As filed with the Securities and Exchange Commission on July 9, 1997
Regi
stration Number 333-7242
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CONFIRMING COPY
FORM SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FILED August 26, 1997.
TRB SYSTEMS INTERNATIONAL INC.
(Exact name of Registrant as specified in its charter)
Delaware __________________
22-3522572
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code number) Identification
organization) code number)
TRB Systems International Inc.
Byung Yim, Chairman
4 Becker Farm Road TRB Systems
Roseland, NJ 07068 International
Inc.
(201) 994-4488 4 Becker Farm Road
Roseland, NJ 07068
(Address, including zip code, and telephone number (Address, including
and including area code, of Registrants principal zip
code, telephone
place of business) number including
area code,
executive principal
or agent
for service)
Approximate date of commencement of the proposed sale to the public: The
business day after the date on which this Registration Statement becomes
effective. If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, please check the following box: |_|
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Maximum
Title of each class Dollar Amount Offering Aggregate Amount
of Securities to be to be Price Offering of Regist-
Registered Registered Per Unit Price ration Fee
================================================================================
Common Stock, with
par value of $0.001(1) $ 500 $0.001 $500(1)
$100.00
Common Stock, without
par value of $0.001(2) $ 200 $0.001 $200(2
) $100.00
Common Stock, without
par value of $0.001(3) $ 260 $0.001 $260(3)
$100.00
Common Stock, with
par value of $0.001(4) $ 1,500 $0.001 $1,500(4)
$100.00
Common Stock, with
par value of $0.001(5) $ 250 $0.001 $250(5
) $100.00
Common Stock, with
par value of $0.001(6) $ 1,000 $0.001 $1,000(6)
$100.00
Common Stock, with
par value of $ 0.001(7 $ 200 $0.001 $200(7
) $100.00
Totals $ 3,910 $0.001 $3,910
$700.00
================================================================================
(1) Represents 500,000 shares of common stock issuable at the direction of the
board of directors of the registrant to officers of the registrant, or its
subsidiaries, said shares to be restricted from sale to the public for six
months from the date of issue. The price per share is the actual price
per share the said shares shall be offered at.
(2) Represents 200,000 shares of common stock issuable at the direction of the
board of directors of the registrant to consultants and professional advisors of
the registrant, or its subsidiaries. The price per share is based on the
average offering price of the said shares.
(3) Represents 260,000 shares of common stock issuable at the direction of the
board of directors of the registrant to creditors of the registrant, or its
subsidiaries. The price per share is based on the average price per share
offered.
(4) Represents 1,500,000 shares of common stock issuable at the direction of
the board of directors of the registrant to creditors of the registrant, or its
subsidiaries, said shares to be restricted from sale to the public for one
year from the date of issue. The price per share is based on the average
offering price of the said shares.
(5) Represents 250,000 shares of common stock issuable at the direction of the
board of directors of the registrant to a Creditor of the registrant, or its
subsidiaries. The price per share is based on the offering price of the said
shares.
(6) Represents 1,000,000 shares of common stock issuable at the direction of
the board of directors of the registrant to employees of the registrant, or its
subsidiaries, said shares to be restricted from sale to the public for six
months from the date of issue. The price per share is based on the offering
price of the said shares.
(7) Represents 200,000 shares of common stock issuable at the direction of the
board of directors of the registrant to an investor in the registrant, or its
subsidiaries, said shares to be restricted from sale to the public for six
months from the date of issue. The price per share is based on the offering
price of the said shares.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
will file a further amendment which specifically states that this Registration
Statement will thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933. or until the Registration Statement becomes
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
PAGE 01
This registration statement is comprised of 246 consecutively numbered
pages, including exhibits. The exhibit index called for by Item 601 of
Regulation SB is located at page 53.
Pursuant to Item 601 of Regulation S-B showing location in the Prospectus
of information required by Items 101 through 510 of Regulation SB-2.
Registration Statement
Item Number and Caption Prospectus Caption
101. Description of Business THE COMPANY
102. Description of Property THE COMPANY -
PROPERTY
103. Legal Proceedings LITIGATION
201. Market for Common Stock and CERTAIN MARKET INFORMATION
Related Stockholder Matters
202. Description of Securities to be DESCRIPTION OF SECURITIES
Registered
303. Management's Discussion and MANAGEMENTS DISCUSSION AND
Analysis or Plan of Operation ANALYSIS OF OPERATIONS
& CHANGES IN FINANCIAL
CONDITION
304. Changes in and Disagreements With
Accountants on Accounting and Financial
Disclosure. NOT APPLICABLE
310. Financial Statements FINANCIAL STATEMENTS
401. Directors, Executive MANAGEMENT;
Officers, Promoters and PRINCIPAL STOCKHOLDERS;
CERTAIN
and Control Persons TRANSACTIONS;CONFLICTS OF
INTEREST
402. Executive Compensation MANAGEMENT
403. Security Ownership of Certain PRINCIPAL STOCKHOLDERS;
CERTAIN
Beneficial Owners TRANSACTIONS
and Management
404. Certain Relationships and CERTAIN TRANSACTIONS;
CONFLICTS
Related Transactions OF INTEREST
405. Compliance with Section
16(a) of the Exchange Act MANAGEMENT
501. Forepart of the Registration COVER PAGE
Statement and Outside Front Cover
Page of Prospectus
502. Inside Front Cover and Outside COVER PAGE; INSIDE FRONT
COVER
Back Cover Pages of Prospectus AND OUTSIDE BACK COVER PAGES
Prospectus
503. Summary Information SUMMARY OF THE
PROSPECTUS; RISK
& Risk Factors FACTORS
504. Use of Proceeds USE OF PROCEEDS
505. Determination of Offering Price COVER PAGE; DILUTION;
CERTAIN
MARKET INFORMATION
506. Dilution DILUTION
507. Selling Securities Holders PLAN OF DISTRIBUTION
508. Plan of Distribution COVER PAGE; INSIDE
FRONT
COVER; PLAN OF DISTRIBUTION
509. Interests of Named Experts CERTAIN TRANSACTIONS
and Counsel
510. Disclosure of Commission INDEMNIFICATION
ARRANGEMENTS
PAGE 02
Prospectus Page 01
TRB SYSTEMS INTERNATIONAL INC.
(a Delaware Corporation)
3,910,000 Shares of Common Stock, with a Par Value of $0.001
This offering involves registration of 3,910,000 shares currently held in
treasury, which may be issued at the discretion of the board of directors of
the Company, 1,000,000 shares to the employees of the Company or its
subsidiaries; 500,000 shares to the officers of the Company, and 200,000
shares to consultants and professional advisors of the Company, 200,000 to
investors in the Company, and 2,010,000 to current creditors of the
Corporation. The Company is a holding corporation with one wholly owned
operating subsidiary, TRB Systems Inc., organized pursuant to the laws of
Delaware in 1994, and involved, worldwide, in the manufacture, sale, and
distribution of bicycles, exercise equipment, and motorized two-wheeled
transportation systems.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
========================================================================
Price Per Aggregate Price Expenses & Proceeds to
Share to Public Commissions Company
========================================================================
Shares Unknown (1) Unknown (2) None
(3)
========================================================================
(1) The price per Selling Stockholders' Share to the public will be based on
the bid price for the Company's common stock on the dates of specific sales,
unless shares are sold in private transactions. Consequently, no determination
can be made as to actual pricing matters.
(2) It is anticipated that normal brokerage commissions will be charged by
firms that sell any of the Selling Stockholders' Shares for the account of the
Selling Stockholders and that such commissions will be tied to a percentage of
the sales price; however, no specific information pertaining thereto can be
provided. The Company estimates that it will pay approximately $50,000 in
fixed expenses pertaining to the offering, including accounting fees,
Securities and Exchange Commission, National Association of Securities
Dealers, Inc., printing expenses, transfer agent fees and expenses and
miscellaneous costs.
(3) The shares will be issued as reduction of current debt, converting debt to
equity, and for services rendered. Therefor, there will be no direct proceeds
to the Company. The 200,000 shares reserved for Investors, is for
reorganization of investments made in the subsidiary, prior to its purchase
by the Company.
PAGE 03
Prospectus Page 02-03-04
COLOR PHOTOS OF PRODUCT
Pages 3,4,5 of the First Amendment to the Registration Statement
on Form SB-2, filed with the Securities and Exchange Commission
on September 8, 1997 are incorporated herein by reference
(Additional Information).
PAGES 04-05-06
Prospectus Page 05
TRB SYSTEMS INTERNATIONAL INC.
(a Delaware Corporation)
TRB Systems International Inc.
4 Becker Farm Road, Roseland, NJ 07068
(201) 994-4488
The date of this Prospectus is April 30, 1997
ADDITIONAL INFORMATION
The Company has filed a Registration Statement on Form SB-2 (adopted under
authority of the Securities Act of 1933, as amended) with respect to the
securities offered hereby, with the United States Securities and Exchange
Commission. This Prospectus does not contain all the information set forth in
the Registration Statement and the exhibits and schedules thereto. For further
information, reference is hereby made to the Registration Statement.
Statements contained in this Prospectus as to the contents of any contract or
other document are not necessarily complete, and in each instance reference
is made to the copy of such contract filed as an exhibit to the Registration
Statement, each such statement may be inspected without charge at the Public
Reference Section of the Commission in its Washington, D.C. office and copies of
all or any part thereof may be obtained from the Commission at prescribed
rates. A number of the exhibits included in the Registration Statement have
been incorporated by reference to materials previously filed with the
Securities and Exchange Commission by the Company. Such exhibits will be
provided without charge upon written or oral request addressed to Charles C.
Khym, Esq., General Counsel; TRB Systems International Inc., 39-01 Main
Street, Suite 605, Flushing New York 11354, or by calling (718) 445-1300.
The Company currently does not furnish its stockholders with annual
reports containing financial statements certified by its independent public
accountants and quarterly reports containing unaudited financial information
for the first three quarters of each fiscal year. Prior to the sale of the
Registered Securities, the Company was not subject to the informational
requirements of the Securities Exchange Act of 1934 since its securities were
not registered with the Commission pursuant to the requirements of Sections 13
or 15(d) of the Securities Exchange Act of 1934, as amended. However, as of
the date hereof the Company is required to file reports, including annual
reports on form 10KSB, quarterly reports on Form 10QSB and periodic reports
of current events on Form 8K with the United States Securities and Exchange
Commission.
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus. Any information or representation not contained herein, if given or
made, must not be relied upon as having been authorized by the Company or by
the Selling Stockholders. Neither the delivery of this Prospectus nor any
sale made hereunder shall under any circumstances create any implication that
there has been no change in the affairs of the Company since the date hereof.
This Prospectus does not constitute an offer or a solicitation of any offer
to buy any securities offered hereby in any jurisdiction to any person to
whom it is unlawful to make such an offer or solicitation in such jurisdiction.
Until January 30, 1998, all dealers effecting transactions in the
registered securities, whether or not participating in this distribution, may
be required to deliver a Prospectus. This is in addition to the obligation of
dealers to deliver a Prospectus when acting as underwriters and with respect to
their unsold allotments or subscriptions.
PAGE 07
Prospectus Page 06
GLOSSARY OF TERMS
AS USED HEREIN, THE FOLLOWING HAVE THE MEANINGS SET FORTH BELOW:
TRB The collective and generic term for the Company's subsidiary,
TRB Systems Inc., organized in 1994, pursuant to the laws of the State of
Delaware.
Capital Stock. The generic term for the Company's Common Stock.
Common Stock. The shares of the Company's common stock, with a par value of
$0.001, of which 30,000,000 shares are authorized and 11,840,523 are issued and
outstanding (see "DESCRIPTION OF SECURITIES").
NASD. National Association of Securities Dealers, Inc. The self-
regulatory body registered under the Securities Exchange Act of 1934, as
amended, responsible for regulation of securities brokers and dealers, and the
operator of the NASDAQ inter-dealer automated quotation system's bulletin board
over which Company securities are traded.
Registered Securities The generic and collective term for the 3,910,000
shares held by the Company in treasury being registered.
The Company. TRB Systems International Inc., a Delaware Corporation and
the
issuer of the securities registered hereby.
PROSPECTUS SUMMARY
The following is a summary of certain information contained in this
Prospectus and is qualified in its entirety by the more detailed information
and financial statements (including notes thereto) appearing elsewhere herein.
THE COMPANY
The Company was incorporated in the State of Delaware on April 9, 1997.
The Company was organized as a purchaser of TRB Systems Inc., and purchased the
said company on April 18, 1997.
The Company is currently a holding company for one operating subsidiary,
TRB Systems Inc., organized pursuant to the laws of the State of Delaware. TRB
Systems Inc. has never been a party to any material reclassification, merger,
consolidation, or purchase or sale of a significant amount of assets not in the
ordinary course of business other than with respect to its acquisition by the
Company. For purposes of this prospectus, the Company's subsidiary is
sometimes referred to as "TRB".
