considered Current 50,000
Non Current Portion $591,967
========
NOTE 5 - LOANS PAYABLE - OFFICERS/SHAREHOLDER:
Loans payable - officers/shareholder at July 31, 1997
were $499,250. The loans bear interest at 10% per
annum and have maturity dates in excess of one year.
Interest has been provided for in these statements.
NOTE 6 - MORTGAGE LOAN AGREEMENT:
Under the provision of the Letter of Credit
Reimbursement Agreement dated January 31, 1997, the
Corporation is required to maintain the following
covenants.
Minimum Working Capital $300,000
Minimum Current Ratio 1.25:1
Minimum Net Worth 850,000
Maximum Leverage 3.75:1
Maximum Capital Expediture 50,000
At July 31, 1997, the Covenants, were as follows:
Working Capital 1,604,223
Current Ratio 1.53:1
Net Worth 2,364,379
Leverage Ratio (includes Officers loans) 1.52:1
We have classified the Mortgage according to its short
term and long term portions because of the probability
of compliance within the next twelve months.
In addition, officers and Stockholder's have subordinated
$490,000 of their loans.
NOTE 7 - PROVISION FOR BAD DEBTS
Management has determined that of the total accounts
receivable of $3,505,313, the probability is that
$250,000 of the accounts receivable will be uncollectible.
The estimated uncollectible accounts receivable has
been deducted against income.
<PAGE>
IRA D. GANZFRIED & COMPANY
Certified Public Accountants
260 Fifth Avenue
New York, New York 10001
(212) 686-9310
Fax: (212) 686-4489
SUPPLEMENTARY INFORMATION
Our report on our review of the basic financial statements of Coffee
Holding Co., Inc. for the nine months ended July 31, 1997, appears on page 1.
That review was made for the purpose of expressing limited assurance that
there are no material modifications that should be made to the financial
statements in order for them to be in conformity with generally accepted
accounting principles. The information included in the accompanying schedules
of cost of goods sold and selling and administrative expenses for the nine
months ended July 31, 1997 is presented only for supplementary analysis
purposes. Such information has been subjected to the inquiry and analytical
procedures applied in the review of the basic financial statements, and we are
not aware of any material modifications that should be made thereto.
IRA D. GANZFRIED & COMPANY
September 22, 1997
New York, New York
.............................
<PAGE>
TRANSPACIFIC INTERNATIONAL GROUP CORP. AND
COFFEE HOLDING CO., INC. PROFORMA CONDENSED BALANCE SHEET
<PAGE>
TRANSPACIFIC INTERNATIONAL GROUP CORP.
PRO-FORMA BALANCE SHEET
AS AT JULY 31, 1997
A S S E T S
Transpacific Coffee Combined
International Holding
Group Corp. Co. Inc.
CURRENT ASSETS:
Cash $ 783 $ 925,016 $ 925,799
Accounts Receivable -0- 2,504,387 2,504,387
Merchandise Inventory -0- 1,137,960 1,137,960
Inventories -0- -0- -0-
Prepaid Items -0- 39,204 39,204
Total Current Assets $ 783 $ 4,606,567 $ 4,607,350
OTHER ASSETS:
Property and Equipment -0- 1,288,196 1,288,196
Deferred and Other Assets -0- 63,927 63,927
Good Will - Unamortized -0- -0- -0-
TOTAL ASSETS $ 783 $ 5,958,690 $ 5,959,473
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Mortgage Payable
Current Portion -0- $ 50,000 $ 50,000
Due to -0- 1,925,254 1,925,254
Accounts Payable &
Accruals -0- 1,027,090 1,027,090
Total Current Liabilities -0- $ 3,002,344 $ 3,002,344
OTHER LIABILITIES:
Mortgage Payable-Non
Current Portion -0- 591,967 591,967
Loans Payable - Officers -0- 499,250 499,250
Total Other Liabilities -0- 1,091,217 1,091,217
STOCKHOLDERS' EQUITY:
Capital Stock 10 460,000 460,010
Paid In Capital 24,997 -0- 24,997
(Deficit) Retained Earnings (24,224) 1,405,129 1,380,905
Total Stockholders'
Equity $ 783 $1,865,129 1,865,912
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 783 $5,958,690 $5,959,473
========= ========== ==========
A S S E T S
Pro-Forma Pro-Forma
Adjustment Balance Sheet
CURRENT ASSETS:
Cash $ -0- $ 925,799
Accounts Receivable -0- 2,504,387
Merchandise Inventory -0- 1,137,960
Inventories -0- -0-
Prepaid Items -0- 39,204
Total Current Assets $ 783 $4,607,350
OTHER ASSETS:
Property and Equipment -0- 1,288,196
Deferred and Other Assets -0- 63,927
Good Will - Unamortized 433,125 433,125
TOTAL ASSETS $ 433,125 $6,392,598
============ ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Mortgage Payable
Current Portion -0- $ 50,000
Due to -0- 1,925,254
Accounts Payable &
Accruals -0- 1,027,090
Total Current
Liabilities -0- $3,002,344
OTHER LIABILITIES:
Mortgage Payable-Non
Current Portion -0- 591,967
Loans Payable - Officers -0- 499,250
Total Other Liabilities -0- 1,091,217
STOCKHOLDERS' EQUITY:
Capital Stock -0- 460,010
Paid In Capital 450,000 474,997
(Deficit) Retained Earnings (16,875) 1,364,030
Total Stockholders'
Equity $ 433,125 $2,299,037
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 433,125 $6,392,598
========= ==========
See Accountant's Review Report
<PAGE>
TRANSPACIFIC INTERNATIONAL GROUP CORP.
PRO-FORMA STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED JULY 31, 1997
Transpacific Coffee Combined
International Holding
Group Corp. Co. Inc.
OPERATING INCOME:
Sales Revenues $ -0- $ 18,547,105 $ 18,547,105
Cost of Sales -0- 15,586,862 15,586,862
Gross Profit -0- 2,960,243 2,960,243
OPERATING EXPENSES:
Selling &
Administrative $ 1,965 $ 1,221,400 $ 1,223,365
Salaries - Officers -0- 183,771 183,771
Interest (4) 298,315 298,311
Total Operating Expenses $ 1,961 $ 1,703,486 $ 1,705,447
Income - before other
deductions (1,961) 1,256,757 1,254,796
Other Deduction -
Goodwill Amortized -0- -0- -0-
Income Before Taxes (1,961) 1,256,757 1,254,796
Less: Local Taxes -0- 113,000 113,000
Net Income $ (1,961) $ 1,143,757 $ 1,141,796
========== ========== ==========
Pro-Forma Pro-Forma
Adjustment Statement
Of Income
OPERATING INCOME:
Sales Revenues $ -0- $ 18,547,105
Cost of Sales -0- 15,586,862
Gross Profit -0- 2,960,243
OPERATING EXPENSES:
Selling &
Administrative $ -0- $ 1,223,365
Salaries - Officers -0- 183,771
Interest -0- 298,311
Total Operating Expenses $ -0- $ 1,705,447
Income - before other deductions -0- 1,254,796
Other Deduction -
Goodwill Amortized (16,875) (16,875)
Income Before Taxes (16,875) 1,237,921
Less: Local Taxes -0- 113,000
Net Income $ (16,875) $ 1,124,921
========= ==========
See Accountant's Review Report
<PAGE>
TRANSPACIFIC INTERNATIONAL GROUP CORP.
PRO-FORMA NOTES
FOR THE NINE MONTHS ENDED JULY 31, 1997
NOTE 1:
The purpose of the pro-forma statements is to give effect to the
merger of Coffee Holding Co., Inc. and Transpacific International
Group Corp. Transpacific International Group, Corp. will be the
surviving entity.
The stock of Transpacific International Group Corp. will be swapped
for the outstanding shares of Coffee Holding Co., Inc.
NOTE 2:
The Pro-Forma statements of the company are being accounted for
by the purchase method under Accounting Principles Board Number 16.
Shareholders of Transpacific International Group Corp. will receive
25% of the stock of Coffee Holding Co., Inc.
Based on a valuation performed by others, the value of Coffee
Holding Co., Inc. at July 31, 1997 was $1,800,000. The company
that performed the valuation assigned $450,000 to Goodwill.
Goodwill is to be amortized over a 20 year period using the
straight-line method.
The proforma income statements reflect amortization of goodwill for
a nine months period.
NOTE 3:
The Pro-Forma Statement of Income for the fiscal year ended October
31, 1996 is also presented.
<PAGE>
IRA D. GANZFRIED & COMPANY
Certified Public Accountants
260 Fifth Avenue
New York, New York 10001
(212) 686-9310
Fax: (212) 686-4489
Board of Directors
Coffee Holding Co., Inc.
We have reviewed the accompanying pro-forma balance sheet of Transpacific
International Group Corp. as at July 31, 1997 and the related statements of
income for the nine months then ended. All information included in these
financial statements is the representation of the management of Transpacific
International Group Corp.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial datat and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on our review, we are not aware of any material modification that
should be made to the accompanying financial statements in order for them to
be in conformity with generally accepted accounting principles.
IRA D. GANZFRIED & COMPANY
October 29, 1997
New York, New York
............................
COFFEE HOLDING CO., INC.
PRO-FORMA STATEMENTS OF INCOME
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1996
Transpacific Coffee Combined
International Holding
Group Corp. Co. Inc.
