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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F/A
[ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURI-
TIES EXCHANGE ACT OF 1934
OR
[X] AMENDMENT NO. 1 TO ANNUAL REPORT ON FORM 20-F FILED ON OR ABOUT JULY
15, 1998 PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended: December 31, 1997
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Date of Amendment: September 9, 1998
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________
Commission file number 000-22113
EURO TECH HOLDINGS COMPANY LIMITED
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(Exact name of Registrant as specified in its charter)
EURO TECH HOLDINGS COMPANY LIMITED
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(Translation of Registrant's name into English)
British Virgin Islands
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(Jurisdiction of incorporation or organization)
18/F Gee Chang Hong Centre, 65 Wong Chuk Hong Road, Hong Kong
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(Address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each Name of each exchange
class on which registered
Not Applicable
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Not Applicable
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Securities registered or to be registered pursuant to Section 12(g) of the Act.
Common Stock, $.01 par value
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(Title of Class)
Redeemable Common Stock Purchase Warrants
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(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act.
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(Title of Class)
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Indicate the number of outstanding shares of each of the issuer's
classes of capital or common stock as of the close of the period covered by the
annual report.
2,068,200 shares of Common Stock
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1,740,000 Warrants
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 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 _________
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Indicate by check mark which financial statement item the registrant
has elected to follow.
Item 17 X Item 18 _________
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(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes __________ No ___________
(ii)
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The Registrant hereby amends Item 4 "Control of Registrant" commencing
on Page 22 and Item 13. "Interest of Management in Certain Transactions"
commencing on page 42 of its Form 20F for its fiscal year ended December 31,
1997 as follows:
Item 4. Control of Registrant
The following table sets forth, as of July 1, 1998, certain information
concerning beneficial ownership of shares of Common Stock with respect to (i)
each person known to the Company to own 10% or more of the outstanding shares of
Common Stock, and (ii) all officers and directors of the Company as a group:
<TABLE>
<CAPTION>
Amount and Approximate
Nature of Percentage
Beneficial of Common
Ownership Stock Owned
<S> <C> <C>
T.C. Leung(1)(2)(3)..................... 2,500,000 79%
Pearl Venture Ltd.(1)(2).............. 2,500,000 79%
Regent Earning Ltd.(1).............. 1,027,600 50%
All Executive Officers and
Directors of the Company
as a group (7 persons)(2)(3)(4)......... 2,650,000 80%
</TABLE>
1 The address for Mr. Leung is c/o Euro Tech (Far East) Ltd., 18/F Gee
Chang Hong Centre, 65 Wong Chuk Hang Road, Hong Kong. The address for Pearl
Venture Ltd. ("Pearl") is Columbus Centre Building, Wichhams Cay, Road Town,
Tortola, British Virgin Islands. The address for Regent Earning Ltd. ("Regent")
is Room 101 Wo Hing Commercial Building, No. 11 Wing Ho Street, Central Hong
Kong.
2 Includes shares of the Company's Common Stock owned of record by Pearl,
which is a trust established for the benefit of Mr. Leung. Also includes those
shares of the Company's Common Stock owned of record by Regent, of which Pearl
is the majority share-holder. See Item 13. "Interest of Management in Certain
Transac- tions."
3 Does not include such person's proportionate interest in shares of the
Company's Common Stock held of record by Regent or Broadskill Investments, Inc.
("Broadskill"). Broadskill is a Hong Kong Corporation which owns an approximate
44% equity interest in Regent. See Item 13. "Interest of Management in Certain
Transactions."
4 Gives effect to the exercise of Management Options owned of record by the
Company's executive officers and directors. See Item 13. "Interest of Management
in Certain Transactions."
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Item 14. Interest of Management in Certain Transactions.
The Company was incorporated under the laws of the British Virgin
Islands on September 30, 1996. Shortly after incorporation, the Company sold
50,000 shares of its Common Stock to Gusrae, Kaplan & Bruno and 100,000 shares
of its Common Stock to Sidford for aggregate cash consideration of $1,500 or
$.01 per share. Gusrae, Kaplan & Bruno is United States counsel to the Company
and was granted the right to purchase said shares in partial consideration of
its services rendered to the Company in connection with the Company's initial
public offering ("Public Offering"). Sidford has been and is a business
consultant to Far East which initially was paid HK$5,000 by Far East and granted
the option to purchase the aforementioned 100,000 shares. In January 1997, Far
East amended its consulting agreement with Sidford to pay Sidford $5,000 per
month for twenty months. At that same time, the Company repurchased the 100,000
shares of its Common Stock held by Sidford.
Pearl is a British Virgin Islands company which is a trust for the
benefit of T.C. Leung, the Company's Chairman of the Board and Chief Executive
Officer. Regent is a Hong Kong corporation.
