SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
AMENDMENT NO. 1
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to .
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Commission File No. 33-8964
AM-PAC INTERNATIONAL, INC.
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(Exact name of small business issuer as specified in its charter)
Nevada 16-1260971
- -------------------------------- ----------------------------------
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
1110 Palmer Ave.
Winter Park, Florida 32789
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(Address of principal executive offices) (Zip Code)
(407) 718-8244
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(Issuer's telephone number)
431 East Central Boulevard, Suite 900
Orlando, Florida 32801
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
--- ---
As of August 1, 1998, 8,720,222 shares of Common Stock of the issuer were
outstanding.
<PAGE>
AM-PAC INTERNATIONAL, INC.
INDEX
Page
Number
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - June 30, 1997
and December 31, 1996........................................... 3
Consolidated Statements of Operations - For the six months
ended June 30, 1997 and 1996.................................... 4
Consolidated Statements of Cash Flows - For the three months
and six months ended June 30, 1997 and 1996 ................... 5
Notes to Consolidated Financial Statements....................... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations....................................... 7
PART II - OTHER INFORMATION................................................ 9
SIGNATURES................................................................. 9
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AM-PAC INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
ASSETS
June 30, December 31,
1997 1996
--------- -------------
CURRENT ASSETS:
Cash $ 24,792 $ 47,651
Inventory 17,387 0
Prepaid expenses 2,358 0
-------- --------
Total current assets 44,537 47,651
PROPERTY AND EQUIPMENT
Buildings and improvements 281,194 171,614
Land and improvements 204,841 204,841
Furniture and equipment 33,185 2,000
Less accumulated depreciation (110,644) (103,313)
-------- --------
Net property and equipment 408,576 275,142
OTHER ASSETS
Escrow deposits 16,562 6,228
Loan receivable - stockholder 237,847 238,398
Related party receivable 46,599 0
Organizational costs, net 1,627 1,837
Total other assets 302,635 246,463
-------- --------
Total assets $ 755,748 $ 569,256
======== ========
LIABILITY AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 191,744 $ 111,287
Other liabilities 13,511 22,915
Current portion long term debt 18,801 9,075
-------- --------
Total current liabilities 224,056 143,277
LONG TERM DEBT
Mortgage payable 421,563 435,719
Loans payable - related party 7,449 114,459
-------- --------
Total long-term debt 429,012 550,178
Total liabilities 653,068 693,455
STOCKHOLDERS' EQUITY:
Common Stock; $.001 par value; 149,000,000 shares
authorized, 8,240,547 and 7,740,547 shares issued
and outstanding respectively, 8,240 7,740
Additional paid in capital 1,472,558 973,058
Accumulated deficit (1,378,118) (1,104,997)
----------- -----------
Total stockholders' equity (deficit) 102,680 (124,199)
----------- -----------
Total liabilities and stockholder equity $ 755,748 $ 569,256
========== ===========
See accompanying notes to consolidated financial statements
3
<PAGE>
AM-PAC INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
For the three months ended For the six months ended
June 30, June 30,
---------------------------- -------------------------
1997 1996 1997 1996
----------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Revenue:
Sales $ 58,637 $ 720 $ 138,789 $ 720
Franchise fees 85,488 17,339 96,546 32,904
Commissions 0 7,333 113 7,333
Rental property income 920 21,450 920 42,900
Interest income, net 25 288 25 288
Total revenue 145,070 47,130 236,393 84,145
Costs and expenses:
Cost of sales 24,981 0 47,724 0
Rental property expenses 0 19,741 0 38,396
General and administrative expenses 207,381 14,884 461,777 24,928
Total costs and expenses 232,362 34,625 509,501 63,324
Net income (loss) from operations (87,292) 12,505 (273,108) 20,821
Net income per share $ (.011) $ .002 $ (.034) $ .007
Average weighted number
of shares outstanding 8,240,547 5,407,214 7,990,547 3,073,880
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE>
AM-PAC INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
For the Six Months Ended June 30,
1997 1996
----------- ----------
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $ (273,108) $ 20,821
Adjustments to reconcile net
cash provided (used) by
operating activities
Depreciation 7,375 3,943
Increase in prepaids (12,691) (9,587)
Increase in inventory (17,387) (0)
Decrease in receivable 0 7,175
Increase in accounts payable 80,457 2,040
Increase (decrease) in other current liabilities (9,404) 759
Net cash provided (used) by operating activities (224,758) 25,151
Cash flows from investing activities
Purchase of equipment and leasehold improvements (140,598) 0
--------- ---------
Net cash provided (used) by investing activities (140,598) 0
Cash flows from financing activities
Loans to related parties (46,048) (1,977)
Proceeds from borrowings 392,990 0
Repayment of debt (4,445) (9,375)
--------- ---------
Net cash provided (used) by financing activities 342,497 (11,352)
--------- ---------
Net increase (decrease) in cash (22,859) 13,799
Cash at beginning of period 47,651 33,840
--------- ---------
Cash at end of period $ 24,792 $ 47,639
========= =========
Supplemental disclosure of cash flow information:
Interest expense 33,991 22,017
========= =========
Income taxes 0 0
========= =========
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE>
AM-PAC INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997
1. The interim financial statements are prepared pursuant to the requirements
for reporting on Form 10- QSB. The June 30, 1997 balance sheet data was
derived from audited financial statements but does not include all
disclosures required by generally accepted accounting principles. The
interim financial statements and notes thereto should be read in
conjunction with the financial statements and footnotes thereto included in
the Company's report on Form 10-KSB for the year ended December 31, 1996.
