U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
COMMISSION FILE NUMBER 000-29865
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from _______ to
_______
PREMIER BRANDS, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 33-0489616
(State or other jurisdiction of (IRS Employer identification No.)
incorporation or organization)
437 Madison Avenue - New York, New York 10022
(Address of principal executive offices)
(212) 888-6822
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes [x] No [ ]
Number of shares of common stock outstanding as of
July 31, 2000: 29,258,319
PREMIER BRANDS, INC. AND SUBSIDIARIES
(A Development Stage Company)
PART I - FINANCIAL INFORMATION (Post Re-Capitalization - See Notes)
------------------------------
Item 1. Financial Statements PAGE NO.
Consolidated Balance Sheets as of June 30, 2000
(unaudited) 2
Consolidated Statements of Operations for the
Three months ended June 30, 2000 and since inception 3
Consolidated Statements of Cash Flows for the
Six months ended June 30, 2000 4-5
Notes to Consolidated Financial Statements 6-9
Item 2. Management's Discussion and Analysis 9-11
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 17
<PAGE 1>
PREMIER BRANDS, INC. & SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
As of June 30, 2000
ASSETS
CURRENT ASSETS
Cash $ 4,087
LONG-TERM ASSETS
Investments in foreign operations 2,016,139
------------
TOTAL ASSETS $ 2,020,226
============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 74,391
Accrued expenses 12,607
Taxes payable 800
-------------
TOTAL CURRENT LIABILITIES 87,798
STOCKHOLDERS' EQUITY
Convertible preferred stock
($.001 par value, 5,000,000
authorized, none issued) -0-
Common stock
($.001, par value,100,000,000
authorized- 29,258,319
issued and outstanding) 29,258
Additional Paid-in-capital 2,001,299
Deficit accumulated during
development stage (98,129)
-------------
TOTAL STOCKHOLDERS'EQUITY 1,932,428
-------------
$ 2,020,226
============
See Accompanying Notes to Consolidated Financial Statements
<PAGE 2>
PREMIER BRANDS, INC. & SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months Ended June 30, 2000 and the period of March 1,
2000 (Inception) to June 30, 2000
Three Period of March 1,
Months Ended 2000 (Inception)
June 30, 2000 to June 30, 2000*
EXPENSES
General and
Administrative Expenses $ 33,055 $ 34,355
Costs associated with
Reverse merger - See Notes 63,774 63,774
------------- -------------
TOTAL EXPENSES 96,829 98,129
------------- -------------
NET LOSS (96,829) (98,129)
============= =============
Net Loss Per Share-
Basic and fully diluted $ (.011) $ (.016)
============= ============
Weighted Average Shares 8,032,495 6,120,407
============= =============
* Also `Cumulative to Date Loss Since Inception'
See Accompanying Notes to Consolidated Financial Statements
<PAGE 3>
PREMIER BRANDS, INC. & SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the period of March 1, 2000 (Inception) to June 30, 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (98,129)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Common stock issued upon
Reorganization 29,258
Increase (Decrease) in operating
liabilities:
Accounts payable & accrued expenses 74,391
Accrued expenses 12,607
Taxes payable 800
NET CASH PROVIDED BY --------------
OPERATING ACTIVITIES 18,927
--------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in distribution company (16,139)
--------------
NET CASH USED IN INVESTING
ACTIVITIES (16,139)
--------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock issuances 1,299
--------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 1,299
NET INCREASE IN CASH --------------
AND CASH EQUIVALENTS $ 4,087
Cash and cash equivalents,
beginning of period $ -0-
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 4,087
==============
See Accompanying Notes to Consolidated Financial Statements
<PAGE 4>
PREMIER BRANDS, INC. & SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONT. (Unaudited)
For the period of March 1, 2000 (Inception) to June 30, 2000
Non-cash financing activities:
Common stock issued relating to reverse merger:
$ 29,258
============
Common stock issued for equity investments in foreign
Operations: $ 2,000,000
============
See Accompanying Notes to Consolidated Financial Statements
<PAGE 5>
PREMIER BRANDS, INC. & SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2000 (UNAUDITED)
ITEM 1.