TRB Systems Inc., a Delaware corporation formed in April, 1994, was
formed to market, worldwide, the Transbar Power System (TPS) technology and
its applications to the bicycle, exercycle, wheelchair, and motorized
bicycles. These technology rights were assigned from ABL Properties Company,
the owner of the patent rights to the TPS technology, to TRB Systems Inc. (See
"Organization").
Between 1983 and 1990, over $7.9 million was spent by Alenax
Corporation (TRB's predecessor), owned and operated by Mr. Byung Yim,
president of both TRB and TRB Systems International Inc., developing and
marketing a line of TPS bicycles, and in 1988 the company sold a total of
8,500 TPS bicycles. This experience has given rise to the new technologically
superior product line that TRB is ready to market.
PAGE 08
Prospectus Page 07
In the early years, Alenax's management wrestled with liquidity problems
and difficulties with its manufacturing process. During that time, the
company obtained four domestic distributorship agreements totaling $52 million
in sales, two international licensing agreements, and also completed
manufacture and test of the first prototypes of its exercycle and tricycle.
Unfortunately, during a corporate relocation in 1988 from Rochester, New York
to Piscataway, New Jersey, Alenax lost its entire inventory, including
corporate materials, through the negligence of a trucking company that
eventually declared bankruptcy. Due to this working capital loss, Alenax
chose to shut down operations while continuing with TPS product development.
TRB, having been assigned by ABL Properties Corp. (ABL) the exclusive
rights to market and enhance the vehicles using the Transbar Power System
(TPS), intends to create a new generation of cycling and fitness products
using the patented (by ABL ) Transbar Power System technology. Although TRB
is a new company, its TPS technology has undergone considerable development
over the years, as abovementioned, by Alenax. The characteristic of the TPS
technology is similar, yet biomechanically superior, to that used in stepper
machines, which is currently one of the fastest growing segments of exercise
equipment.
TRB's technology allows users to engage in biomechanically correct
exercise without the trauma associated with many alternate forms of exercise.
Orthopedic doctors and physical therapists have prescribed the TPS bike for
patients because of the variable stroke, non-impact motion it provides.
TRB's products are also appealing to older consumers and TRB is
well-positioned to benefit from the aging of the U.S. population. The TPS
motion provides older consumers with an exercise that is cardiovascular and
anaerobic, while at the same time is safe and gentle.
TRB's immediate goals are (i) to conduct product test marketing in
target market segments, (ii) to identify and establish strategic relationships
domestically and internationally, (iii) to develop initial sales/marketing
materials, literature and programs, (iv) to accomplish regional product
introduction in 1997, and (v) to license its technology internationally.
TRB intends to target four markets during its first year:
1) Alternative Transportation, Recreation & Leisure, Health & Fitness
2) Senior Citizens
3) Rehabilitation & Therapeutic
4) International
TRB already has over one million dollars worth of sales from licensing
agreements, as well as sales from sales commitments by licensees (SEE
"Selected Financial Information")
The Company's current mailing address is 4 Becker Farm Road, Roseland,
NJ 07068; and its phone number is (201) 994-4488.
SELECTED FINANCIAL INFORMATION
Set forth below is selected financial information of the Company and its
consolidated subsidiary. The provided information is derived from the more
detailed audited consolidated financial statements as of April 30, 1997, and
should be read in conjunction with the audited consolidated financial
statements including elsewhere in this Prospectus and are qualified in their
entirety by reference thereto (see "FINANCIAL STATEMENTS").
PAGE 09
Prospectus Page 08
SELECTED FINANCIAL DATA
Audited Audited
Audited Audited
10 months annual
annu
al annual
Ended Ended
Ended
Ended
April,30 June 30
June
30 June 30
1997 1996
19
95 1994
OPERATING RESULTS*
(all data is in $US)
Continuing Operations
Gross Revenue $1,130,000 $ 79,982 $ 60,000 $
65,000
Other Income 5 135 45
74
Total Income 1,130,005 80,117 60,045 65,074
Expenses:
Total Expenses 371,302 229,734 289,510
263,644
Net profit (loss) 758,703 (149,617) (238,465) (198,570)
before taxes
Income taxes(recovery) 29,571 ( 59,019) ( 82,646) (
76,250)
Net Profit(Loss) 729,128 ( 90,598) (155,819) (122,320)
Net profit (loss) per 0.06158 (177.643) (305.527)
(239.843)
share ($)
FINANCIAL POSITION
Current Assets $1,127,585 $ 7,200 $ 7,482
$
8,229
Other Assets 1,293,617 307,644 240,769
126,390
Total Assets 2,421,202 314,844 248,251
134,619
Current Liabilities 208,570 683,253 525,390
255,939
Other Liabilities 314,000 0 0
0
Total Liabilities 522,570 683,253 525,390
255,939
Stockholder's equity 1,898,632 ( 363,737) ( 277,139) (
121,320)
SECURITIES OUTSTANDING
As of the date of this Prospectus, 11,840,523 shares of Common stock were
issued and outstanding, and 1,819,477 were reserved for issuance at the
discretion of the Board of Directors. The change in shareholders' equity,
should all the reserved stock registered herein be sold, will be an increase
in the number of stock by up to 1,819,477 in the quantity of shares of Common
Stock outstanding (see "CAPITALIZATION", "PLAN OF DISTRIBUTION" and "PRINCIPAL
STOCKHOLDERS")
CURRENT STOCKHOLDERS
Approximately 250 persons own shares of the Company's Common Stock (see
"CERTAIN TRANSACTIONS" and "PRINCIPAL STOCKHOLDERS").
PAGE 10
Prospectus Page 09
DEFINITION OF TERMS
Certain terms used in this Prospectus, usually identified by initial
capital letters, are defined in the section of this Prospectus captioned
"GLOSSARY OF TERMS."
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE IN NATURE AND INVOLVE A
DEGREE OF RISK. THEY SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO
LOSE THEIR INVESTMENT IN THE COMPANY WITHOUT A MATERIALLY ADVERSE IMPACT ON
THEIR STANDARD OF LIVING OR FINANCIAL SECURITY. THEREFORE, PRIOR TO PURCHASE
EACH PROSPECTIVE INVESTOR SHOULD CONSIDER THE FOLLOWING RISK FACTORS, AS WELL AS
ALL OTHER INFORMATION SET FORTH ELSEWHERE IN THIS PROSPECTUS.
RISKS OF THE OFFERING
Potential Future Sales Pursuant To Rule 144.
Generally, under Rule 144, a person (or persons whose shares are
aggregated) who has satisfied a two year holding period may, under certain
circumstances, sell within any three month period a number of shares which does
not exceed the greater of one percent (1%) of the then outstanding Common Stock
or the average weekly trading volume during the four calendar weeks prior to
such sale. Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has not been an
affiliate of the Company for at least 90 days and who has satisfied a three
year holding period. The two year holding period for all the Company's
currently outstanding restricted shares required by Rule 144 has expired,
except with reference to the shares issued to Mr. Byung Yim, the Company's
president, and his affiliates, in exchange for the capital stock of TRB
during April of 1997, which will expire during April of 1998 and thereafter,
the holders may periodically sell their Company securities, subject to
applicable volume limitations, restrictions on the manner of sale and
applicable reporting requirements (see "CERTAIN TRANSACTIONS").
Depression of Market Price
The sale of Company securities pursuant to the provisions of Rule 144 or
pursuant to this Registration Statement will increase the amount of Company
securities available for public purchase and consequently, may adverse affect
the market price for the Company's Common Stock (see "DESCRIPTION OF
SECURITIES" and "UNDERWRITING").
Absence of Underwriter
The Selling Stockholders' Shares will be sold directly by the Selling
Stockholders, consequently, no underwriter is expected to be involved
therewith. The absence of an underwriter means that there will be less due
diligence in conjunction with this offering than would be performed in an
underwritten offering, and furthermore, that there are no brokers committed
to stabilizing the market for the Company's securities.
BUSINESS RISKS
No Dividends
The Company has never paid dividends on its Common Stock. The Company
does not anticipate paying dividends for the foreseeable future and intends to
devote earnings, if any,
PAGE 11
Prospectus Page 10
to the development of the Company's business. The payment of dividends in
the future rests within the discretion of the Company's Board of Directors
and will depend on the existence of substantial earnings,the Company's
financial requirements and other factors. TRB has paid nosubstantial
dividends in the past; and earnings for the foreseeable future
are expected to be retained to finance corporate business expansion.
Material Reliance Upon Officers.
The Company is wholly dependent upon the personal efforts and abilities of
its officers and directors, especially Mr. Byung Yim. The loss of or
unavailability to the Company of the services of any of its officers or
directors would have a materially adverse effect on the Company's business
prospects and potential earning capacity. The Company does not carry any
insurance to compensate for any such loss, nor does it intend to obtain "key
man" life insurance covering its officers or directors.
Possible Loss of Entire Investment.
Prospective investors should be aware that if the Company is not
successful in its endeavors, their entire investment in the Company could
become worthless. Even if the Company is successful in its programs there
can be no assurances that investors will derive a profit from their investment.
Dilution.
The Company's Current Stockholders acquire their Common Stock at an
average cost of $.001 per share. Based upon the assumptions set forth under
the caption "DILUTION," this offering involves a potential future dilution to
investors; see "DILUTION".
FOR ALL OF THE AFORESAID REASONS, AND OTHERS SET FORTH HEREIN, THESE
SECURITIES INVOLVE A HIGH DEGREE OF RISK. ANY PERSON CONSIDERING AN INVESTMENT
IN THE SECURITIES OFFERED HEREBY SHOULD BE AWARE OF THESE AND OTHER FACTORS SET
FORTH IN THIS PROSPECTUS. THESE SECURITIES SHOULD ONLY BE PURCHASED BY PERSONS
WHO CAN AFFORD A TOTAL LOSS OF THEIR INVESTMENT IN THE COMPANY AND HAVE NO
IMMEDIATE NEED FOR A RETURN ON THEIR INVESTMENT.
DILUTION
Once Registration of all shares is effected, there is an immediate
potential for the dilution of the 11,840,523 outstanding shares by the issuance
of the 1,819,477 shares registered and issuable at the discretion of the Board
of Directors of the Company, as well as the potential dilution in the event the
Company chooses to raise money through the issuance of common stock.
USE OF PROCEEDS
THE FOREGOING ESTIMATES ARE SUBJECT TO MATERIAL CHANGE IF, IN THE OPINION
OF THE COMPANY'S BOARD OF DIRECTORS, THE ACTUAL OPERATIONS OF THE COMPANY
JUSTIFY DIFFERENT EXPENDITURES OR A DIFFERENT ALLOCATION OF PRIORITIES.
CERTAIN MARKET INFORMATION
Market for Common Equity
Prior to April 30, 1997, there was no trading of the Company's shares of
common stock in the over-the-counter-market. The Company's common stock is
presently not traded in the over-the-counter
PAGE 12
Prospectus Page 11
market, but is expected to be so traded by November 1, 1997 on the NASDAQ
Bulletin Board System. The following table indicates the high and low bid as
quoted for the Company's common stock. The following over-the-counter
quotations reflect inter-dealer prices, without retail mark-up, mark-down,
or commission, and may not necessarily represent actual transactions.
The range of the reported high and low bid quotations
have been derived primarily from information quoted on the NASDAQ Bulletin
Board System.
Bid Price
For the Quarter Ended High Low
Prior to April 30, 1997 * *
* No verifiable transactions.
Security Holders
As of April, 30, 1997, the latest practicable date for which information
is available, the Company had approximately 250 common stock holders.
Dividends
There have been no cash dividends declared or paid since the inception the
Company and no dividends are contemplated to be paid in the foreseeable future.
No dividends were paid by the Company's subsidiaries, prior to their
acquisition by the Company; however, it is anticipated that for the foreseeable
future, the Company's profits (if any) will be reinvested in the Company rather
than distributed as dividends.
Offering Price
No offering price has been pre-established for the reserved shares
registered. Rather, it is anticipated that the Selling Stockholders will sell
them into the public market at such times as the price is deemed favorable,
when considered in light of the recipients' capital requirements. The
recipients will be the sole determiners of appropriate pricing, on a case by
case basis.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
April 30, 1997, as adjusted to reflect the reserved shares.
April
Title of Class 30, 1997
Stockholders' Equity
Stated Value of Shares Issued $ 11,841
Additional Paid-In Capital $1,526,396
Retained Earnings (Loss) $ 360,395
Debt
Total Liabilities $ 522,570
PAGE 13
Prospectus Page 12
THE COMPANY
HISTORICAL DATA
The Company was incorporated in the State of Delaware on April 9, 1997.
