SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-KSB
(X) ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 1996
( ) TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 33-3272-W
LOTUS PACIFIC, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State of organization)
52-1947160
(I.R.S. Employer Identification Number)
235 Route 22 East, Greenbrook, New Jersey 08812
(Address of principal executive offices)
(908) 752-5899
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Check whether the issuer (1) filed all reports required by
Section 13 or 15 (d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes ____X____ No ________
The aggregate market value of the common stock held by
non-affiliates as of June 30, 1996: Not Determinable.
Shares outstanding of the issuer's common stock as
of June 30, 1996: 26,937,054 shares.
The issuer had $ 22,164 in revenue for the year
ended June 30, 1996.
Part I
Item 1. Description of Business.
(a) General Development of Business
Lotus Pacific, Inc. (the "Registrant" or "Company"), was
incorporated under the laws of the State of Delaware on
June 25, 1985. The Registrant was organized to raise capital
and to investigate and acquire any suitable asset, property
or other business opportunity which, in the opinion of
management, would be in the best interests of the Company.
In April 1987, the Company completed a public offering of
securities registered on Form 3-18 with the Securities and
Exchange Commission. The Company completed a business
acquisition in January 1991, and pursued a specified business
program until March 1993. In June 1993, the company disposed
of all of its interests in other entities and ceased to have
any business operations.
In September 1994, the Company completed a transaction
wherein it sold 7,000,000 shares of its common stock
(after giving effect to a 1 for 50 reverse stock split)
for $7,000, and sold 43,000 shares of Series A Preferred
Stock for $43,000 to Lotus International Holding Corp.
The company also sold 1,000,000 shares of common stock
to other persons for $1,000. In connection with said
transactions the Company appointed new officers and
directors and changed its corporate name to Lotus Pacific, Inc.
In March 1995, the Company issued 18,000,000 shares
of its common stock to Lotus International Holding
Corp. for $180,000.
In September 1995, the Company entered into a
Stock Exchange Agreement wherein it acquired a 70%
equity interest in Shanghai Union Auto-Bicycle C., Ltd.
("Shanghai Union"), a company located in Shanghai, China.
The registrant issued 560,000 restricted shares of
its common stock as the sole consideration given for
the 70% interest in Shanghai Union. In June 1996,
the registrant entered into a second Stock Exchange
Agreement wherein it exchanged the 70% equity interest
in Shanghai Union with a Hong Kong company for 112,000
shares of common stock of Rightiming Electronics
Corp., a Delaware corporation.
The Company currently has 26,937,054 shares of common
stock issued and outstanding.
(b) Financial information about Industry Segments
The registrant does not presently have separate
industry segments.
(c) Narrative Description of the Business.
The Company's business plan is to seek one or more
potential business ventures, which, in the opinion
of management, my warrant involvement by the company.
The Company will only acquire business which can
generate or provide audited financial statements.
The company recognizes that because of its limited
financial, managerial and other resources, the number
of suitable potential business ventures which may be
available to it will be extremely limited. The Company's
principal business objective will be to seek long-term
growth potential in the business venture in which
it participates rather than to seek immediate,
short-term earnings. In seeking to attain the Company's
business objective, it will not restrict its search to
any particular business or industry, but may participate
in business ventures of essentially any kind or nature,
including, but not limited to, finance, high technology,
manufacturing, natural resources, service, research and
development, communications, insurance, brokerage,
transportation and others. Management's discretion is
unrestricted and it may participate in any business venture
whatsoever, which may meet the business objectives discussed
herein. It is emphasized that the business objectives
discussed are extremely general and are not intended
to be restrictive upon the discretion of management.
Item 2. Properties.
The registrant has the total cash assets of $213,081.83 as
of June 30, 1996. The Company holds 112,000 shares of
common stock of Rightiming Electronics Corp., a Delaware
nonpublic company which designs and manufactures
electronic software in New Jersey and China. The
Company currently is provided office space by its directors.
Item 3. Legal Proceedings.
