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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) August 28, 2000
PACIFIC CMA, INC.
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(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
COLORADO 000-27653 84-1475073
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
7331 SOUTH MEADOW COURT, BOULDER, COLORADO 80301
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(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code (303) 530-3353
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(Former name or former address, if changed since last report)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
(a) On August 28, 2000, control of Pacific CMA, Inc., a Colorado
corporation (the "Company," "we," or "us"), changed. The transactions that
caused the change of control were memorialized in two agreements:
o Stock Purchase Agreement (the "Purchase Agreement"); and
o Stock Exchange Agreement (the "Exchange Agreement").
The Purchase Agreement and the Exchange Agreement (collectively, the
"Change of Control Agreements") were each executed as of July 25, 2000, and,
following the preparation and delivery of various documents prepared in
connection with the change of control transactions contemplated by those
agreements, were each effective as of August 28, 2000.
The Purchase Agreement was executed by Lam King Ko, Alfred ("Mr. Lam")
and by Dean F. Sessions, Grant W. Peck, Gary S. Joiner, Mark DiSalvo, John
Stearns, Richard Stearns, Scott Olson, and Jay Lutsky (collectively, the
"Selling Stockholders"). Pursuant to the terms of the Purchase Agreement, Mr.
Lam purchased 9,000,000 shares of our common stock (the "Shares") from the
Selling Stockholders. The purchase price for the Shares was $45,000, which was
paid through the delivery by Mr. Lam of his promissory note, written in favor of
the Selling Stockholders' designated agent. The initial principal amount of the
promissory note, and the interest accrued thereon, is due and payable in full
three business days after NASD Regulation, Inc. ("NasdR"), grants its approval
to one of its member firms for the publication of bid and asked quotations on
the OTC Bulletin Board for our common stock. Mr. Lam is the indirect beneficial
owner of the corporation that sold to us the issued and outstanding stock of
our operating subsidiary through the Exchange Agreement. Until the closing of
the Change of Control Agreements, Mr. Lam was otherwise unaffiliated with us.
The Exchange Agreement was executed by an authorized representative of
our then-current management and by an authorized representative of Buller
Services Corporation, a British Virgin Islands International Business Company
("Buller"). Immediately prior to the effectiveness of the change of control
transactions contemplated by the Change of Control Agreements, Buller was the
sole shareholder of AGI Logistics (Hong Kong) Limited, a Hong Kong corporation
("AGI"), that became our wholly-owned subsidiary as a result of the change of
control transactions. Pursuant to the terms of the Exchange Agreement, we
acquired all 15,000,000 issued and outstanding shares of AGI's common stock from
Buller and, in exchange, we issued 8,000,000 shares of our common stock to
Buller. Mr. Lam is the record and beneficial holder of all of the issued and
outstanding shares of capital stock of Buller.
Immediately prior to the effectiveness of the Change of Control
Agreements, our issued and outstanding capitalization consisted of 12,000,000
shares of common stock and no shares of preferred stock. Immediately thereafter,
it consisted of 20,000,000 shares of common stock and no shares of preferred
stock.
The following table sets forth certain information known to us regarding
the beneficial ownership of our common stock, as of August 28, 2000 (immediately
following the effectiveness of the Change of Control Agreements), by (a) each
beneficial owner of more than five percent of
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our common stock, (b) each of our directors, and (c) all of our directors and
executive officers as a group. Except as otherwise indicated, each person has
sole voting and investment power with respect to all shares shown as
beneficially owned, subject to community property laws where applicable.
<TABLE>
<CAPTION>
BENEFICIAL OWNER (1) SHARES BENEFICIALLY OWNED PERCENTAGE BENEFICIALLY OWNED
-------------------- ------------------------- -----------------------------
<S> <C> <C>
Lam King Ko, Alfred (2).... 17,000,000 85.0%
Scott Turner (3)........... -0- -0-
Chan Wai Ying, Louisa (4).. -0- -0-
All directors and executive
officers as a group
(8 persons)................ 17,000,000 85.0%
</TABLE>
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(1) We believe that all persons have full voting and investment power
with respect to the shares. Under the rules of the Securities and
Exchange Commission, a person (or group of persons) is deemed to be a
"beneficial owner" of a security if he or she, directly or indirectly,
has or shares the power to vote or to direct the voting of such
security, or the power to dispose of or to direct the disposition of
such security. Accordingly, more than one person may be deemed to be a
beneficial owner of the same security. A person is also deemed to be a
beneficial owner of any security, which that person has the right to
acquire within 60 days, such as warrants or options to purchase shares
of our common stock.
(2) Includes 9,000,000 shares of common stock owned of record by Mr. Lam
and 8,000,000 shares owned of record by Buller, of which Mr. Lam is
the sole record and beneficial shareholder. Mr. Lam's address is
c/o AGI, Flat C & D, 11/F, Garment Centre, 576-586 Castle Peak Road,
Cheung Sha Wan, Kowloon, Hong Kong.
(3) Mr. Turner's address is c/o Airgate International Corporation,
15304 Rockaway Boulevard, Jamaica, New York 11434.
(4) Ms. Chan's address is c/o AGI, Flat C & D, 11/F, Garment Centre,
576-586 Castle Peak Road, Cheung Sha Wan, Kowloon, Hong Kong.
In connection with the effectiveness of the transactions contemplated by
the Change of Control Agreements, each of our then-current directors and
officers resigned their positions after having appointed the designees of Buller
and Mr. Lam. For a list of our new directors and officers and their five-year
biographies, please see Item 2. Acquisition or Disposition of Assets --
Management.
Copies of the Purchase Agreement, the four related promissory notes, and
the Exchange Agreement are filed as exhibits to our Current Report on Form 8-K
and are incorporated in their entirety herein. The foregoing description is
modified by such references.
(b) We have no knowledge of any arrangements the operation of which
may at a subsequent date result in a subsequent change in control of us.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
(a) Pursuant to the terms of the Exchange Agreement, we acquired
all 15,000,000 of the outstanding and issued shares of common stock of AGI. The
transaction contemplated by the Exchange Agreement was negotiated between Mr.
Lam, on behalf of Buller, and our directors. In evaluating AGI as a candidate
for the proposed acquisition, our directors used various criteria, such as the
value of the assets of AGI, its ability to compete in the freight forwarding
market, the experience in the industry of its management, its current business
operations and anticipated operations, its business name and reputation, and the
anticipated growth of its business. In evaluating us, Mr. Lam, on behalf of
Buller, placed a primary emphasis on our status as a company without material
liabilities, whose common stock was registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "1934 Act").
Until the effectiveness of the Change of Control Agreements, there was
no material relationship between Buller or Mr. Lam and our Company or any of our
affiliates, any of our directors or officers, or, to our best knowledge, any
associate of any of our directors or officers, with the exception of the
relationship generated in connection with the consulting agreement between PCMA,
Inc., a Nevada corporation, and AGI, as more particularly described in Item 5.
Other Events.
(b) We expect to continue, and, if appropriate, expand, the
existing business operations of AGI as our wholly owned subsidiary. A
description of the business of AGI, its property, management, and certain
important risk factors are set forth below.
BUSINESS
AGI was incorporated in Hong Kong with limited liability on
August 12, 1998, under the Hong Kong Companies Ordinance.
AGI is engaged in the business of providing international air freight,
sea freight, river freight, rail freight forwarding services, local and inland
trucking, and warehousing for the import and export markets in or through Hong
Kong and South China to the United States, Europe, and other areas of Asia. AGI
offers full logistics services to its customers through its network of offices
and warehouses, subcontractors and overseas agents.
AGI's executive office is in Hong Kong. AGI maintains the following
branch offices in the PRC: Futian, Shenzhen; Yantian, Shenzhen; and Guangzhou.
There are currently 47 employees in AGI's Hong Kong office; seven employees in
the Futian, Shenzhen, office; seven employees in the Yantian, Shenzhen, office;
and 18 employees in the Guangzhou office. AGI has also entered into agency
agreements with 104 freight-forwarding companies worldwide.
COMPETITION
There are currently 106 air freight forwarder companies and 519 sea
freight forwarding companies operating in Hong Kong that we consider to be
competitors to AGI. Management believes that AGI's customer base, sales and
marketing force, relationships with major airlines and shipping lines, network
of overseas agents, pricing, marketing strategies, and new Internet freight
system, will minimize competitive threats to AGI's business. Notwithstanding
this belief,
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however, there is no assurance that AGI will be able to compete successfully
with its competitors and to operate its business successfully and profitably.