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and pursuant to the rules
and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements.
In the opinion of management, the unaudited condensed consolidated
financial statements contain all adjustments consisting only of normal
recurring accruals considered necessary to present fairly the
Company's financial position at June 30, 2000, the results of
operations for the three months ended June 30,2000 and the period of
March 1, 2000 to June 30, 2000, and cash flows for the period of March
1, 2000 to June 30, 2000. The results for the period ended June 30,
2000, are not necessarily indicative of the results to be expected for
the entire fiscal year ending December 31, 2000.
NOTE 2 - EARNINGS (LOSS) PER SHARE
The following represents the calculation of earnings (loss) per share:
Three Period of March 1,
Months Ended 2000 (Inception)
BASIC & FULLY DILUTED* June 30, 2000 to June 30, 2000
--------------------- --------------------------------
Net Loss $ (96,829) $ (98,129)
Less- preferred stock dividends -- --
-------------- -------------
Net Loss $ (96,829) $ (98,129)
Weighted average number
Of common shares 8,032,495 6,120,407
-------------- -------------
Basic & Fully Diluted*
loss per share $ (.011) $ (.016)
============== =============
* The Company had no common stock equivalents during the periods presented
<PAGE 6>
NOTE 3 - PRINCIPLES OF CONSOLIDATION
The unaudited consolidated financial statements for June 30, 2000 and
the six months then ended include the accounts of Premier Brands,
Inc., a Utah USA corporation, and its wholly owned subsidiary, Cathay
Bancorp.com Limited, a Hong Kong corporation. On June 30, 2000, the
Company acquired allof the issued and outstanding common shares of CMD
Capital, Limited (`CMD'), a Hong Kong corporation. The accounts of CMD
are not included in the financial statements as the effective date for
accounting purposes is considered to be July 1, 2000.
NOTE 4 - NATURE OF BUSINESS AND RECENT REORGANIZATION
Pursuant to the share exchange agreement dated June 14, 2000, the
Company acquired 100% of the issued and outstanding shares of Cathay
Bancorp.com Limited (`Bancorp') in exchange for the issue of
21,750,000 shares of the Company's common stock. Bancorp was
incorporated on March 1, 2000 under the Laws of Hong Kong. The
transaction is treated as a reverse merger in accordance with
Accounting Principles Board (APB)opinion No. 16, whereby the
shareholders of Bancorp received approximately 83.8% of the then
outstanding shares of the Company. The transaction has been accounted
for using the purchase method of accounting, with Bancorp being
identified as the acquirer for accounting purposes. The merger was
treated as a tax-free reorganization for federal and state income tax
purposes. Additionally, the Company maintains the option to purchase
between a 20% and 40% interest in WebShanghai.com Co. Ltd
(`WebShanghai') through Hong Kong Technologies Solutions, Limited, an
option to purchase a 70% indirect interest in the PRCInvest.com
website, and an option to acquire a 50% interest in Capital
Entertainment Limited, an entertainment portal joint venture in China.
NOTE 5 - ACQUISITION OF CMD CAPITAL LIMITED
Pursuant to an agreement dated June 30, 2000, the Company acquired
100% of the issued and outstanding shares of CMD Capital Limited
(`CMD'), a Hong Kong corporation, in exchange for the issue of
2,800,000 shares of the Company's common stock. As at the date of
purchase, CMD's assets included 70% of the common stock of PRC
Investment Journal Inc (`PRC') whose assets included 100% ownership of
the PRCInvest.com website. Pursuant to an underlying joint venture
contract, CMD is required to provide funding of $5,000,000 to PRC for
continued development of PRC and the PRC website. Of this amount,
$2,000,000 will be used to develop a Hong Kong version. The
transaction has been accounted for using the purchase method of
accounting.
<PAGE 7>
NOTE 6 - COMMITMENTS
On April 6, 2000, Bancorp entered into a Letter of Intent whereby
Bancorp will participate in the formation of a limited liability
company in Hong Kong under the name of Hong Kong Technologies
Solutions Limited (Limited) or another selected appropriate name.
