U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934
For the quarterly period ended March 31, 1997
Commission File Number 333-588-NY
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(Name of Small Business Issuer in Its Charter)
Nevada 11-3860760
(State of Incorporation) (IRS Identification
Number)
347 Fifth Ave., Suite 1507, New York, NY 10016
(Address of principal executive offices) (Zip Code)
(212) 213-6908
(Issuer's telephone number, including area code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes x No
As of March 31, 1997, there were 97,000 shares of the issuer's common
stock, $.0001 par value per share, issued and outstanding.
<PAGE>
TRANSPACIFIC INTERNATIONAL GROUP CORP.
FORM 10-QSB
MARCH 31, 1997
INDEX
Page #
PART I - FINANCIAL INFORMATION
Item I - FINANCIAL STATEMENTS (UNAUDITED)
Balance sheet - as of March 31, 1997
Statement of operations & deficit accumulated
during the development stage
Three months ended March 31, 1997
and the Period October 9, 1995 (Date of Inception)
to March 31, 1997
Statement of change in stockholders' equity
Three months ended March 31, 1997
and the Period October 9, 1995 (Date of Inception)
to March 31, 1997
Statement of cash flows
Three months ended March 31, 1997
and the Period October 9, 1995 (Date of Inception)
to March 31, 1997
Notes to the financial statements
General and administrative expenses
Three months ended March 31, 1997
and the Period October 9, 1995 (Date of Inception)
to March 31, 1997
Item II - MANAGEMENT'S DISCUSSION AND ANALYSIS
AND PLAN OF OPERATION
TRANSPACIFIC INTERNATIONAL GROUP CORP.
FORM 10-QSB
MARCH 31, 1997
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
<PAGE>TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
BALANCE SHEET
AS OF MARCH 31, 1997
ASSETS
CURRENT ASSETS
Cash 783
Total Current Assets 783
OTHER ASSETS
Organization costs 0
Deferred offering costs 0
Total Other Assets 0
TOTAL ASSETS 783
CURRENT LIABILITIES
Accounts payable 0
Total Current Liabilities 0
STOCKHOLDER'S EQUITY
Common Stock$.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
<PAGE>
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
STATEMENT OF OPERATIONS & DEFICIT ACCUMULATED
DURING THE DEVELOPMENT STAGE
THREE MONTHS ENDED MARCH 31, 1997, AND
THE PERIOD FROM OCTOBER 9, 1995 (Date of Inception)
TO MARCH 31, 1997
October 9,
Three months 1995
Ended (Inception) to
March 31, March 31,
1997 1997
Operating Income:
Revenues 0 0
Interest Income 15 217
Cost of revenues 0 0
Gross profit 15 217
Operating expenses:
General & administrative expenses 0 0
Professional fees(Sch 1) 1,965 24,430
Operating income (loss) ( 1,950) (24,213)
Non operating (income) expenses:
Depreciation & Amortization 0 0
Interest & Bank Charges 11 11
Income (loss) before taxes ( 1,961) (24,224)
Provision for income taxes 0 0
Net income (loss) ( 1,961) (24,224)
Deficit accumulated during development stage
beginning through March 31, 1997 (22,263) 0
Deficit accumulated during development stage
beginning through March 31, 1997 (24,224) (24,224)
# of common shares outstanding
from date of inception 97,000 97,000
See accompanying independent accountant's report
and notes to the financial statements
<PAGE>
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
STATEMENT OF CHANGE IN STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1997, AND
THE PERIOD FROM OCTOBER 9, 1995 (Date of Inception)
TO MARCH 31, 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
<PAGE>
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1997, AND
THE PERIOD FROM OCTOBER 9, 1995 (Date of Inception)
TO MARCH 31, 1997
October 9,
Three months 1995
Ended (Inception) to
March 31, March 31,
1997 1997
Operating activities:
Net income (loss) (1,961) (24,224)
Non cash charges (credit to earnings):
Depreciation and amortization 0 0
Changes in operating assets and
liabilities:
Net cash provided (used) in operating activities
(1,961) (24,224)
Cash provided by (used) in investing activities:
Equity increase (decrease) 0 25,007
Net cash provided (used) in investing
activities 0 25,007
Financing activities:
Net cash provided (used) in financing activities
0 0
Net increase (decrease) in cash (1,961) 783
Cash at October 9, 1995
(date of inception) 2,744 0
Cash at December 31, 1996 783 783
Supplemental disclosure of cash flow information:
Interest paid, net of amount capitalized 11 11
Income taxes paid 0 0
See accompanying independent accountant's report
and notes to the financial statements
<PAGE>
TRANSPACIFIC INTERNATIONAL GROUP CORP.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD OCTOBER 9, 1995 (Date of Inception)
TO MARCH 31, 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.
