UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. 1
to
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12 (g) OF THE SECURITIES EXCHANGE ACT OF 1934
TRANSAMERICAN HOLDINGS, INC.
-----------------------------------------------
(Name of Small Business Issuer in Its Charter)
NEVADA 77-0434471
--------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
9601 Wilshire Boulevard, Suite 620, Beverly Hills, California 90210
-------------------------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(310) 271-4159
----------------
Telephone Number
Securities to be registered under Section 12(b) of the Exchange Act:
None.
Securities to be registered under Section 12(g) of the
Exchange Act:
Common Stock, $0.001 par value
------------------------------
(Title of class)
<PAGE>i
TABLE OF CONTENTS
PART I Page
Item 1. Description of Business.............................................1
Item 2. Plan of Operation...................................................4
Item 3. Description of Property.............................................8
Item 4. Security Ownership of Certain Beneficial Owners and
Management..........................................................8
Item 5. Directors, Executive Officers, Promoters and Control
Persons.............................................................9
Item 6. Executive Compensation.............................................11
Item 7. Certain Relationships and Related
Transactions.......................................................12
Item 8. Description of Securities..........................................12
PART II
Item 1. Market for Common Equities and Related Stockholder
Matters............................................................14
Item 2. Legal Proceedings..................................................16
Item 3. Changes in and Disagreements with Accountants......................16
Item 4. Recent Sales of Unregistered Securities............................16
Item 5. Indemnification of Directors and Officers..........................19
PART F/S
Financial Statements.....................................................20/F-1
Table of Contents.........................................................20/F-1
PART III
Item 1. Index to Exhibits..................................................21
Signatures ...................................................................21
<PAGE>1
PART I
Item 1. Description of Business
TransAmerican Holdings, Inc. (the "Company") was incorporated under the
name Health Research, Ltd., on July 22, 1996, under the laws of the State of
Nevada to engage in any lawful corporate activity, including, but not limited
to, selected mergers and acquisitions.
The Company initially issued 5,000 shares of its no par value common stock
for $5,000 in cash. The Company has amended its Articles of Incorporation to
change its authorized capitalization to 100,000,000 shares of common stock,
$0.001 par value. (See Notes to Financial Statements: Note 4-Stockholders'
Equity). No preferred shares are currently authorized.
The Company has been in the developmental stage and was inactive until
November 1999, at which time the current management became involved. On November
15, 1999, the Company changed its name to TransAmerican Holdings, Inc.
The sole purpose of the Company at this time has been to raise capital and
to locate and acquire a private on-going business. Although the Company and its
management are expending significant time and activities towards identifying
possible business opportunities, the Company may still be defined as a "blank
check" company under current regulatory guidelines.
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.
In addition, the Company is filing this registration statement to enhance
investor protection and to provide information. On December 11, 1997, the
National Association of Securities Dealers, Inc. (NASD) announced that its Board
of Governors had approved a series of proposed changes for the Over The Counter
("OTC") Bulletin Board and the OTC market. The principal changes, which were
approved by the Securities and Exchange Commission on January 4, 1999 allows
only those companies that report their current financial information to the
Securities and Exchange Commission, banking, or insurance regulators to be
quoted on the OTC Bulletin Board. The rule provides for a phase-in period for
those securities already quoted on the OTC Bulletin Board.
Risk Factors
The Company's business is subject to certain risk factors, including the
following:
1. The Company's Lack Of Operating History Will Result In Continued Losses
Until A Business Combination Can Be Completed. The Company has had no
operating history nor any revenues or earnings from operations. The Company
will sustain operating expenses without corresponding revenues, at least
until the consummation of a business combination which will result in the
Company continuing to incur a net operating loss which will increase
continuously until the Company can consummate a business combination with a
<PAGE>2
profitable business opportunity. There is no assurance that the Company can
identify such a business opportunity and consummate such a business
combination.
2. The Company's Success Is Dependent Upon The Management Of A Business To Be
Acquired. The success of the Company's proposed plan of operation will
depend to a great extent on the operations, financial condition and
management of the identified business opportunity. When the Company
completes a business combination, the success of the acquired company's
operations will be dependent upon management of the acquired company and
numerous other factors.