Limited will acquire 40% of Webshanghai. Bancorp will subscribe to 50%
of the ownership in Limited thereby owning 20% of WebShanghai for
$2,500,000 cash and $1,000,000 worth of the common stock of the
Company. Upon the successful completion of the acquisition of
WebShanghai, the Company will pay $650,000 worth of the Company's
common stock as a finders fee to SNet Communications (HK) Limited. In
addition the Company is responsible for all related restructuring
costs incurred in connection with the transaction.
On May 5, 2000, Bancorp also entered into a Cooperation Agreement
whereby it will cooperative to establish a Sino-foreign equity joint
venture (the `Joint Venture'). The Joint Venture will be responsible
for constructing and managing a series of entertainment websites,
including "estage" and "TalkShow". The Company will hold 50% of the
Joint Venture's registered capital. On June 28, 2000 the Company
entered into a Sino-Foreign cooperative Joint Venture Contract to be named
Capital Entertainment Limited. For its share of the equity, the
Company and another equity holder will jointly contribute $10,000,000
cash in several installments. The specific date of each installment
will be determined by the needs of the project, provided that the
first installment of $2,000,000 is contributed within 30 days after the
issuance of the Joint Venture's business license of which $250,000 of
the first installment is due within 10 working days of signing the
contract. A second installment of $3,000,000 will be due within 90
days after the issuance of the business license, and the final
installment of $5,000,000 will be due before January 31, 2001. Upon
the formal establishment of the Joint Venture, the
Company will pay $700,000 and the Company has issued 500,000 shares of
common stock to SNet Communications (HK) Limited (`SNet') pursuant to
an agreement dated June 15, 2000 between SNet and Bancorp. Upon completion
of the entertainment websites to be owned by the Joint Venture, the Company
will issue 250,000 common shares each to SNet. Upon obtaining
the necessary license to operate talk show programs, the Company will
issue 250,000 common shares each to SNet. To date the company
has issued 500,000 discussed above shares to SNet, valued at $4 per share.
Pursuant to a joint venture agreement and cooperation agreement dated
April 22, 2000, CMD Capital Limited (`CMD'), CMD agreed to establish a
joint venture for the purpose of establishing an investment
information portal in China, with a version to be created for Hong
Kong. For its share of the equity, the Company will contribute
$5,000,000 of which $2,000,000 will be for the Hong Kong version. The
Company will hold 70% of the joint venture's registered capital. The
contributions will
<PAGE 8>
be determined by the needs of the project provided that for the China
portal, $100,000 is paid within 10 working days after execution of the
contract, $700,000 within 22 days of obtaining a business license,
which includes the first $100,000, and $1,400,000 within 140 days
after the launch of the website, and $900,000 within 280 days after
receipt of a business license. The Hong Kong version requires $100,000
within 10 days after the agreement takes effect, $600,000 within 22
working days after the agreement takes effect, which includes the
first $100,000, $600,000 within 70 working days after the official
publication and $800,000 within 140 working days after the official
publication.
NOTE 7 - SUBSEQUENT EVENTS
Subsequent to June 30, 2000, the Company incorporated three new Hong
Kong subsidiaries, Cathay B Trade, Limited, Cathay Entertainment,
Limited and Cathay Investment, Limited. Cathay Entertainment, Limited
will hold the Company's interest in the entertainment ventures on
behalf of CathayBancorp.com Limited and Cathay Investment, Limited
will hold the Company's interests in CMD Capital Limited. Cathay B
Trade, Limited will be used for future projects.
The Company will also be `reincorporating' from Utah to Delaware and
will be change its name from `Premier Brands, Inc.' to `CathayOne,
Inc.'
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following information should be read in conjunction with the
consolidated financial statements and the accompanying notes thereto
included in Item 1 of this Quarterly Report and the Form 10-SB of the
Company for the year ended December 31, 1999.
