U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
|X| Quarterly report under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1998
|_| Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from to _________
Commission file number 333-07727
Shampan, Lamport Holdings Limited
(Exact Name of Small Business Issuer as Specified in Its Charter)
Washington 98-0138706
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
1500-609 Granville Street, Vancouver, B.C. Canada V7Y 1G5
(Address of Principal Executive Offices)
(604) 687-0888
(Issuer's Telephone Number, Including Area Code)
(formerly named Allegiant Technologies Inc.)
(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 _________
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable Common stock, par value, $0.01 per
share, 6,748,251 shares of common stock outstanding as of July 31, 1997
Transitional Small Business Disclosure Format (check one):
Yes No ____X______
<PAGE>
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS-JUNE 30, 1998
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
(Expressed in United States Dollars)
FINANCIAL STATEMENTS
(Unaudited - Prepared by Management)
JUNE 30, 1998
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
BALANCE SHEET
(Expressed in United States Dollars)
AS OF JUNE 30
<TABLE>
<CAPTION>
1997 1998
----------------- ----------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 33,388 $ 45,377
Accounts receivable, net 23,366 3,000
Other receivable 2,851 -
Inventories 147,827 -
Prepaid expenses 31,927 7,640
---------------- ----------------
Total current assets 239,359 56,017
Property and equipment, net 80,402 -
---------------- ----------------
Total assets $ 319,761 $ 56,017
================ ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Debentures payable $ 500,000 $ -
Notes payable 119,704 198,500
Accounts payable and accrued liabilities 832,624 53,087
Deferred revenues 24,455 -
---------------- ----------------
Total current liabilities 1,476,783 251,587
---------------- ----------------
Shareholders' equity:
Capital stock
Authorized
50,000,000 preferred shares, par value $0.01 per share
100,000,000 common shares, par value $0.01 per share
Issued and outstanding
6,748,251 common shares 83,930 67,483
Additional paid-in capital 4,062,235 4,843,682
Accumulated deficit (5,303,187) (5,106,735)
--------------- ---------------
Total shareholders' equity (1,157,022) (195,570)
--------------- ---------------
Total liabilities and shareholders' equity $ 319,761 $ 56,017
================ ================
</TABLE>
Unaudited - See accompanying notes.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
STATEMENTS OF OPERATIONS
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Three Month Period Ended Six Month Period Ended
June 30, June 30,
1997 1998 1997 1998
------- ------- ------ -----
<S> <C> <C> <C> <C>
NET REVENUE $ 138,845 $ 15,708 $ 454,357 $ 62,541
COST OF REVENUE 62,195 6,168 149,770 18,415
---------------- --------------- ---------------- ----------------
GROSS PROFIT 76,650 9,540 304,587 44,126
---------------- --------------- ---------------- ----------------
EXPENSES
Sales and marketing 48,443 8,694 240,435 24,837
Research and development 53,938 - 216,024 1,840
General and administrative 166,809 49,635 406,216 90,978
Amortization of purchase of intangibles 31,149 - 62,298 -
---------------- --------------- --------------- ---------------
300,339 58,329 924,973 117,655
---------------- --------------- --------------- ---------------
Loss from operations (223,689) (48,789) (620,386) 73,529
--------------- -------------- --------------- ----------------
OTHER INCOME (EXPENSE)
Interest (25,201) (3,000) (25,201) (5,000)
Gain (loss) on disposal of property (21,654) 8,623 (21,654) 4,053
Write-off of intangibles (197,293) - (197,293) -
Gain on settlement of obligations - - - 5,413
---------------- -------------- --------------- ----------------
(244,148) 5,623 (244,148) 4,466
--------------- --------------- ---------------- ----------------
Net loss for the period $ (467,837) $ (43,166) $ (864,534) $ (69,063)
=============== ============== =============== ===============
Loss per share $ (0.055) $ (0.006) $ (0.103) $ (0.010)
=============== ============== ============== ===============
Shares used in computing per share amounts 8,393,007 6,598,251 8,393,007 6,598,251
================ ============== ============== ===============
</TABLE>
Unaudited - See accompanying notes.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
STATEMENTS OF SHAREHOLDERS' EQUITY
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Additional Total
Number Paid-in Accumulated Shareholders'
of Shares Par Value Capital Deficit Equity
------------ ---------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Balances at December 31, 1996 8,107,295 $ 81,073 $ 3,965,092 $ (4,438,653) $ (392,488)
Shares issued - cash 285,712 2,857 97,143 100,000
Net loss (864,534) (864,534)
--------------- ---------------- ---------------- -------------- ---------------
Balances at June 30, 1997 8,393,007 83,930 4,062,235 (5,303,187) (1,157,022)