In the opinion of management, the interim financial statements reflect all
adjustments of a normal recurring nature necessary for a fair statement of
the results for the interim periods presented.
2. Related Party Transactions
The Company and JT Investments, Ltd., an entity controlled by Thomas
Tedrow, the President and a controlling shareholder of the Company and
Jeffery Martin who may be deemed a controlling shareholder of the Company
agreed to mutually rescind the agreement to sell real estate housing the
Company's Headlightz restaurant. Simultaneous with the recision of the sale
of real property, the Company's subsidiary, Headlightz of Orlando, Inc. and
JT Investments, Ltd. rescinded the lease of the restaurant.
3. Subsequent Events
Effective after the close of business on December 31, 1997, the Company
transferred ownership of 100% of the outstanding shares of all of its
subsidiaries to Forbes Investments, Ltd. ("Forbes"), a British Virgin
Islands company owned by Jeffrey Martin, a controlling stockholder of the
Company, in exchange for 800,000 shares of the Company's common stock owned
by Forbes.
Because most of the Company's assets and liabilities are owned by the
subsidiaries the effect of this transaction is to increase the Company's
net worth by $20,057. No independent valuation of the assets transferred
was obtained by the Company.
In May 1998, effective after the close of business December 31, 1997, the
Company agreed to acquire 100% of the outstanding common stock of Sun East
International Holdings Ltd., a Caymen Islands corporation with its
headquarters in Hong Kong.
Under the terms of the agreement, the Company will issue between 12,500,000
shares and 15,000,000 shares of common stock for 100% of Sun East's common
stock. The number of shares issued will depend upon Sun East's net income
for the year ended December 31, 1997 as reported in Sun East's 1997 audited
financial statements.
At the time of closing, the Company will have no assets or liabilities and
will have reduced its issued and outstanding common stock to 3,000,000
shares. To achieve this, the Company's controlling stockholders will return
5,715,547 shares to the Company and will receive the Company's remaining
assets and assume the Company's remaining liabilities. Pursuant to the
exchange agreement, all outstanding warrants have been retired.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This Form 10-QSB contains forward looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The Company's actual results could differ materially from
those set forth in the forward looking statements.
Results of Operations - Three months ended June 30, 1997 compared to the three
months ended June 30, 1996.
Revenues. Revenues for the three months ended June 30, 1997 increased by $97,940
or 207.8% to $145,070 from $47,130 for the three months ended June 30, 1996.
This increase resulted from an increase in sales at the Company's restaurant and
an increase in franchise fees which were partially offset by reductions in
commissions, rental and interest income.
Cost of Sales. Cost of sales for the three months ended June 30, 1997 were
$24,981. There were no cost of sales for the three months ended June 30, 1996 as
the Company's restaurant was not in operation during this period in 1996.
Rental Property Expense. There was no rental property expense for the three
months ended June 30, 1997 while rental property expense totalled $19,741 for
the three months ended June 30, 1996. This decrease in rental property expense
resulted from the Company purchasing the operations of the entity to which it
had previously been paying rent and cancelling the lease.
General and Administrative Expense. General and administrative expenses for the
three months ended June 30, 1997 increased by $192,497 or 1,293.3% to $207,381
from $14,884 for the three months ended June 30, 1996. This increase resulted
from the hiring of additional employees, increased professional fees and
pre-opening expenses associated with the renovation of the Florida restaurant.
Results of Operations - Six months ended June 30, 1997 compared to the six
months ended June 30, 1996.
Revenues. Revenues for the six months ended June 30, 1997 increased by $152,248
or 180.9% to $236,393 from $84,145 for the six months ended June 30, 1996. This
increase resulted from an increase in sales at the Company's restaurant and an
increase in franchise fees which were partially offset by reductions in
commissions, rental and interest income.
