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 September 30, 1997
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________.
Commission File Number 33-8964
AM-PAC INTERNATIONAL, INC.
------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 16-1260971
- ----------------------------- ------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or jurisdiction)
1110 Palmer Ave., Winter Park, Florida 32789
---------------------------------------------
(Address of principal executive offices)
(407) 718-8244
-------------------------
(Issuer's telephone number)
431 East Central Boulevard, Suite 900, Orlando, Florida 32801
--------------------------------------------------------------
(Former name, former address and formal fiscal year,
if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
twelve (12) months (or such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing requirements for the
past ninety (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
-------
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Balance Sheets - September 30, 1997
and December 31, 1996........................................ 3
Consolidated Statements of Operations - for the three and
months ended September 30, 1997 and 1996................... 5
Consolidated Statements of Cash Flows -for the nine months
ended September 30, 1997 and 1996.......................... 6
Notes to Consolidated Financial Statements................... 7
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................. 8
PART II - OTHER INFORMATION .............................................. 8
Signatures ........................................................ 8
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AM-PAC INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
<TABLE>
September 30, December 31,
1997 1996
--------------- ---------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 3,195 $ 47,651
Inventory 20,568 0
Prepaid expenses 1,179 0
Employee advance 100 0
---------------- ---------------
25,042 47,651
PROPERTY AND EQUIPMENT
Buildings and improvements 336,531 171,614
Land and improvements 204,841 204,841
Furniture and equipment 94,971 2,000
---------------- ---------------
636,343 378,455
Less accumulated depreciation (120,503) (103,313)
---------------- ---------------
Net property and equipment 515,840 275,142
OTHER ASSETS
Escrow deposits 20,905 6,228
Loan receivable - stockholder 237,847 238,398
Related party receivable 43,123 0
Organizational costs - net 1,522 1,837
---------------- ---------------
Total other assets 303,397 246,463
Total assets $ 844,279 $ 569,256
================ ===============
LIABILITY AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
Other liabilities $ 33,666 $ 111,287
Current portion of long term debt 13,103 22,915
9,738 9,075
--------------- ---------------
Total current liabilities 56,507 143,277
LONG TERM DEBT
Mortgages payable 428,333 435,719
Loans payable - related party 236,269 114,459
--------------- ---------------
Total long term debt 664,602 550,178
--------------- ---------------
Total liabilities 721,109 693,455
--------------- ---------------
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value, 149,000,000
shares authorized, 8,315,547 shares and 7,740,547
shares issued and outstanding, respectively 8,316 7,740
Additional paid in capital 1,613,673 973,058
Accumulated deficit (1,498,819) (1,104,997)
--------------- ---------------
Total stockholders' equity (deficit) 123,170 124,199
--------------- ---------------
Total liabilities and stockholder equity $ 844,279 $ 569,256
=============== ===============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
3
<PAGE>
AM-PAC INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
For the three months For the nine months
ended ended
September 30, September 30,
------------------------------ -------------------------------
1997 1996 1997 1996
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Revenue
Sales $ 102,474 $ 0 $ 241,263 $ 720
Franchise fees 14,785 10,204 111,331 43,108
Commissions (50) 0 63 7,333
Rental property income 462 21,450 1,382 64,350
Interest income 0 0 25 288
------------- ------------- ------------- --------------
Total revenue 117,671 31,654 354,064 115,799
Cost and expenses
Cost of sales 23,185 0 70,909 0
Rental property expenses 0 19,198 0 57,594
Operating, general and
administrative expenses 215,188 51,267 676,965 76,195
------------- ------------- ------------- --------------
Total costs and expenses 238,373 70,465 747,874 133,789
------------- ------------- ------------- --------------
Net income (loss) from operations (120,702) (38,811) (393,810) (17,990)
Net income (loss) per share $ (.015) $ (.015) $ (.049) $ (.004)
============= ============= ============= ==============
Average weighted number of shares 8,265,547 2,580,182 8,081,991 4,629,436
outstanding ============= ============= ============= ==============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
4
<PAGE>
AM-PAC INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
For the nine months ended
September 30,
--------------------------------------
1997 1996
------------------- ----------------
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $ (393,810) $ (17,990)
Adjustments to reconcile net cash
provided (used) by operating activities
Depreciation and amortization 17,339 6,020
(Increase)/decrease in prepaids (11,512) (9,587)
(Increase)/decrease in inventory (20,568) 0
(Increase)/decrease in receivable (100) 7,175
Increase/(decrease) in accounts payable 63,571 (1,725)
Increase/(decrease) in other current liabilities (9,812) 61
Increase in escrow deposits (4,343) 0
------------------- --------------
Net cash provided (used) by operating activities (359,235) (16,046)
Cash flows from investing activities
Purchase of equipment and leasehold improvements (257,721) 0
Collection on related party receivable 3,476 0
------------------- --------------
Net cash provided (used) by investing activities (254,245) 0
Cash flows from financing activities
Loans to related parties (46,048) (6,201)
Proceeds from related party borrowings 621,810 0
Repayment of debt (6,738) (9,375)
------------------- --------------
Net cash provided (used) by financing activities 569,024 (15,576)
------------------- --------------
Net increase (decrease) in cash (44,456) (31,622)
Cash at beginning of period 47,651 34,040
------------------- --------------
Cash at end of period $ 3,195 $ 2,418
=================== ==============
Supplemental disclosure of cash flow information:
Interest expense $ 47,521 $ 33,025
=================== ==============
Income taxes $ 0 $ 0
=================== ==============
Supplemental schedule of noncash investing and financing activities:
Conversion of accounts payable to common stock $141,191 $ 0
=================== ==============
Conversion of related party debt to common stock $500,000 $ 0
=================== ==============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
5
<PAGE>
AM-PAC INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
1. INTERIM PRESENTATION
The interim financial statements are prepared pursuant to the requirements
for reporting on Form 10-QSB. The December 31, 1996 balance sheet 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 notes 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. SHAREHOLDERS' EQUITY
During the nine months ended September 30, 1997, the Company issued 500,000
shares of common stock in satisfaction of notes payable to related parties
totaling $500,000 and issued 75,000 shares of common stock in satisfaction
of accounts payable totaling $141,191.