Net Sales -0- $21,162,100 $21,162,100
Cost of Sales -0- 18,775,383 18,775,383
Gross Profit -0- 2,386,717 2,386,717
Operating Expenses:
Selling And
Administrative 1,965 1,154,341 1,156,306
Salaries - Officers -0- 413,740 413,740
Interest (4) 310,591 310,587
Total Operating Expenses 1,961 1,878,672 1,880,633
Income (Loss) Before
Other Deduction (1,961) 508,045 506,084
Other Deduction-
Amortization Of Goodwill -0- -0- -0-
Income (Loss) Before
Local Income Taxes (1,961) 508,045 506,084
Local Income Taxes -0- 8,528 8,528
Net Income $ (1,961) $ 499,517 $ 497,556
========= =========== ==========
Pro-Forma Pro-Forma
Adjustment Statement
Of Income
Net Sales -0- $21,162,100
Cost of Sales -0- 18,775,383
Gross Profit -0- 2,386,717
Operating Expenses:
Selling And Administrative -0- 1,156,306
Salaries - Officers -0- 413,740
Interest -0- 310,587
Total Operating Expenses -0- 1,880,633
Income (Loss) Before
Other Deduction -0- 506,084
Other Deduction-
Amortization Of Goodwill 11,250 11,250
Income (Loss) Before
Local Income Taxes -0- 494,834
Local Income Taxes -0- 8,528
Net Income $ -0- $ 486,306
========== ===========
Pro-forma adjustments represent 1/40 of Goodwill value of $450,000
See Accountant's Review Report
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
Section 757 of the Nevada Revised Statutes for Domestic and Foreign
Corporations, provides for the indemnification of Transpacific's officers,
directors and corporate employees and agents under certain circumstances as
follows:
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS;
ADVANCEMENT OF EXPENSES. - (1) A corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, except an action by or in the right of the
corporation, by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(2) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation and except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to
the extent that the Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstance of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such court shall deem proper.
(3) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (1) and (2) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorney's fees) actually and
reasonably incurred by him in connection therewith.
(4) Any indemnification under subsections (1) and (2) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in subsections
(1) and (2) of this section. Such determination shall be made (a) by the
board of directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (b) if such a quorum
is not obtainable, or, even if obtainable a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion, or (c) by the
stockholders or (d) if a majority vote of a quorum consisting of directors who
were not parties to the act, suit or proceeding so orders, by independent
legal counsel in a written opinion.
(5) The articles of incorporation, the bylaws or an agreement made by
the corporation may provide that the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking
by or on behalf of the director or officer to repay the amount if it is
ultimately determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation. The provisions of this
subsection do not affect any rights to advancement of expenses to which
corporate personnel other than directors or officers may be entitled under any
contract or otherwise by law.
(6) The indemnification and advancement of expenses authorized in or
ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the articles
of incorporation or any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, for either an action in his official
capacity or an action in another capacity while holding his office, except
that indemnification, unless ordered by a court pursuant to subsection 2 or
for the advancement of expenses made pursuant to subsection 5, may not be made
to or on behalf of any director or officer if a final adjudication establishes
that his acts or omissions involved intentional misconduct, fraud or a knowing
violation of the law and was material to the cause of action. (b) Continues
for a person who has ceased to be a director, officer, employee or agent and
inures to the benefit of the heirs, executors and administrators of such a
person.
Section 752.1 of the statute reads as follows: A corporation may
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under this
section.
If a claim under the above paragraph is not paid in full by Transpacific
within 30 days after a written claim has been received by Transpacific, the
claimant may at anytime thereafter bring suit against Transpacific to recover
the unpaid amount of the claim. If the claimant is successful, it is entitled
to be paid the expense of prosecuting such claim, as well.
Transpacific will, to the fullest extend permitted by Section 757 of the
Nevada Revised Statutes for Domestic and Foreign Corporations, indemnify any
and all persons whom it has the power to indemnify against any and all of the
expense, liabilities and loss, and this indemnification shall not be deemed
exclusive of any other rights to which the indemnities may be entitled under
any By-law, agreement, or otherwise, both as to action in his/her official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such persons.
Transpacific may, at its own expense, maintain insurance to protect itself and
any director, officer, employee or agent of Transpacific against any such
expense, liability or loss, whether or not Transpacific would have the power
to indemnify such person against such expense, liability or loss under the
Nevada statute.
<PAGE>
Item 25. Expenses of Issuance and Distribution
The other expenses payable by Coffee in connection with the issuance and
distribution of the securities being registered pursuant to this
Reconfirmation Offer are estimated as follows:
Securities and Exchange Commission
Registration Fee......................... $ 0
Legal Fees............................... $35,000.00
Accounting Fees.......................... $15,000.00
Printing and Engraving................... $ 2,500.00
Miscellaneous............................ $ 500.00
Transfer Agent Fee....................... $ 1,500.00
TOTAL..................................... $54,500.00
Pursuant to the Merger Agreement, Coffee shall pay for all expenses
incurred in connection with the Reconfirmation Offer.
<PAGE>
Item 26. Recent Sales of Unregistered Securities
Transpacific issued 97,000 shares on November 29, 1995 to its initial
stockholders for $25,006.
Name/Address
Consideration Shares
Beneficial of Common Price
Owner (1) Stock Purchased(2) Paid
Ho Cheong Chio 86,000 $22,170.80
The Bank of China Building
27/F-A-D Avenida
Doutor Mario
Soares, Macao
Hong Cao 2,000 $ 515.60
203 Howard St.
Waverly, NY 14892
Weng I. Ip 2,000 $ 515.60
Rua Do Bairainho No. 5
4F (A) Edf. Lei Si
Macau
Po Wa Lee 2,000 $ 515.60
Rua de Uniao, 4-M, 4
Macao
Rose-Marie Fox 1,500 $ 386.70
354 East 50th Street
New York, NY 10022
Andreas O. Tobler 1,500 $ 386.70
400 E. 70 St., #2703
New York, NY 10021
Howard Jiang 1,000 $ 257.80
67-113 Dartmouth St.
Forest Hills, N.Y. 11375
Joel Schonfeld 666 $ 171.69
63 Wall St., Ste. 1801
New York, NY 10005
Andrea I. Weinstein 334 $ 86.11
63 Wall St., Ste. 1801
New York, NY 10005
Total Officers
and Directors (one (1) person)
__________________________
(1) May be deemed "Promoters" of Transpacific, as that term is defined
under the Securities Act.
(2) These Shares were sold under the exemption of Section 4(2) of the
Securities Act.
Neither Transpacific nor any person acting on its behalf offered or sold the
securities by means of any form of general solicitation or general
advertising.
Each purchaser represented in writing that he/she acquired the securities for
his own account. A legend was placed on the certificates stating that the
securities have not been registered under the Act and setting forth the
restrictions on their transferability and sale. Each purchaser signed a
written agreement that the securities will not be sold without registration
under the Act or exemption therefrom.
EXHIBITS
Item 27.
2.0 Merger Agreement
3.1 Certificate of Incorporation.*
3.2 By-Laws.*
4.1 Specimen Certificate of Common Stock.*
4.6 Form of Escrow Agreement.*
5.0 Opinion of Counsel.
24.0 Accountant's Consent to Use Opinion.
24.1 Counsel's Consent to Use Opinion.
99.0 Agreement Among Management.*
99.1 Letter of Reconfirmation
*as filed with original SB-2 Registration Statement
<PAGE>
Item 28.
UNDERTAKINGS
The registrant undertakes:
(1) To file, during any period in which offers or sales are being made,
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10 (a) (3) of the
Securities Act;
(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 information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement, including
(but not limited to) any addition or deletion of managing underwriter;
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be treated as a new registration
statement of the securities offered, and the offering of the securities at
that time 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.
(4) To deposit into the Escrow Account at the closing, certificates in such
denominations and registered in such names as required by Transpacific to
permit prompt delivery to each purchaser upon release of such securities from
the Escrow Account in accordance with Rule 419 of Regulation C under the
Securities Act. Pursuant to Rule 419, these certificates shall be deposited
into an escrow account, not to be released until a business combination is
consummated.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to any provisions contained in its Certificate of
Incorporation, or by-laws, 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 any 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 indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
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 , State of , on ,199
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(Registrant)
BY: Ho Cheong Chio
Ho Cheong Chio, 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.
Ho Cheong Chio
Ho Cheong Chio DATED October 27, 1997
President, Director
David Chang
David Chang DATED October 30, 1997
Secretary, Director
Christian Constantinov
Christian Constantinov DATED October 30, 1997
Director
<PAGE>
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
TRANSPACIFIC INTERNATIONAL GROUP CORP.
AND
COFFEE HOLDING CO., INC.
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER by and between Transpacific International
Group Corp., a Nevada corporation,("Transpacific") and Coffee Holding Co.,
Inc., a New York corporation, ("Coffee").
WHEREAS, the Boards of Directors of Transpacific and Coffee, deem it
advisable for the mutual benefit of Transpacific and Coffee, and their
respective shareholders, that Coffee be merged into Transpacific (the
"Merger"), and have approved this Agreement and Plan of Merger (the
"Agreement"); and
WHEREAS, the Boards of Directors of Transpacific and Coffee have
unanimously resolved to recommend to their shareholders acceptance of the
Merger contemplated herein.
NOW THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained herein, and for the purpose of
setting forth certain terms and conditions of the Merger, and the mode of
carrying the same into effect, Coffee and Transpacific hereby agree as
follows:
ARTICLE 1
MERGER AND ORGANIZATION
SECTION 1.1 The Merger. As of the Effective Date (as hereinafter
defined), subject to the terms and conditions hereof, Coffee shall be merged
with and into Transpacific, with Transpacific as the surviving entity (the
"Surviving Entity"). Immediately after consummation of the Merger and the ten
for one (10:1) stock split as described in Section 2.1 hereof, the Surviving
Entity shall be and continue as the public entity, and shall have issued and
outstanding 4,000,000 shares of Common Stock; 3,540,400 (representing 88.5% of
the Surviving Entity) to be held by former Coffee stockholders in proportion
to the amount that each of said shareholders previously held shares of Common
Stock of Coffee, and the balance to be held as per Exhibit 2.1. Transpacific
and Coffee are herein sometimes referred to as the "Constituent Corporations."