Cost of Sales. Cost of sales for the six months ended June 30, 1997 were
$47,724. There were no cost of sales for the six months ended June 30, 1996
because the Company's restaurant was not in operation during this period in
1996.
Rental Property Expense. There was no rental property expense for the six months
ended June 30, 1997 while rental property expense totaled $38,396 for the six
months ended June 30, 1996. This decrease in rental property expense resulted
from the Company purchasing the operation of the entity to which it had
previously been paying rent and cancelling the lease.
General and Administrative Expense. General and administrative expenses for the
six months ended June 30, 1997 increased by $436,849 or 1,752.4% to $461,777
from $24,928 for the six months ended June 30, 1996. This increase resulted from
the hiring of additional employees, increased professional fees and pre-opening
expenses associated with the renovation of the Florida restaurant.
Changes in Financial Condition, Liquidity and Capital Resource.
For the past twelve months, the Company has funded its operations and
capital requirements with loans from related parties. As of June 30, 1997, the
Company had cash of $24,792 and a deficiency of working capital of $179,519.
Net cash generated from operating activities decreased to $(224,758) from
$25,151 for the six months ended June 30, 1997 and 1996 respectively. The
decrease resulted from a loss from operations, and an increase in receivables
and inventory, and a decrease in accounts payable which was offset by the sole
of property for a promissory note.
7
<PAGE>
Net cash used in investing activities increased to $140,598 from 0 for the
six months ended June 30, 1997 and 1996, respectively. This increase resulted
from the purchase of equipment and construction of leasehold improvements at the
Company's Florida restaurant.
Net cash provided by financing activities increased to $342,497 from
$(11,352) for the six months ended June 30, 1997 and 1996, respectively. This
increase in cash provided is entirely attributable to borrowing from related
parties.
At June 30, 1997, the Company had long-term debt of $429,012.
Effective after the close of business on December 31, 1997 the Company
transferred ownership of 100% of the outstanding shares of all of its
subsidiaries to Forbes Investments, Ltd. ("Forbes") a British Virgin Islands
company owned by Jeffrey Martin, a controlling stockholder of the Company, in
exchange for 800,000 shares of the Company's common stock owned by Forbes.
Because most of the Company's assets and liabilities are owned by the
subsidiaries the effect of this transaction is to increase the Company's net
worth by $20,057. No independent valuation of the assets transferred was
obtained by the Company.
In May 1998, effective after the close of business December 31, 1997, the
Company agreed to acquire 100% of the outstanding common stock of Sun East
International Holdings, Ltd., a Caymen Islands corporation with its headquarters
in Hong Kong.
Under the terms of the agreement, the Company will issue between 12,500,000
shares and 15,000,000 shares of common stock for 100% of Sun East's common
stock. The number of shares issued will depend upon Sun East's net income for
the year ended December 31, 1997 as reported in Sun East's 1997 audited
financial statements.
At the time of closing, the Company will have no assets or liabilities and
will have reduced its issued and outstanding common stock to 3,000,000 shares.
To achieve this, the Company's controlling stockholders will return 5,715,547
shares to the Company and will receive the Company's remaining assets and assume
the Company's remaining liabilities.
8
<PAGE>
PART II - OTHER INFORMATION
ITEM 3. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
2.1 Exchange Agreement with Forbes Investments, Ltd.
2.2 Exchange Agreement with the shareholders of Sun East
International Holdings, Ltd. (1)
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
___________________
(1) Incorporated by reference to the respective exhibits filed with the
Registrant's Report on Form 8-K dated May 7, 1998.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
AM-PAC INTERNATIONAL, INC.
Date: September 23, 1998 By: /s/ Thomas Tedrow
---------------------------------
Thomas Tedrow
Chief Executive Officer
Date: September 23, 1998 By: /s/ Michael Martella
---------------------------------
Michael Martella
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 24,792
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 17,387
<CURRENT-ASSETS> 44,537
<PP&E> 519,220
<DEPRECIATION> (110,644)
<TOTAL-ASSETS> 755,748
<CURRENT-LIABILITIES> 224,056
<BONDS> 0
0
0
<COMMON> 8,240
<OTHER-SE> 94,440
<TOTAL-LIABILITY-AND-EQUITY> 755,748
<SALES> 138,789
<TOTAL-REVENUES> 236,393
<CGS> 47,724
<TOTAL-COSTS> 509,501
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (273,108)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (273,108)
<EPS-PRIMARY> (.034)
<EPS-DILUTED> (.034)
</TABLE>