There are not currently any material pending legal
proceedings, to which the registrant is a party or
to which any of its property is subject and no such
proceedings are known to be the registrant to be
threatened or contemplated by or against it.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of the security
holders, through solicitation of proxies or
otherwise during the 4th quarter of the fiscal
year covered by this report.
Part II
Item 5. Market for Common Equity and Related Stockholder Matters
(a) Market Information.
The registrant's common stock is listed on the Electronic
Bulletin Board, and there were 13,800 shares traded on
the market in the past fiscal year.
(b) Holders.
The approximate number of holders of the registrant's
common stock as of 1996 is 193.
(c) Dividends.
The registrant has not paid any cash dividends to
date and does not anticipate or contemplate paying
dividends in the foreseeable future. It is the present
intention of management to utilize all available funds
for the development of the Company's business.
Item 6. Management's Discussion and Analysis or Plan of Operation.
The Company was incorporated June 25, 1985, for the
purpose of investing in any and all types of assets,
properties, and business. On September 29, 1995, the
registrant entered into a stock exchange agreement
wherein it acquired 70% equity interest in Shanghai Union
Auto-Bicycle Co., ltd., a company incorporated and operated
in Shanghai, People's Republic of China. As the
management of the registrant found that the offshore
company did not generate sufficient revenues and profit
as the registrant expected in the nine month period,
the registrant entered into a stock exchange agreement on
June 28, 1996 wherein it exchanged the 70% equity
interest in Shanghai Union Auto-Bicycle Co., Ltd.
for 112,000 shares of common stock of Rightiming
Electronics Corp., a Delaware nonpublic company.
The registrant's plan of operation is to pursue a
business combination with one or more existing business operations.
Item 7. Financial Statements.
See attached audited financial statements.
Item 8. Changes In and Disagreements with Accounting and Financial Disclosure.
The Registrant appointed the accounting firm of Schiffman,
Hughes & Brown to serve as the independent auditors
of its year end financial statements starting from
its fiscal year of 1995. To the best knowledge of
current management, the Registrant did not use an auditor
for its fiscal year prior to 1995 and therefore had no auditors.
To the best knowledge of current management, no adverse
opinion, disclaimer of opinion, qualification or
modification as to uncertainty, audit scope or accounting
principles exists in any report of any prior auditors
on the financial statements of the registrant except
with respect to the Company's ability to go forward as a going concern.
Part III
Item 9. Directors, Executive officers, Promoters and
Control Persons; Compliance with Section 16(a) of the Exchange Act.
(a) Identification of directors and executive officers.
The current directors of the registrant, who will serve
until next annual meeting, or until their successors
are elected or appointed and qualified, and the
current executive officers are set forth below:
Name Age Date Appointed Position
Shuren Lu 66 September 1994 Chairman, President & Director
Mutao Xiong 66 September 1994 Vice President & Director
Jiayin Lu 68 September 1994 Director
Yeechin Shiong 41 September 1994 Secretary
Tom H. Gong 39 June 1994 Vice President and Treasurer
(b) Significant employees.
The registrant has no significant employees.
(c) Family Relationships.
Jiayin Lu is the wife of Shuren Lu.
(d) Business Experience.
(1) Background
Shuren Lu. Mr. Shuren Lu has been General Manager
of Shanghai Harmony Chemical Co. since 1989.
Shuren Lu was a Senior Manager in Shanghai Telephone
& Telegraph Co. from 1979 to 1989. He served as a
Chief Engineer in China Second Ministry of Machinery
from 1959 to 1979. He served as an administrative
manager of Shanghai Telephone & Telegraph Co. from
1952 to 1959 where he was responsible for administrative
functions and corporate planning. Shuren Lu was
graduated from Fudan University, Shanghai, China in 1951
with a Bachelor of Science Degree in Wireless Communications.
Mutao Xiong. Mutao Xiong is currently a director of
Shanghai Harmony Chemical Co. From 1952 to 1990, he
worked in Shanghai Shipping Corp. as Pilot, First Mate
and Captain. Mutao Xiong was graduated from Dalian
Navigation College, China in 1952 with a Bachel
or Degree in Nautical Engineering.