FORWARD LOOKING STATEMENTS
When used in this Quarterly Report on Form 10-QSB the words or phrases
"will likely result," "are expected to," "will continue," "is
anticipated," or similar expressions are intended to identify "forward
looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to certain
risks and uncertainties, including but not limited to changes in
interest rates, the Company's dependence on debt financing and
securitizations to fund operations, and fluctuations in operating
results. Such factors, which are discussed in Management's Discussion
and Analysis of Financial Condition and Results of Operations, could
affect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially from
any opinion or statements expressed herein with respect to future
<PAGE 9>
periods. As a result, the Company wishes to caution readers not to
place undue reliance on any such forward looking statements, which
speak only as of the date made.
The following financial review and analysis is intended to assist in
understanding and evaluating the financial condition and results of
operations of the Company and its subsidiaries for the three month
ended June 30, 2000 and the period of March 1, 2000 (inception) to
June 30, 2000.
Company Overview
Premier Brands, Inc. (the "Company") is a publicly traded Utah
corporation whose purpose is to manage, take a majority position in,
and/or make strategic investments in technological and service
companies in the Internet and e-commerce industries. Although located
in the United States, the Company has positioned itself, through its
principals, to take advantage of the fast-growing Internet content and
services market, and the growing broadband multimedia information
dissemination opportunities in China.
The Company's principal objective is to maximize shareholder value.
Management believes that the best returns for investments in the next
decade will be in the People's Republic of China, Hong Kong, Macau and
Taiwan (collectively, "Greater China"). The Greater China market is
increasingly utilizing Internet applications, and the Company believes
it can capitalize on the growth in information technology. The Company
will initially focus on developing companies in the following markets:
Business-to-business e-commerce; business-to-government-to-business e-
commerce; Internet software application; Internet content provider;
Internet content origination; and Internet information services.
The Company will seek to take an active role in the day-to-day
management of, and acquire a majority equity interest in a limited
number of e-commerce companies with emphasis in China. CathayOnline,
Inc., a fully integrated Internet company serving the global Chinese
community which is publicly traded in the US markets, will provide the
Company with initial capital and other resources for potential
investments from its pool of connections in the Greater China
investment, finance, and Internet communities.
The Company will provide its North American expertise in management,
new technologies, and financial acumen to companies in China. As the
companies mature, the Company will seek to enhance value and liquidity
for its shareholders by bringing these companies to the public market,
arranging merger and acquisition opportunities, or negotiating private
transactions for them. In the alternative, the Company may take an
equity position or enter into joint ventures with such companies.
<PAGE 10>
Internet and Operational Risk Factors
The Company has a limited operating history and is still considered a
`development stage company.' The Company has a short operating history
upon which to evaluate its business and prospects. As a new e-commerce
enterprise, the Company faces intense competitors, and must manage
growth effectively. The Company may not succeed in addressing all
challenges and risks, including unpredictability of future revenues.
Since the Company's inception, it has incurred losses from operations.
The Company anticipates losses to increase relating to the following
factors:
* The development of the `Cathay' brand, marketing, and promotion.
* Expanded product offering and increased categories of products.
* Continued website development costs.
* Additional personnel to manage customer service and in-house
marketing.
* Increases in general and administrative costs to support the
Company's growing operations.
The ability to become profitable, depends on the ability to generate
revenues and maintain low expense levels. The Company's limited
operating history makes it difficult to forecast its revenues.
Results of Operations
General and administrative expenses for the three months ended June
30, 2000 and the period of March 1, 2000 to June 30, 2000 were $33,055
and $34,355, respectively.
Costs associated with the reverse merger during the three months ended
June 30, 2000 were $63,774. Such costs were partially offset by the
issuance of the Company's common stock.