The Merger is to be consummated in such a manner as to meet the provisions of
Internal Revenue Code Section 368(a)(1)(A), and be a tax-free reorganization
for all parties involved.
SECTION 1.2. Effect of Merger. The parties agree to the following
provisions with respect to the Merger:
(a) Name of Surviving Corporation. After the Merger and Effective
Date (as defined in Section 1.2(f) hereof), the name of the Surviving Entity
shall become Coffee Holding Co., Inc.
(b) Articles of Incorporation. The Articles of Incorporation of
Transpacific as in effect immediately prior to the Effective Date shall from
and after the Effective Date be and continue to be the Articles of
Incorporation of the Surviving Entity until changed or amended as provided.
(c) By-Laws. The By-Laws of Transpacific as in effect immediately
prior to the Effective Date shall from and after the Effective Date be and
continue to be the By-Laws of the Surviving Entity until changed or amended as
provided by law.
(d) Corporate Organization. All of the issued and outstanding
shares of common stock of Coffee shall be canceled. The Surviving Entity
shall thenceforth be responsible for all the liabilities and obligations of
each of the Constituent Corporations, with the effect set forth in the
appropriate provisions of Nevada law and the appropriate provisions of New
York law.
(e) Filing of Articles of Merger and Amendment to Articles of
Incorporation. If this Agreement is duly approved by each of the Constituent
Corporations in accordance with the appropriate provisions of Nevada law and
the appropriate provisions of New York law and the respective Articles or
Certificate of Incorporation and By-laws of the Constituent Corporations and
not terminated pursuant to Article 8 hereof, and approved by the shareholders
of Transpacific pursuant to Rule 419 under Regulation C of the Securities Act
of 1933, as amended ("Rule 419"), as soon as practicable after all other
conditions to the Merger set forth in Article 6 hereof shall have been
satisfied or waived, and after Transpacific's Post-Effective Amendment filed
pursuant to Rule 419 has been declared effective by the Securities and
Exchange Commission and Transpacific's shareholder reconfirmation has been
successfully completed and the closing of this Agreement has taken place on or
before February 12, 1998 (the "Closing"), the Merger shall be consummated and
Articles of Merger, to which this Agreement shall be appended, shall be filed
with the appropriate New York governmental agency and an amendment to
Transpacific's Articles of Incorporation shall be filed with the Nevada
Secretary of State. The Closing of this Agreement shall take place at the
offices of Schonfeld & Weinstein, L.L.P., 63 Wall Street, New York, New York
10005, or at such other time, place or date as the parties may mutually agree.
(f) Further Assurances. If at any time after the Effective Date,
the Surviving Entity shall consider or be advised that any deeds, bills of
sale, assignments or assurances or any other acts or things are necessary,
desirable or proper (a) to vest, perfect or confirm, of record or otherwise,
in the Surviving Entity, its right, title or interest in, to or under any of
the rights, properties or assets of the Constituent Corporations acquired or
to be acquired as a result of the Merger, or (b) otherwise to carry out the
purposes of this Agreement, the Constituent Corporations agree that the
Surviving Entity and its proper officers and directors shall be authorized to
execute and deliver, in the name and on behalf of the Constituent
Corporations, all such deeds, bills of sale, assignments and assurances and
do, in the name and on behalf of the Constituent Corporations, all such other
acts and things necessary, desirable or proper to best, perfect or confirm its
right, title or interest in, to or under any of the rights, properties or
assets of the Constituent Corporations acquired or to be acquired as a result
of the Merger and otherwise to carry out the purposes of this Agreement. The
"Effective Date" shall be the date on which the Certificate of Merger is filed
with the appropriate state authorities. The Certificate of Merger shall be
filed with the appropriate state authorities at the Closing.
(g) Upon consummation of the Merger, the current officers and directors
of Transpacific shall resign, and a minimum of three (3) directors shall be
appointed to the Surviving Entity, which directors shall nominate officers of
the Surviving Entity, subject to shareholder approval.
(h) Release of Deposited Funds. On the Effective Date, the Deposited
Funds held in escrow from Transpacific's initial public offering shall be
released to Transpacific. Transpacific shall then immediately deposit these
funds, into a trust account with Rivikin, Radler & Kremer, Esqs. to be
disbursed at the Closing.
ARTICLE 2
THE MERGER
SECTION 2.1 Conversion of Shares in the Merger.
(a) Issuance of New Shares. On the Effective Date, Transpacific's
common stock, including those shares purchased pursuant to Transpacific's
initial public offering and held in escrow pursuant to Rule 419 under
Regulation C of the Securities Act of 1933, as amended ("Rule 419), shall be
split ten for one (10:1) (the "Stock Split"), and Transpacific shall then
issue 3,000,000 shares of its authorized Common Stock to former Coffee share
holders, in the same proportion said share holders held shares of Common Stock
of Coffee. Following the Stock Split, shares of Transpacific shall be
distributed as per Exhibit 2.1 Thus, after the Effective Date and the Stock
Split, the Surviving Entity shall have 4,000,000 shares of common stock issued
and outstanding.
SECTION 2.2 Release of Shares and Funds from Escrow. Pursuant to Rule
419, certificates representing the shares of Common Stock purchased in Transpaci
fic 's initial public offering which offering was declared effective by the
United States Securities and Exchange Commission on August 12, 1996, as well
as the funds used to purchase said shares, are being held in escrow pending
consummation of a Merger (the "Deposited Securities" and the "Deposited
Funds," respectively). Transpacific has eighteen (18) months in which to
consummate a Merger. If a Merger is not consummated within that time, the
Deposited Securities and Deposited Funds shall be returned to Transpacific and
Transpacific shareholders, respectively. Pursuant to Rule 419, Deposited
Securities shall be released to shareholders and Deposited Funds released to
Transpacific following effectiveness of a Post-Effective Amendment and a
reconfirmation offering pursuant to which Transpacific shareholders
representing a minimum of 80% of the offering proceeds of Transpacific 's
initial public offering ($14,400) reconfirm their investments.
SECTION 2.3 Surrender of Certificates. (a) Transpacific has designated
Oxford Transfer Agency, Inc., 1130 Southwest Morrison, Suite 250, Portland
Oregon, as Transfer Agent (the "Transfer Agent") hereunder. Immediately
following effectiveness of the Post-Effective Amendment and shareholder
reconfirmation offering and on or before the Effective Date, the Transfer
Agent shall have mailed and/or made available to each Transpacific shareholder
and each former Coffee shareholder notice and letter of transmittal advising
such holder of the effectiveness of the Post-Effective Amendment and
shareholder reconfirmation and of the Effective Date, and the procedure for
surrendering Coffee stock to the Transfer Agent. Coffee shall immediately
turn in Coffee common stock certificates to the Transfer Agent. Upon the
surrender to the Transfer Agent of such certificates, together with a letter
of transmittal, duly executed and completed in accordance with the
instructions thereon, and after the Stock Split, the Transfer Agent shall
promptly convert and issue an aggregate of 3,000,000 shares of Transpacific
common stock to former Coffee shareholders in exchange for 100% of the
authorized and outstanding shares of Coffee. Until so surrendered and
exchanged, each certificate theretofore representing shares shall represent in
the case of Dissenter's Shares, the right to seek appraisal pursuant to the
laws of the state of incorporation of the Constituent Corporation in which the
holder owns stock (if such right has been perfected).
(b) At the Effective Date, the Stock Split shall become effective, and
each holder of Transpacific common stock issued before the Effective Date,
including those 3,000 shares held in escrow pursuant to Rule 419, shall
surrender his/her stock certificate to the Transfer Agent and the Transfer
Agent shall issue such holder ten (10) shares of the Surviving Entity's common
stock for each share of Transpacific common stock held before the Merger and
Stock Split.
SECTION 2.4 Transfer Agent. Prior to the Offering, Transpacific shall
have made such arrangements to insure that an adequate number of its shares of
Common Stock have been deposited with the Transfer Agent as necessary in
sufficient time to permit prompt distribution against surrender of Coffee
stock certificates as provided hereunder.
SECTION 2.5 Confidentiality. Except to the extent disclosure may be
required by law, each of Coffee and Transpacific will, and will cause its
officers, other personnel and authorized representatives to, hold in strict
confidence, and not disclose to others without the prior written consent of
the other, any information received by them from the other in connection with
the transactions contemplated hereby. In the event this Agreement is
terminated, Coffee, on the one hand, and Transpacific, on the other, each
agree to return promptly, if so requested by the other party or any subsidiary
or division of such other party, in connection with the transactions
contemplated hereby and any copies thereof which may have been made and to
cause their representatives promptly to return such documents and any copies
thereof any of them may have made, other than documents filed with the
Securities and Exchange Commission.
ARTICLE 3
ADDITIONAL AGREEMENTS IN CONNECTION WITH THE MERGER
SECTION 3.1 Inconsistent Activities. Unless and until this Agreement
has been terminated in accordance with its terms, neither Coffee nor
Transpacific will (i) solicit or encourage, directly or indirectly, any
inquiries or proposals to acquire any shares of capital stock of Coffee or
Transpacific or any significant portion of the total assets of either
Constituent Corporation or any subsidiary or division of either of the
Constituent Corporations (whether by merger, purchase of assets, tender offer
or other similar transaction); (ii) afford any third party which may be
considering the merger of any shares of capital stock of Coffee or
Transpacific or any significant portion of the total assets of either
Constituent Corporation, access to the properties, books or records of either
Constituent Corporation except as required by mandatory provisions of law; or
(iii) enter into any discussions or negotiations for, or enter into any
agreement which provides for, the sale of any shares of capital stock of
Coffee or Transpacific or any significant portion of the total assets of
Coffee or Transpacific to a person other than in connection with the
transactions contemplated herein.