Jiayin Lu. Jiayin Lu is currently a Senior Consultant of
Shanghai Harmony chemical Co. with responsibilities for
marketing development, sales, business planning and public
relations. She was an English Teacher in Shanghai T.V.
University between 1984 and 1989. She acted as a Provost
of Shanghai Guizhou High School from 1961 to 1984.
She was an Administrative Manager of Shanghai Housing &
Real Estate Co. from 1951 to 1961. Jiayin Lu was graduated
from Saint Jones University, Shanghai, China in 1951
with a Bachelor Degree in Journalism.
Yeechin Shiong. Yeechin Shiong is currently Treasurer
of Shanghai Green Valley, Inc. (U.S.A.), a position
she has had since 1992. From 1988 to 1991, she was an
accountant at American Fly Corp. Yeechin Shiong graduated
from the University of San Francisco, California,
after studying accounting for two years between
1986 and 1988. She graduated in 1978 from Fudan
University, Shanghai, China, where she majored in Library Science.
Thomas H. Gong. Tom Gong was elected as Vice President
and Treasurer of the Company. He currently serves as a
Director and Vice President of the U.S. Securities &
Futures Corp., a brokerage firm in New York City. He has been
with U.S. Securities & Futures Corp. since 1993. He
was a financial analyst for Rightming Investment Corp.
between 1992 and 1993. He was a Research Fellow in
Shanghai Institute for International Studies
specializing in international trade and monetary
systems between 1982 and 1989. He graduated from Johns
Hopkins University School of Advanced International
Studies in 1992 with a Master's Degree in International
Economics and American Foreign Policy.
(2) Directorships
Except as described herein none of the registrant's
directors, not any person nominated or chosen to become
a director holds any other directorships in any
other company with class of securities registered
pursuant to Section 12 of the Exchange Act or subject
to the requirements of Section 15(d) of such Act or
any company registered as an investment company under
the Investment Company Act of 1940.
(e) Involvement in Certain Legal Proceedings.
None of the officers or directors have been
involved in any material legal proceedings which
occurred within the last five years of any type
as described in Section 401(f) or Regulation S-K.
Item 10. Executive Compensation.
(a) Cash Compensation.
During the last two fiscal years, none of the
registrant's officers or directors individually
received any salary, wage or other compensation.
During the current fiscal year the registrant has
no present plans to pay compensation to officers or directors.
(b) Compensation Pursuant to Plans
There are presently no ongoing pension or other
plans or arrangements pursuant to which remuneration
is proposed to be paid in the future to any of
the officers and directors of the registrant.
(c) Other Compensation.
None.
(d) Compensation to Directors.
None.
Item 11. Security Ownership of Certain Beneficial Owners & Management.
The Company has 26,937,054 shares of common stock
outstanding and 4,300 shares of Series A Preferred
Stock outstanding. All of the series A Preferred Stock
and 25,000,000 shares of the common stock are owned by
Lotus International Holding Corp. the Company has no
other holders of 5% or more of its common stock and
none of its officers and directors own shares individually.
Each share of Series A Preferred Stock has one vote per person.
Shuren Lu and Mutao Xiong constitute the two
sole directors of Lotus International Holdings Corp.
and are also principal shareholders of that entity. Yeechin
Shiong is the Secretary of the Company and Lotus
International Holdings Corp. Therefore, all three of
these persons would each be deemed to be a beneficial
owner of the Company's capital stock owned by Lotus
International Holding Corp.
There are no arrangements including pledges by any
person of securities of the Company, the operation of
which may at a subsequent date result in a change
in control of the Company.
Item 12. Certain Relationships & Related Transactions.
In September 1994, the company issued 7,000,000
shares of common stock for $7,000 and 4,300 shares
of Series A Preferred Stock for $43,000 to Lotus
International Holding Corp. ("LIHC"), at which
time LIHC became the parent corporation of the
Registrant. In April 1995, LIHC purchased an
additional 18,000,000 shares of common stock for $180,000.
