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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
PRE-EFFECTIVE AMENDMENT NO.1 TO
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(g) of
The Securities Exchange Act of 1934
TRIPACIFIC DEVELOPMENT CORPORATION
(Name of Small Business Issuer in its charter)
Nevada 98-0204701
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 106, 1460 Pandosy St., Kelowna,
British Columbia, Canada V1Y 1P3
(Address of principal executive offices) (Zip code)
(250) 868-8177
(Issuer's telephone number)
Securities to be registered pursuant to Section 12(b) of the Act:
none
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of Class)
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TABLE OF CONTENTS
Page
Description of Business ...................................................... 3
Plan of Operation ............................................................ 4
Risk Factors .................................................................10
Description of Property ......................................................13
Security Ownership of Certain
Beneficial Owners and Management.....................................14
Directors, Executive Officers, Promoters
and Control Persons .................................................15
Executive Compensation .......................................................16
Certain Relationships and
Related Transactions ................................................17
Legal Proceedings ............................................................17
Market for Common Equities and Related Stockholder
Matters .............................................................17
Recent Sales of Unregistered Securities.......................................18
Description of Securities ....................................................19
Indemnification of Directors and Officers.....................................19
Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure..................................20
Financial Statements..........................................................21
Exhibit Index ................................................................22
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DESCRIPTION OF BUSINESS
Tripacific Development Corporation (the "Company"), was incorporated on
July 18, 1997 under the laws of the State of Nevada to engage in any lawful
corporate purpose. Other than issuing shares to its shareholders, the Company
never commenced any other operational activities. As such, the Company can be
defined as a "shell" company, whose sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity. The Board of Directors
of the Company has elected to commence implementation of the Company's principal
business purpose, described below under "Plan of Operation."
The Company is filing this registration statement on a voluntary basis
because the primary attraction of the Company as a merger partner or acquisition
vehicle will be its status as a public company. Any business combination or
transaction will likely result in a significant issuance of shares and
substantial dilution to present stockholders of the Company.
The proposed business activities classify the Company as a "blank
check" company. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities or undertake any offering of the
Company's securities, either debt or equity, until such time as the Company has
successfully implemented its business plan.
Lock-up Agreement
Each shareholder of the Company has executed and delivered a "lock-up"
letter agreement, affirming that they shall not sell their respective shares of
the Company's common stock until such time as the Company has successfully
consummated a merger or acquisition and the Company is no longer classified as a
"blank check" company. In order to provide further assurances that no trading
will occur in the Company's securities until a merger or acquisition has been
consummated, each shareholder has agreed to place their respective stock
certificate with the Company's legal counsel, Evers & Hendrickson, LLP, who will
not release these respective certificates until such time as legal counsel has
confirmed that a merger or acquisition has been successfully consummated.
However, while management believes that the procedures established to preclude
any sale of the Company's securities prior to closing of a merger or acquisition
will be sufficient, there can be no assurances that the procedures established
will unequivocally limit any shareholder's ability to sell their respective
securities before such closing.
Investment Company Act of 1940
Although the Company will be subject to regulation under the Securities
Act of 1933, as amended (the "'33 Act"), and the Securities Exchange Act of
1934, as amended (the "'34 Act"), management believes we will not be subject to
regulation under the Investment Company Act of 1940, as amended (the "'40 Act"),
insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business combinations
which result in the Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the '40 Act. In such
event, the Company would be required to register as an investment company and
could be expected to incur significant registration and compliance costs. The
Company has obtained no formal determination from the Securities and Exchange
Commission as to the status of the Company under the '40 Act and, consequently,
a violation of such Act could subject the Company to material adverse
consequences.
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Investment Advisors Act of 1940
Under Section 202(a)(11) of the Investment Advisors Act of 1940, as
amended, an "investment adviser" means any person who, for compensation, engages
in the business of advising others, either directly or through publications or
writings, as to the value of securities or as to the advisability of investing
in, purchasing, or selling securities, or who, for compensation and as part of a
regular business, issues or promulgates analyses or reports concerning
securities. The Company shall only seek to locate a suitable merger of
acquisition candidate, and does not intend to engage in the business of advising
others in investment matters for a fee or otherwise.
Dissenter's Rights
In accordance with Nevada Revised Statutes ("NRS") ss. 78.3793, on the
10th day following the acquisition of a controlling interest by an acquiring
person, if the control shares are accorded full voting rights pursuant to NRS
ss.ss. 78.378 to 78.3793, inclusive, and the acquiring person has acquired a
majority interest of the voting shares, any stockholder of record, other than
the acquiring person, who has not voted in favor of authorizing voting rights
for the control shares is entitled to demand payment for the fair value of his
shares by making a written demand.
Market Makers
The Company has not, and does not intend to enter in to discussions
with broker-dealers or market makers regarding developing a trading market in
its stock until a qualified merger or acquisition candidate has been identified.
Forward Looking Statements
Because we desire to take advantage of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), the Company
cautions readers regarding forward looking statements found in the following
discussion and elsewhere in this registration statement and in any other
statement made by, or on the behalf of the Company, whether or not in future
filings with the Securities and Exchange Commission. Forward looking statements
are statements not based on historical information and which relate to future
operations, strategies, financial results or other developments. Forward looking
statements are necessarily based upon estimates and assumptions that are
inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond the Company's control
and many of which, with respect to future business decisions, are subject to
change. These uncertainties and contingencies can affect actual results and
could cause actual results to differ materially from those expressed in any
forward looking statements made by or on behalf of the Company. The Company
disclaims any obligation to update forward looking statements. Readers should
also understand that under Section 27A(b)(2)(D) of the '33 Act, and Section
21E(b)(2)(D) of the '34 Act, the "safe harbor" provisions of the PSLRA do not
apply to statements made in connection with an initial public offering.