SECTION 3.2 Reasonable Efforts. Subject to the terms and conditions
hereof, each of the parties hereto agrees to use any and all reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary to satisfy the other conditions of Closing set
forth herein.
SECTION 3.3 Conduct of Business by Each of the Constituent Corporations
Pending the Merger. Coffee and Transpacific covenant and agree that, prior to
the Effective Date, unless Coffee or Transpacific, respectively, shall
otherwise agree in writing and except as contemplated by this Agreement:
(a) the business of each of the Constituent Corporations shall be
conducted only in the ordinary and usual course and consistent with its past
practice, and neither Coffee nor Transpacific shall purchase or sell (or enter
into any agreement to so purchase or sell) any properties or assets or make
any other changes in the operations of Coffee or Transpacific, respectively,
taken as a whole;
(b) Neither Constituent Corporation shall (i) amend its Articles of
Incorporation or By-Laws, (ii) change the number of authorized or outstanding
shares of its capital stock, except as set forth in Section 2 hereof or in
Exhibit 2.1 attached hereof and made a part hereto, or (iii) declare, set
aside or pay any dividend or other distribution or payment in cash, stock or
property in respect of the Shares, except as designated herein or set forth in
Exhibit 3.3;
(c) Neither Constituent Corporation shall (i) issue, grant, sell or
pledge or agree or propose to issue, grant, sell or pledge any shares of, or
rights of any kind to acquire any shares of, its capital stock (ii) incur any
indebtedness other than in the ordinary course of business, except as set
forth in Exhibit 3.3, (iii) acquire directly or indirectly by redemption or
otherwise any shares of its capital stock of any class or (iv) enter into or
modify any contact, agreement, commitment or arrangement with respect to any
of the foregoing.
(d) Each Constituent Corporation shall use its best efforts to
preserve intact its business organizations, to keep available the services of
it and its current officers and key employees, and to preserve the good will
of those having business relationships with it.
(e) Coffee and Transpacific will not (i) increase the compensation
payable or to become payable by it to any of its officers or directors, (ii)
make any payment or provision with respect to any bonus, profit sharing, stock
option, stock purchase, employee stock ownership, pension, retirement,
deferred compensation, employment or other payment plan, agreement or
arrangement for the benefit of its employees, except at set forth in Exhibit
3.3 attached hereto and made a part hereof, (iii) grant any stock options or
stock appreciation rights or permit the exercise of any stock appreciation
right where the exercise of such right is subject to its discretion, except as
set forth in Exhibit 3.3, (iv) make any change in the compensation to be
received by any of its officers, or adopt, or amend to increase compensation
or benefits payable under, any collective bargaining, bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund or
arrangement for the benefit of employees, except as set forth in Exhibit 3.3,
(v) enter into any agreement with respect to termination or severance pay, or
any employment agreement or other contract or arrangement with any officer or
director or employee of Coffee or Transpacific, respectively, with respect to
the performance of personal services that is not terminable without liability
by it on thirty days' notice or less, except as set forth in Exhibit 3.3, (vi)
increase benefits payable under its current severance or termination, pay
agreements or policies or (vii) make any loan or advance to, or enter into any
written contract, lease or commitment with, any of its officers or directors;
(f) Neither Coffee nor Transpacific shall assume, guarantee,
endorse or otherwise become responsible for the obligations of any other
individual, firm or corporation or make any loans or advances to any
individual, firm or corporation;
(g) Neither Coffee nor Transpacific shall make any investment of a
capital nature either by purchase of stock or securities, contributions to
capital, property transfers or otherwise, or by the purchase of any property
or assets of any other individual, firm or corporation, except as set forth in
Exhibit 3.3;
(h) Neither Coffee nor Transpacific shall reduce its cash or short
term investments or their equivalent, other than to meet cash needs arising in
the ordinary course of business, consistent with past practices, or in
performing its obligations under this Agreement; and
(i) Neither Coffee nor Transpacific shall enter into an agreement
to do any of the things described in clauses (a), (b), (c), (e), (f), (g) and
(h), except as set forth in Exhibit 3.3.
SECTION 3.4 Access and Information.
(a) Coffee shall afford to Transpacific and its accountants,
counsel and other representatives full access, during normal business hours
throughout the period prior to the Effective Date, to all of the properties,
books, contracts, commitments and records (including but not limited to tax
returns) of Coffee and, during such period, Coffee shall furnish promptly to
Transpacific (i) a copy of each report, schedule and other document filed or
received by it pursuant to the requirements of federal or state securities
laws, and (ii) all other information concerning the business, properties and
personnel of Coffee that may reasonably be requested. In the event of the
termination of this Agreement, Transpacific will, and will cause its
representatives to, deliver to Coffee all documents, work papers and other
material, and all copies thereof, obtained by it or on its behalf from Coffee
as a result of this Agreement or in connection herewith, whether so obtained
before or after the execution hereof, and will hold in confidence all
confidential information, and will not use any such confidential information,
until such time as such information is otherwise publicly available or as it
is advised by counsel that any such information or document is required by law
to be disclosed. If this Agreement is terminated, Transpacific will deliver
to Coffee all documents so obtained by it.
(b) Transpacific shall afford to Coffee and its accountants,
counsel and other representatives full access, during normal business hours
throughout the period prior to the Effective Date, to all of the properties,
books, contracts, commitments and records (including but not limited to tax
returns) of Transpacific and, during such period, Transpacific shall furnish
promptly to Coffee (i) a copy of each report, schedule and other document
filed or received by it pursuant to the requirements of federal or state
securities laws, and (ii) all other information concerning the business,
properties and personnel of Transpacific that may reasonably be requested. In
the event of the termination of this Agreement, Coffee will, and will cause
its representatives to, deliver to Transpacific all documents, work papers and
other material, and all copies thereof, obtained by it or on its behalf from
Transpacific as a result of this Agreement or in connection herewith, whether
so obtained before or after the execution hereof, and will hold in confidence
all confidential information, and will not use any such confidential
information, until such time as such information is otherwise publicly
available or as it is advised by counsel that any such information or document
is required by law to be disclosed. If this Agreement is terminated, Coffee
will deliver to Transpacific all documents so obtained by it.
SECTION 3.5 Notice of Actions and Proceedings. Coffee shall promptly
notify Transpacific, and Transpacific shall promptly notify Coffee of any
claims, actions, proceedings or investigations commenced or, to the best of
its knowledge, threatened, involving or affecting Coffee or Transpacific or
any of their property or assets, or, to the best of its knowledge, against any
employee, consultant, director, officer or shareholder, in his, her or its
capacity as such, of Coffee or Transpacific which, if pending on the date
hereof, would have been required to have been disclosed in writing pursuant to
Section 4.4 hereof or which relates to the consummation of the Merger or the
transactions contemplated hereby.
SECTION 3.6 Notification of Other Certain Matters. Coffee shall give
prompt notice to Transpacific, and Transpacific shall give prompt notice to
Coffee of:
(a) any notice of, or other communication relating to, a default or
event which, with notice or lapse of time or both, would become a default,
received by Coffee or Transpacific subsequent to the date of this Agreement
and prior to the Effective Date, under any agreement, indenture or instrument
material to the financial condition, properties, business or results of
operations of Coffee or Transpacific taken as a whole to which Coffee or
Transpacific is a party or is subject;
(b) any notice or other communication from any third party alleging
that the consent of such third party is or may be required in connection with
the transactions contemplated by this Agreement; and
(c) any material adverse change in the financial condition,
properties, businesses or results or operations of Coffee or Transpacific, or
the occurrence of an event which, so far as reasonably can be foreseen at the
time of its occurrence, would result in any such change.
SECTION 3.7 Stockholder Meeting of Coffee. Coffee shall, at a meeting
of its stockholders duly called by the Board of Directors of Coffee, to be
held as soon as practicable following execution of this Agreement, present the
following proposals for the authorization and approval of the stockholders of
Coffee and recommend their adoption by the stockholders:
a) ratification of this Agreement and authorization of the
consummation of the Merger contemplated herein;
SECTION 3.8 Filing of Post-Effective Amendment. Upon signing this
Merger Agreement, and shareholder approval pursuant to a special meeting of
shareholders, Transpacific shall promptly file with the Securities and
Exchange Commission a Post-Effective Amendment reflecting the Merger as
required by Rule 419.
SECTION 3.9 Reconfirmation Offering. Within five (5) days after
effectiveness of the Post-Effective Amendment, Transpacific shall issue a
reconfirmation offering to its shareholders. Pursuant to Rule 419, the Merger
will be consummated only if a minimum number of investors representing 80% of
the maximum offering proceeds of Transpacific 's initial public offering
($14,400) elect to reconfirm their investments.
SECTION 3.10 Other Agreements of Transpacific. Transpacific shall file
with the SEC any and all appropriate statements or requirements within the
Securities Exchange Act of 1934, as amended, with respect to the Merger,
obtain any consents, amendments to or waivers under the terms of any of
Transpacific 's arrangements required by the transactions contemplated by this
Agreement, and defend any lawsuits or other legal proceedings, whether
judicial or administrative and whether brought derivatively or on behalf of
third parties (including governmental agencies or officials), challenging this
Agreement, or the consummation of the transactions contemplated hereby
(provided that the maximum amount that Transpacific shall be required to spend
on such lawsuits or proceedings shall be $5,000 in the aggregate).