Item 13. Exhibits and Reports on Form 8-K.
(a) The following documents are filed as a part of this report:
1. Audited Financial Statements for the year ended June
30, 1996 and 1995 are included as part of this report.
2. Financial Statement Schedules.
None.
3. Exhibits.
None.
(b) Reports on form 8-K.
The Registrant filed a Form 8-K report as of June
28, 1996, wherein it reported under Item 2, the exchange
of its 70% equity interest in Shanghai Union Auto-Bicycle
Co., Ltd. with a company in Hong Kong for 112,000 shares
of common stock of Rightiming Electronics Corp., a
Delaware corporation.
Signature
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant had
duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
Date: September 25, 1996
Lotus Pacific, Inc.
/S/
__________________________
Shuren Lu, President & CEO
/S/
__________________________
Tom Gong, Vice President & Treasurer
Pursuant to the requirements of the Securities Exchange Act
1934, this report has been signed below by the following
persons on behalf of the registrants and in capacities and
on the dates indicated.
Date: September 25, 1996
/S/
____________________________
Shuren Lu, Director
Date: September 25, 1996
/S/
____________________________
Jiayin Lu, Director
LOTUS PACIFIC, INC.
FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
of Lotus Pacific, Inc.
We have audited the accompanying balance sheets of Lotus
Pacific, Inc. as of June 30, 1996 and 1995 and the
related statements of operations, stockholders' equity,
and cash flows for the years then ended. These financial
statements are the responsibility of the Company's
management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are
free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit
also includes assessing the accounting principles used
and significant estimates made by management, as well
as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred
to above present fairly, in all material respects,
the financial position of Lotus Pacific, Inc. as of June
30, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
/S/
Schiffman Hughes Brown
Blue Bell, Pennsylvania
September 16, 1996
LOTUS PACIFIC, INC.
BALANCE SHEETS
JUNE 30, 1996 AND 1995
ASSETS
1996 1995
Current Asset:
Cas $ 213,082 $ 221,408
Investmen 172,395 -0-
Total assets $ 385,477 $ 221,408
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ -0- $ 4,400
Stockholders' equity:
Common stock (Note 3) 26,937 26,347
Preferred stock, Series A (Note 3) 4 4
Additional paid in capital 367,71 222,002
Accumulated deficit (9,181 (31,345)
Total stockholders' equity 385,477 217,008
$ 385,477 $ 221,408
See independent auditor's report and notes to financial statements
LOTUS PACIFIC, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995
1996 1995
Sales $ -0- $ -0-
Operating expenses (17,934) (16,870)
Operating loss (17,934) (16,870)
Interest income 11,008 2,878
Equity in earnings of
unconsolidated subsidiary 29,090 _____
Net income (loss) $ 22,164 $ (13,992)
Earning (loss) per share $.00 $ (.01)
Weighted average shares 26,799,387 6,859,900
See independent auditor's report and notes to financial statements
LOTUS PACIFIC, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995
Common Preferred Additional
Shares Shares paid-in
Outstanding Outstanding Amount Capital Deficit Total
Balance, June 30, 1994
17,352,700 17,353 524,431 (541,784) -0-
Reverse stock split
(17,005,646) (17,006) 17,006 -0-
Issuance of common stock
26,000,000 26,000 162,000 -0-
Issuance of preferred stock,
Series A 4,300 4 42,996 43,000
Quasi-reorganization (524,431) 524,431
Net loss for the year
ended June 30, 1995 -0- -0- -0- -0- (13,992) (13,992)
Balance, June 30, 1995
26,347,054 4,300 26,351 $ 222,002 $ (31,345) $217,008
Issuance of common stock 590,000 590 145,715 146,305
Net income for the year
ended June 30, 1996
___ ___ ___ 22,164 22,164
26,937,054 4,300 26,941 367,717 $9,181 $385,477
See independent auditor's report and notes to financial statements
LOTUS PACIFIC, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 11996 AND 1995
1996 1995
Cash flows from operating activities:
Net income (loss) $22,164 $(13,992)
Equity in earnings of unconsolidated subsidiary (29,090) __
Adjustments to reconcile net loss to net cash:
Increase (decrease) in accounts payable (4,400) 4,400
Cash used in operating activities (11,326) (9,592)
Cash flows from financing activities:
Issuance of common stock 146,305 188,000
Issuance of preferred stock ___ 43,000
Net cash provided by financing activities 146,305 231,000
Cash flows used for financing activities:
Investment in subsidiary 143,305
Net increase (decrease) in cash (8,326) 221,408
Cash, beginning 221,408 -0-
Cash, ending $213,082 $221,408
Non-cash investing activities:
Issuance of stock $143,305 __
Non-cash financing activities:
Issuance of stock for services $3,000 ___
See independent auditor's report and notes to financial statement
LOTUS PACIFIC, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
1. Organization:
The Company's business is to seek one or more potential
business ventures, which, in the opinion of management
may warrant involvement by the Company. The Company had
no business operations during the year ended June 30, 1995
but continued to investigate business opportunities.