MARKETING
AGI has begun marketing its freight forwarding services by sending its
employees worldwide to establish relationships with a network of agents and to
promote AGI's services in those areas. In addition to the services AGI's agents
provide, they are a significant source of business referral.
PROPERTY
AGI's executive office in Hong Kong is located at Flat C & D, 11/F,
Garment Centre, 576-586 Castle Peak Road, Cheung Sha Wan, Kowloon, Hong Kong,
under a three-year lease that commenced in March of 1999. It has a gross
floor area of approximately 7,400 square feet.
AGI's Hong Kong air operations office is located at Unit 508, 5/F,
Airport Freight Forwarding Center, 2 Chun Wan Road, Chek Lap Kok, Hong Kong,
under a two-year lease that commenced in September of 1999. It has a gross
floor area of approximately 2,000 square feet. AGI's Hong Kong air operations
warehouse is located at Unite 26, G/F, Airport Freight Forwarding Center, 2 Chun
Wan Road, Chek Lap Kok, Hong Kong, under a two-year lease that also
commenced in October of 1999. It has a gross floor area of approximately 7,000
square feet with storage capacity of 1,000 CBM.
AGI's Hong Kong sea operations warehouse is located at Unit 303B, 4/F,
H.I.D.C., Kwai Chung Container Port 4, Container Port Road South, Kwai Chung,
New Territories, Hong Kong, under a one-year lease that commenced in
September of 1999. It has a gross floor area of approximately 38,000 square feet
with storage capacity of 2,200 CBM.
AGI's Futian, Shenzhen, office is located at Room 113B, Block 3,
International Trade Center, 1001 Honghua Road, Futian Free Trade Zone, Shenzhen,
China, under a one-year lease that commenced in April of 1999. It has
a gross floor area of approximately 1,725 square feet. AGI's Futian, Shenzhen,
warehouse is located at 11 Honghua Road, Futian free Trade Zone, Shenzhen,
China, under a one-year lease that commenced in April of 1999. It has
a gross floor area of approximately 161,700 square feet with a storage capacity
of 12,000 CBM.
AGI's Yantian, Shenzhen, office is located at Room 107, Huakung
Building, Yantian Port, Sha Tou Jiao, Shenzhen, China, under a one-year
lease that commenced in February of 2000. It has a gross floor area of
approximately 500 square feet. AGI's Yantian, Shenzhen warehouse is located at
Customs Bonded Warehouse, Yantian Port, Sha Tou Jiao, Shenzhen, China, under a
one-year lease that also commenced in February of 2000. It has a gross floor
area of approximately 26,000 square feet with a storage capacity of 7,000 CBM.
AGI's Guangzhou office is located at Room 1801, Block A, Fuqian
Building, 618-620 Jie Fang Road North, Guangzhou 510030, China, under a
two-year lease that commenced in December of 1998. It has a gross floor
area of approximately 800 square feet. AGI's Guangzhou
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air operations office is located at Room 320, Cargo Building, Baiyun Airport,
Guangzhou 510405, China, under a one-year lease that commenced began in
April of 2000. It has a gross floor area of approximately 200 square feet.
AGI's Guangzhou warehouse is located at G/F, Cargo Building, Baiyun Airport,
Guangzhou 510405, China, under a one-year lease that commenced began in
December of 1998. It has a gross floor area of approximately 2,000 square feet
with a storage capacity of 500 CBM.
LITIGATION
AGI is not engaged in or threatened with or aware of any situation that
could subject it to litigation or other legal proceeding.
MANAGEMENT
Following the effectiveness of the transactions contemplated by the
Change of Control Agreements, our directors and executive officers are:
<TABLE>
<CAPTION>
NAME AGE TITLE
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<S> <C> <C>
Lam King Ko, Alfred 47 Chairman of Board of Directors; President
Scott Turner 46 Vice Chairman of Board of Directors
Chan Wai Ying, Louisa 42 Director
Dorothy Wong 27 Treasurer; Chief Accountant
Rango Lam 28 Secretary
Dickwa Dai 35 Deputy Airfreight Director
John Lam 37 Deputy Seafreight Director
Kaze Chan 35 Deputy Sales Director
</TABLE>
LAM KING KO, ALFRED, is now our president and chairman of our board of
directors. He is the founder of AGI and has served as its managing director
since its inception in 1998. From 1978 to 1996, Mr. Lam was the chairman of a
publicly listed Hong Kong freight forwarding company, AWT World Transport
Holdings Limited ("AWT"). Mr. Lam holds a bachelors degree in business
administration from the Chinese University of Hong Kong.
SCOTT TURNER is now the vice chairman of our board of directors and a
consultant to us. He is the co-founder of Airgate International Corporation, a
New York-based freight forwarding company, with which he has been affiliated
since 1994. Mr. Turner holds a bachelors degree in Business from Hofstra
University.
CHAN WAI YING, LOUISA, is now a member of our board of directors.
She is the wife of Mr. Lam. From 1994 to 1996, Ms. Chan was the executive
director of AWT and has been involved in the air and sea freight forwarding
business for more than 20 years. She holds a Diploma of Accounting in Australia.
DOROTHY WONG is now our treasurer and chief accountant. Prior to her
employment by AGI, she was employed by AWT as assistant accountant from 1994 to
1998.
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RANGO LAM is now our Secretary. Prior to her employment by AGI, she was
employed by World Connect Limited as executive secretary from 1996 to 1999 and
AWT as senior secretary from 1994 to 1996.
DICKWA DAI is now our deputy airfreight director. Prior to his
employment by AGI, he was employed by P A.C. Pactrans Air Cargo (H.K.) Ltd. as
operations director from 1991 to 1999. Mr. Dai is responsible for AGI's
airfreight activities in Hong Kong, China, the United States, and Europe, as
well as for our overall strategic planning and operations.
JOHN LAM is now our deputy seafreight director. Prior to his employment
by AGI, he was employed by Wellcorp Container Lines Limted as Director from 1989
to 1998 and Speedy Neptune (H.K.) Ltd. as general manager from 1998 to 1999.
Mr. Lam is responsible for AGI's seafreight activities in Hong Kong, China, the
United States, and Europe, as well as for our overall strategic planning and
operations.
KAZE CHAN is now our deputy sales director, a position that he has held
at AGI since he co-founded AGI with Mr. Lam in 1998. Mr. Chan is responsible for
AGI's sales and marketing activities in Hong Kong, China, the United States, and
Europe, as well as for our overall strategic planning and operations. During the
five years prior to his employment by AGI, he was employed by Northwest Airlines
as a senior manager in their cargo operations and as a senior manager by AWT.
Mr. Chan received his M.A. in Urban Studies from Michigan State University.
CERTAIN RISK FACTORS
AGI IS OUR SOLE OPERATING ASSET; IT COMMENCED OPERATIONS IN 1998 AND HAS
A LIMITED OPERATING HISTORY. Its operations are subject to the risks and
competition inherent in the establishment of a relatively new business
enterprise. We cannot provide any assurances that future operations will be
profitable or that we will be able to obtain any financing that we may require.
COMPETITION IN THE FREIGHT FORWARDING INDUSTRY IS INTENSE. There are
numerous well-established competitors possessing substantially greater
financial, marketing, personnel, and other resources than AGI. We cannot provide
any assurances that our freight forwarding operations will be profitable in the
long-term.
VARIOUS INTERNATIONAL TRADE ISSUES MAY ADVERSELY AFFECT OUR HONG KONG
BASE OF OPERATIONS. Historically, trade between China and the United States, and
various other countries, has been facilitated through the Hong Kong, as an
intermediary. If China becomes a member of the World Trade Organization, it
would receive Most Favored Nation ("MFN") status on a permanent basis with the
United States; whereas, its MFN status is currently subject to annual renewal.
If China obtains permanent MFN status, trade between China and the United
States, as well as various other countries with intense trade connections with
the United States, could increase, without using Hong Kong as an intermediary.
Such a development could adversely affect AGI's freight forwarding business in
Hong Kong. Management intends to increase marketing activities outside of the
United States, in particular, in Asia, and to appoint more overseas agents in
these areas. In addition, management intends to establish additional branch
offices in certain major cities in China and Southeast Asia. Notwithstanding
such changes, AGI's Hong Kong-generated business is subject to adverse change if
and when China's trade relations with the United States change.