SECTION 3.11 Transpacific Stockholder Consent. Transpacific shall
obtain written consent of two-thirds of its shareholders to take the following
actions:
a) ratification of this Agreement and authorization of the consummation
of the Merger contemplated herein;
b) a ten for one (10:1) stock split of Transpacific's common stock to
take place on the Effective Date, but prior to issuing 3,000,000 shares to
Coffee
c) issuance of 3,000,000 shares of Transpacific common stock to former
Coffee shareholders after Transpacific's Stock Split;
d) the tender of resignations of the directors of Transpacific, whose
resignations are contingent on the consummation of this Merger, and which
shall occur on the Effective Date.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF TRANSPACIFIC
Transpacific represents and warrants to, and agrees with Coffee as
follows:
SECTION 4.1 Organization and Good Standing. Transpacific is a duly
incorporated and validly existing corporation in good standing under the laws
of the state of its incorporation, with all requisite power and authority
(corporate and other) to own its properties and conduct its business, and is
duly qualified and in good standing as a foreign corporation authorized to do
business.
SECTION 4.2 Authorization; Binding Agreement. Transpacific has the
corporate power and authority to execute and deliver this Agreement and to
carry out the transactions contemplated hereby. This Agreement has been duly
and validly authorized, executed and delivered by Transpacific, and subject to
any requisite approval of the Merger by the shareholders of Transpacific,
including a shareholder reconfirmation pursuant to Rule 419, constitutes a
valid and binding agreement of Transpacific in accordance with its terms.
SECTION 4.3 Capitalization. The authorized capital stock of
Transpacific consists of 20,000,000 shares of common stock, par value $.0001
per share. On November 29, 1995, 97,000 shares of Common Stock were issued to
nine (9) insider shareholders. Transpacific 's public offering, whereby 3,000
shares of Common Stock were sold at $6.00 per share, closed on February 10,
1997. As of the date hereof, 100,000 shares of common stock are outstanding
including the 3,000 shares held in escrow pursuant to Rule 419. All of the
outstanding shares of capital stock of Transpacific have been duly authorized
and validly issued and are fully paid and nonassessable. Transpacific is not
aware of any voting trusts, voting agreements or similar understandings
applicable to the Shares. Transpacific does not have any outstanding options,
subscriptions or other rights, agreements or commitments, which either; (a)
obligates Transpacific to issue, sell or transfer any shares of the capital
stock of Transpacific or (b) restricts the transfer of or otherwise relates to
the shares of its Common Stock.
SECTION 4.4 Litigation. Except as may be disclosed in the SEC Filings
(as defined in Section 4.5 hereof), or to Coffee in writing on or prior to the
date hereof, as of the date hereof there are no claims, actions, proceedings,
or investigations pending or, to the best knowledge of Transpacific,
threatened against Transpacific or to the best of Transpacific knowledge,
pending or threatened against any employee, consultant, director, officer or
shareholder, in his, her or its capacity as such, before any court or
governmental or regulatory authority or body which, if decided adversely,
could materially and adversely affect the financial condition, business,
prospects or operations of Transpacific. As of the date hereof, neither
Transpacific nor any of its property is subject to any order, judgment,
injunction or decree, which materially and adversely affects the financial
condition, business, prospects or operations of Transpacific.
SECTION 4.5 Financial Statements and Reports. Transpacific has provided
Coffee with true and complete copies of (a) Transpacific's annual report on
Form 10-KSB for the year ended September 30, 1996, (b) Transpacific 's
quarterly reports on Form 10-Q for the quarters ended December 31, 1996, March
31, 1997 and June 30, 1997, (c) copies of Transpacific 's Registration
Statement on Form SB-2 and Prospectus which was declared effective by the SEC
on August 12, 1996, (d) all other reports, statements and registration
statements filed by it with the SEC since August 12, 1996. The reports,
statements and registration statements referred to in the immediately
preceding sentence including any that are filed subsequent to the date hereof
and prior to the effective date are referred to in the Agreement as the "SEC
Filings." As of their respective dates, the SEC Filings did not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein in
light of the circumstances under which they were made, not misleading. The
financial statements of Transpacific included in the SEC Filings were prepared
by an independent certified public accountant in accordance with generally
accepted accounting principles applied on a consistent basis (except as
otherwise noted in such statements) and present fairly the financial position,
results of operations and changes in financial position of Transpacific as of
the dates and for the periods indicated subject, in the case of unaudited
interim financial statements, to normal year-end adjustments and any other
adjustments described therein. Transpacific will have approximately $16,000,
consisting of the proceeds from Transpacific 's initial public offering,
currently held in escrow, on deposit in a bank duly licensed to do business in
the State, pursuant to Rule 419 on the Effective Date. Transpacific has filed
all filings required by the Securities and Exchange Commission (the "SEC"),
and has complied with all SEC rules and regulations.
SECTION 4.6 Absence of Certain Changes or Events. Except as set forth
in the SEC Filings or in Exhibit 4.6 attached hereto and made a part hereof,
or as disclosed to Coffee in writing, (a) there has not been any change or any
development involving a prospective change, which has affected or may affect
materially and adversely the business, assets or prospects or the financial
position or the results of operations of and its subsidiaries taken as whole;
and (b) Transpacific has not incurred any indebtedness for money borrowed, or
purchased or sold any material amount of assets, other than in the ordinary
course of business, or entered into any other transaction other than in the
ordinary course of business.
SECTION 4.7 Absence of Breach. The execution, delivery and performance
by Transpacific of this Agreement, and the performance by Transpacific of its
obligations hereunder, will not
(a) subject to the appropriate approval by Transpacific 's
shareholders, conflict with or result in a breach of any of the provisions of
its Articles of Incorporation or By-Laws;
(b) subject to obtaining the governmental and other consents
referred to in Section 4.8 hereof, contravene any law, rule or regulation of
any state or of the United States or any political subdivision thereof or
therein, or any order, writ, judgment, injunction, decree, determination or
award currently in effect, which, singly or in the aggregate, would have a
material adverse effect on Transpacific;
(c) conflict in any respect with or result in a breach of or
default under any indenture, loan or credit agreement relating to money
borrowed or (iv) conflict in any respect with or result in a breach of or
default under any other indenture, mortgage, lien, lease, agreement, contract
or instrument to which Transpacific is a party or by which it or any of its
properties may be affected or bound, which, singly or in the aggregate, would
have a material adverse effect on Transpacific.
SECTION 4.8 Governmental and Other Consents, etc. Subject to the
requisite shareholder approval and any required filings with the Securities
and Exchange Commission, no consent, waiver, approval, license or
authorization of or designation, declaration or filing with any governmental
agency or authority or other public persons or entities in the United States
on the part of Transpacific is required in connection with the execution or
delivery by Transpacific of his Agreement or the consummation by Transpacific
of the transactions contemplated hereby other than (i) filings in the State of
Nevada in accordance with state law thereof and in New York in accordance with
New York law, (ii) filings under state securities, "Blue Sky" or anti-takeover
laws and (iii) filings with the SEC and any applicable national securities
exchange.
SECTION 4.9 Benefits Plans. Except as described in the SEC filings,
Transpacific does not have any employment agreement with any executive officer
of Transpacific or any incentive compensation, deferred compensation, profit
sharing, stock option, stock bonus, stock purchase, savings, consultant,
retirement, pension or other "fringe benefit" plan or arrangement with or for
the benefit of any officer, employee, former employee or consultant.
SECTION 4.10 Certain Contracts. Except as disclosed in the SEC Filings,
Transpacific is not a party to any collective bargaining agreement or any
other agreement with employees of Transpacific.
SECTION 4.11 ERISA. Transpacific has no employee benefit plans, as
defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
SECTION 4.12 Transactions With Management. Except as disclosed in the
SEC Filings or in Exhibit 1.13 attached hereto and made a part hereof,
Transpacific is not now a party to any material contract, lease, loan or
commitment with or to any officer or director, or person owning more than 5%
of the outstanding Common Stock of Transpacific or any affiliate or associate
of such officer, director or person.
SECTION 4.13 Compliance with Law. Except as set forth in Exhibit 4.13,
attached hereto and made a part hereof, or disclosed in writing to Coffee,
Transpacific has complied in all material respects with, and Transpacific is
not in default in any material respect under, the applicable statutes,
ordinances, rules, regulations, orders or decrees of all federal states, local
and foreign governmental bodies, agencies and authorities having asserting or
claiming jurisdiction over it or any part of its operations or assets.
SECTION 4.14. Bank Accounts, Depositories; Powers of Attorney. Exhibit
4.14, attached hereto and made a part hereof, sets forth a true, correct and
complete list of the names and locations of all banks or other depositors in
which Transpacific has accounts, trust funds or safe deposit boxes and the
names of the person or persons authorized to draw thereon, borrow therefrom or
have access thereto. Except as listed in Exhibit 4.14, no person or entity
holds a power of attorney of Transpacific.
SECTION 4.15 Complete Disclosure. No representation or warranty in this
Agreement or in any schedule or exhibit hereto nor any information or
certificate delivered or to be delivered to Coffee by or on behalf of
Transpacific will contain any untrue statement of a material fact or omits or
will omit a material fact necessary to make the statements contained therein
not misleading. All information required to be disclosed by this Agreement
concerning Transpacific and all other material information concerning
Transpacific has been disclosed. With respect to any oral agreement disclosed
in any schedule or exhibit hereto, only those terms of such oral agreement
expressly described in such schedule or exhibit shall be deemed to have been
disclosed to Coffee thereby.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF COFFEE
Coffee, represent and warrants to, and agrees with Transpacific as
follows:
SECTION 5.1 Organization and Good Standing. Coffee is a duly
incorporated and validly existing corporation in good standing under the laws
of the State of New York, with all requisite power and authority (corporate
and other) to own its properties and conduct its businesses.