During the year ended June 30, 1996 the Company acquired
a 70% interest in Shanghai Union Auto Bicycle Co. , Ltd.
which it exchanged for a 5% interest in Rightiming
Electronics Corp. The Company is continuing to investigate
business opportunities.
2. Summary of significant accounting policies:
Investment in minority-owned unconsolidated subsidiary.
The Company recorded its 5% investments in Rightiming
Electronics Crop. at cost.
3. Issuance of stock:
The Company, on September 13, 1994, effectuated a 1 for 50
reverse stock split, lowering shares outstanding
from 17,352,700 to 347,054, along with amending its
Certificate of Incorporation to authorize 50,000,000 shares
of common stock at $.001 par value, 100,000 shares
of preferred stock at $.001 par value and 4,300 shares
of Series A preferred stock at $.001 par value. The Series
A preferred stock has a preference of a $10 per share
stated value upon liquidation of the Company.
On September 26, 1994, the company sold 7,000,000
shares of its common stock and 4,300 shares of its
Series A preferred stock to Lotus International Holdings
Corp. for aggregate consideration of $50,000.
All shares authorized have a par value of $.001 per share.
On September 27, 1994, the Company issued 320,000
shares of its common stock to 10 various individuals
and another 680,000 shares of its common stock to
U.S. Securities and Futures Corp. for $.001 per share
for total consideration of $1,000.
The Company sold 18,000,000 shares of its common
stock at $.001 per share to Lotus International Holdings
Corp. on March 28, 1995 for aggregate consideration of $180,000.
On September 25, 1995 the Company issued 590,000
shares of its common stock in exchange for an
interest common stock of another company and fees.
4. Quasi-Reorganization:
On July 1, 1994, the Company went through a quasi-reorganization
in which the accumulated deficit was reduced by $524,431.
5. Acquisitions and dispositions:
On September 25, 1995 the Company exchanged 560,000 shares
of its common stock for a seventy percent equity interest
in shanghai Union (Shanghai Union) Auto Bicycle Co., Ltd.
in shanghai Peoples Republic in China. At September 25, 1995
Shanghai Union had stockholders' equity of $204,721,
70% thereof was $143,305.
On June 28, 1996 the company exchanged its investment in
Shanghai Union for 5% of the outstanding common stock
of Rightiming Electronics Corp. (Rightiming). Rightiming
was incorporated to design and manufacture electronic
software and other products to the marketed in the Far
East. Five percent of Rightiming's stockholders' equity
was $268,018 upon the date of acquisition. The company
recorded its investment in Rightiming at the value of
its investment in Shanghai Union, on the date of the
exchange, $172,395.
6. Income taxes:
At June 30, 1996, the Company had net operating loss
carryforwards totaling $ 43,700 available to offset future
taxable income. The carryforward will begin to expire in 2008.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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