The Company was organized as a purchaser of TRB Systems Inc., and purchased the
said company on April 18, 1997.
The Company is currently a holding company for one operating subsidiary,
TRB Systems Inc., organized pursuant to the laws of the State of Delaware. TRB
Systems Inc. has never been a party to any material reclassification, merger,
consolidation, or purchase or sale of a significant amount of assets not in the
ordinary course of business other than with respect to its acquisition by the
Company. For purposes of this prospectus, the Company's subsidiary is
sometimes referred to as "TRB".
TRB Systems Inc., a Delaware corporation formed in April, 1994, was
formed to market, worldwide, the Transbar Power System (TPS) technology and
its applications to the bicycle, exercycle, wheelchair, and motorized
bicycles. These technology rights were assigned from ABL Properties, the
owner of the patent rights to the TPS technology, to TRB Systems Inc. (See
"Organization").
Between 1983 and 1990, over $7.9 million was spent by Alenax
Corporation (TRB's predecessor), owned and operated by Mr. Byung Yim,
president of both TRB and TRB Systems International Inc., developing and
marketing a line of TPS bicycles, and in 1988 the company sold a total of
8,500 TPS bicycles. This experience has given rise to the new technologically
superior product line that TRB is ready to market.
In the early years, Alenax's management wrestled with liquidity problems
and difficulties with its manufacturing process. During that time, the
company obtained four domestic distributorship agreements totaling $52 million
in sales, two international licensing agreements, and also completed
manufacture and test of the first prototypes of its exercycle and tricycle.
Unfortunately, during a corporate relocation in 1988 from Rochester, New York
to Piscataway, New Jersey, Alenax lost its entire inventory, including
corporate materials, through the negligence of a trucking company that
eventually declared bankruptcy. Due to this working capital loss, Alenax
chose to shut down operations while continuing with TPS product development.
TRB, having been assigned by ABL Properties the exclusive rights to
market and enhance the vehicles using the Transbar Power System (TPS), intends
to create a new generation of cycling and fitness products using the patented
Transbar Power System technology. Although TRB is a new company, its TPS
technology has undergone considerable development over the years, as
abovementioned, by Alenax. The characteristic of the TPS technology is
similar, yet biomechanically superior, to that used in stepper machines, which
is currently on of the fastest growing segments of exercise equipment.
TRB's technology allows users to engage in biomechanically correct
exercise without the trauma associated with many alternate forms of exercise.
The Company's products have been endorsed by numerous professionals in the
medical and fitness community. Orthopedic doctors and physical therapists
have prescribed the TPS bike for patients because of the variable stroke,
non-impact motion it provides.
TRB's products are also appealing to older consumers and TRB is
well-positioned to benefit from the aging U.S. population. The TPS motion
provides older consumers with an exercise that is cardiovascular and
anaerobic, while at the same time is safe and gentle.
TRB's goals are (i) to conduct product test marketing in target market
segments, (ii) to identify and establish strategic relationships domestically
and internationally, (iii) to develop initial sales/marketing materials,
literature and programs, (iv) to accomplish regional product introduction in
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Prospectus Page 13
1997, and (v) to license its technology internationally.
TRB intends to target four markets during its first year:
1) Alternative Transportation, Recreation & Leisure, Health & Fitness
2) Senior Citizens
3) Rehabilitation & Therapeutic
4) International
TRB already has over one million dollars worth of sales from licensing
agreements, as well as sales from sales commitments by licensees (SEE
"Selected Financial Information")
On April 18, 1997, the Company purchased TRB pursuant to and agreement
whereby Motion Plus International Corp. was paid 9,750,000 shares by the
Company for TRB.
BUSINESS
TRB Systems International Inc., organized under the laws of the State of
Delaware in April, 1997, is a holding company for TRB Systems Inc., a Delaware
corporation formed in April, 1994, formed to market, worldwide, the Transbar
Power System (TPS) technology and its applications to the bicycle, exercycle,
wheelchair and motorized bicycle. These technology rights were assigned from
ABL Properties, the owner of the patent rights to the TPS technology, to TRB
Systems Inc.
BUSINESS DEVELOPMENT
TRB has never been a party to any material reclassification, merger,
consolidation, or purchase or sale of a significant amount of assets not in the
ordinary course of business.
Background Information
The Company was incorporated in the State of Delaware on April 9, 1997.
The Company was organized as a purchaser of TRB Systems Inc., and purchased the
said company on April 18, 1997.
The Company is currently a holding company for one operating subsidiary,
TRB Systems Inc., organized pursuant to the laws of the State of Delaware. TRB
Systems Inc. has never been a party to any material reclassification, merger,
consolidation, or purchase or sale of a significant amount of assets not in the
ordinary course of business other than with respect to its acquisition by the
Company. For purposes of this prospectus, the Company's subsidiary is
sometimes referred to as "TRB".
TRB Systems Inc., a Delaware corporation formed in April, 1994, was
formed to market, worldwide, the Transbar Power System (TPS) technology and
its applications to the bicycle, exercycle and wheelchair. These technology
rights were assigned from ABL Properties, the owner of the patent rights to
the TPS technology, to TRB Systems Inc. (See "Organization").
Between 1983 and 1990, over $7.9 million was spent by Alenax
Corporation (TRB's predecessor), owned and operated by Mr. Byung Yim,
president of both TRB and TRB Systems International Inc., developing and
marketing a line of TPS bicycles, and in 1988 the company sold a total of
8,500 TPS bicycles. This experience has given rise to the new technologically
superior product line that TRB is ready to market.
In the early years, Alenax's management wrestled with liquidity problems
and difficulties with its manufacturing process. During that time, the
company obtained four domestic distributorship agreements totaling $52 million
in sales, two international licensing agreements, and also completed
manufacture and test of the first prototypes of its exercycle and tricycle.
Unfortunately, during a corporate relocation in 1988 from Rochester, New York
to Piscataway, New Jersey, Alenax lost its entire
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Prospectus Page 14
inventory, including corporate materials, through the negligence of a
trucking company that eventually declared bankruptcy. Due to this working
capital loss, Alenax chose to shut down operations while continuing with TPS
product development.
TRB, having been assigned by ABL Properties the exclusive rights to
market and enhance the vehicles using the Transbar Power System (TPS), intends
to create a new generation of cycling and fitness products using the patented
Transbar Power System technology. Although TRB is a new company, its TPS
technology has undergone considerable development over the years, as
abovementioned, by Alenax. The characteristic of the TPS technology is
similar, yet biomechanically superior, to that used in stepper machines, which
is currently one of the fastest growing segment of exercise equipment.
TRB's technology allows users to engage in biomechanically correct
exercise without the trauma associated with many alternate forms of exercise.
The Company's products have been endorsed by numerous professionals in the
medical and fitness community. Orthopedic doctors and physical therapists
have prescribed the TPS bike for patients because of the variable stroke,
non-impact motion it provides.
TRB's products are also appealing to older consumers and TRB is
well-positioned to benefit from the aging U.S. population. The TPS motion
provides older consumers with an exercise that is cardiovascular and
anaerobic, while at the same time is safe and gentle.
TRB's goals are (i) to conduct product test marketing in target market
segments, (ii) to identify and establish strategic relationships domestically
and internationally, (iii) to develop initial sales/marketing materials,
literature and programs, (iv) to accomplish regional product introduction in
1997, and (v) to license its technology internationally.
TRB intends to target four markets during its first year:
1) Alternative Transportation, Recreation & Leisure, Health & Fitness
2) Senior Citizens
3) Rehabilitation & Therapeutic
4) International
TRB already has over one million dollars worth of sales from
licensing agreements, as well as sales from sales commitments by licensees
(SEE "Selected Financial Information")
BUSINESS
Principal Products or Services and Their Market
PRODUCT DEVELOPMENT
Preliminary market research indicates that the therapeutic market is
driven primarily by product performance, while non-therapeutic markets are
more sensitive to price. The Company intends to focus its product development
and production efforts for the first year on three lines of products:
bicycles, electric bicycles, and ergometers. TRB's introductory bicycle line,
propelled exclusively by the TPS, will consist of models with multiple sizes
for men and women. This initial line will closely resemble the current
popular cruiser and mountain bikes that offer a comfortable upright riding
position.
Product development will continue with the introduction of an adult
tricycle. Lightweight, higher performance bicycles will eventually also be
introduced to appeal to the performance biking community. Other term products
will be developed to meet the dynamic and continually changing needs of the
market.
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PATENT PROTECTION
Patents covering the speed change and/or propulsion mechanism of the
Transbar Power System have been obtained and are owned by ABL in the U.S.,
China, India, Australia, Taiwan, Japan, and Korea, and a patents are pending
in Europe and Canada. TRB has the exclusive worldwide licensing rights under
all TPS patents, except for Taiwan and South Korea.
TRB PRODUCTS AND TECHNOLOGY
The TPS technology has many applications. TRB will initially focus on
three main product groups; a select line of bicycles, electric bicycles, and
two types of ergometers. Other new product lines and licensing opportunities
will be pursued through third party alliances.
TPS BICYCLE
TPS bicycles are high quality, sophisticated products that closely
resemble conventional bicycles. The TPS bicycle's unique design provides a
smooth, up and down pumping, or stepping action which closely resembles the
body's natural walking and running motion. This is the most powerful movement
a leg can make, reaching a maximum when almost fully extended. TRB's system
takes advantage of these biomechanical facts.
The bicycle's operating principles are relatively simple. The pedal
levers travel up and down through the maximum power range that has an arc of
135 degrees. As the lever on one side is depressed, the opposing lever is
raised. A full lever stroke or a partial stroke may be applied to propel the
bicycle. Lever strokes require far less leg motion than the 360 degree
movement required with a conventional bicycle.
Research indicates that the TPS bicycle provides a significant increase
in propulsion power versus conventional circular pedaling models. The
propelling force of the TPS lever is constant, as opposed to the variable,
circular ascending and descending crank motion of conventional bicycles. The
levers which drive the transbar system do not revolve, and their length can
therefore be increased to take advantage of the power of leverage. Since the
levers do not revolve, the TPS bike permits greater ground pedal clearance
over rough terrain and around turns. Propulsion of a bicycle using the TPS
results in significantly greater distance traveled, for a given expenditure of
effort, than on the same bicycle using conventional bicycle technology.
The overall appearance of the TRB bicycle closely resembles that of the
conventional bicycle. The major difference between TRB's bike and conventional
bikes is the TPS, which has three main components:
TRANSBAR Two opposing bars that are attached directly to the pedal levers.
Each Transbar is interconnected by a chain cable to the hub assembly.
REAR HUB A dual ratcheting sprocket which is engaged by chains that connect
the two opposing Transbars.
SEE-SAW The component allowing for the opposing movement of the two
IDLER Transbars.
TPS gear changes are always sequential, and the chain is always in line
with the drive sprockets making it virtually impossible to "throw a chain," as
with conventional bicycles. Changing gears is accomplished by a single,
positive shift control as compared to dual levers on a conventional 21 or 24
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Prospectus Page 16
speed. The pedal lever is attached to the Transbar at a precise angle to
allow maximum power transfer from rider to machine.
The TRB BIKE is offered in five (5) models; Mountain Bike(MTB), Leisure
Bike, BMX(Children/Youth), ATB(all-terrain), and CROSS-BIKE. In mass
production, TRB will offer a pedal arm in lengths of either 225mm or 250mm.
This will increase the force of each stroke and increase speed considerably
compared to the conventional pedal length of 170mm. TRB plans to focus
initially on the single action, natural stepping motion in all the bikes with
the exception of a 20" JUVENILE BIKE that will be introduced with our
proprietary multifunctional pedal action, with 6 separate pedal functions
possible. Our tricycle will follow within one(1) year.
TRB's research indicates that first time riders, regular bicyclists, and
the older population all like the feel of the TRB BIKE better than a
conventional bike. Women like the fact they can wear a skirt with comfort
while riding, and those with stiff joints, limited range of motion will attest
to the ease of natural motion of TRB bike's pedal action compared to that of
the conventional bike. The most conventional bikes are not structurally or
functionally designed specifically for rehabilitation per se. The "transbar
technology" fills a large void in this huge untapped market, especially in the
"graying population". It also is an easier motion for the beginner.
The transbar configuration in TRB's bike allows the rehabilitating
person (a market segment with a growth of 500,000 persons annually in the US)
who uses our bike in a stationary mode (sits on a stand) to transfer the
natural gait motion of 135 degrees from the inside to the outdoor with the
same bike (without the stand). The TRB pedal action puts less strain and
compression on the knee, hip, and/or ankle. TRB's initial goal is to provide
a faster, more efficient bike with less wear and tear on the legs, knees,
ankles, hips, and lower back. TRB will attack the high-end professional rider
market in the second phase of our business plan. TRB is conducting care
research to verify the speed and efficiency of our racing prototype (i.e.,
longer pedal arm, therefore greater force stroke).