ISSUANCE OF FUTURE SHARES MAY DILUTE INVESTOR SHARE VALUE. We are
authorized to issue 100,000,000 shares of common stock. As we grant options to
attract and retain directors, employees, and consultants, as we engage in
additional acquisitions of complementary businesses through securities
transactions, and as we issue and sell our securities in various capital
transactions, our current stockholders may suffer substantial dilution in the
percentage of our common stock then held by them. Moreover, we may value, on an
arbitrary basis, any securities so issued. The issuance of our securities for
future services or acquisitions or other corporate actions may have the effect
of diluting the value of the shares held by our then-existing
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stockholders, and might have an adverse effect on any trading market for our
common stock that may develop.
PENNY STOCK REGULATIONS MAY AFFECT OUR TRADING MARKET AND THE LIQUIDITY
OF OUR COMMON STOCK. Upon commencement of trading in our common stock, if such
occurs (of which we cannot provide any assurance), our common stock may be
deemed a penny stock. Penny stocks generally are equity securities with a price
of less than $5.00 per share, other than securities registered on certain
national securities exchanges or quoted on the Nasdaq Stock Market, provided
that current price and volume information with respect to transactions in such
securities is provided by the exchange or system. Our securities may be subject
to "penny stock rules" that impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than their established
customers and accredited investors (generally those with assets in excess of
$1,000,000 or annual income exceeding $200,000, or $300,000 together with their
spouse). For transactions covered under the penny stock rules, a broker-dealer
must make a special suitability determination for the purchase of such
securities and have received the purchaser's written consent to the transaction
prior to the purchase. Additionally, for any transaction involving a penny
stock, unless exempt, the "penny stock rules" require the delivery, prior to the
transaction, of a disclosure schedule prescribed by the Securities and Exchange
Commission relating to the penny stock market. A broker-dealer also must
disclose the commissions payable to both the broker-dealer and the registered
representative and current quotations for the securities. Finally, monthly
statements must be sent disclosing recent price information on the limited
market in penny stocks. Consequently, the "penny stock rules" may restrict the
ability of broker-dealers to sell our securities. The penny stock restrictions
will not apply to our securities if they maintain a market price of $5.00 or
greater. We cannot provide any such assurances.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 5. OTHER EVENTS.
Pursuant to the terms of a Consulting Agreement ("Consulting Agreement")
between AGI and PCMA, Inc., a Nevada corporation ("PCMA"), entered into as of
June 1, 2000, AGI, on its own behalf and on behalf of Buller and such other
persons as AGI, from time to time, determined, engaged PCMA (i) to identify a
company whose common stock was registered under the 1934 Act; (ii) to assist AGI
with certain filings required by the Securities and Exchange Commission
following the effectiveness of a business combination transaction with such a
company; and (iii) to assist a broker-dealer with certain of the filings
required by NasdR to obtain permission for such broker-dealer to place priced
bid and asked quotations on the OTC Bulletin Board for our common stock. The
engagement fee paid to PCMA was $200,000 -- payable in cash as to $25,000 and by
promissory note as to $175,000. The initial principal amount of the promissory
note, and the interest accrued thereon, is payable in full three business days
after
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NasdR grants its approval to one of its member firms for the publication
of bid and asked quotations on the OTC Bulletin Board for our common stock.
Copies of the Consulting Agreement and the related promissory note are
filed as exhibits to our Current Report on Form 8-K and are incorporated in
their entirety herein. The foregoing description is modified by such references.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
The following audited financial statements of AGI are attached:
o Audit Report of Moores Rowland;
o Statements of Operations for the period from inception until
December 31, 1998, and the year ended December 31, 1999 (in HK$)
and for the year ended December 31, 1999 (in US$);
o Balance Sheets as of December 31, 1998, and December 31, 1999
(in HK$) and December 31, 1999 (in US$);
o Statements of Stockholders' Equity as of December 31, 1998,
and December 31, 1999 (in HK$) and December 31, 1999 (in US$);
o Statements of Cash Flows for the period from inception until
December 31, 1998, and the year ended December 31, 1999 (in HK$)
and for the year ended December 31, 1999 (in US$);
o Notes to the Financial Statements.
The following unaudited consolidated financial statements of AGI are
attached:
o Unaudited Consolidated Balance Sheet as of June 30, 2000
(in US$);
o Unaudited Consolidated Statement of Operations for the six
months ended June 30, 2000 (in US$);
o Notes to the Financial Statements.
(b) Pro forma financial information.
The following pro forma financial information is attached:
o Pro Forma Consolidated Statements (unaudited);
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o Unaudited Pro Forma Consolidated, Balance Sheet as of
June 30, 2000;
o Unaudited Pro Forma Consolidated, Statement Of Operations for
the year ended December 31, 1999;
o Unaudited Pro Forma Consolidated, Statement Of Operations for
the six-month period ended June 30, 2000; and
o Notes to the Unaudited Pro Forma Consolidated Financial
Statements.
(c) Exhibits.
2.1 Stock Purchase Agreement, dated as of July 25, 2000, among Lam King Ko,
Alfred and Dean F. Sessions, Grant W. Peck, Gary S. Joiner, Mark
DiSalvo, John Stearns, Richard Stearns, Scott Olson, Jay Lutsky, and
Frank Jackson.
2.2 Promissory Note of Lam King Ko, Alfred, dated as of July 25, 2000,
in favor of the Selling Stockholders' designated agent, in the principal
sum of $45,000.00.
2.3 Stock Exchange Agreement, dated as of July 25, 2000, between
Pacific CMA, Inc. and Buller Services Corporation.
2.4 Consulting Agreement, dated as of June 1, 2000, between AGI Logistics
(Hong Kong) Limited and PCMA, Inc.
2.5 Promissory Note of AGI Logistics (Hong Kong) Limited, dated as of
June 1, 2000, in favor of PCMA, Inc., in the principal sum of
$175,000.00.
ITEM 8. CHANGE IN FISCAL YEAR.
Not applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PACIFIC CMA, INC.
By: /S/ LAM KING KO, ALFRED
-----------------------------
Lam King Ko, Alfred
Chairman of the Board and President
Date: August 29, 2000
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[LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
AGI LOGISTICS (HONG KONG) LIMITED
We have audited the accompanying balance sheets of AGI Logistics (Hong Kong)
Limited (a Hong Kong corporation) as of December 31, 1998 and 1999, and the
related statements of operations, stockholders' equity and cash flows for the
period from August 12 (inception) to December 31, 1998 and the year ended
December 31, 1999. 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 United States 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 financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of December 31,
1998 and 1999 and the results of its operations and its cash flows for the
period from August 12 (inception) to December 31, 1998 and the year ended
December 31, 1999 in conformity with generally accepted accounting principles.
/S/ MOORES ROWLAND
-------------------------
MOORES ROWLAND
CHARTERED ACCOUNTANTS
CERTIFIED PUBLIC ACCOUNTANTS
Hong Kong
Date: 26 May 2000
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AGI LOGISTICS (HONG KONG) LIMITED
STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------ -------------------------------------------------
1998 1999 1999
HK$ HK$ US$
<S> <C> <C> <C>
FREIGHT FORWARDING INCOME 33,473,396 71,097,800 9,133,839
COST OF FORWARDING (28,777,774) (59,793,935) (7,681,646)
------------------------ ------------------------ -----------------------
GROSS PROFIT 4,695,622 11,303,865 1,452,193
------------------------ ------------------------ -----------------------
OPERATING EXPENSES
Selling and administrative expenses (1,498,791) (7,366,361) (946,347)
Depreciation (30,000) (365,916) (47,009)
------------------------ ------------------------ -----------------------
Total operating expenses (1,528,791) (7,732,277) (993,356)
------------------------ ------------------------ -----------------------
INCOME FROM OPERATIONS 3,166,831 3,571,588 458,837
------------------------ ------------------------ -----------------------
NON-OPERATING INCOME (EXPENSES)
Interest and other income 9,821 36,451 4,682
Interest expenses -- (5,871) (754)
------------------------ ------------------------ -----------------------
Net non-operating income 9,821 30,580 3,928
------------------------ ------------------------ -----------------------
INCOME BEFORE INCOME TAXES 3,176,652 3,602,168 462,765
Provision for income taxes (note 5) (506,781) (572,291) (73,521)
------------------------ ------------------------ -----------------------
NET INCOME 2,669,871 3,029,877 389,244
======================== ======================== =======================
</TABLE>
The financial statements should be read in conjunction with the accompanying
notes.
