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 September 30, 1999
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 of (I.R.S. Employer Identification No.)
Incorporation or Organization)
1260-609 Granville Street, Vancouver, B.C. Canada V7Y 1G5
(Address of Principal Executive Offices)
(604) 687-0888
(Issuer's Telephone Number, Including Area Code)
(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 date. Common stock, par value, $0.01
per share, 7,316,667 shares of common stock outstanding as of October 31, 1999
Traditional Small Business Disclosure Format (check one):
Yes No X
<PAGE>
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS-SEPTEMBER 30, 1999
SHAMPAN, LAMPORT HOLDINGS LIMITED
FINANCIAL STATEMENTS
(Unaudited)
SEPTEMBER 30, 1999
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
BALANCE SHEET
(Expressed in United States Dollars)
AS AT SEPTEMBER 30
<TABLE>
<CAPTION>
1998 1999
------------ -----------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 26,741 $ 1,085
Accounts receivable, net 246 -
Prepaid expenses 3,750 -
------------- ------------
Total assets $ 30,737 $ 1,085
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 192,500 $ 197,500
Accounts payable and accrued liabilities 53,388 72,417
------------- -------------
Total liabilities 245,888 269,917
------------- -------------
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
7,316,667 common shares 67,482 73,166
Additional paid-in capital 4,843,683 4,900,999
Accumulated deficit (5,126,316) (5,242,997)
------------- -------------
Total shareholders' equity (215,151) (268,832)
------------- -------------
Total liabilities and shareholders' equity $ 30,737 $ 1,085
============= =============
</TABLE>
Unaudited - See accompanying notes.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
STATEMENTS OF OPERATIONS
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Three Month Period Ended Nine Month Period Ended
September 30, September 30,
1998 1999 1998 1999
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
NET REVENUE $ - $ - $ 62,541 $ -
COST OF REVENUE - - 18,415 -
------------- ------------- ------------- ------------
GROSS PROFIT - - 44,126 -
------------- ------------- ------------- ------------
EXPENSES
Sales and marketing - - 24,837 -
Research and development - - 1,840 -
General and administrative 18,480 17,586 94,458 74,833
------------- ------------- ------------- -------------
18,480 17,586 121,135 74,833
------------- ------------- ------------- -------------
Loss from operations (18,480) (17,586) (77,009) (74,833)
------------- ------------- ------------- -------------
OTHER INCOME (EXPENSE)
Interest (3,750) (2,917) (8,750) (10,417)
Finance fee - - (15,000) -
Gain on disposal of property 949 - 5,002 -
Gain on settlement of obligations 1,700 - 7,113 -
------------- ------------- ------------- ------------
(1,101) (2,917) (11,635) (10,417)
------------- ------------- ------------- -------------
Net loss for the period $ (19,581) $ (20,503) $ (88,644) $ (85,250)
============= ============= ============= =============
Loss per share $ (0.003) $ (0.003) $ (0.013) $ (0.013)
============ ============ ============ ============
Shares used in computing per share amounts 6,748,252 6,748,252 6,748,252 6,748,252
============= ============= ============= =============
</TABLE>
Unaudited - See accompanying notes.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
STATEMENTS OF SHAREHOLDERS' EQUITY
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Additional Total
Number Paid-in Accumulated Shareholders'
of Shares Par Capital Deficit Equity
Value
<S> <C> <C> <C> <C> <C>
Balances at September 30, 1998 6,748,252 $ 67,482 $ 4,843,683 $ (5,126,316) $ (215,151)
Net loss - - - (31,431) (31,431)
------------- ------------- ------------- ------------- -------------
Balances at December 31, 1998 6,748,252 67,482 4,843,683 (5,157,747) (246,582)
Shares issued - debt settlement 568,415 5,684 57,316 - 63,000
Net loss - - - (85,250) (85,250)
------------- ------------- ------------- ------------- -------------
Balances at September 30, 1999 7,316,667 $ 73,166 $ 4,900,999 $ (5,242,997) $ (268,832)
============= ============= ============= ============= =============
</TABLE>
Unaudited - See accompanying notes.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Three Month Period Ended Nine Month Period Ended