FITNESS/ HOME TRAINER
TRB's fitness and home trainer was an outgrowth of our experience with
physical therapists who used our "outdoor bike" concept of the natural gait
motion for their patients. They wanted a graded capability of ROM in the
stationary bike, as the patient moved from a narrow range of motion to a wider
and eventually to the 360 degree, circular motion that they were accustomed
to, in typical rehabilitative procedure. TRB's VersiTraniner meets that demand
with a unique training and rehabilitative device that provides six(6)
different sets of exercises.
Lever Propulsion-Action
1. Alternate up and down pumping motion
2. Simultaneous with both feet parallel to each other
3. Bilateral-One foot pumps while the other foot rests motionless
4. One foot pumps 360 degrees while the other foot rest motionless
Conventional Motion-Conventional Rotary Pedal Action
5. 360 degree rotation-conventional bike pedaling-opposed pedals
6. Parallel pedaling-360 degree rotation
The VersiTrainer allows an individual to exercise their abdominals,
hips(lateral rotators), quadriceps, hamstrings, and gluteus(butt) muscles.
All actions are performed in the correct biomechanical positions(unlike the
latest rage, Health Rider, which had sales of over $500,000,000.)
Professional cyclists, orthotists, and therapists are excited about this
prototype product which is now in the final stages completion. Numerous
manufacturers of equipment have expressed interest in buying or distributing
the final VersiTrainer. TRB is in preliminary discussion with NordicTrack.
TRB feels this product has the capability to match or succeed, NordicTrack's
cross-country skier at it's peak of sale of $600 million per year.
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Prospectus Page 17
ELECTRIC BIKE
POWER+BIKE is an outdoor bike that uses the same natural "up-down"
motion of all the TRB bicycles but with the ability to, with the twist of the
handle, become an electric bike with speed capability of 23mph. Our prototype
was field tested (ridden every day) for 1 year in NYC by a NYU student, 6'4"
and over 200lbs. His comments allowed us to further improve the model and
lower its manufacturing costs such that TRB feels confident of selling 30,000
per month after a brief ramp-up. The student said, "Every 10 blocks someone
wanted to know where they could buy one." TRB is extremely excited about this
product, as our initial product drew raves from literally everyone that rode
it. TRB has had numerous equipment distributors who want to market and sell
the POWER+BIKE. TRB has refined it, improved its capabilities, lowered costs
and improved margin capabilities, and is in the process of remodeling a new
hi-tech aerodynamic shell to shroud the bike's frame. TRB's POWER+BIKE is
strategically positioned, not specifically for the luxury market, which has
three new entries this year Bricklin, Mercedes, and Porsche. All three are
designed similar to a moped, are heavy (50lbs or more), and costly, at prices
between $1400-$5000. By comparison, TRB's POWER+BIKE is 23lbs, light and
efficient enough for the senior citizen and women's market (can be pedaled
comfortably in a business skirt or suit) and sleek enough for the "Generation
X" market appeal, sophisticated enough for the urban businessman, cool and
convenience for the outdoor family and RV enthusiasts, and safe and practical
for the recovering heart attack patient who wants to exercise but does not
want to be stuck too far from home. With a retail cost of $600 and a
manufacturing costs at $200, along with the added capabilities of folding the
POWER+BIKE into a POWERPACK so it can be hung upon the back of a door, TRB
believes it can capture the largest market share within this emerging market.
TARGET MARKETS
Senior Market with 64 million over the age of 50. We will focus on the
Sunbelt States: Florida, Arizona, New Mexico, Nevada, California, Texas as
well as North Carolina, South Carolina, and Virginia. Organization such as
AARP (American Association of Retired Personnel) with over 5 million members
will be a main target. This market will be cross-prospected by other major
pyschographics such Recreational Vehicle and TimeShare enthusiasts.
Recreation Vehicle Enthusiasts. Reports by the Recreational Vehicle
International Association (RVIA) have shown that there are 9 million RVs with
2.5 users per RV for 22.5 million RV enthusiasts. We have targeted RV camps
in Palms Desert (California), Lake Conroe (Houston), as well as KOA
(Campgrounds of America) and Coast-to-Coast Florida, two of the larger leaders
in RV and Campgrounds.
Time Share Market. There are 2500 Time Share Properties with 64 million
owners. We have contacted key sales personnel in a new site and are in
negotiation to have the TRB POWER PLUS BIKE to be a premium when buying a Time
Share unit.
Universities/Colleges-public and private. Nationally, there are 14
million students. We have set-up a College Campus Student Leader Program in
the past with our TRB outdoor bicycle(Alenax), and intend to mimic in the main
the same marketing and sales campaign to colleges and universities. We will
roll-out a similar campaign at a later date to the Prep School market with
close to 1 million students.
TRB will also select large specialty store as well as a consortium that
sell Health Clubs in over 19 Western States. We will develop a campaign with
International Spa, the professional Spa organization and will exhibit at their
international trade show. There are over 2500 Spas in this organization.
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ALTERNATIVE PRODUCTS
The TPS technology has many applications for future products. Some
products under consideration include:
1. wheelchairs;
2. adult tricycles;
3. outdoor recumbent (reclining) bicycles;
4. arm/shoulder ergometers.
The outdoor recumbent bicycle has been extremely well received by
several Fortune 500 companies, based on a working prototype presented to such
companies by Dr. Dennis Colacino, COO of the Ergometer Division of TRB. (See
"Management").
The Market
TRB will focus on four markets in its first year of operation.
ALTERNATIVE TRANSPORTATION, RECREATION & LEISURE, HEALTH & FITNESS
This market is made up of more than 60 million individuals who currently
exercise regularly. The TRB products that will appeal to this market are the
Versi Trainer and the outdoor TPS bicycle.
Retail
From 1985 to 1995, the U.S. bike market grew at close to a 6% annual
rate. The retail industry has averaged approximately $3 billion annually
through the 1980's and is expected to reach $5 billion by 2000. According to
the National Sporting Goods Association ("NSGA"), the retail market for home
exercise and fitness equipment grew at a compound annual growth rate of 10.5%,
from approximately $1.2 billion in 1987 to an estimated $2.5 billion in 1997.
The sale of aerobic conditioning equipment, including stair climbing
equipment, treadmills, cross country ski exercisers, etc., accounted for $2.0
billion in 1995, or 73.7% of this total. In this industry, the stepper market
is the fastest growing segment. The TPS bicycle will be attractive to this
segment because it allows the stepper motion and muscle conditioning to be
taken outdoors.
Health and Fitness Facilities
To stay competitive, commercial health and fitness facilities have
generally found that they must continue to offer their members
state-of-the-art equipment and programs. As a consequence, health and fitness
facilities typically will spend increasingly more on equipment just to keep
pace. With the number of health and fitness facilities in the U.S. estimated
at 12,500 ( IRSA estimate), there is significant competition among
neighboring
clubs that are facing a saturated market. These facilities find they must
offer their members every possible means of motivation to keep them coming
back. Consequently, health and fitness facilities are driven by the market to
respond very quickly to new products. TRB's recumbent ergometer (Versi
Trainer) will offer health club goers the opportunity to combine conventional
circular motion with the TPS stepper motion in a single machine.
SENIOR CITIZENS
The senior market is the segment of the population over the age of 50,
which includes approximately 64 million Americans (25.6% of the U.S.
population). With the aging of the Baby Boomers, this number is going to
change markedly over the next two decades. By the year 2010, it is projected
that 96 million Americans (32.1% of the population) will be over the age of
50.
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The aging of the U.S. population, combined with the rapidly escalating
cost of health care services, has resulted in an intensifying concern about
the efficiency and effectiveness of the U.S. health care system. As a result,
there is a growing need for individuals, particularly older adults, to
participate regularly in safe, functional and efficient exercise which
combines aerobic conditioning and resistance training.
Historical and Projected U.S. Population Demographics
(in millions)
1970 1992 2000 2005 2010
Total Population 204.0 254.8 274.2 286.3 298.9
Population Age 50 & Over 49.9 65.2 75.6 85.0 95.8
% of Total 24.5 25.6 27.6 29.7 32.1
Population Age 65 & Over 20.0 32.1 34.4 35.8 38.8
% of Total 9.8 12.6 12.5 12.5 13.0
Historical data from U.S. Department of Commerce. Projected data from
Woods & Poole Economics.
Only recently has the medical community begun seriously to evaluate and
appreciate the importance of exercise for older adults. Properly prescribed,
exercise can combat the muscular atrophy associated with aging, improve
cardiovascular conditioning, and strengthen and protect the body against
injury. In addition, exercise can preserve and extend an individual's level
of physical independence and quality of life.
To date, walking has been the number one form of exercise for seniors.
Walking is practiced more than twice as much as any other activity, and almost
50% of all seniors walk for exercise on a regular basis. TRB's TPS technology
offers these individuals an alternative form of exercise, comparable to
walking, that generates better cardiovascular results while using similar
muscles with less joint impact.
Seniors are relatively price insensitive for products that meet their
special needs, and, as such, this market has a fairly inelastic demand.
REHABILITATION & THERAPEUTIC
The Rehabilitation & Therapeutic market consists of four segments: 1)
post surgical (i.e. hip and knee), 2) acute injury, 3) individuals with a
restrictive ROM (range of motion), and 4) other (i.e. arthritic,
biomechanical). There are approximately 500,000 surgeries and 1.5 million hip
and knee injuries every year. According to a recent survey conducted by the
American Hospital Association, there are approximately 6,600 registered
hospitals in the U.S. The following table sets forth, by type of facility,
the percentage of hospitals which make use of therapeutic exercise as a form
of treatment:
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Facility of U.S. Hospitals Facility % of U.S. Hospitals
Physical Therapy 78.4% Comprehensive Geriatric Assessment 20.3
Services
Orthopedic Surgery 66.0 Sports Medical Clinic
18.2
Occupational Therapy 54.3 Fitness Center 14.6
Service
Outpatient Rehabil- 48.2 Inpatient Rehabilitation Unit
13.4
itation Unit
Cardiac Rehabil- 39.0 Geriatric Clinic
8.1
itation Program
Source: AHA, 1992 Annual Survey
In addition, according to statistics compiled by the U.S.
Department of Health and Human Services, there were approximately 16,000
nursing homes in the U.S. in 1995, with an aggregate total of approximately
1.7 million beds. This market segment, including all categories, exceeds 8
million people. To be successful in this market requires that exercise
equipment be both medically sound and appropriate for a wide array of
therapeutic applications. Medical institutions are acutely aware of the need
for accurate and reliable feedback from the exercise equipment used in the
therapeutic process. Product characteristics such as restrictive ROM, precise
variable resistance, and the accurate control and measurement of workout
intensity are of critical importance.
The TRB product that will address the needs of this market is the
Fitness Versi Trainer and the TPS bike. Today the major form of therapy for
post hip and knee surgery is the conventional stationary bike. The 360 degree
fixed stroke is limiting because initial therapy methods limit ROM to less
than 120 degrees. This causes a time lag before the conventional 360 degree
bike can be implemented. The ROM of the TPS is variable and can accommodate
all ROM restrictions, which allows patients to begin rehabilitation sooner.
The biomechanical design of the TPS also puts less strain on limbs and joints
by generating a force along the muscle belly, rather than at the insertion
(joints). This enables patients to recover from surgery faster than with
current techniques, while reducing the probability of reinjury. Products
directed at this market have qualified for third party payment. The
Rehabilitation & Therapeutic market is very technology oriented and is
relatively price insensitive.
INTERNATIONAL
In 1995, worldwide bicycle sales were over $15 billion, equating to over
120 million bicycles sold. Based on historical trends, worldwide sales are
expected to grow at a rate of 5% annually over the next five years. The two
largest international markets, in units, are China and India, with the U.S.
placing third.
Forty million bicycles were sold in China in 1995. Because of China's
population and its use of the bicycle as a primary source of transportation,
compound five year growth has been over 6%. India's market growth is similar
to China. In 1995, 20 million bicycles were sold in India.
Japan, with approximately 7 million units sold in 1995, represents a
market that is skewed toward higher priced bicycles. Europe, if looked at as
one market, is similar in both dollars and units to the U.S.; however, the
number of bicycles per capita is double that of the U.S. (55 bikes per 1,000
people in Europe versus 25 in the U.S.)
The international market offers TRB a tremendous advantage in producing
short term and long term revenue with its TPS products.