SECTION 5.2 Authorization; Binding Agreement. Coffee has the requisite
corporate power and authority to execute and deliver this Agreement. This
Agreement has been duly and validly authorized, executed and delivered by
Coffee and constitutes a valid and binding agreement of Coffee in accordance
with its terms.
SECTION 5.3 Absence of Breach. The execution, delivery and performance
by Coffee of this Agreement, and the performance by Coffee of its obligations
hereunder, do not (i) conflict with or result in a breach of any of the
provisions of its articles of incorporation or by-laws, (ii) subject to
obtaining the governmental and other consents referred to in Section 5.4
hereof, contravene any law, rule or regulation of any state or of the United
States or any political subdivision thereof or therein, or any order, writ,
judgment, injunction, decree, determination or award currently in effect,
which, singly or in the aggregate, would have a material adverse effect on
Coffee, (iii) conflict in any respect with or result in a breach of or default
under any indenture, loan or credit agreement (appropriate waivers having been
obtained) or any other agreement or instrument to which Coffee is a party or
by which Coffee properties may be affected or bound, which, singly or in the
aggregate, would have a material adverse effect on Coffee.
SECTION 5.4 Governmental and Other Consents, etc. Subject to the
requisite Board of Directors approval, no material consent, approval or
authorization of or designation, declaration or filing with any governmental
agency or authority or other public persons or entities in the United States
on the part of Coffee is required in connection with the execution delivery by
Coffee of this Agreement or the consummation by Coffee of the transaction
contemplated hereby other than (i) filings in the state of Nevada in
accordance with the laws of that state and in New York in accordance with the
laws of that state, thereof, (ii) filings under state securities, "Blue Sky"
or anti-takeover laws, and (iii) filings with the SEC and any applicable
national securities exchange.
SECTION 5.5. Financial Statements. Coffee shall provide Transpacific
with certified consolidated financial statements (including the notes thereto)
which have been prepared by an independent certified public accountant in
accordance with generally accepted accounting principles (as in effect from
time to time) applied on a consistent basis and which present fairly the
consolidated financial position, results of operations and changes in
financial position of Coffee.
SECTION 5.6. Capitalization. Coffee has a minimum value of $50,000.00.
SECTION 5.7 Litigation. Except as disclosed in Exhibit 5.7, attached
hereto and made a part hereof, as of the date hereof there are no claims,
actions, proceedings, or investigations pending or, to the best knowledge of
Coffee, threatened against Coffee or to the best of Coffee's knowledge,
pending or threatened against any employee, consultant, director, officer or
shareholder, in his, her or its capacity as such, before any court or
governmental or regulatory authority or body which, if decided adversely,
could materially and adversely affect the financial condition, business,
prospects or operations of Coffee. As of the date hereof, neither
Transpacific nor any of its property is subject to any order, judgment,
injunction or decree, which materially and adversely affects the financial
condition, business or prospects.
SECTION 5.8 Absence of Certain Changes or Events. Except as disclosed
to Transpacific in writing or in Exhibit 5.8, attached hereto and made a part
hereof, (a) there has not been any change or any development involving a
prospective change, which has affected or may affect materially and adversely
the business, assets or prospects or the financial position or the results of
operations of Transpacific; and (b) Coffee has not incurred any indebtedness
for money borrowed, or purchased or sold any material amount of assets, other
than in the ordinary course of business, or entered into any other transaction
other than in the ordinary course of business.
SECTION 5.9 Compliance with Law. Except as set forth in Exhibit 5.9,
attached hereto and made a part hereof, or as disclosed in writing to
Transpacific, Coffee has complied in all material respects with, and is not in
violation of or in default in any material respect under, the applicable
statutes, ordinances, rules, regulations, orders or decrees of all federal
state, local and foreign governmental bodies, agencies and authorities having,
asserting or claiming jurisdiction over it or over any part of its operations
or assets.
SECTION 15.10 Bank Accounts, Depositories; Powers of Attorney. Exhibit
15.10, attached hereto and made a part hereof, sets forth a true, correct and
complete list of the names and locations of all banks or other depositories in
which Coffee has accounts, trust funds or safe deposit boxes and the names of
the person or persons authorized to draw thereon, borrow therefrom or have
access thereto. Except as listed in Exhibit 15.10, no person or entity holds
a power of attorney of Coffee.
SECTION 15.11 Complete Disclosure. No representation or warranty in this
Agreement or in any schedule or exhibit hereto, nor any information or
certificate delivered or to be delivered to Transpacific by or on behalf of
Coffee pursuant to this Agreement contains or will contain any untrue
statement of a material act or omits or will omit a material fact necessary to
make the statements contained therein not misleading. All information
required to be disclosed by this Agreement concerning Coffee and all other
material information concerning Transpacific has been disclosed. With respect
to any oral agreement disclosed in any schedule or exhibit hereto, only those
terms of such oral agreement expressly described in such schedule or exhibit
shall be deemed to have been disclosed to Transpacific thereby.
ARTICLE 6
CONDITIONS
SECTION 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall
be subject to the fulfillment at or prior to the Effective Date of the
following conditions:
(a) this Agreement and the transactions contemplated hereby having
been approved and adopted at or prior to the Effective Date by the requisite
vote of the shareholders of each company as required by applicable law;
(b) no preliminary or permanent injunction or other order issued by
any federal or state court of competent jurisdiction in the United States or
any foreign jurisdiction preventing the consummation of the Merger shall be in
effect;
SECTION 6.2 Conditions to Obligation of Transpacific to Effect the
Merger. The obligation of Transpacific to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Date of the following
conditions any one or more of which (except Section 6.2(h) and (i)) may be
waived by Transpacific:
(a) Coffee shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or prior to
the Effective Date including those specified in Section 5.5 herein;
(b) Coffee shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or prior to
the Effective Date, including the surrender of 100% of its issued and
outstanding common stock to the Transfer Agent and Transpacific 's subsequent
issuance of an aggregate of 3,000,000 shares of its common stock to Coffee
after Transpacific's Stock Split;
(c) the representations and warranties of Coffee set forth in this
Agreement shall be true and correct in all material respects on and as of the
Effective Date as if made on and as of such date, except as contemplated or
permitted by this Agreement.
(d) Coffee shall have delivered a certificate of its President or
its Chairman of the Board to the effect set forth in paragraphs (a), (b) and
(c) of this Section 6.2;
(e) Coffee shall have delivered to Transpacific copies of
resolutions duly adopted by its Board of Directors approving the execution and
delivery of this Agreement, such resolutions being certified by the Secretary;
(f) No action or preceding before any court or governmental or
regulatory authority or body, United States, federal or state or foreign,
shall have been instituted (and be pending) or threatened by any government or
governmental authority, which seeks to prevent or delay the consummation of
the Merger or which challenges any of the terms or provisions of this
Agreement;
(g) No order issued by any United States federal or state or
foreign governmental or regulatory authority or body of by any court of
competent jurisdiction nor any statute, rule, regulation or executive order
promulgated or enacted by any United States federal or state or foreign
governmental authority which prevents the consummation of the Merger shall be
in effect;
(h) Coffee acknowledges that the Post-Effective Amendment filed with
the SEC after this Agreement is signed must be declared effective by the SEC
and the shareholder reconfirmation offering contained therein shall have been
approved by investors representing a minimum of 80% of the proceeds of
Transpacific 's initial public offering, i.e., $14,400;
(i) The fair market value of Coffee is at least $14,400.
(j) Except to the extent such consents are not required at the
Effective Date, Coffee
shall have received the consents or exemptions, or made the filings, as the
case may be, which were referred to in Section 4.8;
(k) Opinion of Counsel to Coffee. Transpacific shall have received
an opinion dated the Effective Date of this Merger by Rivkin, Radler & Kremer,
counsel to Coffee, satisfactory to Transpacific, in substantially the
following form:
i) Coffee is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of New York and has the
corporate power to own all of its properties and assets and carry on its
business in all material respects as it is now being conducted, and is
qualified to do business as a foreign corporation in the states in which the
character and location of the assets owned by it or the nature of the business
transacted by it requires qualification.
ii) The execution and delivery by Coffee of this Agreement and the
consummation of the transactions contemplated by this Agreement in accordance
with the terms hereof will not conflict with or result in a breach of any term
or provision of Coffee's certificate of incorporation or by-laws;
iii) This Agreement has been duly and validly authorized, executed
and delivered and constitutes the legal and binding obligation of Coffee,
except as limited by bankruptcy and insolvency laws and by others laws
affecting the rights of creditors generally; and
iv) To the best knowledge of such counsel, there are no actions,
suits or proceedings pending, or threatened by or against Coffee or affecting
Coffee or its properties, at law or in equity, before any court or any other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind.