Liquidity and Capital Resources
On June 30, 2000, the Company had cash of $4,087 and a working capital
deficit of $83,711. Factors attributable to the increase in the
working capital deficit include an increase in the Company's accounts
payable and an increase in accrued expenses. Net cash provided by
operating activities was $18,927 for the period of March 1, 2000
(inception) to June 30, 2000. Cash used in investing activities
totaled $16,139 due to the Company's initial investment in an
unrelated foreign entity. Cash provided by financing activities
totaled $1,299 for the period of March 1, 2000 (Inception) to June 30,
2000 due to the issuance of common stock upon organization of Cathay
Bancorp. Due to the development of the Company and the proposed
commitments as outlined in the preceding notes, the Company will
require additional
<PAGE 11>
cash funds within the next twelve months. The Company proposes to
accomplish this through various debt and equity placements. If the
Company fails to raise capital, it would materially and adversely
effect the Company.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company settled the matter involving Sports Heroes, Inc., which
was disclosed in the Company's Form 10-SB for the fiscal year ending
December 31, 1999 and the Company's Form 10-QSB for the quarter ending
March 31, 2000, and paid all amounts owed and satisfied all of its
obligations under the settlement agreement.
Pursuant to a Release, dated June 12, 2000 (the "Release"), Volpone
Stamp Company, Inc. (d/b/a Sports Stamps Collectors Association)
("Volpone"), released the Company from any and all claims it has or
may have against the Company arising from or related to any dealings
between the Company and Volpone up until the date of the Release.
Volpone specifically released the Company from any claim arising from
or related to the pleadings and papers filed in the case of Volpone
Stamp Company, Inc., d.b.a. Sports Stamps Collectors Association v.
Premier Brands, Inc. (the "Volpone Case"), filed in the United States
District Court for the Central District of California (Case No. CV 97-
6697 SVW). In consideration for Volpone's execution of the Release,
the Company paid $12,500 to Volpone and a Satisfaction of Judgment was
filed in the United States District Court for the Central District of
California on June 22, 2000, attesting to the payment in full of the
judgment in the amount of $25,000 which was entered in the Volpone
Case on August 11, 1998. Information regarding this matter was also
disclosed in the Company's Form 10-QSB, filed for the quarter ending
on March 31, 2000.
Pursuant to a Release, dated June 12, 2000 (the "Release"),
Enviromint, Inc. (d/b/a Chicagoland Processing Corporation)
("Chicagoland") released the Company from any and all claims it has or
may have against the Company arising from or related to any dealings
between the Company and Chicagoland up until the date of the Release.
Chicagoland specifically released the Company from any claim arising
from or related to the pleadings and papers filed in the case of
Chicagoland Processing Corporation v. Premier Brands, Inc. (the
"Chicagoland Case"), filed in the Municipal Court of the State of
California, County of Orange, West Orange Judicial District (Case No.
227758). In consideration for Chicagoland's execution of the Release,
the Company paid $5,000 to Chicagoland and a Satisfaction of Judgment
was filed in the Municipal Court of the State of California, County of
Orange, West Judicial District on June 30, 2000, attesting to the
<PAGE 12>
payment in full of the judgment in the amount of $17,354.93 for which
a stipulation for entry of judgment was entered into in the
Chicagoland Case on February 27, 1997. Information regarding this
matter was also disclosed in the Company's Form 10-QSB, filed for the
quarter ending on March 31, 2000.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On June 23, 2000, pursuant to an Exchange Agreement dated June 14,
2000, among the Company and SNet and ShanghaiNet Technologies (H.K.)
Company, Limited, the shareholders of Bancorp, the Company acquired
100% of the issued and outstanding shares of Bancorp. At the time of
the transaction, the assets of Bancorp included: 1) an option to
purchase between a 20% and 40% interest in WebShanghai through Hong
Kong Technologies Solutions, Limited; 2) an option to purchase a 70%
indirect interest in the PRCInvest.com website; and 3) an option to
purchase a 50% interest in an entertainment portal joint venture in
China. In consideration for the Bancorp shares, the Company issued to
the Bancorp shareholders an aggregate of 21,750,000 shares of the
Company's common stock. The transaction is treated as a reverse
merger, as the shareholders of Bancorp received approximately 83.8% of
the then-outstanding shares in the Company. There are no material
relationships between the Company, its associates, its officers or any
of the officers or directors of any associates of the Company's and
Bancorp, other than as previously disclosed in the Company's Current
Report on Form 8-K, filed on June 23, 2000.