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Distribution Methods of the Products or Services
Marketing Plans & Products
Currently, bicycles are sold mainly through retail outlets and specialty
bike shops; while institutional exercise equipment is sold through trade
shows, magazines and direct mail. The bicycle industry has seen many
significant changes over the past decade in how products are distributed. TRB
intends to take advantage of the newest techniques. The Company's long-term
strategy is to sell through a network of specialized bike and sporting goods
shops.
In the near term, however, the Company, through its relationship with
CPNM, will begin to promote ergometers, electric bicycles, and bicycles
through a variety of media, i.e. infomercials on cable television and general
television commercials. TRB will establish market awareness through such
direct marketing and will generate cash flow. For the line of ergometers, TRB
plans to investigate possible alliances with existing sporting goods
manufacturers. The Company anticipates that after brand awareness and an
established corporate image have been achieved, TRB will be able to market its
bicycles, ergometers and electric bicycles through a network of bike
retailers, in accordance with the Company's long term strategy.
MANUFACTURING/TECHNOLOGY LICENSING AGREEMENTS
In order to gain access to international and domestic markets, TRB's
products will be manufactured through contracts with existing manufacturers
around the world. Licensing and marketing agreements will be established with
capable individuals and enterprises in selected markets. Ongoing royalty fees
will also be received from licensees. TRB's licensing agreement requires the
licensees to meet minimum volume and quality standards. Moreover, the
agreement also provides that any product enhancement developed by TRB's
licensees becomes the property of TRB.
TRB is manufacturing its proprietary parts through a non-exclusive
relationship with Kun Teng Industries (Taiwan) to produce medium and high end
bicycles, and plans to use Sino-Danish Enterprises Co., Ltd.(China) as a
supplier of proprietary parts and assembled bicycles in the lower price
ranges. Sino-Danish is now ready to begin mass production and TRB has received
a line of credit in China for $2 million to support these production plans.
International licensing and marketing agreements have been reached with
licensees for a total of $1,125,000 from the Ivory Coast, Tanzania,
Benin/Nigeria, Vietnam and India, and payments totaling $210,000 have already
been received, as well as $10,000 for the right of first refusal to be the
licensee in Canada. In addition, TRB is negotiating agreements with a
potential licensee in China. Under the terms of the Chinese license proposal,
Sino-Danish Enterprises Co., Ltd. will sell a minimum of 100,000 bicycles in
the first year. Sino-Danish intends to achieve its sales goals by advertising
the product throughout China on television during prime time hours, for one
full year. TRB expects to sign this agreement, thereby granting Sino-Danish
with an exclusive sales and marketing right for China.
TRB's ergometers are currently ready for mass production by Hsumao
Industrial Corp. Ltd., a leading exercise equipment manufacturer based in
Taiwan.
Competitive Business Conditions and Competitive Position in the Industry and
Methods of Competition
There is no direct competition for the products offered by TRB. The
general competition is the bicycle industry, which is, as aforementioned,
differentiable from the TRB product line.
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Sources and Availability of Raw Materials and the Names of Principal Suppliers
TRB uses commercially available raw materials, and does not foresee any
shortage in supply. No Supplier accounts for greater than 5% of the raw
material needs of TRB.
Dependence on One or a Few Major Customers
No customer of the Company accounts for more than 5% of its business.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or
Labor Contracts, Including Duration
Licenses
TRB has an exclusive license, as aforementioned, for the worldwide
distribution, manufacture, and sale of the TPS system from ABL, the patent
holder.
Other Intellectual Rights
No other patents, trademarks, licenses, franchises, concessions, royalty
agreements or labor contracts are used by the Company.
Need for Any Government Approval of Principal Products or Services
To the best of the Company's knowledge, there are no special requirements
for government approval of its principal products or services, not generally
applicable to normal business operations.
Effect of Existing or Probable Governmental Regulations on the Business
The Company is unaware of any probable regulation of its business, other
than as will apply to businesses in general.
Estimate of the Amount Spent During Each of the Last Two Fiscal Years on
Research and Development Activities, and if Applicable the Extent to Which the
Cost of Such Activities are Borne Directly by Customers
During the past two years TRB spent approximately $250,000 on R&D, all of
which will be borne by the customer as reflected in the price of the products of
TRB.
Costs and Effects of Compliance with Federal, State and Local Environmental Laws
The Company, is not aware of any expenses directly attributable to
compliance with federal, state or local environment laws or regulations.
Number of Total Employees and Number of Full Time Employee
The Company has 4 full time employees, and one part time employees.
Description of Real Estate and Operating Data
The Company currently rents approximately 500 square feet for its staff,
at 4 Becker Farm Road, in Roseland, New Jersey. As well the company has 2,500
square foot R&D facility in Taiwan, with a rent of $14,400 per anum.
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Prospectus Page 23
Management is of the opinion that its current facilities are adequate for
its immediate needs. As the Company's business increases, additional
facilities will be required, however the current facilities are expected to
suffice until after December 31, 1997.
Equipment
The fixed assets of the Company as valued for accounting purposes have a
depreciated book value of $545,000, and an non-depreciated book value of
$545,000. The assets are principally comprised of tools and dies for the
manufacture of the components for the TPS system.
Investment Policies
The Company has no investment policies with respect to investments in real
estate or interests in real estate or investments in real estate mortgages.
Litigation
The Company is not a party to any material litigation.
Operating Subsidiaries of the Company
The subsidiary of the Company generates all revenue for the Company, and
the discussions and tables referring to operations in this prospectus refer to
the revenues generated by the subsidiary.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION,
CHANGES IN FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis relate to factors which have
affected the financial condition and results of operations of the Company for
the ten months ended April 30, 1997 and the three previous fiscal years, ending
June 30, 1996, 1995, and 1994.
On April 18, 1994 the Company purchased 100% of all the outstanding shares
of TRB, as fully described in Material Events (see below). As a result of the
aforementioned transaction, the Company gained TRB, whose activities are fully
described herein.
Discussion of Financial Information
TRB is the active operating entity, producing, marketing, manufacturing,
and supporting the products of the Company. The Company has no active income
save for the activities of TRB. Therefore, the financial information regarding
the parent company and its subsidiary are presented on a consolidated basis.
For the fiscal 10 months ended April 30, 1997 the Company had revenues of
$1,130,000 generating a gross profit of $1,130,000, while in the preceding 3
fiscal years collectively (called the development period) ending on June
30,1996, revenues were $351,345 with a gross profit of $204,982. Cost of goods
sold was $0 for the period ended April 30, 1997 as compared to $146,363 for the
development period. The discrepancy is due to the fact that all sales were for
licenses to sell TRB products in the period ending April 30, 1997, where the
former period included bicycle sales.
Earnings for the two periods were $729,128 for the fiscal year ending
April 30, 1997 and a loss of $368,737 for the development period.. Expenses
were $371,302 for the period ending April 30, 1997 as compared to $791,888
for the developmental period. Overall, the major costs were consulting fees,
R&D, and professional fees.
PAGE 25
Prospectus Page 24
The cash and investment certificate position of the company increased to
$8,091 on April 30, 1997 from $7,200 on June 30, 1996. Retained earnings
changed from ($368,737) on June 30, 1996 to $360,395 on April 30, 1997,
reflecting a very successful year of operation for the company. Curren
assets, as a whole, increased from $7,200 during the developmental period to
$1,127,585.
Material Events
Acquisition of TRB
On April 18, 1997, in exchange for 9,750,000 shares in the common stock of
Company, 100% of the stock in TRB was sold by Motion Plus International, a
Delaware Corporation, its owner, to the Company.
Liquidity
Management believes that the Company has the cash funds and necessary
liquidity to meet the needs of the company over the next year, assuming sales
and development efforts conform to the standards historically set. However, to
fully maximize the potential presented by the TPS technology, management
believes that approximately $10,000,000 will need to be raised. The funds will
be primarily used to increase the marketing effort and for the production of
marketing material, as well as the continued development of the TPS technology.
Current Plans
The key events that are anticipated by management to occur over the next
year are the aggressive marketing of TPS based bicycles by the licensees and
through active infomercial campaigns, as well as the aggressive sales of
licenses for territorial exclusivity in the sale of TRB products. This is more
fully described herein at page18, in the section entitled, The Market.
Accounting Policies and Procedures
The Company follows generally accepted accounting principles in preparing
its financial statements, and has audited statements produced annually, with
its quarterly statements produced by its.
Revenue Recognition
Revenue is recognized using the accrual method of accounting.
Statements of Cash Flows
Statements of Cash flow are prepared quarterly, on a consolidated basis,
using generally accepted accounting principles and guidelines.
Inventory
The Company keeps minimal inventory, manufacturing goods in response to
orders.
Fixed Assets
Fixed assets are valued based on their depreciated value. Depreciation is
calculated using the straight line method.
PAGE 26
Prospectus Page 25
Production Inventory
Low levels are kept, and ordered as manufacturing orders are received.
Principles of Consolidation
All financial Statements are produced on a consolidated basis, as the
subsidiary, TRB, accounts for all operating revenue of the Company.
Income/Loss Per Share
The Computation of loss per share of common stock is based on the weighted
average number of shares outstanding during the periods presented.
Statement Re Computation of Earnings Per Share
The Company has a simple capital structure as defined by APB Opinion
Number 15. Accordingly, earnings per share is calculated by dividing net income
by the weighted average shares outstanding.
Provision for Income Taxes
Provisions for income tax are computed quarterly using the guidelines as
defined in the Federal and State Statutes.
The Company's Immediate Capital Requirements
The requires about $10,000,000 to continue the growth and market
penetration of its TPS products and its R&D.
CONFLICTS OF INTEREST
All of the Company's current officers are also directors of the Company,
and as a group, the Company's officers have a majority of the votes on all
matters which the Board will vote upon the next annual meeting of the Company's
Stockholders. They also hold or control a majority of the Company's
outstanding common stock. Because the Company's current officers and
directors will be voting upon matters of personal interest to them (e.g.,
salaries, bonuses and other benefits), the outcome of such votes will not be
based on arm's length negotiations. While the Company's current officers
intend to exercise fairness in determining their compensation and all other
matters, there can be no assurance that the Company would not have negotiated
more favorable arrangements had persons other than its current officers been
responsible for ultimate determinations.
PAGE 27
Prospectus Page 26
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following sets forth the names and ages of all the Directors and
Executive Officers of the Company, positions held by such person, length of
service, when first elected or appointed and term of office.
First Elected
Name Age or Appointed/Term Position
Byung D. Yim 55 April 18, 1997 President
Biographies of Directors, Officers and Director Nominees
Byung D. Yim, Chairman/CEO
Mr. Yim's responsibilities include long term vision and international
development, as well as the executive management of day to day operations.
Mr. Yim was the founder of both ProMaster Corp. and Alenax Corp. He directly
managed the development and prototype manufacturing, market research and
business planning for Transbar Power products in the past.
Mr. Yim has over 20 years experience with the U.S. import/export
business, and the marketing and distribution of products from the Far East.
Mr. Yim was the distributor of perma stamp lines of Johnson Wax products to
the Middle East. Mr. Yim's experience in the bicycle industry is extensive,
including having been the exclusive sales and distribution agent for Upstate
New York and Eastern Pennsylvania for H. J. Sports, Inc., the exclusive agent
for the third largest bicycle manufacturer in Japan. Mr. Yim is a graduate of
Han Yang University with a B.A. in Nuclear Engineering and Electronics.
Significant Employees
Augustine Rheem, Chief Operating Officer, Bicycle Division
Mr. Rheem's duties include the overseeing of all day to day operations,
design and manufacturing projects, quality control, and overall marketing and
sales strategy and implementation of the bicycle division.
Mr. Rheem holds a graduate degree in Business Administration, and brings
to the Company a wealth of experience in the bicycle marketing field. He has
been directly involved in the manufacture of bicycles, having owned and
operated his own bicycle assembly plant in New Jersey. Mr. Rheem was also the
exclusive sales and marketing distributor for Maruish Cycle Co., the third
largest Japanese manufacturer of bicycles. Overall Mr. Rheem has over 25 years
of national and international experience in all facets of the bicycle and
sporting goods industry, including sales/marketing, general management, and
product development.
Dr. Dennis Colacino, Chief Operating Officer, Ergometer and Exercise
Equipment Division
Dr. Colacino's duties include the day to day running of the ergometer
and exercise equipment division, with full responsibility for the performance
of this division, including overall sales and marketing strategies and their
implementation.
Dr. Colacino has over 25 years working in the preventive medicine,
rehabilitation, and fitness field. His earlier work focused on cardiac
rehabilitation, as Executive Director of Life Clinic (Brandon, FL) and
designer and Executive Director of HEART, a cardiac rehabilitation and
physical therapy facility of New York Medical. He remains a professor of
Preventive Medicine at New York Medical.