Shares cancelled (650,000) (6,500) 6,500
Net income 265,515 265,515
--------------- --------------- ---------------- --------------- --------------
Balances at December 31, 1997 7,743,007 77,430 4,068,735 (5,037,672) (891,507)
Shares issued - cash 5,600,000 56,000 154,000 210,000
- debt settlements 14,400,000 144,000 396,000 540,000
Shares cancelled (1,350,000) (13,500) 13,500
4:1 Reverse split (19,794,756) (197,947) 197,947
Shares issued - bonus 150,000 1,500 13,500 15,000
Net loss (69,063) (69,063)
--------------- --------------- --------------- -------------- ----------------
Balances at June 30, 1998 6,748,251 $ 67,483 $ 4,843,682 $ (5,106,735) $ (195,570)
=============== ================ ================ =============== ===============
</TABLE>
Unaudited - See accompanying notes.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Three Month Period Ended Six Month Period Ended
June 30, June 30,
1997 1998 1997 1998
----------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net loss for the period $ (467,837) $ (43,166) $ (864,534) $ (69,063)
Adjustments to reconcile net loss to net cash
used in operating activities
Amortization and depreciation 56,739 - 113,478 -
Write-off of intangible 197,293 - 197,293 -
(Gain) loss on disposal of property 21,654 (8,623) 21,654 (4,053)
Changes in operating assets and liabilities
Accounts and other receivables 32,784 3,079 10,867 9,642
Inventories 51,540 32,500 52,376 38,146
Prepaid expenses and deposits 1,168 3,610 33,902 (7,640)
Accounts payable and accrued liabilities 77,779 (26,578) 127,652 (26,092)
Deferred revenues (2,912) - (10,108) -
--------------- --------------- --------------- --------------
(31,792) (39,178) (317,420) (59,060)
--------------- -------------- --------------- ---------------
INVESTING ACTIVITIES
Proceed on sale of property and equipment 51,475 10,373 51,475 20,692
---------------- --------------- ---------------- ----------------
FINANCING ACTIVITIES
Proceeds from issuance of capital stock - 15,000 100,000 765,000
Proceeds from notes payable - 50,000 100,000 50,000
Payment on notes payable 9,034 (7,500) - (16,500)
Payment on debentures payable - - - (750,000)
Deferred costs 15,000 - 15,000 -
Deferred rent (36,502) - (36,502) -
Amortization of debt discount 4,225 - 4,225 -
---------------- --------------- --------------- ----------------
(8,243) 57,500 182,723 48,500
--------------- --------------- --------------- ----------------
Increase (decrease) in cash 11,440 28,695 (83,222) 10,132
Cash, beginning of period 21,948 16,682 116,610 35,245
---------------- -------------- --------------- ----------------
Cash, end of period $ 33,388 $ 45,377 $ 33,388 $ 45,377
================ =============== ================ ================
</TABLE>
Unaudited - See accompanying notes.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
JUNE 30, 1998
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
The Company was incorporated in Washington State, U.S.A. on December 28,
1993 and changed its name from Allegiant Technologies Inc. to Shampan, Lamport
Holdings Limited effective July 21, 1998.
The Company discontinued its principal line of business on May 31, 1998 and
disposed of its technology assets.
Management Plans on Continued Existence
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, in the United States, which
contemplates the continuation of the Company as a going concern. However, the
Company sustained substantial operating losses and used substantial amounts of
working capital in its prior operations. As of June 30, 1998, current
liabilities exceeded current assets by $195,570, and total liabilities exceeded
total assets by $195,570.
Management is exploring and intends to enter into as yet undetermined new
lines of business, which may be highly speculative. The Company will remain
dormant until additional financing is secured and such new operations are
determined.
2. NOTES PAYABLE
<TABLE>
<CAPTION>
1997 1998
-------------- ----------------
<S> <C> <C>
Notes payable - due on demand at any time after May 1, 1999. The notes are
secured by the assets of the Company and bear interest at 10% per annum. $ 100,000 $ 150,000
Note payable, due November 4, 1998. The note is unsecured, non-interest bearing
and convertible into common shares of the Company at the option of the holder at
any time after October 30, 1998 and before November 4, 1998 at a deemed price
per share equal to the average closing price of the Company's shares on
the Vancouver Stock Exchange for the ten days immediately proceeding
November 4, 1998. - 42,500
Notes payable in increments of $3,000 per month. The note is unsecured and non-
interest bearing. - 6,000
----------------- ----------------
$ 100,000 $ 198,500
================= ================
</TABLE>
3. CAPITAL STOCK
Stock options
The Company established a stock option plan ("the Plan") to grant options
to purchase common stock to employees, officers, non-employee directors of the
Company and certain other individuals. The Plan authorizes the Company to issue
or grant stock options to purchase up to 2,517,902 shares of its common stock as
of June 30, 1998.