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AGI LOGISTICS (HONG KONG) LIMITED
BALANCE SHEET
As of December 31, 1998 and 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1999 1999
HK$ HK$ US$
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents 3,240,300 550,876 70,770
Trade receivables 13,050,262 14,069,781 1,807,526
Deposits, prepayment and other debtor 276,410 1,571,605 201,902
Due from a director (note 8) -- 405,831 52,137
Due from other related parties (note 8) 171,960 3,005,567 386,121
------------------ ----------------- ------------------
TOTAL CURRENT ASSETS 16,738,932 19,603,660 2,518,456
Property, plant and equipment, net (note 4) 157,391 1,323,480 170,026
------------------ ----------------- ------------------
TOTAL ASSETS 16,896,323 20,927,140 2,688,482
================== ================= ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade payables 9,036,241 8,113,255 1,042,299
Accrued charges and other creditors 80,000 897,685 115,324
Due to a director (note 8) 4,603,370 -- --
Obligations under hire purchase contract
-current portion (note 6) -- 38,339 4,925
Income tax payable 489,460 1,027,517 132,004
------------------ ----------------- ------------------
TOTAL CURRENT LIABILITIES 14,209,071 10,076,796 1,294,552
Obligations under hire purchase contract-non-current
portion (note 6) -- 99,041 12,724
Deferred taxes 17,321 51,555 6,623
------------------ ----------------- ------------------
TOTAL LIABILITIES 14,226,392 10,227,392 1,313,899
------------------ ----------------- ------------------
COMMITMENTS AND CONTINGENCIES (NOTE 7)
STOCKHOLDERS' EQUITY
Ordinary stock of HK$1 each, issued and outstanding,
1998: 60 shares and 1999: 5,000,000 shares of stock 60 5,000,000 642,344
Retained earnings 2,669,871 5,699,748 732,239
------------------ ----------------- ------------------
TOTAL STOCKHOLDERS' EQUITY 2,669,931 10,699,748 1,374,583
------------------ ----------------- ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 16,896,323 20,927,140 2,688,482
================== ================= ==================
</TABLE>
APPROVED BY THE BOARD OF DIRECTORS ON 26 MAY 2000
/S/ LAM KING KO, ALFRED /S/ CHAN WAI YING, LOUISA
----------------------- ------------------------
DIRECTOR DIRECTOR
The financial statements should be read in conjunction with the accompanying
notes.
14
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED
STATEMENTS OF STOCKHOLDERS' EQUITY
For the period ended December 31, 1998 and the year ended December 31, 1999
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ORDINARY STOCK RETAINED EARNINGS TOTAL
------------------------------------ ------------------------ -------------------------
NUMBER HK$ US$ HK$ US$ HK$ US$
<S> <C> <C> <C> <C> <C> <C> <C>
Balance as of August 12,
1998 (inception) 2 2 1 -- -- 2 1
Issue of ordinary shares
of HK$1 each 58 58 7 -- -- 58 7
Net income -- -- -- 2,669,871 342,995 2,669,871 342,995
----------- ----------- ----------- ----------- ------------ ------------ -----------
Balance as of December
31, 1998 60 60 8 2,669,871 342,995 2,669,931 343,003
Issue of ordinary shares
of HK$1 each 4,999,940 4,999,940 642,336 -- -- 4,999,940 642,336
Net income -- -- -- 3,029,877 389,244 3,029,877 389,244
----------- ----------- ----------- ----------- ------------ ------------ -----------
BALANCE AS OF
DECEMBER 31, 1999 5,000,000 5,000,000 642,344 5,699,748 732,239 10,699,748 1,374,583
=========== =========== =========== =========== ============ ============ ===========
</TABLE>
The financial statements should be read in conjunction with the accompanying
notes.
15
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE
PERIOD ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------- -----------------------------------
1998 1999 1999
HK$ HK$ US$
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income 2,669,871 3,029,877 389,244
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED (USED) BY OPERATING ACTIVITIES
Depreciation 30,000 365,916 47,009
Loss on disposal of property, plant and equipment -- 14,625 1,879
CHANGES IN WORKING CAPITAL:
Trade receivables (13,050,262) (1,019,519) (130,976)
Deposits, prepayment and other debtor (276,410) (1,295,195) (166,392)
Due from other related parties (171,960) (2,833,607) (364,030)
Trade payables 9,036,241 (922,986) (118,575)
Accrued charges and other creditors 80,000 817,685 105,047
Income tax payable 489,460 538,057 69,123
Deferred taxes 17,321 34,234 4,398
----------------- ----------------- -----------------
NET CASH USED IN OPERATING ACTIVITIES (1,175,739) (1,270,913) (163,273)
----------------- ----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (187,391) (1,402,276) (180,149)
Sales proceeds from disposal of property, plant and
equipment -- 9,000 1,156
----------------- ----------------- -----------------
NET CASH USED IN INVESTING ACTIVITIES (187,391) (1,393,276) (178,993)
----------------- ----------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital element of hire purchase payments -- (15,974) (2,052)
Advances from/to a director 4,603,370 (5,009,201) (643,525)
Issue of shares 60 4,999,940 642,336
----------------- ----------------- -----------------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 4,603,430 (25,235) (3,241)
----------------- ----------------- -----------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,240,300 (2,689,424) (345,507)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD/YEAR -- 3,240,300 416,277
----------------- ----------------- -----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD/YEAR 3,240,300 550,876 70,770
================= ================= =================
</TABLE>
The financial statements should be read in conjunction with the accompanying
notes.
16
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
1. ORGANISATION AND PRINCIPAL ACTIVITIES
AGI Logistics (Hong Kong) Limited ("the Company") was incorporated in Hong
Kong with limited liability on August 12, 1998 under the Hong Kong
Companies Ordinance. The Company was incorporated with authorized share
capital of 10,000 ordinary shares of HK$1 each. On incorporation, 2
ordinary shares of HK$1 each were issued at par for cash consideration to
provide initial working capital of the Company.
At an extraordinary general meeting held on November 12, 1998, the issued
share capital of the Company was increased to HK$60 by allotting 58
ordinary shares of HK$1 each, for cash at par, to provide for additional
working capital. These shares rank pari passu with the existing shares in
all respects.
At an extraordinary general meeting held on July 14, 1999, the authorised
share capital of the Company was increased to HK$5,000,000 by the creation
of an additional 4,990,000 ordinary shares of HK$1 each. On the same date,
the issued share capital of the Company was increased to HK$5,000,000 by
allotting 4,999,940 ordinary shares of HK$1 each, for cash at par, to
provide for additional working capital. These shares rank pari passu with
the existing shares in all respects.
At an extraordinary general meeting held on January 21, 2000, the
authorised share capital of the Company was increased to HK$15,000,000 by
the creation of an additional 10,000,000 ordinary shares of HK$1 each. On
the same date, the issued share capital of the Company was increased to HK
$15,000,000 by allotting 10,000,000 ordinary shares of HK$1 each, for cash
at par, to provide for additional working capital. These shares rank pari
passu with the existing shares in all respects.
The principal activities of the Company are freight forwarding.
The ultimate holding company at the balance sheet date is Buller Services
Corporation, a company incorporated in British Virgin Islands.
2. BASIS OF PRESENTATION
The financial statements have been prepared in accordance with generally
accepted accounting principles of the United States of America. This basis
of accounting differs from that used in the statutory financial statements
of a company incorporated in Hong Kong, which were prepared in accordance
with generally accepted accounting principles in Hong Kong.
The financial statements are presented in Hong Kong dollars which is the
Company's functional currency because the Company's operations are
primarily located in Hong Kong. For illustrative purposes, the exchange
rate adopted for the presentations of financial information as of and for
the period ended December 31, 1998 and 1999 has been made at HK$7.784 to
US$1.00. No representation is made that the HK$ amount could have been, or
could be, converted into United States Dollars at that rate on December
31, 1998 and 1999 or at any other rate.
17
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) STATEMENT OF CASH FLOWS
For the purposes of the statement of cash flows, the Company considers
all highly liquid debt instruments with an original maturity within
three months to be cash equivalents.
(b) PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION
Property, plant and equipment is stated at cost less accumulated
depreciation.
The cost of an asset comprises its purchase price and any directly
attributable costs of bringing the asset to its working condition and
location for its intended use. Expenditures incurred after the assets
have been put into operation, such as repairs and maintenance and
overhaul costs, is normally recognized as expenses in the period in
which they are incurred. In situations where it can be clearly
demonstrated that the expenditure has resulted in an increase in the
future economic benefits expected to be obtained from the use of the
assets, the expenditure is capitalized.