Concurrently with the closing of the Company's Public Offering in March
of 1997, the Company consummated the acquisition of Far East by exchanging
1,400,000 shares of the Company's Common Stock for the 1,000,000 issued and
outstanding shares of the Common Stock of Far East at a ratio of 1.4 (one and
four-tenths) shares of the Company's Common Stock for each issued and
outstanding share of Far East's Common Stock.
Pearl was one of the original shareholders of Far East. Prior to 1995,
Pearl and Regent purchased and accumulated 266,000 and 734,000 shares (or 100%
in the aggregate) of the issued and outstanding common stock of Far East for an
aggregate consideration of approximately HK$11,130,000. Broadskill is a Hong
Kong corporation which owns an approximate 44% equity interest in Regent. No
executive officer or director of the Company is an officer or director of Pearl,
Regent or Broadskill. In addition to its direct record ownership of 372,400
shares of the Company's Common Stock, Pearl is also the beneficial owner of
approximately 527,069 shares of the Company's Common Stock through its equity
interest in Regent. Mr. Kwan, and each of Messrs. Wong, Sham and Ms. Wong,
Executive Officers and Directors of the Company and Far East, have equity
interests in Regent and/or Broadskill which if converted into shares of the
Company's Common Stock would represent less than 5% in the case of Mr. Kwan, and
less than 1% of the Company's Common Stock for each of Messrs. Wong and Sham and
Ms. Wong, respectively.
During its fiscal year ended December 31, 1996 ("Fiscal 1996"), the
Company transferred its equity interests in three former subsidiaries, Armiston
(a wholly owned subsidiary), Action (a 51% owned subsidiary) and Euro Electron
(an 80% owned subsidiary) to Regent and Pearl in exchange for the book value
price (an aggregate of HK$10,000) of the Company's interest in these three
subsidiaries.
On November 11, 1996 the Company completed a private placement of an
aggregate of 1,000,000 Warrants (the "Private Warrants") at $.15 per Warrant and
received therefrom aggregate gross proceeds of $150,000. May Davis Group, Inc.
("May Davis") acted as the Company's placement agent in connection with this
private placement and received an aggregate of $19,500 in commissions and
non-accountable expenses. The terms and conditions of the Private Warrants are
identical to the Warrants sold in the Public Offering in March 1997 (the "Public
Warrant"). In March 1997, the Company repurchased 70,000 Private Warrants at
their purchase price for an aggregate repayment of $10,500.
Mr. Leung may be deemed to be a "promoter" of the Company as such term
is defined by the rules promulgated by the Commission under the Securities Act.
As so defined, a promoter is any person who (i) acting alone or in conjunction
with others, took the initiative in founding and organizing an issuer's business
or
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enterprise, or (ii) in connection with founding and organizing the business or
enterprise of an issuer, receives in consideration for services and/or property,
ten percent or more or either of any class of the issuer's securities or the
proceeds therefrom. Mr. Leung was the proponent of the Public Offering to raise
capital for the Company and Far East and of establishing a company in the
British Virgin Islands for that purpose. Mr. Leung is the beneficial owner of
approximately 79% of the Company's shares of Common Stock after giving effect to
the exercise of the 1,100,000 Management Options owned by him.
The Company intends that all transactions between the Company and its
executive officers and directors be on terms no less favorable than could be
obtained from independent third parties and be approved by a majority of the
Company's directors who are not interested in such transactions.
All outstanding balances with related parties are unsecured,
non-interest bearing and are repayable in 1998. The related companies with which
the Company has engaged in transactions are Euro Electron, EuroTherm, Action and
Armiston. During Fiscal 1997 the Company made sales to Action, Euro Electron and
EuroTherm of approximately $4,000, $172,000 and $50,000, respectively.
Additionally, during Fiscal 1997 the Company made purchasers from Action,
Armiston and EuroTherm of approximately $6,000, $36,000 and $598,000,
respectively.
No loans or advances have been or will be made in the future to the
Company's officers, directors or shareholders of at least five (5%) percent of
the issued and outstanding shares of any class of equity securities ("5%-plus
Shareholders"), or their respective affiliates unless such loans are for bona
fide business purposes.
In connection with the Public Offering, the Company sold to May Davis,
for the sum of $10.00, Warrants to purchase up to 60,000 shares of the Company's
Common Stock at $8.25 and Warrants, at a price of $.2475 per Warrant to purchase
up to an additional 60,000 shares of the Company's Common Stock at $5.50 per
share (the "May Davis Warrants"). The May Davis Warrants were not transferable
until March 14, 1998, except to officers and partners of May Davis and selected
dealers who participated in the Public Offering, and are exercisable until March
14, 2002. For the life of the May Davis Warrants, the holders thereof are given
the opportunity to profit from a rise in the market price of the Warrants and/or
Common Stock of the Company with a resulting dilution in the interest of other
securityholders. The Company may find it more difficult to raise additional
equity capital if it should be needed for the business of the Company while the
May Davis Warrants are outstanding, and at any time when the holder of the May
Davis Warrants might be expected to exercise them, the Company would probably be
able to obtain additional equity capital on terms more favorable than those
provided in the May Davis Warrants. The Company has agreed, at its expense, to
register under the Act, on one occasion, and at May Davis' expenses on another
occasion, the May Davis Warrants and/or the underlying securities at the request
of the holder thereof. The Company has also agreed to certain "piggy-back"
registration rights for the holders of the May Davis Warrants and securities
issuable upon exercise thereof.