PLAN OF OPERATION
The Company intends to seek to acquire assets or shares of an entity
actively engaged in a business that generates revenues, in exchange for its
securities. We have not identified a particular acquisition target and has not
entered into any negotiations regarding such an acquisition. As soon as this
registration statement becomes effective under Section 12 of the '34 Act, we
intend to contact investment bankers,
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corporate financial analysts, attorneys and other investment industry
professionals through various media. None of our officers, directors, promoters
or affiliates have engaged in any preliminary contact or discussions with any
representative of any other company regarding the possibility of an acquisition
or merger between the Company and such other company as of the date of this
registration statement.
Depending upon the nature of the relevant business opportunity and the
applicable state statutes governing the manner in which the transaction is
structured, the Company's Board of Directors expects that it will provide the
Company's shareholders with complete disclosure documentation concerning a
potential business opportunity and the structure of the proposed business
combination prior to consummation. Such disclosure is expected to be in the form
of a proxy or information statement.
While such disclosure may include audited financial statements of such
a target entity, there is no assurance that such audited financial statements
will be available. The Board of Directors does intend to obtain certain
assurances of value of the target entity assets prior to consummating such a
transaction, with further assurances that an audited statement would be provided
within sixty days after closing. Closing documents will include representations
that the value of the assets conveyed to or otherwise so transferred will not
materially differ from the representations included in such closing documents,
or the transaction will be voidable.
Due to the Company's intent to remain a shell corporation until a
merger or acquisition candidate is identified, it is anticipated that its cash
requirements shall be minimal, and that all necessary capital, to the extent
required, will be provided by the directors or officers. The Company does not
anticipate that it will have to raise capital in the next twelve months. The
Company also does not expect to acquire any plant or significant equipment.
The Company has no full time employees. Our President and Secretary
have agreed to allocate a portion of their time to the activities of the
Company, without compensation. These officers anticipate that the business plan
of the Company can be implemented by their devoting approximately 5 hours per
month to the business affairs of the Company and, consequently, conflicts of
interest may arise with respect to the limited time commitment by such officers.
The Company does not expect any significant changes in the number of employees.
See "Directors, Executive Officers, Promoters and Control Persons - Conflicts of
Interest".
Our officers and directors may become involved with other companies who
have a business purpose similar to that of the Company. As a result, potential
conflicts of interest may arise in the future. If such a conflict does arise and
an officer or director of the Company is presented with business opportunities
under circumstances where there may be a doubt as to whether the opportunity
should belong to the Company or another "blank check" company they are
affiliated with, they will disclose the opportunity to all such companies. If a
situation arises in which more than one company desires to merge with or acquire
that target company and the principals of the proposed target company has no
preference as to which company will merge with or acquire such target company,
the company which first filed a registration statement with the Securities and
Exchange Commission will be entitled to proceed with the proposed transaction.
General Business Plan
The Company's purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in business opportunities presented
to it by persons or firms who or which desire to seek the perceived advantages
of an Exchange Act registered corporation. The Company will not restrict its
search to any specific business, industry, or geographical location and the
Company may participate in a business venture
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of virtually any kind or nature. This discussion of the proposed business is
purposefully general and is not meant to be restrictive of the Company's
virtually unlimited discretion to search for and enter into potential business
opportunities. Management anticipates that it may be able to participate in only
one potential business venture because the Company has nominal assets and
limited financial resources. See "Part F/S, Financial Statements." This lack of
diversification should be considered a substantial risk to shareholders of the
Company because it will not permit the Company to offset potential losses from
one venture against gains from another.
The Company may seek a business opportunity with entities that have
recently commenced operations, or that wish to utilize the public marketplace in
order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
We may acquire assets and establish wholly owned subsidiaries in various
businesses or acquire existing businesses as subsidiaries.
We anticipate that the selection of a business opportunity in which to
participate will be complex and extremely risky. Due to general economic
conditions, rapid technological advances being made in some industries and
shortages of available capital, management believes that there are numerous
firms seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, providing liquidity (subject
to restrictions of applicable statutes) for all shareholders and other factors.
Potentially, available business opportunities may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex.
We have, and will continue to have, no capital with which to provide
the owners of business opportunities with any significant cash or other assets.
However, management believes we will be able to offer owners of acquisition
candidates the opportunity to acquire a controlling ownership interest in a
publicly registered company without incurring the cost and time required to
conduct an initial public offering. The owners of the business opportunities
will, however, incur significant legal and accounting costs in connection with
acquisition of a business opportunity, including the costs of preparing Form
8-K's, 10-K's or 10-KSB's, agreements and related reports and documents. The '34
Act specifically requires that any merger or acquisition candidate comply with
all applicable reporting requirements, which include providing audited financial
statements to be included within the numerous filings relevant to complying with
the '34 Act. Nevertheless, the officers and directors of the Company have not
conducted market research and are not aware of statistical data which would
support the perceived benefits of a merger or acquisition transaction for the
owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or
under the supervision of, the officers and directors of the Company, none of
whom is a professional business analyst. Management intends to concentrate on
identifying preliminary prospective business opportunities which may be brought
to its attention through present associations of our officers and directors, or
by our shareholders. In analyzing prospective business opportunities, management
will consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; history of
operations, if any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact the proposed activities of the Company; the
potential for growth or expansion; the potential for profit; the perceived
public recognition of acceptance of products, services, or trades; name
identification; and other relevant factors. Officers and directors of the
Company expect to meet personally
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with management and key personnel of the business opportunity as part of their
"due diligence" investigation. To the extent possible, the Company intends to
utilize written reports and personal investigations to evaluate the above
factors. We will not acquire or merge with any company that cannot provide
audited financial statements within a reasonable period of time after closing of
the proposed transaction.