When assets are sold or retired, their cost and accumulated
depreciation are eliminated from the accounts and any gain or loss
resulting from their disposal is included in the statement of
operations.
Depreciation is provided to write off the cost of property, plant and
equipment over their estimated useful lives from the date on which
they become fully operational and after taking into account their
estimated residual values, using the straight-line method at the
following rate per annum:
Furniture and fixtures 3 years
Office equipment 3 years
Motor vehicles 3 years
The Company recognizes an impairment loss on property, plant and
equipment when evidence, such as the sum of expected future cash flows
(undiscounted and without interest charges), indicates that future
operations will not produce sufficient revenue to cover the related
future costs, including depreciation, and when the carrying amount of
asset cannot be realized through sale. Measurement of the impairment
loss is based on the fair value of the assets.
(c) REVENUE RECOGNITION
Revenue represents income arising from freight forwarding services
which is recognized when the relevant services are provided by
reference to the date of shipment.
18
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) LEASED ASSETS
A hire purchase contract is a contract for hire of an asset which
contains provisions giving the hirer an option to acquire legal title
to the asset upon the fulfilment of certain conditions stated in the
contract. Property, plant and equipment held under hire purchase
contracts are capitalized at their fair value at the date of
acquisition. The corresponding liabilities to the hirer, net of
interest charges, is included in the balance sheet as a hire purchase
obligation and categorized under current or non-current liabilities.
Depreciation is provided on the cost of the assets on a straight-line
basis over their estimated useful lives as set out in note 3(b) above.
Finance charges implicit in the purchase payments are charged to the
statement of operations over the periods of the contracts so as to
produce an approximately constant periodic rate of charge on the
remaining balances of the obligations for each accounting period.
(e) OPERATING LEASES
Leases where substantially all the rewards and risks of ownership of
assets remain with the leasing company are accounted for as operating
leases. Rentals payable under operating leases are recognized as an
expense on the straight-line basis over the lease terms.
(f) INCOME TAXES
Provision for income and other related taxes have been provided in
accordance with the tax rates and laws in effect in Hong Kong.
The Company did not carry on any business and did not maintain any
branch office in the United States of America. No provision for
withholding or U.S. federal income taxes or tax benefits on the
undistributed earnings and/or losses of the Company has been provided.
The Company provides for deferred income taxes using the liability
method, by which deferred income taxes are recognized for all
significant temporary differences between the tax and financial
statement bases of assets and liabilities. The tax consequences of
those differences are classified as current or non-current based upon
the classification of the related assets or liabilities in the
financial statements.
(g) FOREIGN CURRENCY TRANSLATION
The Company maintains its accounting books and records in Hong Kong
Dollars ("HK$") and transactions involving foreign currencies are
translated at the approximate rates of exchange ruling at the
transaction dates. Monetary assets and liabilities denominated in
foreign currencies at the year end are retranslated at the approximate
rates of exchange ruling at that date. Translation differences are
included in the statement of operations.
19
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h) USES OF ESTIMATES
The preparation of the Company's financial statements in conformity
with generally accepted accounting principles requires the Company's
management to make estimates and assumptions that affect the amounts
reported in these financial statements and accompanying notes. Actual
amounts could differ from those estimates.
(i) RELATED PARTY
Parties are considered to be related if one party has the ability,
directly or indirectly, to control the other party or exercise
significant influence over the other party in making financial and
operating decisions. Parties are also considered to be related if they
are subject to common control or common significant influence.
(j) FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values for financial instruments under SFAS No.
107, "Disclosures about Fair Value of Financial Instruments", are
determined at discrete points in time based on relevant market
information. These estimates involve uncertainties and cannot be
determined with precision. The estimated fair values of the Company's
financial instruments, which include cash trade receivables, trade
payables and advances due from / to a director and related parties
approximate their carrying value in the financial statements.
(k) ACCOUNTING PRONOUNCEMENTS
COMPREHENSIVE INCOME
As of January 1, 1999, the Company adopted issued Statement of
Financial Accounting Standards ("SFAS") No. 130 ("Reporting
Comprehensive Income"). The adoption of this statement had no impact
on the Company's net income or stockholders' equity. SFAS NO. 130
establishes new rules for the reporting and display of comprehensive
income and its components. Comprehensive income is comprised of net
income and all changes to stockholders' equity, except those due to
investments by owners (changes in paid-in capital) and distributions
to owners (dividends).
SFAS No. 130 requires foreign currency translation adjustments which,
prior to adoption, were reported separately in stockholders' equity,
to be included in other comprehensive income.
SEGMENT INFORMATION
On January 1, 1999, the Company adopted SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information", which
supersedes SFAS No. 14, "Financial Reporting Segments of a Business
Enterprise", and establishes standards for the way that public
enterprises report information about operating segments in financial
statements. It also establishes standards for disclosures regarding
products and services, geographic areas and major customers. SFAS No.
131 defines operating segments as components of an enterprise about
which separate financial information is available that is evaluated
regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance.
20
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(k) ACCOUNTING PRONOUNCEMENTS (CONTINUED)
COSTS OF START-UP ACTIVITIES
As of January 1, 1999, the Company adopted Statement of Position
("SOP") 98-5, "Reporting on the Costs of Start-up Activities", which
requires costs of start-up activities to be expensed as incurred. This
statement is effective for fiscal years beginning after December 15,
1998. The statement requires previously capitalized costs related to
start-up activities to be expensed as a cumulative effect of a change
in accounting principle when the statement is adopted. The adoption of
this new standard did not have a significant effect on the Company's
financial position or results of operations.
COSTS OF COMPUTER SOFTWARE
As of January 1, 1999, the Company adopted SOP 98-1, "Accounting
for the Costs of Computer Software Developed or Obtained for Internal
Use", which establishes new accounting and reporting standards for the
costs of computer software developed or obtained for internal use.
This statement will be applied prospectively and is effective for
fiscal years beginning after December 15, 1998. The impact of this new
standard did not have a significant effect on the Company's financial
position or results of operations.
NEW ACCOUNTING STANDARDS NOT YET ADOPTED
In February 1998, SFAS No. 132, "Employer's Disclosures about Pensions
and Other Postretirement Benefits" amended the disclosure requirements
for pensions and other postretirement benefits. The Company does not
expect the adoption to have significant change on the Company's
financial statement disclosures.
In June 1999, the Financial Accounting Standards Board issued SFAS No.
137, "Accounting for Derivative Instruments and Hedging Activities"
which delayed the effective date of SFAS No. 133 "Accounting for
Derivative Instruments and Hedging Activities" for one year. SFAS No.
133 provides guidance for the recognition and measurement of
derivatives and hedging activities. It requires an entity to record,
at fair value, all derivatives as either assets or liabilities in the
balance sheet, and it establishes specific accounting rules for
certain types of hedges. SFAS No. 133 is now effective for fiscal
years beginning after June 15, 2000 and will be adopted by the Company
when required, if not earlier. The adoption of this new standard did
not have a significant impact on the Company's financial position or
results of operations.
21
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
4. PROPERTY, PLANT AND EQUIPMENT
AS OF
DECEMBER 31, AS OF DECEMBER 31,
--------------- -------------------------
1998 1999 1999
HK$ HK$ US$
Office equipment 152,836 291,319 37,425
Furniture and fixture 6,555 903,890 116,122
Motor vehicles 28,000 516,312 66,330
Less: Accumulated depreciation (30,000) (388,041) (49,851)
--------------- ------------ -----------
Net book value 157,391 1,323,480 170,026
=============== ============ ===========
As of December 31, 1999, the cost and accumulated depreciation of property,
plant and equipment held under a hire purchase contract amounted to
approximately HK$153,354 (US$19,701) and HK$25,559 (US$3,284) respectively.
No property, plant and equipment was held under a hire purchase contract as
of December 31, 1998.
22
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
5. INCOME TAXES
Income tax expense is comprised of the followings:
FOR THE
PERIOD ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
--------------- -------------------------
1998 1999 1999
HK$ HK$ US$
Current taxes 489,460 538,057 69,123
Deferred taxes 17,321 34,234 4,398
--------------- ------------ -----------
Income tax expense 506,781 572,291 73,521
=============== ============ ===========
The Company is subject to income taxes on income arising in or derived from
the tax jurisdiction in which it is domiciled and operates and accordingly,
it is subject to Hong Kong profits tax at a current rate of 16%.