On June 30, 2000, pursuant to a Share Purchase Agreement among
CathayOnline Technologies (Hong Kong) Limited ("CTL"), SNet, Ting Kan
Nok (collectively, the "Sellers"), CMD Capital Limited ("CMD"),
Bancorp and the Company, the Company acquired 100% of the issued and
outstanding shares (the "CMD Shares") of CMD. At the time of the
transaction, CMD's assets included 70% of the shares of common stock
of PRC Investment Journal Inc. (the "Journal") and the Journal's
assets included 100% ownership of the PRCInvest.com website. Pursuant
to the Share Purchase Agreement, CTL will transfer 62.5%, SNet will
transfer 15% and Ting Kan Nok will transfer 22.5% of the CMD Shares to
Bancorp, constituting 100% of the CMD Shares. In consideration for
the CMD Shares, Bancorp agreed to cause the Company to deliver US$16.8
million to the Sellers in the form of shares of the Company's common
stock as follows: the Company issued 630,000, 420,000 and 1,750,000
shares of the Company's common stock, valued at US$6 per share for
purposes of the Share Purchase Agreement, to Ting Kan Nok, SNet and
CTL, respectively.
<PAGE 13>
Pursuant to a Compensation Agreement, dated June 15, 2000, between
Bancorp and SNet Communications (HK) Limited ("SNet") (the "SNet
Compensation Agreement"), in connection with services provided to
Cathay Bancorp.Limited, a wholly-owned subsidiary of the Company
("Bancorp"), the Company (through Bancorp) has agreed to provide SNet
with the right to subscribe, on the same terms as are available to the
relevant other purchasers or transferees, for 10% of the shares of any
subsidiary of the Company or Bancorp upon a reverse merger, spinoff or
public listing or offering of shares by such subsidiaries. Pursuant
to the SNet Compensation Agreement, Bancorp will pay US$700,000 to
SNet and caused the Company to issue 500,000 shares of the Company's
common stock to SNet upon the establishment of a sino-foreign equity
joint venture company (the "JV"). Information regarding the
establishment of the JV was disclosed in the Company's Current Report
on Form 8-K, filed on July 7, 2000. Also in connection with this
agreement, upon the successful completion of the Company's acquisition
(through Bancorp) of a 20% interest in, a separate sino-foreign equity
joint venture company, Bancorp will pay US$650,000 to SNet for its role
in the acquisition. The Company will also issue up to 500,000
additional shares of common stock to SNet upon the JV reaching certain
operational thresholds.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Pursuant to a written consent dated as of June 30, 2000, in lieu of a
special meeting, a majority of the shareholders of the Company
authorized a change in the Company's state of incorporation from Utah
to Delaware, the merger of the Company into its wholly-owned
subsidiary, CathayOne Inc., CathayOne Inc. being the surviving
company.
ITEM 5. OTHER INFORMATION
On June 8, 2000, by unanimous written consent, the Board of Directors
of the Company elected S. David Cooperberg, Brian W. Ransom and
Phillip L. Flaherty as directors. Simultaneously, the Board accepted
the resignations of the three then-incumbent directors. Information
regarding the new directors was disclosed in the Company's Current
Report on Form 8-K, filed on June 23, 2000. Also on June 8, 2000, the
Board appointed Mr. Cooperberg, Mr. Ransom and Mr. Flaherty as
President, Secretary and Treasurer of the Company, respectively. On
June 26, 2000, by unanimous written consent, the Board appointed Peter
Lau as a director, David Ng as Vice President and Marc A. Berger to
replace Mr. Ransom as Secretary of the Company.
<PAGE 14>
On July 26, 2000, by unanimous written consent, the Board appointed
Mr. Lau as Chief Executive Officer of the Company. Mr. Lau previously
served as Chief Financial Officer of CathayOnline, Inc., an Internet
company, from November, 1999 until July 25, 2000, and continues to
serve as Secretary of CathayOnline and on its Board of Directors.