Management of the Company, while not especially experienced in matters
relating to the new business of the Company, shall rely upon their own efforts
and, to a much lesser extent, the efforts of our shareholders, in accomplishing
the business purposes of the Company. It is not anticipated that any outside
consultants or advisors, except for our legal counsel and accountants, will be
utilized by the Company to effectuate its business purposes. However, if we do
retain such an outside consultant or advisor, any cash fee earned by such party
will be paid by the prospective merger/acquisition candidate, as the Company has
no cash assets with which to pay such obligation. We have no contracts or
agreements with any outside consultants and none are contemplated.
We will not restrict our search for any specific kind of firms, but may
acquire a venture that is in its preliminary or development stage or is already
operating. It is impossible to predict at this time the status of any business
in which the Company may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded, or may seek
other perceived advantages which the Company may offer. Furthermore, we do not
intend to seek capital to finance the operation of any acquired business
opportunity until such time as the Company has successfully consummated a merger
or acquisition.
It is anticipated that the Company will incur nominal expenses in the
implementation of its business plan. Because the Company has no capital with
which to pay these anticipated expenses, present management of the Company will
pay these charges with their personal funds, as interest free loans to the
Company, for a minimum of twelve months from the date of this registration
statement. If additional funding is necessary, management and or shareholders
will continue to provide capital or arrange for additional outside funding.
However, the only opportunity which management has to have these loans repaid
will be from a prospective merger or acquisition candidate. Management's
agreements with the Company contain no negative covenants that would impede or
prevent consummation of a proposed transaction. There is no assurance, however,
that management will continue to provide capital indefinitely if a merger
candidate cannot be found. If a merger candidate cannot be found in a reasonable
period of time, management may be required reconsider its business strategy,
which could result in the dissolution of the Company.
Acquisition of Opportunities
In implementing a structure for a particular business acquisition, we
may become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. It may also acquire
stock or assets of an existing business. On the consummation of a transaction,
it is probable that the present management and shareholders of the Company will
no longer be in control of the Company. In addition, our directors may, as part
of the terms of the acquisition transaction, resign and be replaced by new
directors without a vote of the Company's shareholders or may sell their stock
in the Company. Any terms of sale of the shares presently held by officers
and/or directors of the Company will be also afforded to all other shareholders
of the Company on similar terms and conditions. Any and all such sales will only
be made in compliance with the securities laws of the United States and any
applicable state.
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It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, we may agree to register all or a part of
such securities immediately after the transaction is consummated or at specified
times thereafter. If such registration occurs, of which there can be no
assurance, it will be undertaken by the surviving entity after the Company has
successfully consummated a merger or acquisition and the Company is no longer
considered a "shell" company. Until a merger or acquisition is consummated, the
Company will not attempt to register any additional securities. The issuance of
substantial additional securities and their potential sale into any trading
market which may develop in the Company's securities may have a depressive
effect on the value of the Company's securities in the future, if such a market
develops, of which there is no assurance.
While the actual terms of a transaction to which the Company may be a
party cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In order to
obtain tax-free treatment under the Code, it may be necessary for the owners of
the acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company would retain 20% or less
of the issued and outstanding shares of the surviving entity, which would result
in significant dilution in the equity of such shareholders.
As part of the Company's "due diligence" investigation, officers and
directors of the Company will meet personally with management and key personnel,
may visit and inspect material facilities, obtain independent analysis of
verification of certain information provided, check references of management and
key personnel, and take other reasonable investigative measures to the extent of
the Company's limited financial resources and management expertise. The manner
in which the Company participates in an opportunity will depend on the nature of
the opportunity, the respective needs and desires of the Company and other
parties, the management of the opportunity and the relative negotiation strength
of the Company and such other management.
With respect to any merger or acquisition, negotiations with target
company management is expected to focus on the percentage of the Company which
the target company shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among other things, the
target company's assets and liabilities, the Company's shareholders will in all
likelihood hold a substantially lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage ownership may be
subject to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the percentage
of shares held by the Company's then shareholders.
We will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will require
some specific representations and warranties by all of the parties, will specify
certain events of default, will detail the terms of closing and the conditions
that must be satisfied by each of the parties prior to and after such closing,
will outline the manner of bearing costs, including costs associated with the
Company's attorneys and accountants, will set forth remedies on default and will
include miscellaneous other terms.
As stated previously, we will not acquire or merge with any entity that
cannot provide independent audited financial statements within a reasonable
period of time after closing of the proposed transaction. The Company is subject
to the reporting requirements of the '34 Act. Included in these requirements is
the
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affirmative duty of the Company to file independent audited financial statements
as part of its Form 8-K to be filed with the Securities and Exchange Commission
upon consummation of a merger or acquisition, as well as the Company's audited
financial statements included in its annual report on Form 10-K (or 10-KSB, as
applicable). If such audited financial statements are not available at closing,
or within time parameters necessary to insure the Company's compliance with the
requirements of the '34 Act, or if the audited financial statements provided do
not conform to the representations made by the candidate to be acquired in the
closing documents, the closing documents will provide that the proposed
transaction will be voidable at the discretion of the present management of the
Company. If such transaction is voided, the agreement will also contain a
provision providing for the acquisition entity to reimburse the Company for all
costs associated with the proposed transaction.