A reconciliation of the income tax provision to income taxes computed using
the Hong Kong statutory income tax rate is summarized below:
<TABLE>
<CAPTION>
FOR THE
PERIOD ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
--------------- -------------------------
1998 1999 1999
HK$ HK$ US$
<S> <C> <C> <C>
Income before income taxes 3,176,652 3,602,168 462,765
Hong Kong statutory tax rate 16% 16% 16%
--------------- ------------ -----------
Tax at Hong Kong statutory rate 508,264 576,347 74,043
Permanent differences on tax computation
-non-deductible expenses -- 922 118
-non-taxable income (1,483) (4,978) (640)
--------------- ------------ -----------
Income tax provision 506,781 572,291 73,521
=============== ============ ===========
</TABLE>
The Company's deferred income taxes at December 31, 1998 and 1999 comprise
mainly the tax effect on temporary differences in respect of the excess of
tax allowances over depreciation provided on the Company's property, plant
and equipment.
23
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
6. OBLIGATIONS UNDER HIRE PURCHASE CONTRACT
The Company hires motor vehicles under a hire purchase contract. The
scheduled future minimum lease payments are as follows:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
----------------------------------------------
1999 1999
HK$ US$
<S> <C> <C>
Payable during the following period:
Within one year 52,428 6,735
Over one year but not exceeding two years 52,428 6,735
Over two years but not exceeding three years 52,428 6,735
Over three years but not exceeding four years 30,583 3,929
----------------------- ---------------------
Total minimum lease payments 187,867 24,134
Less: amount representing interest 50,487 6,485
----------------------- ---------------------
Present value of net minimum lease payments 137,380 17,649
======================= =====================
</TABLE>
7. COMMITMENTS AND CONTINGENCIES
COMMITMENTS UNDER OPERATING LEASES:
As of December 31, 1999, the Company has the following non-cancellable
operating lease commitments for the years ending December 31:
HK$ US$
2000 1,462,464 187,881
2001 715,182 91,878
2002 16,800 2,158
2003 16,800 2,158
2004 1,400 180
-------------- -------------
Total operating lease commitments 2,212,646 284,255
============== =============
24
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
8. RELATED PARTY TRANSACTIONS
During the period, the Company had the following transactions with related
parties:
<TABLE>
<CAPTION>
FOR THE
PERIOD ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------- ----------------------------------------
1998 1999 1999
HK$ HK$ US$
<S> <C> <C> <C>
Payment of freight cost to companies
controlled by directors of the Company (338,237) (205,465) (26,396)
Received freight income from companies
controlled by directors of the Company -- 67,557 8,679
=================== =================== ====================
</TABLE>
(a) As of December 31, 1998 and 1999, the Company's directors have
beneficial interests in the Company and all the aforementioned related
parties.
(b) Certain general and administrative expenses incurred by the
Company during the period on behalf of the related parties were
reimbursed by the respective related parties at cost.
(c) The Company received/made certain advances from/to a director and
related parties. The balances due from/to the Company as of December
31, 1998 and 1999 were unsecured, interest-free and have been fully
repaid subsequently.
9. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
<TABLE>
FOR THE
PERIOD ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------- ----------------------------------------
1998 1999 1999
HK$ HK$ US$
<S> <C> <C> <C>
Cash paid for:
Interest expenses -- 5,871 754
================== ================ ======================
</TABLE>
25
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
10. OTHER SUPPLEMENTAL INFORMATION
The following items are included in the statements of operations.
<TABLE>
<CAPTION>
FOR THE
PERIOD ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------- ------------------------------------
1998 1999 1999
HK$ HK$ US$
<S> <C> <C> <C>
Rental expenses under operating leases 36,040 698,958 89,794
Hire of other assets under operating leases -- 15,490 1,990
================= ================= ==================
</TABLE>
11. SUBSEQUENT EVENTS
(i) Subsequent to the balance sheet date, the Company has acquired a 100%
equity interest in a related company from the Company's directors for
a total consideration of approximately HK$5.1 million (US$0.7
million). The Company has also acquired a 100% equity interest in
another company for a consideration of HK$100,000 (US$12,847).
(ii) Details of movements in the ordinary stock of the Company subsequent
to the balance sheet date are set out in note 1 to the financial
statements.
26
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
12. SEGMENTS OF THE BUSINESS
The Company operates mainly in two business segments, being the provision
of air freight forwarding and sea freight forwarding services. There is no
customer which contributed more than 10% of the total income for each
segment.
The following table summarized the Company's operations during the period
analyzed into air and sea freight forwarding services:
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
--------------------- --------------------------------------------
1998 1999 1999
HK$ HK$ US$
<S> <C> <C> <C>
FREIGHT FORWARDING INCOME
Air forwarding 31,845,759 58,254,224 7,483,842
Sea forwarding 1,627,637 12,843,576 1,649,997
--------------------- --------------------- ----------------------
TOTAL 33,473,396 71,097,800 9,133,839
===================== ===================== ======================
GROSS PROFIT
Air forwarding 4,811,191 7,606,351 977,178
Sea forwarding (115,569) 3,697,514 475,015
--------------------- --------------------- ----------------------
TOTAL 4,695,622 11,303,865 1,452,193
===================== ===================== ======================
</TABLE>
The table below summarized the Company's income during the period/year
ended December 31, 1998 and 1999 and total assets as of that dates analyzed
into geographical locations:
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
--------------------- --------------------------------------------
1998 1999 1999
HK$ HK$ US$
<S> <C> <C> <C>
FREIGHT FORWARDING INCOME
North America 15,384,879 34,584,355 4,443,006
Europe 13,502 1,250,329 160,628
Asia 18,075,015 35,263,116 4,530,205
--------------------- --------------------- ----------------------
TOTAL 33,473,396 71,097,800 9,133,839
AS OF DECEMBER 31, AS OF DECEMBER 31,
--------------------- --------------------------------------------
1998 1999 1999
HK$ HK$ US$
TOTAL ASSETS
North America 6,873,105 10,909,433 1,401,520
Europe 13,760 13,706 1,761
Asia 10,009,458 10,004,001 1,285,201
--------------------- --------------------- ----------------------
TOTAL 16,896,323 20,927,140 2,688,482
===================== ===================== ======================
</TABLE>
27
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (FOR MANAGEMENT PURPOSE ONLY)
AS AT 30th JUNE 2000
(EXPRESSED IN US DOLLARS)
At
30 June 2000
------------
US$
Amount
------
Current Assets
Cash and Cash Equivalents 1,772,042
Trade Receivables 2,552,546
Deposits, Prepayment and Other Debtor 106,576
Due From A Director (Note 8) 167,639
Bills Receivable (Note 7) 185,863
-----------
Total Current Assets 4,784,666
Goodwill (Note 5) 42,073
Property, Plant and Equipment (Note 6) 194,874
-----------
5,021,613
-----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Trade Payables 1,415,819
Accrued Charges and Other Creditors 19,996
Obligations Under Hire Purchase Contracts 49,307
Income Tax Payable 247,660
-----------
Total Current Liabilities 1,732,782
-----------
Stockholders' Equity
Ordinary Stock of HK$1 each 15,000,000
(equal to US$0.128 each)
issued and fully paid 1,927,030
Retained Earnings (Note 3) 1,361,801
-----------
Total Shareholders' Equity 3,288,831
===========
Total Liabilities And Stockholders' Equity 5,021,613
-----------
Certified True and Correct By:
/S/ LAM KING KO, ALFRED
------------------------------
Director - Lam King Ko, Alfred
HONG KONG
DATED: 18th August, 2000
28
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (FOR MANAGEMENT PURPOSE ONLY)
FOR THE 6 MONTHS ENDED 30 JUNE 2000
(EXPRESSED IN US DOLLARS)
1 Jan 2000 - 30 June 2000
-------------------------
US$
OPERATING REVENUE 6,470,077
---------
OPERATING EXPENSES
Cost of Forwarding (4,899,165)
Salaries and Bonus (386,202)
Rent and Related Expenses (95,925)
Depreciation (34,656)
Other selling and Administrative Expenses (Note 1) (321,657)
-----------
TOTAL OPERATING EXPENSES (5,737,605)
===========
INCOME FROM OPERATIONS 732,472
-----------
NON-OPERATING INCOME (EXPENSES)
Bank Interest 10,285
Other Income 141
Interest Expenses (Note 2) (1,302)
-----------
TOTAL NON-OPERATING INCOME 9,124
===========
INCOME BEFORE INCOME TAXES 741,596
PROVISION FOR INCOME TAXES (NOTE 9) (118,655)