September 30, September 30,
1998 1999 1998 1999
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net loss for the period $ (19,581) $ (20,503) $ (88,644) $ (85,250)
Adjustments to reconcile net loss to net cash
used in operating activities
(Gain) on disposal of property (949) - (5,002) -
Changes in operating assets and liabilities
Accounts and other receivables 2,754 - 12,396 -
Inventories - - 38,146 -
Prepaid expenses and deposits 3,890 - (3,750) -
Accounts payable and accrued liabilities 301 (44,540) (25,791) 7,559
------------- ------------- ------------- -------------
(13,585) (65,043) (72,645) (77,691)
------------- ------------- ------------- -------------
INVESTING ACTIVITIES
Proceed on sale of property and equipment 949 - 21,641 -
------------- ------------- ------------- ------------
FINANCING ACTIVITIES
Proceeds from issuance of capital stock - 63,000 765,000 63,000
Proceeds from notes payable - - 50,000 5,000
Payment on notes payable (6,000) - (22,500) -
Payment on subscription payable - - (750,000) -
------------- ------------- ------------- ------------
(6,000) 63,000 42,500 68,000
------------- ------------- ------------- -------------
Decrease in cash (18,636) (2,043) (8,504) (9,691)
Cash, beginning of period 45,377 3,128 35,245 10,776
------------- ------------- ------------- -------------
Cash, end of period $ 26,741 $ 1,085 $ 26,741 $ 1,085
============= ============= ============= =============
</TABLE>
Unaudited - See accompanying notes.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
(Expressed in United States Dollars)
September 30, 1999
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 substantially discontinued its principal line of business,
developing, marketing and supporting interactive multimedia development software
during 1997. On May 31, 1998 the Company disposed of its remaining inventory and
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 September 30, 1999, current
liabilities exceeded current assets by $268,832.
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.
The Company's ability to continue as a going concern is dependent upon,
among other things, its ability to secure additional funding which is not
assured. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
United States Generally Accepted Accounting Principles
Accounting under United States and Canadian generally accepted accounting
principles is substantially the same with respect to the accounting principles
used by the Company in the preparation of these financial statements.
Reclassifications
Certain reclassifications have been made to the 1998 financial statements
to conform with the 1999 presentation. These reclassifications have no effect on
the financial position or operating results of the Company.
Reverse Split
The comparative figures for the Company's common stock have been adjusted
to reflect a four for one share reverse split that was made effective July 21,
1998.
<PAGE>
SHAMPAN LAMPORT HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
(Expressed in United States Dollars)
September 30, 1999
2. CAPITAL STOCK
Common Shares
On September 24, 1999 the Company issued 568,415 common shares of the
Company in full settlement and satisfaction of $63,000 of debt, in the
aggregate, owing to directors and officers of the Company and to a company
controlled by a director and a officer of the Company. The total number of
common shares issued therefore increased from 6,748,252 as of June 30, 1999 to
7,316,667 as of September 30, 1999.
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 629,475 shares of its common stock as
of September 30, 1999. There were not stock options outstanding as of September
30, 1999.
Warrants
As of September 30, 1999, the Company has outstanding warrants entitling
the holders to purchase a total of 1,683,333 common shares of the Company at
$0.1725 per share until October 15, 1999. On October 14, 1999, the expiry date
was extended to October 15, 2000.
Reverse Split
On September 15, 1999 the Company sought and received shareholder approval
for a three for one share reverse split. As of September 30, 1999 the reverse
split was not made effective and may be abandoned by the directors, at their
sole discretion, without further approval from the shareholders. These financial
statements reflect the number of shares and warrants issued before giving effect
to this reverse split.