Year 2000 Disclosure
Many existing computer programs use only two digits to identify a year
in the date field. These programs were designed and developed without
considering the impact of the upcoming change in the century. If not corrected,
many computer applications could fail or create erroneous results by or at the
year 2000. As a result, many companies will be required to undertake major
projects to address the Year 2000 issue. Because the Company has no assets,
including any personal property such as computers, it is not anticipated that we
will incur any negative impact as a result of this potential problem. However,
it is possible that this issue may have an impact on us after we successfully
consummate a merger or acquisition. Management intends to address this potential
problem with any prospective merger or acquisition candidate. There can be no
assurances that new management of the Company will be able to avoid a problem in
this regard after a merger or acquisition is consummated.
Competition
The Company will remain an insignificant participant among the firms
which engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns which have significantly
greater financial and personnel resources and technical expertise than the
Company. In view of the Company's combined extremely limited financial resources
and limited management availability, the Company will continue to be at a
significant competitive disadvantage compared to the Company's competitors.
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RISK FACTORS
Our business is subject to numerous risk factors, including the
following:
No Operating History or Revenue and Minimal Assets. We have had no
recent operating history nor any revenues or earnings from operations since its
inception. The Company has no significant assets or financial resources. We
will, in all likelihood, sustain operating expenses without corresponding
revenues, at least until the consummation of a business combination. This may
result in the Company incurring a net operating loss that will increase
continuously until we can consummate a business combination with a profitable
business opportunity. There is no assurance that the Company can identify such a
business opportunity and consummate such a business combination.
Speculative Nature of Company's Proposed Operations. The success of our
proposed plan of operation will depend to a great extent on the operations,
financial condition and management of the identified business opportunity. While
management intends to seek business combination(s) with entities having
established operating histories, there can be no assurance we will be successful
in locating candidates meeting such criteria. In the event we complete a
business combination, the success of our operations may be dependent upon
management of the successor firm or venture partner firm and numerous other
factors beyond our control.
Scarcity of and Competition for Business Opportunities and
Combinations. The Company is and will continue to be an insignificant
participant in the business of seeking mergers with, joint ventures with and
acquisitions of small private and public entities. A large number of established
and well-financed entities, including venture capital firms, are active in
mergers and acquisitions of companies that may be desirable target candidates
for the Company. Nearly all such entities have significantly greater financial
resources, technical expertise and managerial capabilities than the Company and,
consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination.
Moreover, we will also compete in seeking merger or acquisition candidates with
numerous other small public companies.
No Agreement for Business Combination or Other Transaction. We have no
arrangement, agreement or understanding with respect to engaging in a merger
with, joint venture with or acquisition of, a private or public entity. There
can be no assurance we will be successful in identifying and evaluating suitable
business opportunities or in concluding a business combination. Management has
not identified any particular industry or specific business within an industry
for evaluation by the Company. There is no assurance we will be able to
negotiate a business combination on terms favorable to the Company.
No Standards for Business Combination. We have not established a
specific length of operating history or a specified level of earnings, assets,
net worth or other criteria which it will require a target business opportunity
to have achieved. Accordingly, we may enter into a business combination with a
business opportunity having no significant operating history, losses, limited or
no potential for earnings, limited assets, negative net worth or other
characteristics that are indicative of development stage companies.
Continued Management Control, Limited Time Availability. While seeking
a business combination, management anticipates devoting up to twenty hours per
month to the business of the Company. None of our officers have entered into a
written employment agreements with us and none is expected to do so in the
foreseeable future. We have not obtained key man life insurance on any of its
officers or directors. Notwithstanding the combined limited experience and time
commitment of management, loss of the services of any of these individuals would
adversely affect development of our
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business and its likelihood of continuing operations. See "Directors, Executive
Officers, Promoters and Control Persons."
Conflicts of Interest - General. Officers and directors of the Company
may participate in business ventures which could be deemed to compete directly
with the Company. Additional conflicts of interest and non-arms length
transactions may also arise in the event our officers or directors are involved
in the management of any firm with which we transact business. Management has
adopted a policy that the Company will not seek a merger with, or acquisition
of, any entity in which management serves as officers, directors or partners, or
in which they or their family members own or hold any ownership interest.
Reporting Requirements May Delay or Preclude Acquisition. Sections 13
and 15(d) of the '34 Act require reporting companies to provide certain
information about significant acquisitions, including certified financial
statements for the company acquired, covering one, two, or three years,
depending on the relative size of the acquisition. The time and additional costs
that may be incurred by some target entities to prepare such statements may
significantly delay or essentially preclude consummation of an otherwise
desirable acquisition by the Company. Acquisition prospects that do not have or
are unable to obtain the required audited statements may be inappropriate for
acquisition so long as the reporting requirements of the '34 Act are applicable.
Lack of Market Research or Marketing Organization. The Company has
neither conducted, nor have others made available to it, results of market
research indicating that market demand exists for the transactions contemplated
by the Company. Moreover, we do not have, and do not plan to establish, a
marketing organization. Even in the event demand is identified for a merger or
acquisition contemplated by the Company, there is no assurance we will be
successful in completing any such business combination.