-----------
PROFIT ATTRIBUTABLE TO SHAREHOLDERS 622,941
-----------
29
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS FOR MANAGEMENT PURPOSE
(Expressed in US dollars)
1. OTHER SELLING AND ADMINISTRATIVE EXPENSES
1 JAN 2000 - 30 JUNE 2000
------------------------
US$
Accountancy and Secretarial Fee 16,087
Bank Charges 2,548
Building management Fee and Air-
Conditioning Charge 19,171
Director Emoluments 33,263
Electricity and Water 10,176
Entertainment 24,959
Exchange Difference 8,151
Insurance 8,819
Internet Charges 1,903
Licence Fee 17,463
Local Travelling Expenses 14,613
Bad debts 989
Motor Vehicles Expenses 13,010
Overseas Travelling Expenses 19,538
Packing Charges 4,182
Postage and Courier 8,040
Repairs and Maintenance 12,915
Staff Messing 10,560
Printing and Stationery 16,872
Subscription Fee 6,274
Sundry Expenses 15,669
Telephone, pager and Fax 32,984
Legal and professional fee 1,317
Motor rental 1,123
China office expenses 9,455
Fuel Expenses 11,576
--------------
321,657
==============
2. INTEREST EXPENSES
1 JAN 2000 - 30 JUNE 2000
-------------------------
US$
Hire purchase interest 1,302
===============
3. RESERVES
AT 30 JUNE 2000
---------------
US$
Accumulated Profit at 1/1/2000 738,860
Profit for the period from 1/1/2000
to 30/6/2000 622,941
---------------
Accumulated Profit at 30/6/2000 1,361,801
===============
30
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS FOR MANAGEMENT PURPOSE (CONT'D)
(Expressed in US Dollars)
4 BASIS OF PRESENTATION
As of 30th June, 2000, the consolidated financial statements of the Group
include the financial statements of the company and the following
subsidiaries:
<TABLE>
<CAPTION>
PERCENTAGE OF
EQUITY INTEREST ISSUED AND
DATE AND DATE ATTRIBUTABLE TO FULLY PAID REGISTERED PRINCIPAL
NAME OF INCORPORATION THE GROUP CAPITAL SHARE CAPITAL ACTIVITIES
------- ----------------- ------------------- -------------- ----------------- ------------
US$ US$
<S> <C> <C> <C> <C> <C>
Guangzhou Huahsheng
International Forwarding Hong Kong 0.257 128,469 (equal Freight
Ltd 2nd December, 1998 100% (equal to HK$2) to HK$1,000,000) Forwarding
Sparkle Shipping, Godown, Hong Kong 642,343 (equal 642,343 (equal to Freight
Wharf & Transp. Co., Ltd 2nd June, 1999 100% to HK$5,000,000) HK$5,000,000) Forwarding
</TABLE>
31
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS FOR MANAGEMENT PURPOSE (CONT'D)
(expressed in US dollars)
5. GOODWILL
The Company acquired 100% equity interests in Sparkle Shipping, Godown,
Wharf & Transp. Co., Limited and Guangzhou Huahsheng International
Forwarding Limited for considerations of HK$100,000 each respectively on
3rd January, 2000.
The amount of goodwill arised from such acquisitions are as follows:
US$
Sparkle Shipping, Godown, Wharf & Transp.
Co., Limited (HK$267,634) 34,383
Guangzhou Huahsheng International
Forwarding Limited 7,690
-------------
42,073
=============
6. PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
SPARKLE SHIPPING,
AGI LOGISTICS GUANGZHOU HUAHSHENG GODOWN, WHARF &
(HONG KONG) INTERNATIONAL TRANSP., CO.,
LTD. FORWARDING LTD. LTD. TOTAL
---------------- --------------------- -------------------- ----------
US$ US$ US$ US$
<S> <C> <C> <C> <C>
Office equipment 43,764 5,565 5,183 54,512
Furniture and fixtures 116,122 1,589 297 118,008
Motor vehicles 66,330 -- 39,825 106,155
Leasehold improvements -- 1,565 172 1,737
Less: Accumulated depreciation (78,757) (2,098) (4,683) (85,538)
---------------- --------------------- -------------------- ----------
Net book value 147,459 6,621 40,794 194,874
================ ===================== ==================== ==========
</TABLE>
7. BILLS RECEIVABLE
Bills receivable represent unpresented cheques at the period end and
subsequently been cleared in August, 2000.
32
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS FOR MANAGEMENT PURPOSE (CONT'D)
(Expressed in US Dollars)
8. AMOUNT DUE FROM A DIRECTOR
The balance due from a director is unsecured, interest-free and with no
fixed date of repayment.
9. TAXATION
Hong Kong Profits Tax has been provided at a rate of 16% on the Group's
estimated assessable profits for the period.
US$
The charge comprises:
Hong Kong Profit tax:
Current period 118,655
-----------
The Company did not carry on any business and did not maintain any branch
office in the United States of America, therefore no provision for
withholding or U.S. federal income taxes or tax benefits on the
undistributed earnings of the Group has been made.
33
<PAGE>
AGI LOGISTICS (HONG KONG) LIMITED
CONSOLIDATED FINANCIAL STATEMENTS
(FOR MANAGEMENT PURPOSE ONLY)
FOR THE PERIOD FROM 1ST JANUARY 2000 TO 30TH JUNE 2000
CONTENTS PAGES
----------------------------------- ------
CONSOLIDATED BALANCE SHEET PF-3
CONSOLIDATED STATEMENT OF OPERATIONS PF-4
NOTES TO THE FINANCIAL STATEMENTS PF-6-7
(NOTE 1 TO NOTE 9)
PF-1
<PAGE>
PACIFIC CMA, INC.
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following financial pro forma consolidated statements represent the Pacific
CMA, Inc. ("Pacific CMA") pro forma consolidated balance sheet as of June 30,
2000 and statements of operations for the year ended December 31, 1999 and the
six-month period ended June 30, 2000.
The transactions described in Note 2 have been accounted for as a "reverse
acquisition," since AGI Logistics (H.K.) Ltd., a Hong Kong corporation ("AGI"),
through its parent company, Buller Services Corporation, a British Virgin
Islands International Business Company ("Buller") and Buller's sale shareholder
(who is the president of AGI), had control of the combined entity after the
transactions were completed. Under reverse acquisition accounting, AGI is
considered the accounting acquiror and Pacific CMA is considered the accounting
acquiree. As Pacific CMA had no substantive assets or operations at the date of
the transactions, the excess of the consideration to be paid by AGI for the
reverse acquisition of $225,000 (representing estimated transaction expenses)
over the value of the net assets acquired is recorded as goodwill, representing
the value AGI attributes to its access to U.S. capital markets obtained as a
result of the transactions.
The following pro forma consolidated balance sheet gives effect to the
transactions as if they occurred on June 30, 2000. The accompanying pro forma
consolidated statements of operations give effect to the transactions as if
they occurred on January 1, 1999 for the December 31, 1999 results and
January 1, 2000 for the June 30, 2000 results. The financial statements include
adjustments directly attributable to the transactions and expected to have a
continuing impact on the combined company.
The pro forma information is based on historical financial statements. The
information has been prepared in accordance with the rules and regulations of
the Securities and Exchange Commission and is provided for comparison and
analysis purposes only. The pro forma information does not purport to be
indicative of the results that actually would have occurred had the combination
been effected at either January 1, 1999 or 2000.
PF-2
<PAGE>
PACIFIC CMA, INC.
Pro Forma Consolidated Balance Sheet
As of June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Pro forma Pro forma
AGI Pacific CMA Subtotal Adjustments Consolidated
----------- ------------ ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,772,042 $ 1,025 $ 1,773,067 $ - $ 1,773,067
Trade receivables 2,552,546 - 2,552,546 - 2,552,546
Other 460,078 - 460,078 - 460,078
----------- ------------ ------------ ------------- --------------
Total current assets 4,784,666 1,025 4,785,691 - 4,785,691
Property, plant and equipment 194,874 - 194,874 - 194,874
Goodwill 42,073 - 42,073 223,975 (A) 266,048
----------- ------------ ------------ ------------- --------------
TOTAL ASSETS $ 5,021,613 $ 1,025 $ 5,022,638 $ 223,975 $ 5,246,613
=========== ============ ============ ============= ==============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables $ 1,415,819 $ - $ 1,415,819 $ - $ 1,415,819
Accrued liabilities and other 69,303 - 69,303 225,000 (B) 294,303
Income taxes payable 247,660 - 247,660 - 247,660
----------- ------------ ------------ ------------- --------------
Total current liabilities 1,732,782 - 1,732,782 225,000 1,957,782
----------- ------------ ------------ ------------- --------------
Stockholders' equity:
Common stock 1,927,030 2,400 1,929,430 (2,400) (C) 1,927,030
Additional paid-in capital - 10,668 10,668 (10,668) (C) -
Retained earnings (accumulated deficit) 1,361,801 (12,043) 1,349,758 12,043 (C) 1,361,801
----------- ------------ ------------ ------------- --------------
Total stockholders' equity 3,288,831 1,025 3,289,856 (1,025) 3,288,831
----------- ------------ ------------ ------------- --------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 5,021,613 $ 1,025 $ 5,022,638 $ 223,975 $ 5,246,613
=========== ============ ============ ============= ==============
</TABLE>
The accompanying notes are an integral part
of these pro forma financial statements.