PAGE 28
Prospectus Page 27
For 12 years, Dr. Colacino designed and managed the Cardiovascular
Programs at Texaco and PepsiCo., overseeing the health and fitness for 150,000
employees at PepsiCo. From 1986 to the present, he has been President of the
Colacino Group which helps companies with start-ups, marketing and sales.
During this time, he has developed proformas and strategic planning,
negotiated contracts, and developed products and equipment with the major
companies in the sports and fitness industry.
As a founder and member of the Board of Trustees of the Association of
Fitness in Business, Dr. Colacino remains active in the health care field.
Dr. Colacino is a graduate of Western Washington State College. He has
a Masters degree from the University of Mexico in Physical Education, and a
Ph.D. from the University of Wisconsin in Physiology.
Amelia B. Eclavia, Chief Financial Officer
Ms. Eclavia's responsibility is to oversee the financial health of TRB.
Ms. Eclavia is a CPA, holding a Bachelor of Science Degree in Business
Administration. She was Senior Accountant at Thompson Professional Publishing
and Information Technology from 1973 to 1996.This company is the operating
unit in the United States of Thompson Corporation, a multi-billion dollar,
multi-national corporation. Her duties involved the preparation of financial
statements for the company president, management of the royalty system,
accounting for short term investments, supervision of Accounts Payable, and
the analysis and control of Accounts Receivable. Prior to this position, from
1971 to 1973 Ms. Eclavia was Assistant Controller of Genesee Management
Corporation, managers, owners, and developers of multi-million dollar real
estate projects. Her tasks included the preparation of financial statements,
budgets, cash flow analyses, and the supervision of the staff accounting
clerks.
Ms. Eclavia has a wealth of experience in managing the finances of major
corporations, as well as in leveraged buy-outs, acquisitions, and
divestitures, and will bring a useful insight to TRB.
Marn T. Seol, Vice-president, R&D
Mr. Seol is the inventor of both "propulsion mechanisms for lever
propelled bicycles", and "multi purpose transmission mechanisms for bicycles".
Mr. Seol began pursuing his interest in designing bicycles in 1976 by opening
Dong Yang Industrial Co., Ltd. in Korea. In 1983 he joined forces with Mr.
Yim, and since that time has worked for Mr. Yim in developing the research and
development division of his companies.
Mr. Seol is responsible for overseeing the design and technological
advancements in all TRB product lines, as well as directly involved in
developing new products and product lines. He will also monitor and develop
all quality control systems.
Family Relationships,
Augustine Rheem and Byung Yim are Brothers.
Involvement in Certain Legal Proceedings.
Based on information provided in response to questionnaires filed as
exhibits to this Current report, During the past five years no current
director, person nominated to become a director, executive officer, promoter
or control person of the Company has been a party to or the subject of:
(1) Any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;
PAGE 29
Prospectus Page 28
(2) Any conviction in a criminal proceeding or has been subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(3) Any order, judgment, or decree, not subsequently reversed, suspended or
vacated, of any court of competent jurisdiction, permanently or temporarily
enjoying, barring suspending or otherwise limiting his involvement in any type
of business, securities or banking activities; and
(4) Been found by a court of competent jurisdiction (in a civil action), the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not been
reversed, suspended, or vacated.
Compensation
Compensation of Directors
Standard Arrangements
All members of the Company's board of directors are paid a per diem fee of
for attendance at meetings of the board of directors and committees thereof.
In addition, if required, they are reimbursed for travel expenses and lodging
is arranged for them, at the Company's expense. At such time as adequate funds
are available, all director (and officers) of the Company will be covered by
liability insurance. Directors are reimbursed for all out of pocket expenses
incurred in the performance of their roles, subject to provision of receipts in
form and substance adequate to satisfy Internal Revenue Service audit
requirements (e.g., long distance telephone, postage, etc.).
Other Arrangements
Neither the Company nor any of its subsidiaries have any other
arrangements to compensate its directors.
Employment contracts, termination of employment & change-in-control
arrangements.
The Company does not have any compensatory plan or arrangement, including
payments to be received from the Company, with respect to a named executive
officer that results or will result from the resignation, retirement or any
other termination of such executive officer's employment with the Company and
its subsidiaries or from a change-in-control of the Company or a change in
the name executive officer's responsibilities following a chance-in-control,
which, including all periodic payments or installments, exceeds $100,000.
Compliance with Section 16(a) of the Securities Exchange Act of 1934, as
Amended
The Company has omitted disclosure concerning this item, as permitted
under applicable securities laws, and does not anticipate provision of such
information in its definitive proxy statement for 1997. Such disclosure was
omitted because management was uncertain as to the accuracy of information
available to it pertaining to such compliance by persons whom it does not
control. Based on information contained in files supplied by the Company's
former legal counsel, it appears that the Company's officers and directors were
in compliance with filing obligations as of April 30, 1997.
Resignations of Officers and Directors
In conjunction with the acquisition of TRB, the Company's then serving
officers and directors agreed to resign in favor of persons designated by Mr.
Byung Yim. In conjunction therewith, all of the Company's officers and
directors resigned during April, 1997.
PAGE 30
Prospectus Page 29
CERTAIN TRANSACTIONS
The following information pertains to all transaction during the last two
year, or proposed transactions, to which the Company was or is to be a party,
in which any of the following persons had or is to have a direct or indirect
material interest: any director or executive officer of the Company: any
nominee for election as a director; any principal security holder listed above;
and, any member of the immediate family (including spouse, parents, children,
siblings, and in-laws) of any of the foregoing persons.
Relationship Nature of Interest Amount of
Year
Name to Company in the Transaction Interest
Byung Yim President takeover of TRB Systems Owns 20%
1997
Inc. by the Company
of Seller
of TRB*
*See, Significant Events, Purchase of TRB Systems by Company.
Parents of the Company
The following table discloses all persons who are parent of the Company
(as such term is defined in Securities and Exchange Commission Regulation C),
showing the basis of control and as to each parent, the percentage of voting
securities owned or other basis of control by its immediate parent if any.
Percentage
O
ther
of Voting Basis
Basis for Securities For
Name Control Owned
Control
Motion Plus International
Corporation(MPI) Share Ownership 82.3% None
NOTE: Motion Plus International Corporation is controlled by Byung Yim, the
president of the Company, and his children.
Transaction with Promoters, if Organized Within the Past Five Years
There have been no transactions with Promoters over the past five years.
PRINCIPAL STOCKHOLDERS
The following sets forth the security ownership of Management of the
Company and any holders of the Company's common stock known to own 5% or more
of the Company's issued and outstanding common stock, as of April 30, 1997:
Principal Stockholders
As of the date of this Current Report, the following persons (including
any "group") are, based on information available to the Company, beneficial
owners of more than five percent of the Company's common stock (its only class
of voting securities):
PAGE 31
Prospectus Page 30
Name and Amount and
Title Address of Nature of
Perce
nt
of Beneficial Beneficial of
Class Owner Owner
C
lass
Common Motion Plus Inter- 9,750,000 82.3%
Stock national Corporation Shares
21 Hutton Ave.
West Orange,
New Jersey 07052
Security Ownership of Management
As of the date of this Current Report, the following table discloses, as
to each class of equity securities of the registrant or any of its parents or
subsidiaries other than directors' qualifying shares, beneficially owned by all
directors and nominees, the names of each executive officer (as defined in Item
402[a][2] of Securities and Exchange Commission regulation S-B), and directors
and executive officers of the registrant as a group, the total number of shares
beneficially owned and the percent of class so owned. Of the number of shares
shown, the associated footnotes indicate the amount of shares with respect to
which such persons have the right to acquire beneficial ownership as specified
in Securities and Exchange Commission Rule 13(d)(1).
Name and Amount and
Title Address of Nature of Percen
t
of Beneficial Beneficial of
Class Owner Owner
Class
Common Byung Yim * *
Stock 21 Hutton Ave.
West Orange, New Jersey 07052
* Mr. Yim has a 20% ownership interest in MPI, which owns 9,750,000 shares, or
82.3% of the outstanding common shares.
COMMON STOCK
The Company is authorized to issue 30,000,000 shares of Common Stock, with
a par value 0f $.001. Immediately prior to this offering 11,840,523 shares of
Common Stock were outstanding and held of record by more than 250 persons. The
holders of Common Stock have one vote per share on all matters (including
election of directors) without provision for cumulative voting. Thus, holders
of more than fifty percent (50%) of the shares voting for the election of
directors can elect all of the directors, if they choose to do so. The Common
Stock currently is not redeemable and has no conversion or preemptive rights.
The Common Stock currently outstanding is (and the Shares being issued pursuant
to this prospectus will be) validly issued, fully paid and non-assessable.
In the event of liquidation of the Company's assets available for Common
Stock will share equally in any balance of the Company's assets available for
distribution to them after satisfaction of creditors and the holders of the
Company's senior securities. The Company may pay dividends, in cash or in
securities or other property when and as declared by the board of directors
from funds legally available therefor, but has paid no cash dividends on its
Common Stock.
TRANSFER AGENT
The transfer agent for the Company's Capital Stock is Continental Stock
Transfer Company of New York.
PAGE 32
Prospectus Page 31
SHARES ELIGIBLE FOR FUTURE SALE
There are 1,819,477 shares registered herein and available for future sale
at the discretion of the board of directors.
ADDITIONAL INFORMATION
The foregoing statement is a summary of the rights and privileges of the
holders of the Company's Stock. It does not purport to be complete and is
subject to the provisions of the Colorado General Corporation Act, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, and, the rules, regulations and bylaws of the National Association of
Securities Dealers, Inc.. The foregoing statements are qualified in their
entirely by such references.
PLAN OF DISTRIBUTION
This offering involves registration of 3,910,000 shares currently
held in treasury, which may be issued at the discretion of the board of
directors of the Company as follows: 1,000,000 shares to the employees of the
Company or its subsidiaries; 500,000 shares to the officers of the Company, and
200,000 shares to consultants and professional advisors of the Company, 200,000
to investors in the Company, and 2,010,000 to current creditors of the
Corporation.
INDEMNIFICATION ARRANGEMENTS
The Company's articles of incorporation and bylaws provide for
indemnification of the Company's officers, directors and agents to the fullest
extent permitted by law. The Company's articles of incorporation also limit
the right of stockholders to sue Company officers, directors and agents. In
addition, the Company's employment agreements with its officers all require the
Company to defend the contracting parties against all liabilities resulting
from their association with the Company, to the greatest extent legally
permitted.
Insofar as indemnification for liabilities arising under the Securities
Act OF 1933, as amended, may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the United States Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is therefore unenforceable.
SUPPLEMENTAL LITERATURE
The Company is required, as of April 30, 1997, to file special and
periodic reports containing financial and business information with the
Securities and Exchange Commission (i.e., reports on Forms 8K, 10-QSB, 10-KSB
collectively referred to as the "34 Act Reports"). Copies of the 1934 Act
Reports can be obtained either from the Company or from the public reference
section of Securities and Exchange Commission's Washington, D.C. office.
LITIGATION
The Company is not a party to any material pending legal proceedings other
than those that arise in the ordinary course of business.
PAGE 33
Prospectus Page 32
LEGAL OPINIONS
Charles C. Khym, Esquire, Attorney at Law, has rendered his opinion that
the shares of Common Stock reserved as described herein when issued will be
validly issued, fully paid and non-assessable, and that future purchasers
thereof will not be subject to personal liability as a result of their
ownership thereof.
EXPERTS
The audited financial statements of the Company appearing in this
Prospectus and in the Registration Statement have been examined by chartered
accountants, as set forth in their report appearing elsewhere herein, and are
included in reliance upon such report the authority of such firm as expert in
auditing and accounting.
FINANCIAL STATEMENTS
(See following pages)
PAGE 34
Prospectus Page 33
TRB SYSTEMS INTERNATIONAL INC.
Consolidated Financial Statements and
Accountant's Audit Report
For the Ten-Month Period Ended
April 30, 1997
-and-
For Each of the Fiscal Years Ended
June 30, 1996, June 30, 1995, and June 30, 1994
PAGE 35
Prospectus Page 34
TRB SYSTEMS INTERNATIONAL INC.
CONSOLIDATED FINANCIAL STATEMENTS
April 30, l997
TABLE OF CONTENTS
______________________________________________________________________
Page
Accountant's Audit Report 35
Financial Statements:
Balance Sheet 36
Statements of Earnings and Retained Earning 37
Consolidated Statement of Stockholder's Equity 38
Statements of Cash Flows 39
Notes to Financial Statements 43
______________________________________________________________________
PAGE 36
Prospectus Page 35
Stan J.H. Lee & Co. , CPA, CMA Tel) 201-944-7246
440 West St. 3rd Fl.
Fort Lee, N.J. 07024-5058 Fax) 201-944-7759
E-Mail) [email protected]
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and
Shareholders of
TRB Systems International Inc.,
Roseland, New Jersey
We have audited the accompanying consolidated balance sheet of TRB Systems
International Inc. as of April 30, l997, June 30, 1996, June 30, 1995, and
June 30, 1994, and the consolidated related statement of operations and
retained earnings for the ten-month period ended April 30, 1997, and the
fiscal years ended June 30, 1996, June 30, 1995 and June 30, 1994. 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. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of TRB
International Inc. at April 30, l997, and the results of its operations and
its cash flow for the ten-month period then ended, and the financial position
on June 30, 1996, June 30, 1995, and June 30, 1994, and the results of its
operations and its cash flow for the fiscal year ended on each of June 30,
1996, June 30, 1995, and June 30, 1994, all in conformity with generally
accepted accounting principles.
