SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(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 OF 15(d) OF THE EXCHANGE ACT OF 1934
From the transition period from ____________ to ___________.
Commission File Number 0-6456
INFRASTRUCTURE INTERNATIONAL, INC.
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(Exact name of small business issuer as specified in its charter)
Nevada 87-0287034
- --------------------------------------------- ---------------------------------
(State or other jurisdiction of incorporation (IRS Employer Identification No.)
or organization)
Rm. 2211-2215, Science and Technology Building, No. 1001
Shangbuzhong Road, Fution District Shenzhen, PRC
--------------------------------------------------------
(Address of principal executive offices)
011-07-55-369-0588
---------------------------
(Issuer's telephone number)
N/A
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (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 No X
--- -----
Class Shares Outstanding Date
Common, $.001 par value 2,430,000 December 1, 1999
<PAGE>
INFRASTRUCTURE INTERNATIONAL, INC.
INDEX
Page
Number
-------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheet - September 30, 1997 and
December 31, 1996........................................ 3
Condensed Statement of Operations - For the three
months and nine months ended September 30, 1997 and 1996. 4
Condensed Statement of Cash Flows - For the nine
months ended September 30, 1997 and 1996................. 5
Notes to Condensed Financial Statements.................. 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................... 8
PART II - OTHER INFORMATION................................................ 8
Item 6. Exhibits and Reports on Form 8-K......................... 8
SIGNATURES.................................................................. 9
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INFRASTRUCTURE INTERNATIONAL, INC.
Balance Sheet
<TABLE>
September 30, 1997 December 31, 1996
------------------ -----------------
<S> <C> <C>
Assets
Current assets:
Cash $ 0 $ 481
Due from shareholders 0 13,000
Total current assets $ 0 $ 13,481
--------- ----------
Property, net 0 24,215,838
--------- ----------
Total assets $ 0 $24,229,319
========= ==========
Liabilities and Shareholders's Equity
Current Liabilities
Accrued expenses $ 110,500 $ 32,000
Due to related company 0 74,855
Due to a joint venture partner 0 2,192,146
Loan from a joint venture partner 0 16,446,897
--------- ----------
Total liabilities $ 110,500 $18,745,898
--------- ----------
Minority interest 0 2,384,922
--------- ----------
Stockholders' Equity
Preferred stock, Series A convertible and
redeemable, par value $.001 issued and outstanding:
2,000 as of 9/30/97 and 3,000 as of 12/31/96
2 3
Preferred stock, Series B supervoting, par value
$.001 issued and outstanding: 100,000 as of
9/30/97and as of 12/31/96 100 100
Common stock, par value $.001 issued and
outstanding: 2,430,000 as of 9/30/97 and 9,680,000
as of 12/31/96 2,430 9,680
Additional paid in capital 3,512,884 3,513,584
Accumulated deficit (3,625,916) (430,948)
Cumulative translation adjustments 0 6,080
--------- ----------
Total stockholder' equity (110,500) 3,098,499
Total liabilities and stockholders' equity $ 0 $24,229,319
========= ==========
</TABLE>
See Notes to the Financial Statements
3
<PAGE>
INFRASTRUCTURE INTERNATIONAL, INC.
Statement of Operations
<TABLE>
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
-------------------------- -------------------------
1997 1996 1997 1996
-------- ------ -------- -------
<S> <C> <C> <C> <C>
Revenues $ 0 $ 0 $ 0 $ 0
------ ------- ---------- -------
Expenses
Operating expenses $ 0 $ 18,451 $ 0 $ 20,732
Total expenses $ 0 $ 18,451 $ 0 $ 20,732
------ ------- ---------- -------
Loss from continuing operations 0 0 (51,401) (20,732)
Discontinued operations
Income (loss) from discontinued operations
$ 0 $ 0 $ 3,152,072 $ 0
------ ------- ---------- -------
Loss on Disposal of Discontinued operations
$ 0 $ 0 $ 0 $ 0
Net income (loss) $ 0 $(18,451) $(3,203,473) $(20,732)
------ ------- ---------- -------
Basic earnings (loss) per common share
Loss from continuing operations 0 (.05) (.021) (.04)
Income (loss) from discontinued operations
0 0 (1.297) 0
------ ------- ---------- -------
0 (.05) (1.318) (.04)
====== ======= ========== =======
Diluted earnings (loss) per common share
Loss from continuing operations
Income (loss) from discontinued operations 0 (.05) (.012) (.04)
0 0 (.751) 0
------ ------- ---------- -------
0 (.05) (.763) (.04)
====== ======= ========== =======
Average shares outstanding 2,430,000 524,227 2,430,000 466,894
========= ======= ========== =======
</TABLE>
See Notes to the Financial Statements
4
<PAGE>
INFRASTRUCTURE INTERNATIONAL, INC.
Statements of Cash Flows
<TABLE>
For the Nine Months Ended September 30,
-----------------------------------------
1997 1996
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (3,203,473) $ (20,732)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities
Loss on disposal of discontinued operations $ 3,152,072 $ 0
Decrease in accounts payable 0 (94,300)
Increase (decrease) in operating assets -
Due from shareholders $ 13,000 $ 0
Increase (decrease) in operating liabilities -
Accrued expenses 78,500 0
Due to related parties (34,019) 0
Net cash provided by (used for) operating activities $ 6,080 $ 115,032
---------- ---------
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from issuance of shares $ 0 $ 112,475
Cash outflow from disposal of subsidiary $ (481) $ 0
---------- ---------
Net cash provided by (used in) investing activities $ (481) $ 112,475
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in shareholder loan $ 0 $ 2,557
---------- ---------
Net cash provided by financing activities $ 0 $ 2,557
---------- ---------
Net increase (decrease) in cash: 5,599 0
Effect of translation adjustments (6,080) 0
Beginning cash balance 481 0
---------- ---------
Ending cash balance $ 0 $ 0
========== =========
</TABLE>
See Notes to the Financial Statements
5
<PAGE>
INFRASTRUCTURE INTERNATIONAL, INC.