3. RELATED PARTY TRANSACTIONS
During the nine months ended September 30, 1998 and 1999, the Company paid
or accrued, the following amounts to related parties:
<TABLE>
<CAPTION>
1998 1999
---------- ------------
<S> <C> <C>
Management fees $ 27,000 $ 42,000
Rent 11,250 8,750
Interest 8,750 10,417
Finance fee 15,000 -
------------- ------------
$ 62,000 $ 52,417
============= =============
</TABLE>
Notes payable to a director are $150,000 and $155,000 at September 30, 1998
and 1999, respectively.
Included in accrued liabilities at September 30, 1999 is $25,500 of accrued
interest due to a director of the Company.
<PAGE>
SHAMPAN LAMPORT HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
(Expressed in United States Dollars)
September 30, 1999
4. YEAR 2000 ISSUE
Management has completed a review of the Company's systems, and believes,
given the dormant nature of the Company, that any costs to be incurred to ensure
its systems are Year 2000 compliant will not be significant.
Because of the unprecedented nature of the Year 2000 Issue, its effects
will not be fully determinable until the year 2000 and thereafter. Management
cannot assure that the Company is or will be Year 2000 ready, that new business
lines, if any, will be Year 2000 ready, or that parties with whom the Company
does business will be Year 2000 ready.
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
The Company was principally engaged in the development and marketing of
interactive multimedia software. On May 31, 1998 the Company ceased these
operations and disposed of its technology assets to an arms length purchaser. As
at September 30, 1999 the Company had cumulative net losses of $5,242,997.
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.
See Notes to the Financial Statements for a description of the Company's
significant accounting policies.
On May 28, 1999 the Company voluntarily delisted its common shares from trading
on the Vancouver Stock Exchange. The Company's shares continue to be quoted on
the OTC Bulletin Board in the United States under the trading symbol SLHX.
On September 15, 1999 the Company sought and received shareholder approval for a
3 for 1 share reverse split. As of September 30, 1999 the reverse split was not
made effective and it may be abandoned by the directors, at their sole
discretion, without further approval from the shareholders.
On September 24, 1999 the Company issued 568,415 common shares of the Company in
full settlement and satisfaction of debts in the aggregate amount of $63,000.
On October 14, 1999 the Company extended the expiry date on outstanding warrants
that entitle the holders to purchase a total of 1,683,333 common shares of the
Company at a price of $0.1725 per share from October 15, 1999 to October 15,
2000.
Liquidity and Capital Resources
The Company has sustained substantial operating losses and has used substantial
amounts of working capital in its operations from inception to September 30,
1999. As of September 30, 1999 the Company had cash equivalents of $1,085 and a
working capital deficit of $268,832. Total liabilities exceeded the book value
of total assets by $268,832.
The Company's ability to satisfy its liabilities and meet its obligations as
they become due is dependent upon its ability to secure additional funding
through public or private sales of securities, including equity securities of
the Company and there are no assurances that the Company will be successful in
securing additional funding. As a consequence, there exists a risk that the
Company will be forced to seek protection from its creditors under federal or
state bankruptcy statutes.
<PAGE>
Results of Operations
The Company ceased operations and sold its product inventory and technology
assets on May 31, 1998.
General and administrative expenses consist primarily of the costs of the
Company's finance and administrative personnel, including the chief executive
officer, rent, telephone, legal, audit and all other costs usually associated
with maintaining a public company in good standing. General and administrative
expenses decreased from $94,458 for the nine months ended September 30, 1998 to
$74,833 for the nine months ended September 30, 1999. It is expected that they
will remain the Company's largest expenditure until such time the Company
acquires or commences a new line of business.
The Company terminated, at no additional cost, all existing agreements to pay
management fees and rent effective July 31, 1999. This results in a monthly
savings of $7,250.
The Company was able to eliminate the interest charge on $50,000 owed to a
director effective July 31, 1999. This results in a monthly savings of $417.