Lack of Diversification. The Company's proposed operations, even if
successful, will in all likelihood result in the Company engaging in a business
combination with a business opportunity. Consequently, our activities may be
limited to those engaged in by business opportunities which the Company merges
with or acquires. The Company's inability to diversify its activities into a
number of areas may subject the Company to economic fluctuations within a
particular business or industry and therefore increase the risks associated with
our operations.
Government Regulation. Although we will be subject to the reporting
requirements under the '34 Act, as amended, management believes the Company will
not be subject to regulation under the '40 Act, as amended, insofar as the
Company will not be engaged in the business of investing or trading in
securities. In the event we engage in business combinations which result in the
Company holding passive investment interests in a number of entities, we could
be subject to regulation under the '40 Act. In such event, we would be required
to register as an investment company and could be expected to incur significant
registration and compliance costs. The Company has obtained no formal
determination from the Securities and Exchange Commission as to the status of
the Company under the '40 Act and, consequently, violation of such Act could
subject the Company to material adverse consequences.
Probable Change in Control and Management. A business combination
involving the issuance of the Company's common stock will, in all likelihood,
result in shareholders of a private company obtaining a controlling interest in
the Company. Any such business combination may require management of the Company
to sell or transfer all or a portion of the Company's common stock held by them,
or resign as members of the Board of Directors of the Company. The resulting
change in control of the Company could result in removal of one or more present
officers and directors of the Company and a corresponding reduction in or
elimination of their participation in the future affairs of the Company.
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Reduction of Percentage Share Ownership Following a Business
Combination. Our primary plan of operation is based upon a business combination
with a private concern which, in all likelihood, would result in the Company
issuing securities to shareholders of any such private company. The issuance of
previously authorized and unissued common stock of the Company would result in
reduction in percentage of shares owned by present and prospective shareholders
of the Company and may result in a change in control or management of the
Company.
Disadvantages of Blank Check Offering. We may enter into a business
combination with an entity that desires to establish a public trading market for
its shares. A business opportunity may attempt to avoid what it deems to be
adverse consequences of undertaking its own public offering by seeking a
business combination with us. Such consequences may include, but are not limited
to, time delays of the registration process, significant expenses to be incurred
in such an offering, loss of voting control to public shareholders and the
inability or unwillingness to comply with various federal and state laws enacted
for the protection of investors.
Absence of Trading Market. There currently is no trading market for the
Company's stock and there is no assurance that a trading market will develop.
"Penny" Stock Regulation of Broker-Dealer Sales of Company Securities.
For transactions covered by Rule 15g-9 under the '34 Act, a broker-dealer must
furnish to all investors in penny stocks, a risk disclosure document required by
the rule, make a special suitability determination of the purchaser and have
received the purchaser's written agreement to the transaction prior to the sale.
In order to approve a person's account for transactions in penny stock, the
broker or dealer must (i) obtain information concerning the person's financial
situation, investment experience and investment objectives; (ii) reasonably
determine, based on the information required by paragraph (i) that transactions
in penny stock are suitable for the person and that the person has sufficient
knowledge and experience in financial matters that the person reasonably may be
expected to be capable of evaluating the rights of transactions in penny stock;
and (iii) deliver to the person a written statement setting forth the basis on
which the broker or dealer made the determination required by paragraph (ii) in
this section, stating in a highlighted format that it is unlawful for the broker
or dealer to effect a transaction in a designated security subject to the
provisions of paragraph (ii) of this section unless the broker or dealer has
received, prior to the transaction, a written agreement to the transaction from
the person; and stating in a highlighted format immediately preceding the
customer signature line that the broker or dealer is required to provide the
person with the written statement and the person should not sign and return the
written statement to the broker or dealer if it does not accurately reflect the
person's financial situation, investment experience and investment objectives
and obtain from the person a manually signed and dated copy of the written
statement.
A penny stock means any equity security other than a security (i)
registered, or approved for registration upon notice of issuance on a national
securities exchange that makes transaction reports available pursuant to 17 CFR
11Aa3-1 (ii) authorized or approved for authorization upon notice of issuance,
for quotation on the Nasdaq NMS ; (iii) that has a price of five dollars or more
or . . . . (iv) whose issuer has net tangible assets in excess of $2,000,000
demonstrated by financial statements dated less than fifteen months previously
that the broker or dealer has reviewed and has a reasonable basis to believe are
true and complete in relation to the date of the transaction with the person.
Consequently, the rule may affect the ability of broker-dealers to sell the
Company's securities.
Taxation. Federal and state tax consequences will, in all likelihood,
be major considerations in any business combination we may undertake. Currently,
such transactions may be structured so as to result in tax-free treatment to
both companies, pursuant to various federal and state tax provisions. The
Company
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<PAGE>
intends to structure any business combination so as to minimize the federal and
state tax consequences to both the Company and the target entity; however, there
can be no assurance that such business combination will meet the statutory
requirements of a tax- free reorganization or that the parties will obtain the
intended tax-free treatment upon a transfer of stock or assets. A non-qualifying
reorganization could result in the imposition of both federal and state taxes
which may have an adverse effect on both parties to the transaction.
Requirement of Audited Financial Statements May Disqualify Business
Opportunities. Management believes that any potential business opportunity must
provide audited financial statements for review for the protection of all
parties to the business combination. One or more attractive business
opportunities may choose to forego the possibility of a business combination
with us, rather than incur the expenses associated with preparing audited
financial statements.
DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no agreements to
acquire any properties. The Company intends to attempt to acquire assets or a
business in exchange for its securities.