/s/Stan Lee, CPA/s/
_______________________
Stan J.H. Lee, CPA
May 9, l997
Fort Lee, N.J.
PAGE 37
Prospectus Page 36
TRB SYSTEMS INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEET AS OF
APRIL 30, 1997;JUNE 30,1996
JUNE 30, 1995; and JUNE 30,1994
(Notes 1 and 2)
1997 1996 1995 1994
ASSETS
CURRENT ASSETS:
Cash $ 8,091 $ 206 $ 488 $ 1,235
Accounts receivable- 1,100,000 0 0 0
trade (Note 14)
Accounts receivable- 12,500 0 0 0
other
Inventory 6,994 6,994 6,994 6,994
1,127,585 7,200 7,482 8,229
OTHER ASSETS:
Prepaid expenses 14,547 14,547 17,053 2,129
(Note 10)
Property and equipment 545,000 0 0 0
(Note 17)
Organization costs, 63,027 75,182 64,820 48,011
net of accumulated
amortization
Security deposits 1,043 0 0 0
Deferred tax assets 0 217,915 158,896 76,250
(Note 4 and 9)
Investment in sub- 670,000 0 0 0
sidiary (Note 12)
1,293,617 307,644 240,769 126,390
$ 2,421,202 $ 314,844 $ 248,251 $134,619
======== ======== ======== =======
LIABILITIES :
CURRENT LIABILITIES:
Accounts payable $ 179,000 $ 464,455 $ 361,816 $ 223,848
and accrued expenses
(Note 8)
Accrued corporation 29,570 0 0 0
income tax payable
$ 208,570 $ 464,455 $ 361,816 $
223,848
Loans from 259,000 0 0 0
individuals (Note 9)
Director's loans 55,000 218,126 163,574 32,091
(Note 9)
314,000 683,253 525,390
255,939
SHAREHOLDER'S EQUITY:
Common stock, $.001
par value,11,840,523
shares issued and
outstanding
(Note 12,13,15 and 16) 11,841
Common stock, $1.00 par
value,
1,000 shares authorized,
510 shares issued
and outstanding 510 510
510
(Note 18)
Additional 1,526,396 490 490
490
paid-in-capital
Retained Earnings 360,395 (368,737) (278,139) (122,320)
(Deficit)
Total Shareholders 1,898,632 (367,737) (277,139) (121,320)
$ 2,421,202 318,844 248,251
134,619
======== ======= ====== ======
PAGE 38
Prospectus Page 37
TRB SYSTEMS INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
TEN-MONTH PERIOD ENDED APRIL 30, 1997, AND FISCAL YEARS ENDING
JUNE 30. 1996, JUNE 30, 1995, JUNE 30, 1994 (Notes 1 and 2)
1997 1996 1995
1994
SALES 0 161,345
0 0
COST OF SALES 0 146,363 0
0
GROSS PROFIT 0 14,982
0 0
LICENSING FEES (Note 14) $1,130,000 $ 65,000 $ 60,000 $
65,000
OPERATING EXPENSES:
Promotion expense 0 1,484
1,353 1,438
Consulting 76,600 38,000 39,970
57,500
Commission 36,782 15,000 0
0
Research and development 29,600 81,494 156,885
87,359
(Note 7)
Professional fees 27,164 0 0
50,000
Travel 1,790 4,511 3,364
3,638
Business gifts 0 1,791
538 0
Meals and entertainment 0 6,086 15,017
15,163
Auto expense (Note 6) 3,840 11,302 13,062
20,465
Corporation taxes 0 366
0 0
Officer's salaries 50,000 0 0
0
Payroll taxes 5,857 0 0
0
Leasing expense 16,825 0 0
0
Rent (Note 3) 4,810 5,249 2,872
2,545
Telephone 5,304 6,062 7,516
6,664
Office 16,282 14,270 28,617
12,990
Insurance expense 2,925 1,289 1,512
0
Bank charges 2,041 1,827 1,910
410
Postage 1,350 580 1,317
137
Miscellaneous 2,762 5,504 1,193
0
Sample charges 0 0 2,866
0
Interest expense 0 12,672 6,796
0
Shipping & Delivery 0 460 0
0
Dues & Fees 0 1,896 0
0
Contributions 0 100 0
0
Advertising 63,000 0 0
0
Amortization 23,990 19,791 13,722
5,335
Other operating expense 2,380 0 0
0
Total Operating Expenses 371,302 229,734 298,510
263,644
OTHER INCOME:
Dividend income 5 135 45
74
INCOME (LOSS) BEFORE
INCOME TAX EXPENSE 758,703 (149,617) (238,465)
(198,570)
Income tax expense (304,780)
Research and development
tax credit applied 21,414 8,149 1,568
8,736
(Note 5)
Tax Benefits from net
operating loss carry
forward applied
net of tax (Note 5) 253,795 50,870 81,078
67,514
NET INCOME (LOSS) 729,128 ( 90,598) ( 155,819) (122,320)
ACCUMULATED DEFICIT,
at beginning ( 368,737) (278,139) ( 122,320) 0
(ACCUMULATED DEFICIT),
RETAINED EARNINGS, $ 360,395 ($368,737) ( 278,139) (122,320)
at end
Earnings per share $ .06158 ($177.643) ($305.520) ($239.
843)
(Note 16)
PAGE 39
Prospectus Page 38
TRB SYSTEMS INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
FOR THE TEN-MONTH PERIOD ENDED
APRIL 30, l997
Capital Stocks
Number of shares Amount Retained Earnings Total
Net earnings for
the ten-month
period ended
April 30, l997 $ 360,395 $ 360,395
Shares issued as
compensation
for consulting services 250,000 $ 25,000 -0- 25,000
Shares issued as
director's compensation
and repayment of
director's loans 500,000 318,126 0- 318,126
Shares issued in exchange
for 100 % of TRB Systems
Inc.'s voting common stocks 9,750,000 765,011 0- 765,011
Shares issued to various
individuals 1,340,523 430,100 -0- 430,100
11,840,523 $ 1,538,237 360,395 $ 1,898,632
======== ============= ======= ===========
PAGE 40
Prospectus Page 39
TRB SYSTEMS INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
TEN-MONTH PERIOD ENDED
APRIL 30, 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 729,128
Noncash item included in net earnings 23,990
Increase in accounts receivable - trade (1,100,000)
Increase in accounts receivable - other (12,500)
Decrease in deferred tax assets 217,915
Decrease in accounts payable and accrued expenses (285,455)
Increase in accrued corporation income taxes 29,570 (397,352)
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in security deposits (1,043)
Additional organization expenditure (11,831)
Issuance of common stocks 418,111 405,237
Net Increase in balance of cash 7,885
Cash as of July 1, l996 206
Cash as of April 30, l997 $ 8,091
====
SUPPLEMENTAL DISCLOSURES:
Conversion of current liabilities to long term $ 259,000
Conversion of director's loans to equity shares (163,126)
Acquisition of property and equipment in exchange (545,000)
for equity shares
Investment in a subsidiary in exchange for equity shares (670,000)
Issuance of common stocks 1,119,126
Net $ -0-
PAGE 41
Prospectus Page 40
TRB SYSTEMS INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JUNE 30, 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (90,598)
Noncash item included in net loss 19,791
Increase in prepaid expense 2,506
Increase deferred tax assets (59,019)
Increase in accounts payable and accrued expenses 102,639 $ (24,681)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in loans from a director 54,552 54,552
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditure for organization costs (29,589) ( 29,589)
Net decrease in balance of cash ( 282)
Cash as of July 1, l995 488
Cash as of June 30, 1996 $ 206
=====
PAGE 42
Prospectus Page 41
TRB SYSTEMS INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JUNE 30, 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (155,819)
Noncash item included in net loss 13,722
Increase in prepaid expense ( 14,924)
Increase deferred tax assets (82,646)
Increase in accounts payable and accrued 137,968 $ (101,699)
expenses
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans from a director 131,483 131,483
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditure for organization costs (30,531) ( 30,531)
Net decrease in balance of cash (747)
Cash as of July 1, l994 1,235
Cash as of June 30, 1995 $ 488
=====
PAGE 43
Prospectus Page 42
TRB SYSTEMS INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JULY 12, 1993 (Inception) TO JUNE 30, 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (122,320)
Noncash item included in net loss 5,335
Increase in inventory (6,994)
Increase in prepaid expense ( 2,129)
Increase deferred tax assets (76,250)
Increase in accounts payable and accrued 223,848 $ 21,490
expenses
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans from a director 32,091 32,091
CASH FLOWS FROM INVESTING ACTIVITIES:
Issuance of common stocks 1,000
Expenditure for organization costs (53,346) (52,346)
Net Increase in balance of cash 1,235
Cash as of July 12, 1993 - 0 -
Cash as of June 30, 1994 $ 1,235
=====
PAGE 44
Prospectus Page 43
TRB SYSTEMS INTERNATIONAL INC.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
1. Incorporation and Business Activity
TRB Systems International Inc., a Delaware Corporation incorporated on
April 9, 1997, is a holding company whose only asset is 100 % of voting
common stock in TRB Systems Inc.
TRB Systems Inc. was incorporated pursuant to the laws of Delaware on
April 7, 1994, on which day it merged with TRB Systems Inc., a Corporation
incorporated pursuant to the laws of New York on July 12, 1993, to form TRB
Systems Inc., a Delaware Corporation.
TRB Systems Inc. is in the business of manufacturing, distributing, and
selling bicycle, fitness, and motorized 2 wheel transportation products.
Currently all operations are run from the head office facilities in
Roseland, New Jersey.
These financial statements are consolidated for the 10 month period
ending April 30,1977, and reflect the operation of the Company's sole
subsidiary for all previous periods. This is consistent with attempting to
properly show the financial position of the Company, as the Company is
merely a holding company with all significant activity taking place in the
subsidiary (See Notes 2 and 4).
2. Summary of Significant Accounting Policies
a) Principles of Consolidations
TRB Systems Inc., the only subsidiary of TRB Systems International
Inc. has been included in the consolidated financial statements, as it is
the operating entity, with TRB Systems International Inc., a non-
operating holding company.
In accordance with the reverse takeover method of accounting, as
referred to in note 4 these consolidated financial statements of the
Company include the accounts of TRB Systems International Inc. together
with the results of TRB Systems Inc. for the ten-month period ended
April 30, l997. For comparative purposes, the financial Statements for
TRB Systems Inc. have been included.
b) Revenue and Expense Recognition
The Company prepares its financial statements on the accrual
accounting basis.
Consequently, certain revenue and related assets are recognized when
earned rather than
when received, and certain expenses are recognized when the
obligation is incurred or the
asset consumed, rather than when paid.
c) Accounting Method
The Company recognizes income and expenses on accrual basis.
d) Depreciation
Depreciation is computed by using the straight-line method for
financial reporting purposes and the modified accelerated cost recovery
method for federal income tax purposes.
e) Income Taxes
Income taxes are provided for the tax effects of transactions
reported in the
PAGE 45
Prospectus Page 44
TRB SYSTEMS INTERNATIONAL INC.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS, CONT'D.
financial statements and consist of taxes currently due plus
deferred taxes related primarily to differences between the bases of
certain assets and liabilities for financial and tax reporting. The
deferred taxes represent the future tax return consequences of those
differences, which will either be taxable when the assets and liabilities
are recovered or settled.
f) Net Operating Loss Carryforward
Income taxes are provided for the tax effects of transactions
reported in the financial statements and consist of taxes currently due
plus deferred taxes for operating losses that are available to offset
future taxable income.
g) Intangible Assets
Intangible assets subject to amortization include organization
costs, loan closing costs, and in-force leasehold costs. Organization
costs and in-force leasehold costs are being amortized using the interest
method over the life of the related loan.
h) Reclassifications
Certain accounts in the prior-year financial statements have been
reclassified for comparative purposes to conform with the presentation in
the current-year financial statements.
i) Property and Equipment
Property and equipment are carried at cost. Depreciation of property
and equipment is provided using the straight-line method for financial
reporting purposes at rates based on the following estimated useful
lives:
Machinery and equipment 3-10
Furniture and fixtures 3-10
Engineering equipment 3-10
Buildings 20-30
i) Property and Equipment - Continued
For federal income tax purposes, depreciation is computed using the
modified accelerated cost recovery system. Expenditures for major
renewals and betterments that extend the useful lives of property and
equipment are capitalized. Expenditures for maintenance and repairs are
charged to expense as incurred.
j) Inventories
Inventories are stated at the lower of cost (determined on the
first-in, first-out basis) or market value.
