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 March 31, 1998
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 (IRS Employer Identification No.)
incorporation or organization)
Rm. 2211-2215, Science and Technology Building, No. 1001
Shangbuzhong Road, Fution District Shenzhen, PRC
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(Address of principal executive offices)
011-07-55-369-0588
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(Issuer's telephone number)
N/A
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(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 va 2,430,000 December 1, 1999
<PAGE>
INFRASTRUCTURE INTERNATIONAL, INC.
INDEX
Page
Number
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets - March 31, 1998 and
December 31, 1997........................................ 3
Condensed Statements of Operations - For the three
months and nine months ended March 31, 1998 and 1997..... 4
Condensed Statements of Cash Flows - For the nine
months ended March 31, 1998 and 1997..................... 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.......................... 9
SIGNATURES.................................................................. 9
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INFRASTRUCTURE INTERNATIONAL, INC.
Balance Sheet
<TABLE>
March 31, December 31,
1998 1997
---------------- ---------------
<S> <C> <C>
Assets
Total Assets $ 0 $ 0
============== ===============
Liabilities & Stockholders' Equity
Current Liabilities
Accrued Expenses $ $ 110,500
114,000
-------------- ---------------
Total Current Liabilities $ $ 110,500
114,000
-------------- ---------------
Stockholders' Equity
Preferred Stock, Series A convertible and redeemable
par value $.001 issued and outstanding 2,000 shares 2 2
Preferred Stock, Series B supervoting, par value $.001
issued and outstanding 100,000 100 100
Common stock, $.001 par
value issued and outstanding 2,430,000 2,430 2,430
Additional paid-in Capital $ 3,512,884 $ 3,512,884
Deficit accumulated during development stage $ (3,629,416) $ (3,625,916)
--------------
Total Stockholders' Equity (deficit) $ (114,000) $ (110,500)
-------------- ---------------
Total Liabilities & Stockholders' Equity $ 0 $ 0
============== ===============
</TABLE>
See Notes to the Financial Statements
3
<PAGE>
INFRASTRUCTURE INTERNATIONAL, INC.
Statement of Operations
<TABLE>
For the Three Months Ended March 31,
------------------------------------
1998 1997
-------- --------
<S> <C> <C>
Revenues $ 0 $ 0
General and administrative expenses $ (3,500) $ (51,401)
-------- ---------
Loss from continuing operations before
income taxes $ (3,500) $ (51,401)
Provision for income taxes 0 0
-------- ---------
Loss from continuing operations $ (3,500) $ (51,401)
Discontinued operations
Income (loss) from discontinued operations
of toll road
$ 0 $ 0
Loss on disposal of discounted operations $ 0 $ 3,152,072
-------- ---------
Income (loss) before minority interests $ (3,500) $(3,203,473)
Minority interests 0 0
-------- ---------
Net income / (Loss) $ (3,500) $(3,203,473)
======== =========
Basic earnings (loss) per common share
Loss from continuing operations (.001) (.021)
Income (loss) from discontinued operations 0 (1.297)
-------- ---------
(.001) (1.318)
======== =========
Diluted earnings (loss) per common share
Loss from continuing operations (.001) (.012)
Income (loss) from discontinued operations 0 (.751)
-------- ---------
(.001) (.763)
======== =========
Average shares outstanding 2,430,000 2,430,000
========= =========
</TABLE>
See Notes to the Financial Statements
4
<PAGE>
INFRASTRUCTURE INTERNATIONAL, INC.
Statement of Cash Flows
<TABLE>
For the Three Months Ended March 31,
--------------------------------------
1998 1997
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (3,500) $ (3,203,473)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities
Loss on disposal of discontinued operations $ 0 $ 3,152,072
Increase (decrease) in operating assets -
Due from shareholders $ 0 $ 13,000
Increase (decrease) in operating liabilities -
Accrued expenses 3,500 78,500
Due to related parties 0 (34,019)
-------- -----------
Net cash provided by (used for) operating activities $ 0 $ 6,080
-------- -----------
CASH FLOW FROM INVESTING ACTIVITIES:
Cash outflow from disposal of subsidiary $ 0 $ (481)
-------- -----------
Net cash provided by (used in) investing activities $ 0 $ (481)
-------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans from shareholders $ 0 $ 0
-------- -----------
Net cash provided by financing activities $ 0 $ 0
-------- -----------
Net increase (decrease) in cash: 0 5,599
Effect of translation adjustments 0 (6,080)
Beginning cash balance 0 481
-------- -----------
Ending cash balance $ 0 $ 0
======== ===========
</TABLE>
5
<PAGE>
INFRASTRUCTURE INTERNATIONAL, INC.
Notes to the Financial Statements
March 31, 1998
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 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. 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.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Material Changes in Result 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. This Agreement was retroactive to December 1,
1996. 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. 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.
During the three months ended March 31, 1998, the Company had no operations
other than the search for a business to acquire or with which to combine.
The Company reported no revenues for the three months ended March 31, 1998,
but had accrued expenses of $3,500. For the three month period ended March 31,
1997 the Company had no revenues but general and administrative expenses of
$51,401. In addition, during the three months ended March 31, 1997 the Company
had a loss from discontinued operations of $3,152,072 resulting from the
disposal of Guanghui Highway Project Company Limited.
Material Changes in Financial Condition, Liquidity and Capital Resources
At March 31, 1998 the Company had no current assets and current liabilities
of $114,000 as compared to no assets and current liabilities of $110,500 as of
December 31, 1997.
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.
8
<PAGE>
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
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> 3-mos
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 114,000
<BONDS> 0
0
2
<COMMON> 2,430
<OTHER-SE> (116,432)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,500
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,500)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,500)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