SECTION 6.3 Conditions to the Obligation of Coffee to Effect the
Merger. The obligation of the Coffee to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Date of the following conditions,
any one or more of which (except 6.3(m)) may be waived by Coffee:
(a) The representations and warranties of Transpacific set forth in
this Agreement shall be true and correct in all material respects on and as of
the Effective Date as if made on and as of such date, except as contemplated
or permitted by this Agreement;
(b) Except to the extent such consents are not required at the
Effective Date, Transpacific shall have received the consents or exemptions,
or made the filings, as the case may be, which were referred to in Section
5.4;
(c) Transpacific shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or prior to
the Effective Date including those specified in Section 4.5 herein;
(d) Transpacific shall have delivered a certificate of its
President to the effect set forth in paragraphs (a), (b) and (c) of this
Section 6.3;
(e) Transpacific shall have delivered to Coffee copies of
resolutions duly adopted by the Board of Directors of the Company approving
the execution and delivery of this Agreement, such resolutions being certified
by the Secretary of the Company;
(f) No action or proceeding before any court or governmental or
regulatory authority or body, United States federal or state or foreign, shall
have been instituted (and be pending or threatened) by any government or
governmental authority, which seeks to prevent or delay the consummation of
the Merger or which challenges any of the terms or provisions of this
Agreement; and
(g) No order issued by any United States federal or state or
foreign governmental or regulatory authority or body, or by any court of
competent jurisdiction nor any statute, rule, regulation, or executive order
promulgated or enacted by any United States, federal, or state or foreign
government or governmental authority, which prevented the consummation of the
Merger or materially and adversely affects the business, financial condition,
or operations of Transpacific shall be in effect.
(h) Shareholder Approval. Pursuant to a reconfirmation offering in
which shareholders representing a minimum of $14,400 of the proceeds from
Transpacific 's initial public offering elect to reconfirm their investment,
The shareholders of Transpacific upon the Effective Date of this Merger will
have duly approved the Merger, the Stock Split, and the issuance of 3,000,000
shares of Transpacific Common Stock after the Stock Split.
(i) Opinion of Counsel to Transpacific. Coffee shall have received
an opinion dated the Effective Date of this Merger by Schonfeld & Weinstein,
63 Wall Street, Suite 1801, New York, New York 10005, counsel to Transpacific,
satisfactory to Coffee, in substantially the following form:
i) Transpacific is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Nevada
and has the corporate power to own all of its properties and assets and carry
on its business in all material respects as it is now being conducted, and is
qualified to do business as a foreign corporation in the states in which the
character and location of the assets owned by it or the nature of the business
transacted by it requires qualification.
ii) The execution and delivery by Transpacific of this
Agreement and the
consummation of the transactions contemplated by this Agreement in accordance
with the terms hereof will not conflict with or result in a breach of any term
or provision of Transpacific's certificate of incorporation or by-laws;
iii) The authorized capitalization of Transpacific consists
of 20,000,000 shares of common stock, par value $.0001 per share. As of the
date of this Agreement, there are 100,000 shares of common stock issued and
outstanding, including the 3,000 shares being held in escrow pending
consummation of the Merger, as per Rule 419. As of the Effective Date, after
the Stock Split and subsequent issuance of 3,000,000 shares to Coffee, there
will be 4,000,000 shares of Transpacific outstanding;
iv) This Agreement has been duly and validly authorized,
executed and delivered and constitutes the legal and binding obligation of
Transpacific, except as limited by bankruptcy and insolvency laws and by
others laws affecting the rights of creditors generally; and
v) To the best knowledge of such counsel, there are no
actions, suits or proceedings pending, or threatened by or against
Transpacific or affecting Transpacific or its properties, at law or in
equity, before any court or any other governmental agency or instrumentality,
domestic or foreign, or before any arbitrator of any kind.
(i) Tax Opinion. Coffee shall have received an opinion of its tax
counsel, advisor or accountant that the Merger to be consummated by the terms
of this Agreement qualifies as a tax-free reorganization as defined under the
Internal Revenue Code of 1986, as amended.
(j) Net Cash. Transpacific shall have net cash, including the
Deposited Funds, in excess of $16,000 on the Effective Date.
(k) Coffee acknowledges that the Post-Effective Amendment filed
with the SEC after this Agreement is signed must be declared effective by the
SEC and the shareholder reconfirmation offering contained therein shall have
been approved by investors representing a minimum of 80% of the proceeds of
Transpacific 's initial public offering, i.e., $14,400.
(l) Except to the extent such consents are not required at the
Effective Date, Coffee shall have received the consents or exemptions, or
made the filings, as the case may be, which were referred to in Section 4.8.
(m) The fair market value of Coffee is at least $14,400.
(n) The directors and officers shall resign from Transpacific and
such officers and directors designated by Coffee shall be duly elected.
SECTION 6.4 Waiver of Condition; Right to Proceed. Unless stated
otherwise herein, if any of the conditions to the obligations of Coffee and
Transpacific specified in Sections 6.2 and 6.3 hereof has not been satisfied
(excluding Sections 6.2(h) and (i) and 6.3(h) and (j)), Coffee or
Transpacific, as the case may be, in addition to any other rights which may be
available to them or it, shall have the right to waive such conditions and to
proceed with the Merger (subject to satisfaction of the other conditions
contained herein, unless also waived).
ARTICLE 7
RULE 419 REQUIREMENTS
SECTION 7.1 Merger Criteria. Pursuant to Rule 419 under Regulation C of
the Securities Act of 1933, as amended ("Rule 419"), the fair market value of
Coffee must represent at least 80% of the maximum offering proceeds of
Transpacific 's initial public offering, i.e., Coffee's fair market value must
be at least $14,400 (80% x $18,000). If the fair market value of Coffee is
determined by Transpacific to be less than $14,400 on the Effective Date, this
Agreement shall terminate immediately.
SECTION 7.2 Post-Effective Amendment. Once the Merger Agreement has
been executed, Transpacific shall update its registration statement with a
Post-Effective Amendment. The Post-Effective Amendment shall contain updated
information concerning Transpacific and information about Coffee and its
business including audited financial statements; and the results of
Transpacific 's initial public offering. The Post-Effective Amendment shall
also include the terms of the reconfirmation offer mandated by Rule 419. The
reconfirmation offer shall include certain prescribed conditions which must be
satisfied before Deposited Securities can be released from escrow. If the
Post-Effective Amendment is not declared effective by the Securities and
Exchange Commission, the reconfirmation offering is not complete and the
merger is not consummated within 18 months of the date of effectiveness of
Transpacific's initial public offering, this Agreement shall terminate
automatically.
SECTION 7.3 Reconfirmation Offering. The reconfirmation offer must
commence after the effective date of the Post-Effective Amendment. Pursuant
to Rule 419, the terms of the reconfirmation offer shall include the following
conditions:
(a) The prospectus contained in the Post-Effective Amendment will be
sent to each investor whose securities are held in the Escrow Account within 5
business days after the effective date of the Post-Effective Amendment;
(b) Each investor will have no fewer than 20 and no more than 45
business days from the effective date of the Post-Effective Amendment to
notify Transpacific in writing that the investor elects to remain an investor;
(c) If Transpacific does not receive written notification from any
investor within 45 business days following the effective date of the
Post-Effective Amendment, the pro rata portion of the Deposited Funds (and any
related interest or dividends) held in escrow on such investor's behalf will
be returned to the investor within 5 business days by first class mail or other
equally prompt means;
(d) The Merger will be consummated only if a minimum number of
investors representing 80% of the maximum offering proceeds ($14,400) elect to
reconfirm their investment;
(e) If the Merger has not been consummated by February 12, 1998 (18
months from the date of the prospectus), the Deposited Funds held in escrow
shall be returned to all investors on a pro rata basis within 5 business days
by first class mail or other equally prompt means, and this Agreement shall be
declared null and void.
SECTION 7.4 Release of Deposited Funds and Deposited Securities. The
Deposited Funds and Deposited Securities may be released to Transpacific and
the investors in Transpacific's initial public offering, respectively, after:
(a) The Escrow Agent has received a signed representation from
Transpacific and any other evidence acceptable by the Escrow Agent that:
(i) Transpacific has executed an agreement for Merger of a business
for which the par value of the business represents at least 80% of the maximum
offering proceeds and has filed the required Post-Effective Amendment;
(ii) The Post-Effective Amendment has been declared effective, the
mandated reconfirmation offer having the conditions prescribed by Rule 419 has
been completed, and Transpacific has satisfied all of the prescribed
conditions of the reconfirmation offer.
(b) The Merger of a business with the fair value of at least 80% of
the maximum proceeds is consummated.
ARTICLE 8
TERMINATION
SECTION 8.1 Board Action. This Agreement may be terminated at any time
by mutual consent of the Boards of Directors of Transpacific and Coffee.
SECTION 8.2 Certain Dates. In the event that Transpacific shall not
have received certified financial statements from Coffee or this Agreement is
not executed by both parties by November [ ], 1997, this Agreement may
be terminated by either party upon written notice, whether before or after
approval of the Merger thereof by the holders of the requisite number of
shares of Transpacific. This Agreement shall terminate automatically if the
Merger has not been consummated by February 12, 1998, eighteen (18) months
from the effective date of Transpacific's initial public offering, which
consummation includes a declaration of effectiveness by the Securities and
Exchange Commission of Transpacific 's Post-Effective Amendment and successful
completion of a shareholder reconfirmation offering, pursuant to which
shareholders representing less than 80% of the proceeds from Transpacific 's
initial public offering vote to reconfirm their investments.
SECTION 8.3 Audited Financial Statements. In the event that Coffee's
audited financial statements are materially and adversely inconsistent with
the Coffee unaudited financial statements contained herein, Transpacific shall
have the right to unilaterally terminate this Agreement by the Board of
Directors of Transpacific notifying Coffee and its counsel, Rivkin, Radler and
Kremer, of such termination. Such notice shall be sent to Coffee and its
United States counsel prior to the Effective Date.
SECTION 8.4 Government Order. This Agreement may be terminated by
either Coffee or Transpacific if any court of competent jurisdiction in the
United States or other United States governmental body shall have issued an
order, decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement and such
other, decree, ruling or other action shall have become final and
non-appealable.
SECTION 8.5 Effect of Termination. In the event of the termination of
this Agreement, this Agreement shall thereafter become void and have no effect
and no party hereto shall have any liability to any other party hereto or its
shareholders or directors or officers in respect thereof, except for the
obligations of the parties hereto in Section 9.2 hereof.