Uncertainty due to the YEAR 2000 Issue
The Year 2000 Issue arises because many computerized systems use two digits
rather than four digits to identify a year. Date-sensitive systems may
incorrectly recognize the year 2000 as some other date, resulting in errors. The
effects of the Year 2000 Issue may be experienced before, on or after January 1,
2000 and, if not addressed, the impact on operations and financial reporting may
range from minor errors to significant systems failure, which could affect an
entity's ability to conduct normal business operations. The Company is presently
dormant. For this reason, and until a new line of business is established
management believes that the Year 2000 Issue will not materially affect the
Company. However, it is not possible to be certain that all aspects of the Year
2000 Issue affecting the Company, including those related to the efforts of
customers, suppliers or other third parties, will be fully resolved.
Investor Relations
The Company did not engage in any investor relations activity during the period.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable
ITEM 2. CHANGES IN SECURITIES
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual General Meeting on September 15, 1999 to present the
audited financial statements of the Company for the year ended December 31, 1998
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 5,251,324, which represented
approximately 77.82% 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 5,237,224 - 14,100
William McCartney 5,237,224 - 14,100
Craig Gould 5,237,224 - 14,100
Edward Lewis5,237,224 - 14,100
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 5,237,774 VOTES AGAINST - VOTES WITHHELD 13,550
--------- ----------------- -------------------
<PAGE>
2. To pass a Special Resolution consolidating the share capital of the
Company on a three (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 5,233,524 VOTES AGAINST 17,800 VOTES WITHHELD -
---------------- ---------------------- -----------------
This has not been made effective as of the date of this report.
3. To authorize the Board of Directors of the Company to make application
to the British Columbia Securities Commission to remove the Company's "reporting
issuer" status in the province of British Columbia.
VOTES FOR 4,899,713 VOTES AGAINST 13,550 VOTES WITHHELD 338,061
---------------- ---------------------- ------------------
No action has been taken on this matter as of the date of this report.
4. To authorize the Board of Directors of the Company to amend the
Company's articles of incorporation so that an amendment to the articles, the
approval of a plan of merger or share exchange requiring shareholder approval,
the sale, lease, exchange or other disposition of all or substantially all of
the Company's assets other than in the usual course of business, or the
dissolution of the Company require only an approval by a simple majority of the
votes of the shareholders of each class of shares of the Company entitled to
vote.
VOTES FOR 5,236,724 VOTES AGAINST 14,600 VOTES WITHHELD -
----------------- ---------------------- ----------------
ITEM 5. OTHER INFORMATION
Not Applicable.
ITEM 6. EXIBITS AND REPORTS ON FORM 8-K
The Company filed a Form 8-K report on September 27, 1999 disclosing that the
Company had issued 568,415 common shares of the Company in full settlement and
satisfaction of debts in the aggregate amount of $63,000.
The Company filed a Form 8-K report on October 14, 1999 disclosing that the
Company agreed to extend the expiry date on outstanding warrants that entitle
the holders to purchase a total of 1,683,333 common shares of the Company at a
price of $0.1725 per share from October 15, 1999 to October 15, 2000.
<PAGE>
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 November 4, 1999.
SHAMPAN, LAMPORT HOLDINGS LIMITED.
By: /s/ Steven A. Rothstein
Steven A. Rothstein
President and Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND THE STATEMENT OF OPERATIONS ATTACHED AS AN EXHIBIT TO THE COMPANY'S
FORM 10-QSB FOR THE THREE MONTHS ENDED JUNE 30, 1999, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,085
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,085
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,085
<CURRENT-LIABILITIES> 269,917
<BONDS> 0
0
0
<COMMON> 4,974,165<F1>
<OTHER-SE> (5,242,997)
<TOTAL-LIABILITY-AND-EQUITY> 1,085
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 74,833
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,417
<INCOME-PRETAX> (85,250)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (85,250)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
<FN>
<F1>This includes amounts paid in excess of par value.
</FN>
</TABLE>