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 Schedule 1
TRANSPACIFIC INTERNATIONAL GROUP CORP. Three months October 9,
(A Development Stage Company) ended 1995
GENERAL & ADMINISTRATION EXPENSES March 31, March 31,
THREE MONTHS ENDED MARCH 31, 1997, AND 1997 1997
THE PERIOD FROM OCTOBER 9, 1995 (Date of Inception)
TO MARCH 31, 1997
Legal fees 0 20,000
Other professional fees 1,965 4,430
Total General & administrative expenses
1,965 24,430
See accompanying independent accountant's report
and notes to the financial statements
<PAGE>
TRANSPACIFIC INTERNATIONAL GROUP CORP.
FORM 10-QSB
March 31, 1997
Item 2. Management's Discussion and Analysis and Plan of Operation
The Company does not currently engage in any business activities which
provide any cash flow. Thecosts of identifying, investigating, and analyzing
Business Combinations will be paid with money in the Company's treasury, and
not with proceeds received from the Company's initial public offering.
The Company may seek a Business Combination in the form of firms which
have recently commenced operations, are developing companies in need of
additional funds for expansion into new products or markets, are seeking to
develop a new product or service, or are established businesses which may be
experiencing financial or operating difficulties and are in need of additional
capital. A Business Combination may involve the acquisition of, or merger
with, a Company which does not need substantial additional capital but which
desires to establish a public trading market for its shares, while avoiding
what it may deem to be adverse consequences of undertaking a public offering
itself, such as time delays, significant expense, loss of voting control and
compliance with various Federal and State securities laws.
The Company will not acquire a Target Business unless the fair value of
the Target Business represents 80% of the maximum offering proceeds (the "Fair
Market Value Test.") To determine the fair market value of a Target Business,
the Company's management will examine the certified financial statements
(including balance sheets and statements of cash flow and stockholders'
equity) of any candidate and will participate in a personal inspection of any
potential Target Business. If the Company determines that the financial
statements of a proposed Target Business does not clearly indicate that the
Fair Market Value Test has been satisfied, the Company will obtain an opinion
from an investment banking firm (which is a member of National Association of
Securities Dealers, Inc., (the "NASD") with respect to the satisfaction of
such criteria.
<PAGE>TRANSPACIFIC INTERNATIONAL GROUP CORP.
FORM 10-QSB
MARCH 31, 1997
Based upon management's experience with and knowledge of blank check
companies, the probable desire on the part of the owners of target businesses
to assume voting control over the Company (to avoid tax consequences or to
have complete authority to manage the business) will almost assure that the
Company will combine with just one target business. Management also
anticipates that upon consummation of a Business Combination, there will be a
change in control in the Company which will most likely result in the
resignation or removal of the Company's present officers and directors.