3. There Is Strong Competition For Business Opportunities. The Company is and
will continue to be a participant in the business of seeking mergers with,
joint ventures with and acquisitions of small private and public entities.
A large number of established entities, including venture capital firms,
are also active in mergers and acquisitions of companies and such entities
may have greater financial resources, technical expertise and managerial
capabilities and, consequently, the Company will be at a competitive
disadvantage. The Company will also compete in seeking merger or
acquisition candidates with other small public companies.
4. Reporting Requirements May Delay Or Preclude Acquisitions. Sections 13 and
5(d) of the Securities Exchange Act of 1934 (the "1934 Act"), require
companies subject thereto 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 not be appropriate for acquisition so
long as the reporting requirements of the 1934 Act are applicable.
5. Lack Of Diversification May Be Adverse To The Company. Because of limited
initial resources at this time, the Company may only be able to participate
in one potential business acquisition. This lack of diversification may not
permit the Company to offset potential losses from one venture against
gains from another.
6. If The Company Were To Be Classified As An Investment Company, Regulatory
And Compliance Costs Will Be Significantly Greater. Although the Company
will be subject to regulation under the 1934 Act, management believes the
Company will not be subject to regulation under the Investment Company Act
of 1940, 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 Investment Company Act of 1940. 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
<PAGE>3
Company has obtained no formal determination from the Securities and
Exchange Commission as to the status of the Company under the Investment
Company Act of 1940 and, consequently, any violation of such Act would
subject the Company to material adverse consequences.
7. A Policy Of No Change In Control And Management May Limit Business
Opportunities. A business combination involving the issuance of the
Company's Common Shares will result in shareholders of a private company
obtaining an interest in the Company. The Company, however, does not expect
to enter into any business combination which would require management of
the Company to sell or transfer all or a portion of the Company's Common
Shares held by them, resign as members of the Board of Directors of the
Company, or otherwise result in change in control of the Company. This
policy may limit the number of business opportunities the Company will
consider.
8. A Reduction of Percentage Share Ownership May Result Following A Business
Combination. The Company's primary plan of operation is based upon a
business combination with a private concern which may result in the Company
issuing securities to shareholders of any private company. The Company does
not contemplate the issuance of previously authorized and unissued Common
Shares of the Company which would result in reduction in percentage of
shares owned by present and prospective shareholders of the Company that
may result in a change in control or management of the Company.
9. A Blank Check Offering Has Disadvantages. The Company 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 the Company.
10. Taxation May Be A Material Factor In Any Business Combination. Federal and
state tax consequences will be major considerations in any business
combination the Company 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 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.
11. Requirement Of Audited Financial Statements May Disqualify Some Business
Opportunities. Management of the Company 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
<PAGE>4
business combination with the Company, rather than incur the expenses
associated with preparing audited financial statements.
12. Dilution. 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.
13. A Limited Trading Market May Adversely Affect The Company's Ability To
Complete Acquisitions. There is a limited trading market for the Company's
common stock at present. An active trading market may or may not develop.
Item 2. 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. The Company has identified potential business opportunities and has
entered into preliminary discussions. However, the Company has not entered into
any agreement or understanding as of the date of this registration statement.
The officers of the Company are devoting 100% of their time to Company
activities. The officers of the Company have agreed to allocate such time
without salary. See "Item 5 - Directors, Executive Officers, Promoters and
Control Persons - Resumes."
General Business Plan
The Company's purpose is to seek and acquire an interest in business
opportunities presented to it by persons or firms who or which desire to seek
the advantages of an Issuer who has complied with the 1934 Act. In its search
for a business opportunity, the Company will not restrict its selection to any
specific business, industry, or geographical location and the Company may
participate in a business venture of any kind or nature. This discussion of the
proposed business is purposefully general and is not meant to restrict the
Company's unlimited discretion to search for and enter into potential business
opportunities. Management anticipates that it may presently be able to
participate in only one potential business venture because the Company has
nominal assets. See "Item F/S - Financial Statements."
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 benefits of an issuer who has complied with
the 1934 Act. Such 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.