PF-3
<PAGE>
Pacific CMA, Inc.
Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
Pro forma Pro forma
AGI Pacific CMA Subtotal Adjustments Consolidated
----------- ------------ ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
Net revenues $ 9,133,839 $ - $ 9,133,839 $ - $ 9,133,839
Cost of revenues 7,681,646 - 7,681,646 - 7,681,646
----------- ------------ ------------ ------------- --------------
Gross profit 1,452,193 - 1,452,193 - 1,452,193
Operating and other expenses 1,062,949 4,425 1,067,374 44,795 (D) 1,112,169
----------- ------------ ------------ ------------- --------------
NET INCOME (LOSS) $ 389,244 $ (4,425) $ 384,819 $ (44,795) $ 340,024
=========== ============ ============ ============= ==============
Basic and diluted earnings
(loss) per share $ (0.00) $ 0.02
============ ==============
Basic and diluted weighted
average common shares outstanding 12,000,000 8,000,000 (E) 20,000,000
============ ============= ===============
</TABLE>
The accompanying notes are an integral part
of these pro forma financial statements.
PF-4
<PAGE>
Pacific CMA, Inc.
Pro Forma Consolidated Statement of Operations
For the Six-Month Period Ended June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Pro forma Pro forma
AGI Pacific CMA Subtotal Adjustments Consolidated
----------- ------------ ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
Net revenues $ 6,470,077 $ - $ 6,470,077 $ - $ 6,470,077
Cost of revenues 4,899,165 - 4,899,165 - 4,899,165
----------- ------------ ------------ ------------- --------------
Gross profit 1,570,912 - 1,570,912 - 1,570,912
Operating and other expenses 947,989 5,056 953,045 22,398 (D) 975,443
----------- ------------ ------------ ------------- --------------
NET INCOME (LOSS) $ 622,923 $ (5,056) $ 617,867 $ (22,398) $ 595,469
=========== ============ ============ ============= ==============
Basic and diluted earnings
(loss) per share $ (0.00) $ 0.03
============ ===============
Basic and diluted weighted
average common shares outstanding 12,000,000 8,000,000 (E) 20,000,000
============ ============= ===============
</TABLE>
The accompanying notes are an integral part
of these pro forma financial statements.
PF-5
<PAGE>
PACIFIC CMA, INC.
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION:
Effective August 28, 2000, Pacific CMA, an inactive public company, and AGI,
involved primarily in freight forwarding (through AGI's parent company, Buller),
entered into transactions that resulted in a combination of the two entities, as
described in Note 2. As Buller is a newly formed corporation with no operations,
which is wholly owned by the president of AGI and whose only asset is its
investment in AGI, it has been ignored as a separate entity in the accompanying
pro forma presentation.
The unaudited pro forma information is not necessarily indicative of the future
consolidated results of operations of Pacific CMA or the consolidated results of
operations that would have resulted had the acquisition taken place on January
1, 1999 or 2000. The unaudited pro forma consolidated balance sheet as of June
30, 2000 reflects the effects of the transactions as if they occurred on June
30, 2000. The accompanying pro forma consolidated statements of operations give
effect to the transactions as if they occurred on January 1, 1999 for the
December 31, 1999 results and January 1, 2000 for the June 30, 2000 results.
The unaudited pro forma consolidated financial statements should be read in
conjunction with AGI's audited financial statements as of December 31, 1999 and
unaudited interim financial statements as of June 30, 2000 and accompanying
notes appearing elsewhere herein and the audited financial statements of Pacific
CMA as of December 31, 1999 and unaudited interim financial statements as of
June 30, 2000 and related notes as previously filed with the Securities and
Exchange Commission.
NOTE 2 - DESCRIPTION OF TRANSACTIONS:
Pursuant to the Stock Purchase Agreement dated July 25, 2000 (and effective on
August 28, 2000), the sole shareholder of Buller completed the purchase of
9,000,000 shares of the issued and outstanding common stock of Pacific CMA from
certain selling shareholders of Pacific CMA, for a promissory note of $45,000,
to be paid when the Company gets a dealer approved to publish the Company's bid
and ask quotations on the U.S. OTC bulletin board. If the Company does not get
dealer approval by September 30, 2000, the purchasers may cancel this
transaction. This purchase represented 75% of the issued and outstanding common
stock of Pacific CMA and was contingent upon the simultaneous completion of a
share exchange between Buller and Pacific CMA (see below).
PF-6
<PAGE>
PACIFIC CMA, INC.
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 2 - DESCRIPTION OF TRANSACTIONS, continued:
Pursuant to the Stock Exchange Agreement dated July 25, 2000 (and effective on
August 28, 2000), Buller agreed to exchange 100% of the issued and outstanding
shares of AGI for 8,000,000 newly issued shares of Pacific CMA. As a result of
this transaction, AGI became a wholly owned subsidiary of Pacific CMA.
AGI incurred estimated costs of approximately $225,000 related to these
transactions.
These transactions were recorded as a "reverse acquisition" where AGI (through
its parent company, Buller and Buller's sole stockholder, who is president of
AGI) was considered the accounting acquiror as it retained control of Pacific
CMA, Inc. After these transactions, the total issued and outstanding shares of
Pacific CMA were 20,000,000, 85% of which were beneficially owned by the sole
shareholder of Buller.
As Pacific CMA had no substantive assets or operations at the date of the
transactions, the excess of the total estimated consideration paid by AGI for
the reverse acquisition over the value of the net assets acquired is recorded as
goodwill, representing the value AGI attributes to its access to U.S. capital
markets obtained as a result of the transactions. The goodwill will be amortized
over five years, the estimated period of benefit.
NOTE 3 - DESCRIPTION OF ADJUSTMENTS:
The following adjustments were applied to the historical financial statements of
Pacific CMA and AGI to arrive at the pro forma consolidated balance sheet and
statements of operations:
(A) To record the goodwill resulting from the reverse acquisition of
Pacific CMA by AGI, through AGI's parent, Buller and Buller's sole
stockholder, who is president of AGI.
(B) To record the cash payments made and acquisition costs incurred by AGI
related to the transactions.
(C) To eliminate the equity accounts of Pacific CMA, the accounting
acquiree.
(D) To record the annual and six-month amortization of goodwill over a
useful life of five years. The effect of either U.S. or Hong Kong
income taxes as a result of this amortization has been ignored as its
effect would be insignificant to the combined pro forma results as a
whole.
(E) To record new shares issued to Buller in the share exchange
transaction.
PF-7
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
<S> <C>
PAGE
------
2.1 Stock Purchase Agreement, dated as of July 25, 2000, among Lam King Ko,
Alfred; Chan Chiu Yin, Cheng Kit Mei, and Chu Kit Ching, and Dean F.
Sessions, Grant W. Peck, Gary S. Joiner, Mark DiSalvo, John Stearns,
Richard Stearns, Scott Olson, Jay Lutsky, and Frank Jackson.
2.2 Promissory Note of Lam King Ko, Alfred, dated as of July 25, 2000,
in favor of the Selling Stockholders' designated agent, in the principal
sum of $45,000.00.
2.3 Stock Exchange Agreement, dated as of July 25, 2000, between
Pacific CMA, Inc. and Buller Services Corporation.
2.4 Consulting Agreement, dated as of June 1, 2000, between AGI Logistics
(Hong Kong) Limited and PCMA, Inc.
2.5 Promissory Note of AGI Logistics (Hong Kong) Limited, dated as of
June 1, 2000, in favor of PCMA, Inc., in the principal sum of
$175,000.00.
</TABLE>
34