None of the Company's officers or directors have had any preliminary
contact or discussions with any representative of any other entity regarding a
Business Combination. Accordingly, any Target Business that is selected may
be a financially unstable Company or an entity in its early stage of
development or growth (including entities without established records of sales
or earnings), the Company will become subjected to numerous risks inherent in
the business and operations of financially unstable and early stage or
potential emerging growth companies. In addition, the Company may affect a
Business Combination with an entity in an industry characterized by a high
level of risk, and although management will endeavor to evaluate the risks
inherent in a particular industry or Target Business, there can be no
assurance that the Company will properly ascertain or assess all significant
risks.
Management anticipates that it may be able to effect only one potential
Business Combination, due primarily to the Company's limited financing. As a
result, the Company will not be able to offset potential losses from one
venture against gains from another.
The Company anticipates that the selection of a Business Combination will
be complex and extremely risky. Because of general economic conditions, rapid
technological advances being made in some industries, and shortages of
available capital, management believes that there are numerous firms seeking
even the limited additional capital which the Company will have and/or the
benefits of a publicly traded corporation. Such perceived benefits of a
publicly traded corporation may include facilitating or improving the terms on
which additional equity financing may be sought, providing liquidity for the
principals of a business, creating a means for providing incentive stock
options or similar benefits to key employees, providing liquidity (subject to
restrictions of applicable statutes) for all shareholders, and other factors.
Potentially available Business Combinations may occur in many different
industries and at various stages of development, all of which will make the
task of comparative investigation and analysis of such business opportunities
extremely difficult and complex.
The analysis of Business Combinations will be undertaken by or under the
supervision of the officers and directors of the Company, none of whom is a
professional business analyst. Management intends to concentrate on
identifying preliminary prospective Business Combinations which may be brought
to its attention through present associations. In analyzing prospective
Business Combinations, management will consider such matters as the available
technical, financial, and managerial resources; working capital and other
financial requirements; history of operation, if any; prospects for the
future; nature of present and expected competition; the quality and experience
of management services which may be available and the depth of that
management; the potential for further research, development, or exploration;
specific risk factors not now foreseeable but which then may be anticipated to
impact the proposed activities of the Company; the potential for growth or
expansion; the potential for profit; the perceived public recognition or
acceptance or products, services, or trades; name identification; and other
relevant factors. Officers and directors of the Company will meet personally
with management and key personnel of the firm sponsoring the business
opportunity as part of their investigation. To the extent possible, the Company
intends to utilize written reports and personal investigation to evaluate the
above factors.
Since the Company will be subject to Section 13 or 15 (d) of the
Securities Exchange Act of 1934, it will be required to furnish certain
information about significant acquisitions, including audited financial
statements for the Company(s) acquired, covering one, two or three years
depending upon the relative size of the acquisition. Consequently,
acquisition prospects that do not have or are unable to obtain the required
audited statements may not be appropriate for acquisition so long as the
reporting requirements of the Exchange Act are applicable. In the event the
Company's obligation to file periodic reports is suspended under Section
15(d), the Company intends on voluntarily filing such reports.
It may be anticipated that any Business Combination will present certain
risks. Many of these risks cannot be adequately identified prior to
selection, and investors herein must, therefore, depend on the ability of
management to identify and evaluate such risks. In the case of some of the
potential combinations available to the Company, it may be anticipated that
the promoters thereof have been unable to develop a going concern or that such
business is in its development stage in that it has not generated significant
revenues from its principal business activity prior to the Company's merger or
acquisition, and there is a risk, even after the consummation of such Business
Combinations and the related expenditure of the Company's funds, that the
combined enterprises will still be unable to become a going concern or advance
beyond the development stage. Many of the Combinations may involve new and
untested products, processes, or market strategies which may not succeed.
Such risks will be assumed by the Company and, therefore, its shareholders.
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may
also purchase stock or assets of an existing business.