Management believes the Company will be able to offer owners of acquisition
candidates the opportunity to acquire an interest in an issuer who has complied
with the 1934 Act without incurring the cost and time required to conduct an
initial public offering. The owners of the business opportunity will, however,
<PAGE>5
incur significant legal and accounting costs in connection with the acquisition
of a business opportunity, including the costs of preparing and filing required
reports or Form 8-K, 10-K or 10-KSB, agreements and related reports and
documents. The 1934 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 filings
relevant to complying with the 1934 Act.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, the officers and directors of the Company. Management
intends to concentrate on identifying prospective business opportunities, which
may be brought to its attention through present associations with the Company's
officers and directors, or by the Company's 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; 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 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 with management and key
personnel of the business opportunity as part of their investigation. To the
extent possible, the Company intends to utilize written reports and personal
investigation to evaluate the above factors. The Company will not acquire or
merge with any company for which audited financial statements cannot be obtained
within a reasonable period of time after closing of the proposed transaction.
Management of the Company will rely upon their own efforts in accomplishing
the business purposes of the Company. It is not anticipated that any outside
consultants or advisors will be utilized by the Company to effectuate its
business purposes. However, if the Company does retain such outside consultant
or advisor, any cash fee will be paid by the prospective or acquisition
candidate. There have been no contracts or agreements with any outside
consultants and none are anticipated in the future.
It is anticipated that the Company will incur nominal expenses in the
implementation of its business plan described herein. In addition, the Company
has issued shares of common stock in private placements and may issue additional
shares prior to the acquisition of a business opportunity.
Acquisition Of Opportunities
In implementing a structure for a particular business acquisition, the
Company 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. 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
<PAGE>6
and all such sales will only be made in compliance with the securities laws of
the United States and any applicable state.
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, the Company 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. The issuance of
substantial additional securities and their potential sale into a 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.
As part of the Company's investigation, officers and directors of the
Company will meet personally with management and key personnel, will visit and
inspect material facilities, obtain independent analysis of verification of
certain information provided, check references of management and key personnel,
and take other investigative measures as the Company's management may deem
necessary. 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 management of
the target company are 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 percentage ownership may be subject
to reduction in the event the Company acquires a target company with substantial
assets. Any merger or acquisition effected by the Company is expected to have a
dilutive effect on the percentage of shares held by the Company's then
shareholders.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Generally, such
agreements will require specific representations and warranties by all of the
parties thereto, will specify certain events of default, will detail the terms
of closing and the conditions which 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, the Company will not acquire or merge with any entity which
cannot provide independent audited financial statements within a reasonable
period of time after closing of the proposed transaction. The Company is subject
to all of the reporting requirements included in the 1934 Act. Included in these
requirements is the 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
<PAGE>7
available at closing, or within time parameters necessary to insure the
Company's compliance with the requirements of the 1934 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 rescinded, at the discretion of
the present management of the Company. If such transaction is rescinded, the
agreement will also contain a provision providing for the acquisition entity to
reimburse the Company for all costs associated with the proposed transaction.
To assist in the acquisition of a business opportunity, the Company may
hire consultants, attorneys or accountants as it deems appropriate. The Company
will retain the services of these consultants, attorneys and accountants from
time to time on an "as needed" basis. There is no prior arrangement or
understanding regarding the engagement of any particular consultant for future
services.
Investment Company Act Of 1940
Although the Company will be subject to regulation under the Securities Act
of 1933, as amended, and the 1934 Act, management believes the Company will not
be subject to regulation under the Investment Company Act of 1940 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 Investment
Company Act of 1940. 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
Investment Company Act of 1940 and, consequently, any violation of such Act
would subject the Company to material adverse consequences. The Company's Board
of Directors unanimously approved a resolution stating that it is the Company's
desire to be exempt from the Investment Company Act of 1940 under Regulation
3a-2 thereto.