ARTICLE 9
GENERAL AGREEMENTS
SECTION 9.1 Cooperation. Each of the parties hereto shall cooperate
with the other in every reasonable way in carrying out the transactions
contemplated herein (including obtaining consents and making filings), and in
delivering all documents and instruments deemed reasonably necessary or useful
by counsel for any party hereto.
SECTION 9.2 Supplement Schedule. From time to time prior to the
Effective Date, the parties will promptly disclose in writing to each other
any matter arising which, if existing or occurring at the date of this
Agreement, would have been required to be disclosed in writing to the other.
No such disclosure shall have any effect for the purpose of determining the
satisfaction of the conditions set forth in Sections 6.1, 6.2 and 6.3.
SECTION 9.3 Funds. Except as otherwise provided for herein or
elsewhere in writing, each party shall incur all its own costs and expenses in
connection with this Agreement and the transactions contemplated hereby.
After the consummation of the Merger, all expenses will be incurred by the
Surviving Entity.
SECTION 9.4 Survival of Representations and Warranties. All
representations and warranties in this Agreement or in any instrument or
certificate delivered pursuant to this Agreement delivered on or prior to the
Effective Date shall not survive the consummation of the Merger.
SECTION 9.5 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
by messenger, transmitted by telex or telegram or mailed by registered or
certified mail, postage prepaid, as follows:
(a) If to Transpacific, to:
David Chang
116 Pinehurst, #121
New York, New York 10023
With a copy to:
Joel Schonfeld, Esq.
Schonfeld & Weinstein, L.L.P.
63 Wall Street, Suite 1801
New York, New York 10005
(b) If to Coffee, to:
Andrew Gordon
Coffee Holding Co. Inc.
4401 First Avenue
Brooklyn, New York 11232
With a copy to:
Walter J. Gumersell, Esq.
Rivkin, Radler & Kremer, Esqs.
EAB Plaza, West Tower
Uniondale, New York 11556
The date of any such notice shall be the date hand delivered or otherwise
transmitted or mailed.
SECTION 9.6 Amendment. This Agreement (including the documents and
instruments referred to herein or therein) (a) constitutes the entire
agreement and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter
hereof, (b) is not intended to confer upon any other person any rights or
remedies hereunder, and (c) shall not be assigned by operation of law or
otherwise. This Agreement may be amended or modified in whole or in part to
the extent permitted by New York law at any time, by an agreement in writing
executed in the same manner as this Agreement after authorization to do so by
the Board of Directors of Coffee and Transpacific.
SECTION 9.7 Waiver. Except as otherwise set forth herein, at any time
prior to the Effective Date, the parties hereto may (a) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representation and warranties
contained herein or in any document delivered pursuant hereto, and (c) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid is set forth in an instrument in writing signed on behalf of such
party.
SECTION 9.8 Brokers. Coffee and Transpacific each represent and warrant
that no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the Merger. Coffee
represents and warrants that no broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the merger, except for South Street Capital Group, L.L.C. or its
assigns. The fee shall be payable in full on the Effective Date. The fee
shall be a cash payment equal to five percent (5%) of the market
capitalization of the Surviving Entity. For the purposes of the preceding
sentence, market capitalization shall equal the number of shares outstanding
multiplied by the price per share of the common stock; in no event shall the
market capitalization be considered less than $12,000,000.
SECTION 9.9 Publicity. So long as this Agreement is in effect, the
parties hereto shall not issue or cause the publication of any press release
or other announcement with respect to the Merger or this Agreement without the
consent of the other party.
SECTION 9.10 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.11 Successors and Assigns. This Agreement shall be binding
upon and insure to the benefit of and enforceable by the respective successors
and assigns of the parties hereto.
SECTION 9.12 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
<PAGE>COUNTERPART SIGNATURE PAGE TO
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
TRANSPACIFIC INTERNATIONAL GROUP CORP.
AND
COFFEE HOLDING CO., INC.
IN WITNESS WHEREOF the parties have executed this Agreement by their duly
authorized officers as of the ____ day of __________, 1997.
COFFEE HOLDING CO., INC.
By:
President
TRANSPACIFIC INTERNATIONAL GROUP CORP.
By:
President
<PAGE>
November 5, 1997
Securities and Exchange Commission
Washington, D.C.
Re: TRANSPACIFIC INTERNATIONAL GROUP CORP.
To Whom It May Concern:
Transpacific International Group Corp. (the "Company") is a corporation duly
incorporated and validly existing and in good standing under the laws of the
state of Nevada. The Company has full corporate powers to own its property
and conduct its business, as such business is described in the prospectus.
The Company is qualified to do business as a foreign corporation in good
standing in every jurisdiction in which the ownership of property and the
conduct of business requires such qualification.
This opinion is given in connection with the reconfirmation of Three Thousand
(3,000) Shares of Common Stock at a price of $6.00 per Share, sold in the
Company's initial public offering.
I have acted as counsel to the company in connection with the preparation of
the Registration Statement on Form SB-2, pursuant to which such Shares are
being registered and, in so acting, I have examined the originals and copies
of the corporate instruments, certificates and other documents of the Company
and interviewed representatives of the Company to the extent I deemed it
necessary in order to form the basis for the opinion hereafter set forth. In
such examination I have assumed the genuineness of all signatures and
authenticity of all documents submitted to me as certified or photostatic
copies. As to all questions of fact material to this opinion
which have not been independently established, I have relied upon statements
or certificates of officers or representatives of the Company.
All of the 3,000 Shares subject to the reconfirmation are now currently held
in escrow as per Rule 419.
Based upon the foregoing, I am of the opinion that the 3,000 Shares of Common
Stock of the Company currently held in escrow pursuant to Rule 419 and subject
to a reconfirmation are fully paid and non-assessable and there will be no
personal liability to the owners thereof.
The undersigned hereby consents to the use of this opinion in connection with
such Registration Statement and its inclusion as an exhibit accompanying such
Registration Statement.
Very truly yours,
SCHONFELD & WEINSTEIN, LLP
<PAGE>
To the Board of Directors of
Transpacific International Group Corp.
347 Fifth Avenue, Suite 1507
New York, New York 10016
Re: Coffee Holding Co., Inc.
The undersigned, Lester S. Ganzfried, a certified public accountant, does
hereby consent to the use of my opinions dated December 19, 1996 and September
22, 1997, to Coffee Holding Co., Inc. to be used and filed in connection with
the Post-Effective Amendment to Transpacific International Group Corp.'s
Registration Statement and Prospectus on Form SB-2, as filed with the
Securities and Exchange Commission. I also consent to the use of my name
under the caption "Experts" in the above-mentioned Post-Effective Amendment.
IRA D. GANZFRIED & COMPANY
Dated: November 7, 1997
New York, New York
BY: LESTER S. GANZFRIED, C.P.A.
<PAGE>
CHACON & ASSOCIATES
Certified Public Accountants
78 Euclid Avenue
Ardsley, New York 10502
To The Board of Directors of
Transpacific International Group Corp.
347 Fifth Avenue, Suite 1507
New York, New York 10016
Re: TRANSPACIFIC INTERNATIONAL GROUP CORP.
The undersigned, Chacon & Associates, a certified public accountants, do
hereby consent to the use of my opinions dated December 16, 1996 and July
24, 1997, to Transpacific International Group Corp. to be used and filed in
connection with the Post-Effective Amendment to Transpacific International
Group Corp.'s SB-2 Registration Statement and Prospectus, as filed with the
Securities and Exchange Commission. I also consent to the use of my name
under the caption "Experts" in the above-mentioned Registration Statement.
Dated: November 6, 1997
New York, New York
<PAGE>
To The Board of Directors of
Transpacific International Group Corp.
347 Fifth Avenue, Suite 1507
New York, New York 10016
Re: Transpacific International Group Corp.
We, SCHONFELD & WEINSTEIN, hereby consent to the use of our opinion dated
November 5, 1997, to Transpacific International Group Corp. to be used and
filed in connection with the SB-2 Registration Statement and Prospectus, as
filed with the Securities and Exchange Commission.
SCHONFELD & WEINSTEIN, LLP
Dated: November 5, 1997
New York, New York
<PAGE>
TRANSPACIFIC INTERNATIONAL GROUP CORP.
SHAREHOLDER RECONFIRMATION
To The Board of Directors
Transpacific International Group Corp.
347 Fifth Avenue
Suite 1507
New York, New York 10016
The undersigned, owner of shares of Transpacific International
Group Corp. (the "Shares"), purchased in Transpacific International Group
Corp.'s initial public offering, hereby acknowledges that these Shares are
being held in escrow pursuant to Rule 419 of Regulation C under the Securities
Act of 1933, as amended ("Rule 419"). I further acknowledge that I have 20
days from the effective date of the post-effective amendment [( )] to
notify Transpacific International Group Corp. that I will remain an investor
in Transpacific International Group Corp. I am aware that if Transpacific
International Group Corp. has not received this notice within 20 days
following the effective date of the post-effective amendment, my pro rata
funds which are currently held in escrow shall be sent by first class mail, or
other equally prompt means, to me within five days.
I have read over the post-effective amendment of Transpacific
International Group Corp. and wish to reconfirm my investment.
Name (print or type) Signature
Street Address
City, State, Zip Code Social Security Number
Phone Number
Please return the enclosed Letter of Reconfirmation to Schonfeld & Weinstein,
L.L.P., 63 Wall Street, Suite 1801, New York, New York 10005. The Shareholder
Reconfirmation vote will take place on [ ], 1998. Please make sure this
letter is received by Schonfeld & Weinstein by [ ].