The Company operates from its offices at Suite 106, 1460 Pandosy St.,
Kelowna, British Columbia, Canada. Space is provided to the Company on a rent
free basis by Mr. Hemmerling, an officer and director of the Company, and it is
anticipated that this arrangement will remain until such time as the Company
successfully consummates a merger or acquisition. Management believes that this
space will meet the Company's needs for the foreseeable future.
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<TABLE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Management
The table below lists the beneficial ownership of the Company's voting
securities by each person known by the Company to be the beneficial owner of
more than 5% of such securities, as well as the securities of the Company
beneficially owned by all directors and officers of the Company. Unless
otherwise indicated, the shareholders listed possess sole voting and investment
power with respect to the shares shown.
<CAPTION>
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent of
Title of Class Owner Owner Class
- -------------- ----- ----- -----
<S> <C> <C> <C>
Common Devinder Randhawa 152,000 30.4%
Suite 106
1460 Pandosy St.
Kelowna, B.C., Canada
Common Bob Hemmerling 152,000 30.4%
Suite 106
1460 Pandosy St.
Kelowna, B.C., Canada
Common All Officers and 304,000 60.8%
Directors as a
Group (2 persons)
</TABLE>
The balance of the Company's outstanding Common stock are held by 8
persons.
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<PAGE>
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS
The directors and officers of the Company are as follows:
Name Age Position
- ---- --- --------
Devinder Randhawa 39 President, Chairman
Robert Hemmerling 40 Secretary, Treasurer, Director
The above listed officers and directors will serve until the next
annual meeting of the shareholders or until their death, resignation,
retirement, removal, or disqualification, or until their successors have been
duly elected and qualified. Vacancies in the existing Board of Directors are
filled by majority vote of the remaining Directors. Officers of the Company
serve at the will of the Board of Directors. There are no other family
relationship between any executive officer and director of the Company.
Resumes
Devinder Randhawa, President and chairman of the Company, was appointed
to his positions with the Company on July 23, 1997. Upon completing his MBA
in1985, Mr. Randhawa has been in the venture capital/corporate finance
(sub-investment banking). Mr. Randhawa was either a registered representative or
an analyst for 8 years before founding RD Capital Inc. RD Capital, Inc. is a
privately held consulting firm assisting emerging companies in the resource and
non-resource sectors. Mr. Randhawa was the founder of startup's such as First
Smart Sensor and Strathmore Resources Ltd. Mr. Randhawa received a Bachelors
Degree in Business Administration with Honors from Trinity Western College of
Langley, British Columbia in 1983 and received his MBA from the University of
British Columbia in 1985. He devotes only such time as necessary to the business
of the Company, which time is expected to be nominal.
Robert Hemmerling, Secretary, Treasurer and a director, was appointed
to his positions with the Company on July 23, 1997. In addition to his positions
with the Company, since September 1996, Mr. Hemmerling has been employed with
Strathmore Resources, Ltd., Kelowna, British Columbia in the investor relations
department. Strathmore Resources is engaged in the business of acquiring and
developing uranium properties. Prior, from January 1996 through August 1996, Mr.
Hemmerling was unemployed. From January 1992 through December 1995, Mr.
Hemmerling was an electrician with Concord Electric, Kelowna, British Columbia.
He devotes only such time as necessary to the business of the Company, which
time is expected to be nominal.
Prior "Blank Check" Experience
None of our officers and/or directors have had any direct experience in
identifying emerging companies for investment and/or business combinations.
Conflicts of Interest
Members of the Company's management are associated with other firms
involved in a range of business activities. Consequently, there are potential
inherent conflicts of interest in their acting as officers and directors of the
Company. Insofar as the officers and directors are engaged in other business
activities,
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<PAGE>
management anticipates it will devote only a minor amount of time to the
Company's affairs.
The officers and directors of the Company are now and may in the future
become shareholders, officers or directors of other companies which may be
formed for the purpose of engaging in business activities similar to those
conducted by the Company. Accordingly, additional direct conflicts of interest
may arise in the future with respect to such individuals acting on behalf of the
Company or other entities. Moreover, additional conflicts of interest may arise
with respect to opportunities which come to the attention of such individuals in
the performance of their duties or otherwise. The Company does not currently
have a right of first refusal pertaining to opportunities that come to
management's attention insofar as such opportunities may relate to the Company's
proposed business operations.
The officers and directors are, so long as they are officers or
directors of the Company, subject to the restriction that all opportunities
contemplated by the Company's plan of operation which come to their attention,
either in the performance of their duties or in any other manner, will be
considered opportunities of, and be made available to the Company and the
companies that they are affiliated with on an equal basis. A breach of this
requirement will be a breach of the fiduciary duties of the officer or director.
If the Company or the companies in which the officers and directors are
affiliated with both desire to take advantage of an opportunity, then said
officers and directors would abstain from negotiating and voting upon the
opportunity. However, all directors may still individually take advantage of
opportunities if the Company should decline to do so. Except as set forth above,
we have not adopted any other conflict of interest policy with respect to such
transactions.
EXECUTIVE COMPENSATION
None of our officers and/or directors receive any compensation for
their respective services rendered unto the Company, nor have they received such
compensation in the past. They all have agreed to act without compensation until
authorized by the Board of Directors, which is not expected to occur until the
we have generated revenues from operations after consummation of a merger or
acquisition. As of the date of this registration statement, the Company has no
funds available to pay directors. Further, none of the directors are accruing
any compensation pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates a
merger or acquisition with an unaffiliated entity, that entity may desire to
employ or retain one or a number of members of the Company's management for the
purposes of providing services to the surviving entity or otherwise provide
other compensation to such persons. However, the Company has adopted a policy
whereby the offer of any post-transaction remuneration to members of management
will not be a consideration in the Company's decision to undertake any proposed
transaction. Each member of management has agreed to disclose to the Company's
Board of Directors any discussions concerning possible compensation to be paid
to them by any entity which proposes to undertake a transaction with the Company
and further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the Company's Board of Directors is offered
compensation in any form from any prospective merger or acquisition candidate,
the proposed transaction will not be approved by the Company's Board of
Directors as a result of the inability of the Board to affirmatively approve
such a transaction.