The Securities Enforcement and Penny Stock Reform Act of 1990
The Securities Enforcement and Penny Stock Act of 1990 requires additional
disclosure relating to the market for penny stocks in connection with trades in
any stock defined as a penny stock. The Commission has adopted regulations that
generally define a penny stock to be any equity security that has a market price
of less than $5.00 per share, subject to certain exceptions. Such exceptions
include any equity security listed on Nasdaq and any equity security issued by
an issuer that has (i) net tangible assets of at least $2,000,000, if such
issuer has been in continuous operation for three years, (ii) net tangible
assets of at least $5,000,000, if such issuer has been in continuous operation
for less than three years, or (iii) average annual revenue of at least
$6,000,000, if such issuer has been in continuous operation for less than three
years. Unless an exception is available, the regulations require the delivery,
prior to any transaction involving a penny stock, of a disclosure schedule
explaining the penny stock market and the risks associated with that market.
<PAGE>8
Lock-Up Agreement
The Chairman of the Board and the President of the Company have 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 entered into a merger or acquisition agreement, or the Company is no
longer classified as a "blank check" company, whichever first occurs.
Item 3. Description Of Property
The Company does not own any real property and at this time has no agreement to
acquire any real property.
The Company presently leases, under a sublease agreement, an approximately
3,080 square foot office space at 9601 Wilshire Boulevard, Suite 620, Beverly
Hills, CA 90210. The lease expires June 30, 2004. The monthly rent for the
office space is $8,500. The Company believes that this arrangement will meet the
Company's needs for the foreseeable future.
Item 4. Security Ownership Of Certain Beneficial Owners And Management
(a) Security Ownership of Certain Beneficial Owners
The following table sets forth the security and beneficial ownership for
each class of equity securities of the Company beneficially owned by all
directors and officers of the Company.
<TABLE>
<S> <C> <C> <C>
Title of Class Name and Address of Number of Shares Percent
Beneficial Owner Beneficially Owned of Class (1)
--------------- ------------------------------- -------------------- -------------
Common Najib E. Choufani 9,200,000 56.24%
9601 Wilshire Blvd, Suite 620
Beverly Hills, CA 90210
Common Michael Savage 200,000* 1.22%
9601 Wilshire Blvd, Suite 620
Beverly Hills, CA 90210
Common Fred E. Tannous -0- -0-
9601 Wilshire Blvd, Suite 620
Beverly Hills, CA 90210
Common All directors and officers 9,400,000 57.46%
as a group (3 persons)
</TABLE>
----------------------------
* Beneficial ownership.
<PAGE>9
(b) Security Ownership of Management
<TABLE>
<S> <C> <C> <C>
Name and Address of Number of Shares Percent
Title of Class Beneficial Owner Beneficially Owned of Class (1)
--------------- ------------------------------- ------------------- ------------
Common Najib E. Choufani 9,200,000 56.24%
9601 Wilshire Blvd, Suite 620
Beverly Hills, CA 90210
Common Michael Savage 200,000 1.22%
9601 Wilshire Blvd, Suite 620
Beverly Hills, CA 90210
Common Fred E. Tannous -0- -0-
9601 Wilshire Blvd, Suite 620
Beverly Hills, CA 90210
Common All directors and officers 9,400,000 57.46%
as a group (3 persons)
</TABLE>
(1) Percent of class is based on 16,359,090 shares of Common Stock issued and
outstanding as of June 30, 2000. The total of the Company's outstanding
Common Shares are held by 65 persons.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The following table sets forth certain information with respect to
the only promoters, directors and executive officers of the Company:
Name Age Position
------------------ --- ------------------------------
Najib E. Choufani 59 Chairman and Sec/Treas.
Michael Savage 78 President/Secretary/Director
Fred E. Tannous 34 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 agreements or understandings for
any officer or director to resign at the request of another person and no
officer or director is acting on behalf of or will act at the direction of any
other person. Mr. Tannous is a son-in-law of Mr. Choufani. Except for said
relationship, there is no family relationship between any other executive
officer and director of the Company.
Messrs. Choufani, Savage and Tannous may be considered promotors of the
Company as defined under the Securities Act of 1933.
<PAGE>10
Resumes
Najib E. Choufani. Mr. Choufani has been Secretary, Treasurer and Chairman of
the Board of TransAmerican Holdings, Inc. since January 2000. He is also
President and Director of Uni Financial Group, Inc. as well as Nagimo, Ltd., an
international advisory and financial services firm located in London, and its
U.S. subsidiary, Nagimo America, Inc. He has over 30 years of experience in
international business transactions including commercial banking, insurance,
construction, and contract negotiations. During the past eight years, Mr.