At June 30, 1998, there were no stock options granted.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
JUNE 30, 1998
3. CAPITAL STOCK
Warrants
As of July 21, 1998, the Company has outstanding warrants entitling the
holders to purchase a total of 1,754,761 common shares of the Company as
follows:
<TABLE>
<CAPTION>
Number Exercise
of Shares Price Expiration Date
<S> <C> <C>
71,428 1.60 April 15, 1999
1,683,333 0.15 until October 15, 1998 October 15, 1999*
------------
0.1725 October 16, 1998 to
October 15, 1999
1,754,761
============
* The Company was obligated to issue these warrants in connection with a
private placement of shares of common stock and the settlement of certain debts
for shares of common stock. The relevant agreements were made effective on
October 15, 1998 and shares were issued on January 15, 1998. The warrants were
issued on July 21, 1998 after the completion of a 4:1 reverse split of the
Company's common stock.
</TABLE>
4. RELATED PARTY TRANSACTIONS
During the six month period ended June 30, 1997 and 1998, the Company paid
or accrued, the following amounts to related parties:
<TABLE>
<CAPTION>
1997 1998
------------ ----------------
<S> <C> <C>
Management fees $ 30,000 $ 18,000
Rent - 7,500
Interest - 5,000
Finance fee - 15,000
--------------- ----------------
$ 30,000 $ 45,500
=============== ================
</TABLE>
Included in notes payable and accrued liabilities is the aggregate amount
of $166,000, including accrued interest of $13,000, owing to directors of the
Company or to companies controlled by directors and officers of the Company.
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
The Company was principally engaged in the development and marketing of
interactive multimedia software. As at March 31, 1998 the Company had cumulative
net losses of $5,056,569. On May 31, 1998 the Company ceased these operations
and disposed of its technology assets to an arms length purchaser. The proceeds
from the sale were used to settle certain obligations of the Company. Presently,
management is exploring and intends to enter into as of yet undetermined new
lines of business, which may be highly speculative. The Company will remain
dormant until additional financing is secured and such new operations are
determined.
Liquidity and Capital Resources
As of June 30, 1998 the Company had cash equivalents of $45,377 and a
working capital deficit of $195,570. Total liabilities exceeded the book value
of total assets by $195,570. The Company's ability to satisfy projected working
capital requirements through December 31, 1998 is dependent upon its ability to
secure additional funding through public or private sales of securities,
including equity securities of the Company. There are no assurances that the
Company will be able to secure such requisite funding.
The Company's primary future needs for capital are for exploring and
entering into as of yet undetermined new lines of business.
Reorganization
The Company has completed a reorganization of its capital as follows:
1. Principals of the Company surrendered for cancellation 2,000,000
escrowed shares of common stock.
2. The Company issued 14,400,000 shares of common stock in partial
settlement of debts in the amount of $540,000.
3. The Company issued 5,600,000 shares of common stock pursuant to a
private placement agreement. The subscription proceeds of $210,000 were
primarily used to settle certain obligations of the Company.
4. The Company disposed of its technology assets on May 31, 1998 and used
the proceeds to settle certain obligations of the Company.
5. The Company changed its name to and gave effect to a four for one
reverse split of its issued common stock on July 21, 1998. The reverse split has
been reflected in the June 30, 1998 financial statements attached hereto.
6. The Company borrowed $50,000 from a director of the Company who had
previously loaned the Company $100,000. Both notes, together with accrued
interest, are due on demand at anytime after May 1, 1999. As consideration for
the new loan and an extension of the previous loan the Company issued 150,000
shares of common stock on July 21, 1998, valued at $15,000, to the holder of the
notes. The issuance of these shares has been reflected in the June 30, 1998
financial statements attached hereto.
Results of Operation
The Company's revenues decreased by 86% from $454,357 for the six months
ended June 30, 1997 to $62,541 for the six months ended June 30, 1998. This
precipitous decline was a direct result of the Company's inability to
effectively market, develop and support its products due to insufficient
resources and was the principle reason why the Company ceased operations.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no current legal proceedings against the Company and previous
proceedings commenced by creditors for failure to pay amounts due have been
settled.