The Company has also agreed with May Davis, that if the Company, its
current or future subsidiaries, if any, and its principal shareholders, or their
respective affiliates, will until March 14, 2000 provide May Davis with a Right
of First Refusal with respect to any public or private offering of securities to
raise capital. May Davis must agree to undertake any such financing on the same
or better terms as any other financing proposal.
The Company has agreed that for a period of time ending not earlier
than March 14, 2000, May Davis will have the right to designate a person to be a
non-voting advisor to the Company's Board of Directors who will receive the same
compensation as a member of the Board of Directors and who will be indemnified
by the Company against any claims arising out of his participation at meetings
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of the Board of Directors. Alternatively, May Davis has the right, during such
period, to designate one person to be elected to the Company's Board of
Directors. The Company has agreed to use its best effort to obtain the election
of the May Davis designee and such person shall be entitled to receive the same
compensation, expense reimbursement and other benefits as any other non-employee
Director of the Company, if any. May Davis has designated Mr. Goldberg for the
Company's Board of Directors. At the completion of the Public Offering, the
Company retained May Davis to act as a financial consultant for a period of time
concluding on March 14, 2000 for fees aggregating $108,000 which were paid in
full at that time.
The Company has authorized the issuance of 1,400,000 Options to
purchase up to an aggregate of 1,400,000 shares of Common Stock (the "Management
Options") to its officers, directors and employees in such numbers and to such
persons as the Company's Chairman of the Board and Chief Executive Officer may
direct. The Management Options became exercisable on March 14, 1998 for a term
of ten years.
The exercise price and the number of shares of Common Stock purchasable
upon exercise of any Management Options are subject to adjustment upon the
occurrence of certain events, including stock dividends, reclassification,
reorganizations, consolidations, mergers, and certain issuances and redemptions
of Common Stock and securities convertible into or exchangeable for Common Stock
excluding certain issuances of shares of the Company's Common Stock. No
adjustments in the exercise price will be required to be made with respect to
the Management Options until cumulative adjustments amount to $.05. In the event
of any capital reorganization, certain reclassifications of the Common Stock,
any consolidation or merger involving the Company (other than (i) a
consolidation or merger which does not result in any reclassification or change
in the outstanding shares of Common Stock or (ii) the acquisition of Far East or
any other business), or sale of the properties and assets of the Company, as, or
substantially as, an entirety to any other corporation, Management Options will
thereupon become exercisable only for the number of shares of stock or other
securities, assets, or cash to which a holder of the number of shares of Common
Stock of the Company purchasable (at the time of such reorganization,
reclassification, consolidation, merger, or sale) upon exercise of such
Management Options would have been entitled upon such reorganization,
reclassification, consolidation, merger, or sale.
The table below shows, as to each of the executive officers and
directors of the Company and as to all executive officers and directors of the
Company as a group, the following information with respect to Management Options
granted to date: (i) the aggregate amounts of shares of Common Stock subject to
Management Options granted to date; and (ii) the per share exercise price for
the Management Options granted to these individuals. No other options to these
individuals were issued and outstanding as of July 1, 1998.
<TABLE>
<CAPTION>
Names of Executive Shares Subject Per Share
Officers and Directors to Options Exercise Price
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<S> <C> <C>
T.C. Leung........................ 750,000 $5.50
350,000 $4.00
Alex Sham......................... 30,000 $5.50
20,000 $4.00
Jerry Wong........................ 25,000 $5.50
15,000 $4.00
Nancy Wong........................ 22,500 $5.50
7,500 $4.00
C.P. Kwan......................... 22,500 $5.50
7,500 $4.00
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All Executive Officers and
Directors as a Group (7 persons) 1,250,000 $4.00-$5.50(5)
</TABLE>
Other officers and/or employees of the Company have been or will be
granted Management Options to purchase an aggregate of 150,000 Management
Options, all of which will be exercisable at $5.50 per share. No Management
Options have been exercised as of July 1, 1998.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant certifies that it meets all of the requirements for
filing on Form 20-F and has duly caused this Amendment No. 1 to its Annual
Report to be signed on its behalf by the undersigned, thereunto duly authorized.
EURO TECH HOLDINGS COMPANY LIMITED
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(Registrant)
/s/ T.C. Leung
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Chief Executive Officer and Chairman
of the Board
Date: September 9, 1998
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5 Price range.
5