Notes to the Financial Statements
September 30, 1997
1. General
The interim financial statements are prepared pursuant to the requirements
for reporting on Form 10-QSB. The December 31, 1996 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 notes included in the Company's 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. Foreign Currency Conversion
The Company's financial information is presented in U.S. dollars. Renminbi
have been converted into U.S. dollars at the exchange rate of 8.32 to 1.
3. Significant Events
Transfer of Ownership
---------------------
In December 1996, the Company acquired 100% interest in Guanghui Highway
Project Company Limited ("GHHP"), a BVI company, from Yiu Yat Hung and Yiu Yat
On, GHHP's principal shareholders by issuing 8,430,000 shares of the Company's
common stock, par value $.001, and 100,000 shares of Series B supervoting
preferred stock.
On January 2, 1997, Yiu Yat On transferred (i) 5,000,000 shares of common
stock of the Company to New Eagle Infrastructure Limited ("NEI" a company
incorporated in the British Virgin Islands), (ii) 1,100,000 shares of common
stock of the Company and 100,000 shares of Series B supervoting preferred stock
of the Company to New Silver Eagle Holdings Limited ("NSEHL" a company
incorporated in the British Virgin Islands), and (iii) 2,330,000 shares of
common stock of the Company to unrelated parties. NEI is wholly owned by NSEHL,
which is beneficially owned by Yiu Yat On, Yiu Yat Hung and their family
members.
On May 1, 1997, 700 shares of Series A convertible and redeemable preferred
stock, par value US$0.001 each were converted into 700,000 shares of common
stock, par value US$0.001 each. In addition, 300 shares of Series A convertible
and redeemable preferred stock were tendered for cancellation in December 1997.
6
<PAGE>
Disposal of a subsidiary - GHHP
- -------------------------------
In June 1997, the Company entered into an agreement to dispose of 100%
interest in Guanghui Highway Project Company Limited, ("GHHP") to Yiu Yat On and
New Silver Eagle Holdings Limited. This Agreement was retroactive to December 1,
1996. As consideration, Yiu Yat On and New Silver Eagle Holdings Limited have
agreed to surrender to the Company their interest in 8,430,000 shares of common
stock of the Company and 100,000 shares of Series B supervoting preferred stock
of the Company. This was considered done as of January 1, 1997. As of December
31, 1997, Yiu Yat On and New Silver Eagle Holdings Limited had only surrendered
7,950,000 shares of common stock, which have been canceled. In connection with
the disposal of GHHP, GHHP have agreed to return the sum of US$3,000,000
contributed by the Company to GHHP in 1996. However, it is uncertain whether
GHHP has the necessary resources to repay its obligation to the Company and,
consequently, the Company has recorded a full provision of US$3,000,000 against
this receivable as of December 31, 1997. The operating results of GHHP have been
accounted for as discontinued operations for the years ended December 31, 1996
and 1997.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
In June 1997, the Company entered into an agreement to dispose of 100%
interest in Guanghui Highway Project Company Limited, ("GHHP") to Yiu Yat On and
New Silver Eagle Holdings Limited. As consideration, Yiu Yat On and New Silver
Eagle Holdings Limited agreed to surrender to the Company their interest in
8,430,000 shares of common stock of the Company and 100,000 shares of Series B
supervoting preferred stock of the Company. This Agreement was retroactive to
December 1, 1996. As of December 31, 1997, Yiu Yat On and New Silver Eagle
Holdings Limited had only surrendered 7,950,000 shares of common stock, which
have been canceled. In connection with the disposal of GHHP, GHHP agreed to
return the sum of US$3,000,000 contributed by the Company to GHHP in 1996.
However, it is uncertain whether GHHP has the necessary resources to repay its
obligation to the Company and, consequently, the Company has recorded a full
provision of US$3,000,000 against this receivable as of December 31, 1997. The
operating results of GHHP have been accounted for as discontinued operations for
the years ended December 31, 1996 and 1997. GHHP had no revenue for the year
ended December 31, 1997.
As a result of accounting for the operating results of GHHP as discontinued
operations for the years ended December 31, 1996 and 1997, comparison of
revenues and expenses, and assets and liabilities is irrelevant.
Although the Company has no liquidity, it believes that it will be able to
find a suitable Company with which to merge.
Year 2000 Compliance
Because the Company has no operations, the year 2000 compliance is not an
issue for the Company.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
27.1 Financial Data Schedule
b) Reports on Form 8-K
None
8
<PAGE>
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.
INFRASTRUCTURE INTERNATIONAL, INC.
Date: December 3, 1999 By: /s/ Yiu Yat On
----------------------------------
Yiu Yat On, Chairman
and Chief Executive Officer
Date: December 3, 1999 By: /s/ Ma Ding Jie
-----------------------------------
Ma Ding Jie, Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 110,500
<BONDS> 0
0
102
<COMMON> 2,430
<OTHER-SE> (113,032)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