Choufani was successful in structuring, negotiating and promoting 14
transactions amounting to over $230 million with royal dignitaries and
businessmen from Kuwait, Saudi Arabia and the United Arab Emirates (UAE). From
1989 to 1991, he was Chairman and General Manager of Euromed Bank, a commercial
bank associated with Credit Lyonnais of France, located in Lebanon. From 1982 to
1989, he was Chairman and General Manager of Prosperity Bank of Lebanon, S.A.L.,
also located in Lebanon. During this period, Mr. Choufani was successful in
developing strategic relationships with banks, business associates and wealthy
individuals from the Gulf Region to attract over $100 million in deposits. In
his banking capacity, he was extensively involved in various aspects of monetary
policy and banking affairs as well as advising on economic policy. From 1979 to
1991, Mr. Choufani was President of Oriental Insurance & Reinsurance Co., S.A.L.
where he was successful in growing the company by over 300% to become one of the
most successful local insurance underwriter with an asset base of approximately
$50 million. In addition to being the sole representative for Lebanon and the
entire Middle East of Iran Insurance Co., Mr. Choufani was the representative
responsible for structuring a $500 million multi-year development project
between the Lebanese government and China Harbours Engineering Co. for the
construction of a wide-range harbor in Lebanon. Mr. Choufani holds a Bachelors
degree from Cairo University.
Michael Savage. Mr. Savage has been President, Chief Executive Officer and
Director of TransAmerican Holdings since January 2000. For over fifty years, he
has been active in various aspects of finance. His experience includes the
pioneering of the equipment leasing business through his founding of General
Leasing Corporation in 1952. In 1960, Mr. Savage founded and was President and
Chief Executive Officer of Capital Reserve Corporation, a financial services
company traded on the American Stock Exchange. He has lectured extensively to
various business groups on the topic of equipment leasing, marketing and design
development topics. Mr. Savage has consistently undertaken curricula in
business, architecture, and psychology at the University of Southern California
and University of California at Los Angeles since 1947.
Fred E. Tannous. Mr. Tannous has been a Director of the TransAmerican Holdings,
Inc. since November, 1999. He is currently Manager of Investment Analyst
Activities at DirecTV, a subsidiary of Hughes Electronics Corporation.. From
1996 until October 1999, he served as Treasurer and Chief Financial Officer of
Colorado Casino Resorts, Inc, a publicly-traded company with hotel and casino
operations in Colorado. He was instrumental in creating its public status and
raising over $25 million in private equity and nearly $40 million in debt
financing to fund the development of its latest $25 casino project. From 1994 to
1996, he was Managing Director of F.E. Tannous & Co. Investment Management Group
in Beverly Hills, California where he managed private equity funds. Mr. Tannous
consulted extensively to start-up Internet and technology ventures by developing
business plans, generating pro-forma financials, advising on business strategy
<PAGE>11
and capital structure, and raising capital through private placements and public
offerings. Mr. Tannous received an MBA in finance and accounting from the
University of Chicago Graduate School of Business. He also holds a Masters and
Bachelors degree in Electrical Engineering in from the University of Southern
California.
Previous Blank Check Companies - Current Blank Check Companies
Other than Mr. Tannous, the officers and directors of the Company have not
been officers or directors in any other blank check companies. Fred Tannous, a
director of the Company, is a principal shareholder, President and a director of
Centurion Communications Corporation ("Centurion"), a blank check company. The
initial business purpose of Centurion is to engage in a business combination
with an unidentified company or companies. Until completion of a business
combination, Centurion will be classified as a blank check.
Conflicts of Interest
Members of the Company's management are associated with other firms
involved in a range of business activities. There are possible inherent
conflicts of interest in their acting as officers and directors of the Company.
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
engaged in business activities similar to those conducted by the Company.
Accordingly, conflicts of interest may arise in the future with respect to such
individuals acting on behalf of the Company or other entities.
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 companies in which the officers and directors are
affiliated with 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, the Company has
not adopted any other conflict of interest policy with respect to such
transactions.