3) Description of Leasing Arrangements
The Company leases its executive office facilities under non-
cancelable short-term operating leases.
The future minimum lease payments required under the leases is
minimal and immaterial in amount.
4) Business Combination
Pursuant to an Agreement dated April 18, 1997, and effective on
that date, TRB Systems International Inc. issued 9,750,000 common shares
in exchange for all outstanding shares in the capital of TRB Systems Inc.
As a result of this transaction, control of the combined companies passed
to the former shareholders of TRB Systems Inc.
PAGE 46
Prospectus Page 45
TRB SYSTEMS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONT'D.
This business combination situation is referred to as a "Reverse
Takeover". Legally, TRB Systems International Inc. is the parent or
continuing corporation; however, Generally Accepted Accounting Principles
require that the former shareholders of TRB Systems Inc. be identified as
the acquirer and that TRB Systems International Inc. and be treated as
the acquired company. Accordingly, control of the assets and business of
TRB Systems International Inc. has been acquired by TRB Systems Inc. in
consideration for the issuance of common shares.
5) Operating Loss and Tax Credit Carryforwards
The Company had loss carryforwards totaling $ 586,787 that have
been offset in full against current taxable income and R & D tax credits
totaling $ 21,414 which were fully applied against the current tax
liability . Accordingly there is no longer net operating loss
carryforward or tax credit carryforward for use in the future.
6) Related Party Transaction
The Company has a policy of providing an executive with a Company-
leased automobile for business purposes and the amount of such expense
for the ten-month period ended April 30, l997 was $ 3,840. For the fiscal
periods ending June 30, 1996, 1995, and 1994, the expense was,
respectively, $11,302, $3,062, and $20,465
There were no other significant non arm's-length basis transactions
between the Company and any related party during the ten-month period
ended April 30, l997.
7) Research and Development Cost
SFAS No.2 - Accounting for research and development costs,
generally, requires all research and development costs to be charged to
expenses when incurred, rather than recording them as inventory or
elements of overhead. Costs that are expensed as research and development
are as follows; a) intangibles purchased from others, and materials and
equipment b) salaries and related costs of personnel engaged in research
and development activities c) services performed by others in connection
with research and development activities and d) reasonable allocation of
indirect costs except general and administrative costs not clearly
related to research and development activities).
Amount of research and development costs charged to expenses are as
follows;
Fiscal year ended Amount
June 30, 1994 $ 87,359
June 30, l995 156,885
June 30, l996 81,494
Ten-month period
ended April 30, l997 29,600
8) Accounts Payable and Accrued Expenses
The accounts payable and accrued expenses also include the
capitalized portion of legal and consulting expenses incurred in the
development of standardized contracts, promotional materials and the
filing and registration of patents, and are amortized over a sixty-month
period. For the fiscal year ended June 30, l994, such capitalized
expenditure amounts to $ 48,153, and negligible thereafter.
Payable for legal and other $ 126,000
professional expenses
Other various accrued expenses 53,000 $ 179,000
PAGE 47
Prospectus Page 46
TRB SYSTEMS INTERNATIONAL INC.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS CONT'D.
9) Director's Loans and Loans From An Individual
The loans payable to a director are unsecured, non-interest bearing
with no set terms of repayment.
10) Prepaid Expenses
ABL Properties owns the patents which are exclusively licensed to
TRB Systems Inc. Any cost incurred by TRB Systems Inc. to maintain the
patents is reimbursable by ABL and is credited toward the $ 200,000
license fees due to ABL on the first anniversary following the
commencement of active bicycle sales.
11) Credit For Increased Research Expenditures
Internal Revenue Code allows for claiming a credit for incremental
research expenses incurred before July 1, 1995, or between June 30, 1996
and June 1, 1997, as one of the components of the general business
credit.
The credit is subject to the limitation and the carryback and
carryforward rules and the remaining unused credit at the end of
carryforward period is allowed as a deduction in the year following the
expiration of the carryforward period. (See Note 5 Above)
12) Conversion Of Certain Liabilities And Accrued Expenses To Equity In Parent
Company
Certain current liabilities and loans to TRB System, Inc., were
converted to equity in TRB Systems International Inc. and valued at $
670,000.
13) Payments In Shares Of Common Stock As Subsequent Event
A contract was signed on April 18, 1997 in which Alpha Bytes Inc.
accepted 250,000 shares, to be issued directly to its shareholders, as
payment for consulting services valued at $ 25,000 and rendered to TRB
Systems, Inc.
Also, on April 18, 1997, Byung Yim was issued 500,000 shares, in
lieu of moneys owed him by TRB Systems Inc. for past services, and as
payment of director's loans.
14) Account Receivable - Trade and Licensing Fees
The Company recognizes revenue and expenses on accrual basis and
accordingly, treated the balance of licensing fee income receivable from
certain licensing agreement contracts with various distributors in the
U.S. as current income as the Company is now contemplating entering into
full operation, and is thus able to fulfill the terms of the contracts.
15) Common Stocks
The Company is authorized to issue 30,000,000 at $ 0.001 par value
share, and, as of April 30, l997 , 11,840,523 voting common shares are
issued and outstanding.
16) Earnings Per Shares
Earnings (loss) per share is calculated using the weighted average
number of common shares outstanding and common shares equivalents. The
average number of shares outstanding under this assumption would be as
11,840,523 shares as of April 30, l997, and 510 shares (fully diluted
outstanding shares) in TRB Systems, Inc. for prior periods.
PAGE 48
Prospectus Page 47
TRB SYSTEMS INTERNATIONAL INC.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS CONT'D.
17) Property and Equipment
Cost Accumulated Balance
Depreciation 4/30/97
Research, lab equipment, tools
fixture, computer and furniture $495,000 - 0 - $ 495,000
Informercial tape and other
promotional materials 50,000 - 0 - 50,000
Property and equipment were acquired by issuing certain shares of voting
common stocks on April 30, 1997.
18) Share Structure of TRB Systems Inc.
For comparative purposes, TRB Systems Inc. is the deemed
predecessor of TRB Systems International Inc., as TRB Systems Inc.
accounts for all the operating activity of TRB Systems International Inc.
TRB Systems Inc. has authorized Capital of $1,0000 divided into 1,000
common shares with a par value of $1.00 each. Presently there are 510
shares issued, all owned by TRB Systems International Inc.
PAGE 49
Prospectus Page 48
TABLE OF CONTENTS
ITEM
PAGE
Prospectus Summary
6
The Company
6
The Offering
Front Cover
Stockholders
8
TRB Systems International Inc. Securities to be Outstanding 8
Definition of Terms
6
Selected Financial
Information 7
3,910,000 Shares of Common Stock Risk Factors
9
Dilution
10
Certain Market
Information 10
Capitalization
11
The Company
12
Management's
Discussion &
Analysis 23
Conflicts of Interest
26
Management
26
Directors and Executive
Officers
26
Biographies of the
Company's
Executive Officers and
Directors 26
Certain Transactions
29
Principal Stockholders
29
========================= Securities' Description
(Common Stock) 30
PROSPECTUS Common Stock
30
Dividend Policy
9,11
========================= Transfer Agent
30
Shares Eligible for
Future
Sale 31
Additional Information
2-4,31
Plan of Distribution
31
Indemnification
Arrangements 31
Litigation
32
Legal Opinions
32
Experts
32
Financial Statements
33
TRB Systems International Inc.
4 Becker Farm Road, Roseland,
NJ 07068
(201) 994-4488
PAGE 50
Part II, Page I
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24: INDEMNIFICATION OF OFFICERS AND DIRECTORS
In accordance with the General Corporation Laws of the State of Delaware
which were in effect at the time the Registrant was incorporated, the
Registrant's Board of Directors adopted by resolution, as further set forth in
the Registrant's by laws, provisions relative to indemnification of its
Officers and Directors against expenses, judgments, fines, settlements, and
other amounts actually and reasonably incurred in connection with the defense of
any proceeding or threatened proceeding to which such person was or is a
party, or is threatened to be made a party by reason of the fact that such
person was or is an officer or director, provided that, (i) such director or
officers acted in good faith or in a manner reasonably believed by him to be
in the best interests of the corporation to procure a judgment in its favor. In
the latter case, the power to indemnify extends to expenses actually or
reasonably incurred in connection with the defense or settlement of any
proceeding if such person (i) acted in good faith, and (ii) the manner such
officer and director believed to be in the best interest of the corporation
and with such care, including reasonable inquiry, as an ordinary prudent
person would use under similar circumstances. No indemnification will be
made in respect of any claim, issue or matter, as to which such person shall
have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation unless, and only to the extent
that the court in which such action or suit was brought shall determine upon
an application of that,despite the adjudication of liability, but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
Otherwise, indemnification for an officer and director meeting the applicable
standards of conduct is determined by a majority of the disinterested
directors or share or upon application by the corporation, such officer or
director or his attorney, to the court in which such proceeding was pending.
The Securities & Exchanged Commission is of the opinion that
indemnification of Company officers or directors for matters involving
violation of securities laws is against public policy and that agreements
therefor are consequently unenforceable.
ITEM 25: OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with distribution of the securities of the
Company being Registered hereby, other than commissions and non-accountable
expense allowances, will be borne directly by the Company rather than by the
selling stockholder. Such expenses are estimated to be $50,000.
Item
Amount
United States Securities and Exchange
Commission filing fee $ 700
Printing Expenses
7,000
Fees and expenses of counsel for the Company 16,000
Accounting fees and expenses
20,000
Transfer agent fees and expenses
6,000
Miscellaneous
300
TOTAL
$5
0,000
PAGE 51
Part II, Page 2
ITEM 26 RECENT SALES OF UNREGISTERED SECURITIES
Acquisition of TRB Systems Inc.
On April 18, 1997, in exchange for 9,750,000 shares in the common stock of
Company, 100% of the stock in TRB was sold by Motion Plus International, a
Delaware Corporation, its owner, to the Company.
ITEM 27: EXHIBITS
Exhibit
Number Description
Page
1. Constituent Document:
.1 Original Article of Incorporation
90
.2 Bylaws
91
5.1 Opinion of Counsel
87
10. Material Contracts:
.1 Lease of Taiwan Office
105
.2 Exclusive Licensing Agreement between
TRB Systems Inc. and ABL Properties Company.
10
9
.3 Patient Registration and Assignment to ABL.
122
.4 Financing Agreement between TRB Systems Inc.,
and Tianjin Worldwide, Inc. for $2,000,000. 143
.5 License and Marketing Agreement between
TRB Systems Inc. and Mr. Konan Kouadio Simeon
for Ivory Coast.
147
.6 Joint Venture Agreement between TRB Systems Inc.,
and Mr. Janak Shah for India.
167
.7 License and Marketing Agreement between
TRB Systems Inc. and Mr. Abbas R. Datoo
for Tanzania.
193
.8 Distributorship Agreement between TRB Systems
Inc., and Mr. Kishor M. And Gira K. Dattani
for Counties in California 213
.9 Licensing and Marketing Agreement between
TRB Systems Inc.and Stella Kujembola
for Benin and Nigeria.
229
22. Subsidiaries of the Registrant
88
24.6 Consent of Auditors
89
ITEM 28: UNDERTAKINGS
A. Certificates
The Company hereby undertakes to provide its transfer agent with
certificates in such denominations and registered in such names as required to
permit delivery thereof to each purchaser of the Selling Stockholders' stock
offered hereby, from time to time, as required, starting as of the close of
business on the day immediately following the date of this Registration
Statement.
PAGE 52
Part II, Page 3
B. Liabilities
Insofar as indemnification of liabilities arising under the securities
Act of 1933, as amended, may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such otherwise, the Company 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 payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company 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
Company 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 of 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Company has duly caused this Registration Statement to be signed on its
behalf by the undersigned in the City of New York, State of New York on July
02, 1997.
TRB SYSTEMS INTERNATIONAL INC.
By: /s/Byung Yim/s/
Byung Yim*
President and Chairman of the Board
of Directors
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Date: July 02, 1997.
TRB SYSTEMS INTERNATIONAL INC.
By: /s/Byung Yim/s
Byung Yim*
Chairman, Chief Executive Officer & Director
___________
* Mr. Yim is currently the sole member of the Company's Board of
Directors.
PAGE 53