ITEM 2. CHANGES IN SECURITIES
Item 2 is not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The Company borrowed the sum of $100,000 pursuant to a secured promissory
note dated February 13, 1997. The terms of the note provided for the payment of
interest quarterly commencing on July 15, 1997. The Company failed to make any
payment of interest on or since July 15, 1997. The note is secured by a
registered lien against all of the assets of the Company. The lender has agreed
not to pursue the collection of the note and accrued interest thereon until May
1, 1999.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual General Meeting on June 1, 1998 to present the
audited financial statements of the Company for the year ended December 31, 1997
together with the auditors' report thereon, and to vote upon certain matters set
out below. The total number of common shares represented at the meeting by
shareholders in person or by proxy was 23,243,363, which represented
approximately 88% of the total number of common shares issued and outstanding.
The following persons, all of whom were nominated by management, were
appointed to the board of directors of the Company to hold office until the
Company's next Annual General Meeting.
NAME OF DIRECTOR VOTES FOR VOTES AGAINST VOTES WITHHELD
Steven Rothstein 23,242,863 - 500
William McCartney 23,243,863 - 500
Craig Gould 23,243,863 - 500
Edward Lewis 23,242,863 - 500
The following other matters were also voted upon and agreed to by
shareholders at the Meeting.
1. To approve Moss Adams LLP as auditors for the ensuing year and to
authorize the directors to fix the remuneration to be paid to the auditors.
VOTES FOR: 23,242,863
VOTES AGAINST: 500
VOTES WITHHELD: -
2. To pass a Special Resolution consolidating the share capital of the
Company on a four (old shares) for one (new share) basis and increasing the
authorized capital of the Company to 100,000,000 post consolidated common
shares.
VOTES FOR: 23,241,563
VOTES AGAINST: 1,800
VOTES WITHHELD: -
<PAGE>
3. To pass a Special Resolution approving the change of name of the Company
to Shampan, Lamport Holdings Limited, subject to the approval of the regulatory
authorities having jurisdiction.
VOTES FOR: 23,238,563
VOTES AGAINST: 7,800
VOTES WITHHELD: -
4. To authorize the Board of Directors of the Company to sell all of the
Company's right, title and interest in and to its major assets and current
business undertakings to a party dealing at arm's length with the Company, for
and in consideration of the sum of $40,000.
VOTES FOR: 21,500,410
VOTES AGAINST: 12,500
VOTES WITHHELD: 1,730,453
5. To authorize the Board of Directors of the Company to delist the
Company's common shares from the Vancouver Stock Exchange, at any time they
determine providing that the common shares may be traded on the OTC bUlletin
Board in the United States or any other regulated quotation system or organized
exchange.
VOTES FOR: 21,511,410
VOTES AGAINST: 1,500
VOTES WITHHELD: 1,730,453
6. To approve, subject to the approval of the Vancouver Stock Exchange, an
amendment to the Company's existing stock option plan to increase the maximum
number of shares issuable under the plan to 2,000,000 after the consolidation of
the Company's common stock on a four old for one new basis.[ Insiders abstained
from voting]
VOTES FOR: 21,445,125
VOTES AGAINST: 67,785
VOTES WITHHELD: 1,730,453
7. To approve, subject to the approval of the Vancouver Stock Exchange or
any other regulatory authority having jurisdiction, the granting of a general
authority to the directors of the Company to grant insiders of the Company
options to purchase common shares of the Company, not exceeding 10% of the
issued common shares of the Company, and to amend existing stock options granted
to insiders.
VOTES FOR: 21,445,625
VOTES AGAINST: 67,285
VOTES WITHHELD: 1,730,453
8. To authorize the directors to carry out a private placement or other
issuance(s) of an amount of shares or units that is equal to or greater than 20%
of the issued share capital of the Company, at such price or prices and to such
persons on such terms as may be determined by the Directors, subject to the
approval of the Vancouver Stock Exchange.
VOTES FOR: 21,511,410
VOTES AGAINST: 1,500
VOTES WITHHELD: 1,730,453
<PAGE>
ITEM 5. OTHER INFORMATION
Item 5 is not applicable.
ITEM 6. EXIBITS AND REPORTS ON FORM 8-K
None filed during the period ended June 30, 1998
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Chicago, State of Illinois, on August 6, 1998.
SHAMPAN, LAMPORT HOLDINGS LIMITED.
By:
/s/ Steven A. Rothstein
Steven A. Rothstein
President and Chief Executive Officer