Item 6. Executive Compensation
None of the Company's officers and/or directors receive any salary for
their respective services rendered unto the Company, nor have they received such
salaries in the past. They all have agreed to act without salary until
authorized by the Board of Directors, which is not expected to occur until the
<PAGE>12
Company has generated revenues from operations after consummation of a merger or
acquisition.
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
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 outlined herein.
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.
Item 7. 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.
Item 8. Description of Securities
The Company's authorized capital stock consists of 100,000,000 shares of
Common Stock, par value $.001 per share. There are 16,359,090 shares of Common
Stock issued and outstanding as of June 30, 2000. No shares of Preferred Stock
are authorized at this time.
<PAGE>13
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 non-assessable 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 non-assessable. 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.
Blue Sky Consideration
A number of states have enacted statutes, rules and regulations limiting
the sale of securities of "blank check" companies in their respective
jurisdictions. Some states prohibit the initial offer and sale as well as any
subsequent resale of securities of these type of companies to residents of their
states. In such an event, the shareholders of the Company, as well as the
shareholders of any target company, may be limited in their ability to resell
shares of the Company. To the best knowledge of the Company, the following
states may have such limitations: Connecticut, Georgia, Oregon, Washington, and
Florida. This list is not exhaustive and a significant number of other states
may also have such limitations.
Several states may permit secondary market sales of the Company's
securities once or after certain financial and other information with respect to
the Company is published in a recognized securities manual such as Standard &
Poor's Corporation Records or pursuant to exemptions applicable to certain
investors. However, because the Company is a "blank check" company, it may not
be able to be listed in a recognized securities manual until after the
consummation of the first business combination.
<PAGE>14
PART II
Item 1. Market Price for Common Equity and Related Stockholder Matters
(a) Market Price.
On or about June 11, 2000, the Company's Common Stock commenced trading on
the NASDAQ "pink sheets" under the symbol "TAHI". There is only limited
trading in the Company's Common Stock. The following table sets forth the
range of high and low closing representative bid prices for the Company's
Common Stock from June 11, 2000, through June 30, 2000 (as reported in the
"pink sheets"), which represent inter-dealer prices, without retail
mark-up, mark-down or commission and may not reflect actual transactions:
Quarter Ended High Bid Low Bid
--------------- ---------- --------
June 30, 2000 $2.56 $0.13
The Securities and Exchange Commission adopted Rule 15g-9, 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. 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.
For the initial listing in the NASDAQ SmallCap market, a company must have
net tangible assets of $4 million or market capitalization of $50 million or a
net income (in the latest fiscal year or two of the last fiscal years) of
<PAGE>15
$750,000, a public float of 1,000,000 shares with a market value of $5 million.
The minimum bid price must be $4.00 and there must be three market makers. In
addition, there must be 300 shareholders holding 100 shares or more, and the
company must have an operating history of at least one year or a market
capitalization of $50 million.
For continued listing in the NASDAQ SmallCap market, a company must have
net tangible assets of $2 million or market capitalization of $35 million or a
net income (in the latest fiscal year or two of the last fiscal years) of
$500,000, a public float of 500,000 shares with a market value of $1 million.
The minimum bid price must be $1.00 and there must be two market makers. In
addition, there must be 300 shareholders holding 100 shares or more.
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.
(b) Holders
As of June 30, 2000, there were 65 holders of the Company's Common Stock.
In 1996, the Company issued 2,000,000, as adjusted for a 400 to 1 stock split,
of its Common Shares for cash and in 1999 the Company issued an additional
9,200,000 shares for cash. In January 2000, 100,000 shares were issued for
services rendered and in March 2000, 350,000 shares were issued for cash and
services rendered. 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 amended.
In addition, between March 2000 and May 2000, the Company sold 2,660,000
shares to approximately 29 investors. All of the investors are residents of
foreign countries. The shares were purchased for investment purposes. The shares
were sold pursuant to a Regulation S exemption from registration. All of the
stock certificates have been affixed with the appropriate legend restricting
sales and transfers.
As of the date of this registration statement, 1,900,000 shares of the
Company's Common Stock held by non-affiliates are eligible for sale under Rule
144 promulgated under the Securities Act of 1933, 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
<PAGE>16
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.
(c) Dividends
The Company has not paid any dividends to date, and has no plans to do so
in the immediate future.