Investors should note that any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the
percentage of shares held by the Company's then-shareholders, including
purchasers in this offering. On the consummation of a Business Combination,
the Target Business will have significantly more assets than the Company;
therefore, management plans to offer a controlling interest in the Company to
the Target Business. While the actual terms of a transaction to which the
Company may be a party cannot be predicted, it may be expected that the
parties to the business transaction will find it desirable to avoid the
creation of a taxable event and thereby structure the acquisition in a
so-called "tax-free" reorganization under Sections 368(a)(1) or 351 of the
Internal Revenue Code of 1954, as amended (the "Code"). In order to obtain
tax-free treatment under the Code, it may be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company, including investors
in this offering, would retain less than 2% of the issued and outstanding
shares of the surviving entity, which would be likely to result in significant
dilution in the equity of such shareholders. Management of the Company may
choose to avail the Company of these provisions. In addition, a majority of
all of the Company's directors and officers may, as part of the terms of the
acquisition transaction, resign as directors and officers.
Management will not actively negotiate or otherwise consent to the
purchase of any portion of their Common Stock as a condition to or in
connection with a proposed Business Combination unless such a purchase is
requested by a Target Company as a condition to a merger or acquisition. The
officers and directors of the Company who own Common Stock have agreed to
comply with this provision which is based on a written agreement among
management. Management is unaware of any circumstances under which such
policy through their own initiative may be changed.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance on exemptions from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of this transaction, the Company may agree to register such
securities either at the time the transaction is consummated, under certain
conditions, or at specified times thereafter. The issuance of substantial
additional securities and their potential sale into any trading market which
may develop in the Company's Common Stock may have a depressive effect on such
market.
As a part of the Company's investigation, officers and directors of the
Company will meet personally with management and key personnel, visit and
inspect material facilities, obtain independent analysis or verification of
certain information provided, check references of management and key
personnel, and take other reasonable investigative measures, to the extent of
the Company's limited financial resources and management expertise.
The manner of the Business Combination will depend on the nature of the
Target Business, the respective needs and desires of the Company and other
parties, the management of the Target Business opportunity, and the relative
negotiating strength of the Company and such other management.
The Company has no present policy as to whether the Company may acquire
or merge with a business in which the Company's management, promoters, their
affiliates or associates have a direct or indirect ownership interest. The
Company also lacks a policy with regard to related party transactions in
general. The Company's officers and directors have not approached and have
not been approached by any person or entity with regard to any proposed
business ventures with respect to the Company. The Company will evaluate all
possible Business Combinations brought to it. If at any time a Business
Combination is brought to the Company by any of the Company's promoters,
management, or their affiliates or associates, disclosure as to this fact will
be included in the post-effective amendment, thereby allowing the public
investors the opportunity to fully evaluate the Business Combination.
The Company has adopted a policy that it will not pay a finder's fee to
any member of management for locating a merger or acquisition candidate. No
member of management intends to or may seek and negotiate for the payment of
finder's fees. In the event there is a finder's fee, it will be paid at the
direction of the successor management after a change in management control
resulting from a Business Combination. The Company's policy regarding
finder's fees is based on a written agreement among management. Management is
unaware of any circumstances under which such policy through their own
initiative may be changed.
The Company does not intend to advertise or promote the Company.
Instead, the Company's management will actively search for potential Target
Businesses. In the event management decides to advertise (in the form of an
ad in a legal publication) to attract a Target Business, the cost of such
advertising will be assumed by management.
The Company is a blank check company. It has no business of its own, but
instead is attempting to engage in a business combination through the
acquisition of a target company. The Company has no current cash
requirements, save for the printing and filing of reports with the Securities
and Exchange Commission. The Company does not intend to raise any additional
monies within the next twelve months.<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TRANSPACIFIC INTERNATIONAL GROUP CORP.
By:
Ho Cheong Chio, President
Dated: 9/22/97 Ho Cheong Chio
Ho Cheong Chio, President, Director
Dated: 9/22/97 David Chang
David Chang, Secretary, Director
Dated: 9/22/97 Christian Constantinov
Christian Constantinov, Director