3. 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 Jeffrey
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 restuarant. Simultaneous with the recission of the sale of real
property. The Company's subsidiary, Headlightz of Orlando, Inc. and JT
Investments, Ltd. rescind the lease of the restaraunt.
4. 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 a 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 statments.
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/A 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 - Nine months ended September 30, 1997 compared to the
nine months ended September 30, 1996.
Revenues. Revenues for the nine months ended September 30, 1997 increased
by $238,265 or 205.8% to $354,064 from $115,799 for the nine months ended
September 30, 1996. This increase resulted from an increase in sales (from $720
in 1996 to $241,263 in 1997) attributable to the Company's acquisition of
HeadlightZ and an increase in franchise fees ($43,108 in 1996 to $111,331 in
1997) attributable to a one-time payment of $75,000 in connection with the
establishment of a Captain Tony's franchise in Utah, which increases were
partially offset by reductions in commissions, rental and interest income. The
decrease in rental income from $64,350 in 1996 to $1,382 in 1997 was
attributable to the termination of a lease agreement pursuant to which the
Company leased the premises housing the Company's HeadlightZ restaurant to the
former operator of such restaurant pending the Company's acquisition of a liquor
license. After obtaining a liquor license, the lease of the premises to the
former operator was terminated and the Company took over operation of the
restaurant.
Cost of Sales. Cost of sales for the nine months ended September 30, 1997
were $70,909. There were no cost of sales for the nine months ended September
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 nine
months ended September 30, 1997 while rental property expense totalled $57,594
for the nine months ended September 30, 1996. This decrease in rental property
expense resulted from the termination of the lease from Company to the former
operator of the restaurant located at the HeadlightZ site, as described above.
General and Administrative Expense. General and administrative expenses for
the nine months ended September 30, 1997 increased by $600,770 or 788.5% to
$676,965 from $76,195 for the nine months ended September 30, 1996. This
increase resulted from the hiring of additional employees, increased
professional fees and pre-opening expenses associated with the renovation and
opening 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 September 30, 1997, the
Company had cash of $3,195 and a deficiency of working capital of $31,465.
Net cash used in operating activities increased to $359,235 from $16,046
for the nine months ended September 30, 1997 and 1996 respectively. The increase
resulted from the sale of property for a promissory note which more than offset
the reported net income for the period.
Net cash used in investing activities increased to $257,721 from $0 for the
nine months ended September 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 $569,024 from
$(15,576) use in financing activities for the nine months ended September 30,
1997 and 1996, respectively. This increase in cash provided is entirely
attributable to borrowing from related parties. During the nine months ended
September 30, 1997, the Company converted $500,000 of loans from related parties
into 500,000 shares of common stock and the Company converted $141,191 of legal
fees payable into 75,000 shares of common stock.
At September 30, 1997, the Company had long-term debt or $664,602 which
includes the mortgage on the Company's HeadlightZ restaurant property, totaling
$428,333.
7
<PAGE>
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 Virgins 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.
PART II - OTHER INFORMATION
ITEM 3. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
2.1 Exchange Agreement with Forbes Investments, Ltd. (1)
2.2 Exchange Agreement with the shareholders of Sun East Internationa
Holdings, Ltd. (2)
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
___________________
(1) Incorporated by reference to the respective exhibits filed with the
Registrants 10-Q for the period ended June 30, 1997.
(2) Incorporated by reference to the respective exhibits filed with the
Registrants 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
Dated: September 23, 1998 By: /s/ Michael Martella
------------------------------
Michael Martella
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,195
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 20,568
<CURRENT-ASSETS> 25,042
<PP&E> 636,343
<DEPRECIATION> (120,503)
<TOTAL-ASSETS> 844,279
<CURRENT-LIABILITIES> 56,507
<BONDS> 0
0
0
<COMMON> 8,316
<OTHER-SE> 114,854
<TOTAL-LIABILITY-AND-EQUITY> 844,279
<SALES> 241,263
<TOTAL-REVENUES> 354,064
<CGS> (70,909)
<TOTAL-COSTS> (747,874)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (393,810)
<INCOME-TAX> 0
<INCOME-CONTINUING> (393,810)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (393,810)
<EPS-PRIMARY> (.049)
<EPS-DILUTED> (.049)
</TABLE>