Item 2. Legal Proceedings
There is no litigation pending or threatened by or against the Company.
Item 3. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
The Company has not changed accountants since its formation and there are
no disagreements with the findings of said accountants.
Item 4. Recent Sales of Unregistered Securities
(a) Securities Sold
The Company has sold and issued its securities during the three year period
preceding the date of this registration statement. 2,000,000 shares and
9,200,000 shares of Common Stock of the Company were sold and issued on July 22,
1996 and November 1999, respectively. An additional 100,000 shares were issued
in January 2000 for services rendered. All shares have been issued for
investment purposes in "private transactions" and are "restricted" shares as
defined in Rule 144 under the Securities Act of 1933, as amended. These shares
may not be offered for public sale except under Rule 144, or otherwise, pursuant
to said Act.
In addition, between March 2000 and May 2000, the Company sold 2,660,000
shares to approximately 29 investors. All of the investors are residents of
foreign countries. The shares were purchased for investment purposes. The shares
were sold pursuant to a Regulation S exemption from registration. All of the
stock certificates have been affixed with the appropriate legend restricting
sales and transfers.
In summary, Rule 144 applies to affiliates (that is, control persons)
and non-affiliates when they resell restricted securities (those purchased from
the issuer or an affiliate of the issuer in nonpublic transactions).
Non-affiliates reselling restricted securities, as well as affiliates selling
restricted or non-restricted securities, are not considered to be engaged in a
distribution and, therefore, are not deemed to be underwriters as defined in
<PAGE>17
Section 2(11) of the Securities Act of 1933, as amended, if six conditions are
met:
(1) Current public information must be available about the issuer unless
sales are limited to those made by non-affiliates after two years.
(2) When restricted securities are sold, generally there must be a
one-year holding period.
(3) When either restricted or non-restricted securities are sold by an
affiliate after one year, there are limitations on the amount of
securities that may be sold; when restricted securities are sold by
non-affiliates between the first and second years, there are identical
limitations; after two years, there are no volume limitations for
re-sales by non-affiliates.
(4) Except for sales of restricted securities made by non-affiliates after
two years, all sales must be made in brokers' transactions as defined
in Section 4(4) of the Securities Act of 1933, as amended, or a
transaction directly with a "market maker" as that term is defined in
Section 3(a)(38) of the 1934 Act.
(5) Except for sales of restricted securities made by non-affiliates after
two years, a notice of proposed sale must be filed for all sales in
excess of 500 shares or with an aggregate sales price in excess of
$10,000.
(6) There must be a bona fide intention to sell within a reasonable time
after the filing of the notice referred to in (5) above.
(b) Underwriters and Other Purchasers
There were no underwriters in connection with the sale and issuance of any
securities.
All of the shareholders have had a pre-existing personal or business
relationship with the Company or its officers and directors. By reason of their
business experience, each have been involved financially and by virtue of a time
commitment in business projects with the officers of the Company. Further, each
of the shareholders has established a pre-existing personal relationship with
the officers and directors of the Company. The following are the names of the 65
shareholders of record as of June 30, 2000 and the number of shares purchased by
each of them.