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. In the event the
Company consummates a transaction with any entity referred by associates of
management, it is possible that such an associate will be compensated for their
referral in the form of a finder's fee. It is anticipated that this fee will be
either in the form of restricted common stock issued by the Company as part of
the terms of the proposed transaction, or will be in the form of cash
16
<PAGE>
consideration. However, if such compensation is in the form of cash, such
payment will be tendered by the acquisition or merger candidate, because the
Company has insufficient cash available. The amount of such finder's fee cannot
be determined as of the date of this registration statement, but is expected to
be comparable to consideration normally paid in like transactions. No member of
management of the Company will receive any finders fee, either directly or
indirectly, as a result of their respective efforts to implement the Company's
business plan.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the Company for the
benefit of its employees.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no related party transactions, or any other
transactions or relationships required to be disclosed pursuant to Item 404 of
Regulation S-B.
LEGAL PROCEEDINGS
There is no litigation pending or threatened by or against the Company.
MARKET PRICE FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
There is no trading market for the Company's Common stock at present
and there has been no trading market to date. Management has not undertaken any
discussions, preliminary or otherwise, with any prospective market maker
concerning the participation of such market maker in the aftermarket for the
Company's securities and management does not intend to initiate any such
discussions until such time as the Company has consummated a merger or
acquisition. There is no assurance that a trading market will ever develop or,
if such a market does develop, that it will continue.
Market Price
The Company's Common stock is not quoted at the present time. The
Securities and Exchange Commission has adopted a Rule which established the
definition of a "penny stock," for purposes relevant to the Company, as any
equity security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules require: (i)
that a broker or dealer approve a person's account for transactions in penny
stocks; and (ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person's account for
transactions in penny stocks, the broker or dealer must (i) obtain financial
information and investment experience and objectives of the person; and (ii)
make a reasonable determination that the transactions in penny stocks are
suitable for that person and that person has sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prepared by the Commission relating to
the penny stock market, which, in highlight form, (i) sets forth the basis on
which the broker or dealer made the suitability determination; and (ii) that the
broker or dealer received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks of investing in
penny stock in both public offering and in secondary trading, and about
commissions payable to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies available to
an investor in cases of fraud in penny stock transactions.
17
<PAGE>
Finally, monthly statements have to be sent disclosing recent price information
for the penny stock held in the account and information on the limited market in
penny stocks.
Management intends to strongly consider undertaking a transaction with
any merger or acquisition candidate which will allow the Company's securities to
be traded without the aforesaid limitations. However, there can be no assurances
that, upon a successful merger or acquisition, the Company will qualify its
securities for listing on Nasdaq or some other national exchange, or be able to
maintain the maintenance criteria necessary to insure continued listing. The
failure of the Company to qualify its securities or to meet the relevant
maintenance criteria after such qualification in the future may result in the
discontinuance of the inclusion of the Company's securities on a national
exchange. In such events, trading, if any, in the Company's securities may then
continue in the non-Nasdaq over-the-counter market. As a result, a shareholder
may find it more difficult to dispose of, or to obtain accurate quotations as to
the market value of, the Company's securities.
Effective January 4, 1999, the National Association of Securities
Dealers, Inc. (the "NASD") requires that companies listed for trading on the
Bulletin Board must file a Form 10-SB that must become effective by operation of
law and have no outstanding comments before trading may commence.
Holders
There are ten (10) holders of the Company's Common stock. In July 1997,
the Company issued 500,000 of its Common stock for services and expenses valued
at $.0001 per share ($100.00). All of the issued and outstanding shares of the
Company's Common stock were issued in accordance with the exemption from
registration afforded by Section 4(2) of the Securities Act of 1933.
As of the date of this report, all of the Company's Common stock are
eligible for sale under Rule 144 promulgated under the '33 Act, as amended,
subject to certain limitations included in said Rule. In general, under Rule
144, a person (or persons whose shares are aggregated), who has satisfied a one
year holding period, under certain circumstances, may sell within any
three-month period a number of shares which does not exceed the greater of one
percent of the then outstanding Common stock or the average weekly trading
volume during the four calendar weeks prior to such sale. Rule 144 also permits,
under certain circumstances, the sale of shares without any quantity limitation
by a person who has satisfied a two-year holding period and who is not, and has
not been for the preceding three months, an affiliate of the Company.
Dividends
We have not paid any dividends to date, and has no plans to do so in
the immediate future.
Transfer Agent
The Company does not have a transfer agent at this time.
RECENT SALES OF UNREGISTERED SECURITIES
We have not issued any of our securities during the two year period
preceding the date of this Registration Statement. All of the shares of Common
stock of the Company previously issued have been issued for investment purposes
in a "private transaction" and are "restricted" shares as defined in Rule 144
under the '33 Act, as amended. These shares may not be offered for public sale
except under Rule 144, or
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<PAGE>
otherwise, pursuant to the '33 Act.
As of the date of this report, all of the issued and outstanding shares
of the Company's Common stock are eligible for sale under Rule 144 promulgated
under the '33 Act, as amended, subject to certain limitations included in said
Rule.