From 1996 to 1999, he served as the Managing Director of Corporate
Finance, Manager of Special Projects, and Managing Director of United
States operations for American Fronteer Financial, Inc., a United
States registered securities brokerage firm, and Heng Fung Capital,
Inc. and Heng Fung Equities, Inc., Hong Kong merchant banking
companies with offices in Hong Kong and the United States. While with
the Heng Fung group, Mr. Lau established a U.S. merchant banking and
investment banking operation on Wall Street. From 1994 through 1996,
Mr. Lau served as the Managing Director of Corporate Finance for
Ridgewood Capital LLC, where he provided corporate financial and
advisory services, negotiated and arranged equity and debt financing,
and developed new business. Mr. Lau also is a director of Advanced
Environmental Technology Inc. Mr. Lau is a certified public
accountant by training and has been employed by Deloitte & Touche LLP
as an accountant and a senior management consultant. Mr. Lau was
awarded a Bachelors degree in accounting from University of Hartford
in 1976 and a masters degree in accounting from the University of
Hartford in 1978. Mr. Lau is 46 years old.
Pursuant to a joint venture agreement and cooperation agreement dated
April 22, 2000, CMD Capital Limited (CMD), CMD agreed to establish a
joint venture for the purpose of establishing an investment
information portal in China, with a version to be created for Hong
Kong. For its share of the equity, the Company will contribute
$5,000,000 of which $2,000,000 will be for the Hong Kong version. The
Company will hold 70% of the joint venture's registered capital. The
contributions will be determined by the needs of the project provided
that, for the China portal, $100,000 is paid within 10 working days
after execution of the contract, $700,000 within 22 days of obtaining
a business license, which includes the first $100,000, and $1,400,000
within 140 days after the launch of the website, and $900,000 within
280 days after receipt of a business license. The Hong Kong version
requires the contribution of $100,000 within 10 days after the
agreement takes effect, $600,000 within 22 working days after the
agreement takes effect, which includes the first $100,000, $600,000
within 70 working days after the official publication and $800,000
within 140 working days after the official publication. To date the
amount contributed is $700,000, of which $500,000 was advanced by
another public company having directors in common with the Company,
CathayOnline, Inc. The amount is repayable in cash and or shares of
the Company and has no fixed repayment date.
<PAGE 15>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
2.1 Exchange Agreement, dated June 14, 2000, among the Company
and SNet and ShanghaiNet, incorporated herein by reference
to the Company's Current Report on Form 8-K, filed on July
7, 2000.
2.2 Share Purchase Agreement, dated June 30, 2000, among CTL,
SNet, Ting Kan Nok, CMD, Bancorp and the Company,
incorporated herein by reference to the Company's Current
Report on Form 8-K, filed on July 7, 2000.
3.1 (i) Articles of Incorporation of the Company, as amended,
are incorporated herein by reference to the Company's
Annual Report on Form 10-SB, filed on March 8, 2000.
(ii) An amendment to the Articles of Incorporation of the
Company, dated September 16, 1998, not previously
filed, is hereby attached as Exhibit 3.1 (ii).
(iii) Bylaws of the Company, incorporated herein by
reference to the Company's Annual Report on Form 10-SB,
filed on March 8, 2000.
10.1 Joint Venture Contract between Bancorp and SNet Communications,
dated June 15, 2000.
10.2 Joint Venture Contract between CMD Capital Limited and China
Investment Journal, dated April 22, 2000.
27 Financial Data Schedule
b) Current Reports on Form 8-K
1) Form 8-K, dated June 8, 2000, was filed on June 23, 2000,
regarding the election of new directors to the Board of
Directors of the Company.
2) Form 8-K, dated June 23, 2000, was filed on July 7, 2000,
regarding two acquisitions and one joint venture agreement
of the Company.
--SIGNATURE PAGE FOLLOWS-
<PAGE 16>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PREMIER BRANDS, INC.
--------------------
By: /s/ S. David Cooperberg Date: August 14, 2000
Name: S. David Cooperberg
Title: President
By: /s/ Peter Lau Date: August 14, 2000
Name: Peter Lau
Title: Chief Executive Officer and
Principal Accounting Officer
<PAGE 17>