Name Shares
------------------------------------------ -------------
Uni Financial Group 9,200,000
Patrick Moriarty 1,300,000
Saad A Al Rossais 1,000,000
Fiserv Correspondent Services 625,000
Hillcrest Capital Group 600,000
Hassan Osman 350,000
Fahad Aljeraisy 300,000
Tom Cardall 250,000
<PAGE>18
Name Shares
------------------------------------------ -------------
Hassan Osman 207,000
Salim H. Alhasani 204,000
Ali A. Alkhereiji 200,000
Cede & Co 200,000
G. Savage Mem. Found. 200,000
Gene Stewart 200,000
Preeppinder Hayne 150,000
Kissar Limited 150,000
Leonard Phillips 150,000
Amine & Rima Khouzami 140,000
Pierre Charro 112.000
Favian Holdings Ltd 100,000
Barrak A.M. Alateeqi 50,000
Muna Jassim Aldossari 50,000
Aloha Associates 50,000
Hemisphere Holdings 50,000
Saeed M. Bajuwaiber 40,000
Maroun Charro 40,000
Leyon Bouchikian 38,000
Rolan El Khazaka 38,000
Saleh M. Almeheleb 35,090
Abdulkarim Aldrais 30,000
John Jones 25,000
Nancy Jones 25,000
Saeed Z. Alamri 20,000
Munira Jassim Aldossary 20,000
Khalid I. Almanee 20,000
Ali M. Almuhaileb 20,000
Sean Souleiman 20,000
Jamal Elrifay 15,000
Eihab Ahmed Mohamad Abounoufal 10,000
Randy Wright 5,000
Steve Albaugh 4,000
John Aldridge 4,000
Bruce Briney 4,000
Steve Brohm 4,000
Eileen Buckley 4,000
Herman Chitra 4,000
Jonah Dietz 4,000
Cliff Freeman 4,000
Tim Graves 4,000
David Hack 4,000
Steve Hesse 4,000
Chad Holtz 4,000
Debbie Johnson 4,000
Tom Lambert 4,000
Francesca Lanham 4,000
Mark Price 4,000
Maureen Reading 4,000
Bryon Rhodes 4,000
Tim Rice 4,000
Howard Smith 4,000
Bruce Staggs 4,000
Brett Verde 4,000
Melany Wade 4,000
<PAGE>19
Name Shares
------------------------------------------ -------------
Raymond Willey 4,000
Jennifer Worden 4,000
(c) Consideration
Except for 100,000 shares issued in January 2000 and 350,000 shares issued
in March 2000 for services rendered, each of the shares of stock were sold for
cash. Prior to the forward stock split, each shareholder paid $1.00 per share
for the shares, the Company sold and issued 5,000 shares, and the aggregate
consideration received by the Company was $5,000.00. On November 9, 1999, the
Company issued 9,200,000 shares to Uni Financial Group, Inc. (of which the
President is Najib E. Choufani the Company's Chairman of the Board) for $0.001
per share or an aggregate of $9,200.00.
(d) Exemption from Registration Relied Upon
The sale and issuance of the shares of stock was exempt from registration
under the Securities Act of 1933, as amended, by virtue of section 4(2) as a
transaction not involving a public offering. Each of the shareholders had
acquired the shares for investment and not with a view to distribution to the
public.
Item 5. Indemnification of Directors and Officers
Except for acts or omissions which involve intentional misconduct, fraud or
known violation of law or for the payment of dividends in violation of Nevada
Revised Statutes, there shall be no personal liability of a director or officer
to the Company, or its stockholders for damages for breach of fiduciary duty as
a director or officer. The Company may indemnify any person for expenses
incurred, including attorneys fees, in connection with their good faith acts if
they reasonably believe such acts are in and not opposed to the best interests
of the Company and for acts for which the person had no reason to believe his or
her conduct was unlawful. The Company may indemnify the officers and directors
for expenses incurred in defending a civil or criminal action, suit or
proceeding as they are incurred in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount of such expenses if it is ultimately
determined by a court of competent jurisdiction in which the action or suit is
brought determined that such person is fairly and reasonably entitled to
indemnification for such expenses which the court deems proper.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, 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 Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, as amended, and is therefore unenforceable.
<PAGE>20
PART F/S
TABLE OF CONTENTS
*Independent Auditor's Report
*Assets
*Liabilities and Stockholders' Equity
*Statement of Operations
*Statement of Stockholders' Equity
*Statement of Cash Flows
*Notes To Financial Statements
-------------------------
* Previously filed
<PAGE>21
PART III
Item 1. Exhibit Index
Sequential
No. Page No.
(3)* Articles of Incorporation and Bylaws
3.1.1 Articles of Incorporation .................................
3.1.2 Certificate of Amendment of Articles of Incorporation .....
3.2 Bylaws ....................................................
(12)* Lock-Up Agreement
12.1 Najib E. Choufani .........................................
12.2 Michael Savage.............................................
(27)* Financial Data Schedule
27.1 Financial Data Schedule ...................................
-------------------------
* Previously filed
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.
Date: August 23, 2000 TRANSAMERICAN HOLDINGS, INC.
/s/ MICHAEL SAVAGE
-------------------------------
By: Michael Savage
Its: President