However, all of the shareholders of the Company have executed and
delivered a "lock-up" letter agreement which provides that each such shareholder
shall not sell their respective securities until such time as the Company has
successfully consummated a merger or acquisition. Further, each shareholder has
placed their respective stock certificate with the Company's legal counsel,
Evers & Hendrickson, LLP, who has agreed not to release any of the certificates
until the Company has closed a merger or acquisition. Any liquidation by the
current shareholders after the release from the "lock-up" selling limitation
period may have a depressive effect upon the trading prices of the Company's
securities in any future market which may develop.
In general, under Rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one year holding period, under certain
circumstances, may sell within any three-month period a number of shares which
does not exceed the greater of one percent of the then outstanding Common stock
or the average weekly trading volume during the four calendar weeks prior to
such sale. Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has satisfied a two-year
holding period and who is not, and has not been for the preceding three months,
an affiliate of the Company.
DESCRIPTION OF SECURITIES
The Company's authorized capital stock consists of 100,000,000 shares,
of Common stock, par value $.0001 per share. There are 500,000 shares of Common
stock issued and outstanding as of the date of this filing.
Common Stock
All shares of Common stock have equal voting rights and, when validly
issued and outstanding, are entitled to one vote per share in all matters to be
voted upon by shareholders. The shares of Common stock have no preemptive,
subscription, conversion or redemption rights and may be issued only as fully
paid and nonassessable shares. Cumulative voting in the election of directors is
not permitted, which means that the holders of a majority of the issued and
outstanding shares of Common stock represented at any meeting at which a quorum
is present will be able to elect the entire Board of Directors if they so choose
and, in such event, the holders of the remaining shares of Common stock will not
be able to elect any directors. In the event of liquidation of the Company, each
shareholder is entitled to receive a proportionate share of the Company's assets
available for distribution to shareholders after the payment of liabilities and
after distribution in full of preferential amounts, if any. All shares of the
Company's Common stock issued and outstanding are fully paid and nonassessable.
Holders of the Common stock are entitled to share pro rata in dividends and
distributions with respect to the Common stock, as may be declared by the Board
of Directors out of funds legally available therefor.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Article XII of the Articles of Incorporation and Article VI of the
Bylaws of the Company, as amended, set forth certain indemnification rights. The
Bylaws of the Company provide that the Company shall possess
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<PAGE>
and may exercise all powers of indemnification of officers, directors,
employees, agents and other persons and all incidental powers and authority. The
Company's Board of Directors is authorized and empowered to exercise all of the
Company's powers of indemnification, without shareholder action. The assets of
the Company could be used or attached to satisfy any such liabilities subject to
such indemnification. See Exhibit 3.1 hereto.
Disclosure of Commission Position on Indemnification for
Securities Act Liabilities
The Nevada Revised Statutes, as amended, authorize the Company to
indemnify any director or officer under certain prescribed circumstances and
subject to certain limitations against certain costs and expenses, including
attorneys' fees actually and reasonably incurred in connection with any action,
suit or proceedings, whether civil, criminal, administrative or investigative,
to which such person is a party by reason of being a director or officer of the
Company if it is determined that such person acted in accordance with the
applicable standard of conduct set forth in such statutory provisions. The
Company's Articles of Incorporation provides for the indemnification of
directors and officers to the full extent permitted by Nevada law.
The Company may also purchase and maintain insurance for the benefit of
any director or officer which may cover claims for which the Company could not
indemnify such person.
Insofar as indemnification for liabilities arising under the '33 Act
may be permitted to officers, directors or persons controlling the Company
pursuant to the foregoing, the Company has been informed that in the opinion of
the U.S. Securities and Exchange Commission such indemnification is against
public policy as expressed in the '33 Act, and is therefore unenforceable.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
We have not changed accountants since its formation and there are no
disagreements with the findings of said accountants.
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<PAGE>
Financial Statements.
The following financial statements are attached to this report and
filed as a part thereof.
Table of Contents - Financial Statements .................................. F-2
Independent Auditor's Report .............................................. F-3
Balance Sheet .............................................................. F-4
Statement of Operations .................................................... F-5
Statement of Cash Flows .................................................... F-6
Statement of Shareholders' Equity .......................................... F-7
Notes to Financial Statements .............................................. F-8
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Item 1. Exhibit Index
No.
3.1* Articles of Incorporation
3.2* Amendment to Articles of Incorporation
3.3* Bylaws
4.1 Specimen Informational Statement
4.1.1* Form of Lock-up Agreement Executed by the
Company's Shareholders
27.1* Financial Data Schedule
*Previously filed.
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
Tripacific Development Corporation
Date: July 30, 1999
By:/s/ Devinder Randhawa
- -----------------------------------------------
Devinder Randhawa, President
By:/s/ Bob Hemmerling
- -----------------------------------------------
Bob Hemmerling, Secretary
23
FORM OF INFORMATIONAL STATEMENT
PURSUANT TO NEVADA REVISED STATUES SECTION 78.235
Name
Address
Dear __________:
This information statement certifies that
_______________________________ is the registered holder of ______________
shares of common stock of Tripacific Development Corporation, a Nevada
corporation, transferable on the books of the corporation in person or by
execution of a power of attorney.
Witness the seal of the corporation and the signatures of its duly
authorized officers:
Dated: __________________________________
Tripacific Development Corporation
By: _____________________________________ [SEAL]
Devinder Randhawa, President
By: _____________________________________
Bob Hemmerling, Secretary
