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U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-SB/A AMENDMENT
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
UNDER SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
Pacific Development Corporation
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(Name of Small Business Issuer in its charter)
Colorado 84-1209978
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9903 Santa Monica Boulevard, Suite #564
Beverly Hills, California 90212
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, (310) 470-2431
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None
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Securities to be registered under Section 12(g) of the Act:
Common Stock, $.001 par value
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(Title of class)
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ITEM 1. DESCRIPTION OF BUSINESS.
(A) BUSINESS DEVELOPMENT.
Pacific Development Corporation, formerly Tamaron Oil & Gas, Inc. (the
"Company"), was organized under the laws of the State of Colorado on September
21, 1992, to be the successor to a corporation also named "Tamaron Oil & Gas,
Inc.," which was dissolved by the Colorado Secretary of State in 1990. The
predecessor corporation named "Tamaron Oil & Gas, Inc." ("Tamaron") was
organized under Colorado law on October 6, 1982. The name of the Company was
changed to "Pacific Development Corporation" and the number of its authorized
shares of common stock, $.001 par value per share (the "Common Stock"), was
increased from 20,000,000, to 100,000,000, shares of Common Stock on August 14,
1995. The Company's executive offices are presently located at 9903 Santa
Monica Boulevard, Suite #564, Beverly Hills, California 90212, and its telephone
number is (310) 470-2431.
Messrs. Donald P. Dizon, Milton R. Polland and Francis S.K. Liu were
elected to be directors of the Company to fill the vacancies in the Board of
Directors created by the resignations of Mr. Irwin Krushansky and his wife and
son, Ms. Helen S. and Mr. Robert A. Krushansky, at the 1995 Annual Meeting of
the Shareholders of the Company (the "1995 Annual Meeting") held on August 10,
1995. At the regular meeting of the Board of Directors of the Company held
after the 1995 Annual Meeting, Messrs. Dizon, Polland and Liu were elected to
be executive officers of the Company to fill the vacancies in the executive
offices of President, Secretary and Treasurer of the Company created by the
resignations of Messrs. Irwin and Robert A. Krushansky. (See Item 5.
"Directors, Executive Officers, Promoters and Control Persons" on page 12 of
this Form 10-SB/A Amendment.) Messrs. Irwin and Robert A. Krushansky and Ms.
Helen S. Krushansky resigned their positions with the Company and Messrs.
Dizon, Polland and Liu were elected to replace them because the new members of
management were willing, and believed to be in a better position than prior
management, to assume responsibility for furnishing financial support to the
Company, searching for business opportunities for the Company and obtaining an
attractive candidate(s), together with new management, for a business
combination with the Company. While Messrs. Dizon, Polland and Liu have no
record or beneficial ownership interest in the Company as of the date hereof,
it is anticipated that each of said individuals will receive such number of
restricted shares of the Company's Common Stock, determined to be fair and
reasonable to the Company, at such time as the Company consummates a business
combination with an operating company, or otherwise obtains assets via the
consummation of a business opportunity with a company, identified by them.
Mr. Irwin Krushansky, who served as the President and a director of
the Company from September 1994 through August 10, 1995, served as the
President and a director of Tamaron during the period from 1982 through 1987.
Mr. Krushansky is the record and/or beneficial owner, as a result of his
individual record ownership of 200,000 shares of the Company's Common Stock and
the record ownership of Irwin Management Corp., a corporation 100%-owned by
him, of 700,000 shares of Common Stock, of a total of 900,000 shares of the
Company's Common Stock, representing 20.6% of the total number of shares of
Common Stock of the Company issued and outstanding as of the date hereof.
Mr. Krushansky's percentage record and beneficial ownership interests in the
Company and Tamaron are identical. This is because the 4,363,380 shares of the
Company's Common Stock issued and outstanding as of the date hereof were
distributed on the basis of one share of Common Stock of the Company for each
share of common stock of Tamaron owned of record by each former Tamaron
shareholder, including Mr. Krushansky and Irwin Management Corp., prior to
Tamaron's dissolution.
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On July 6, 1984, Tamaron received gross and net proceeds in the
amounts of $230,000 and $182,127, respectively, from an intrastate offering,
pursuant to a disclosure document filed with the Division of Securities of the
State of Colorado which became effective on January 9, 1984, of 23,000,000
shares of common stock at an offering price of $.01 per share. Tamaron was
listed in Moody's Investor Services in July 1984 and its common stock traded
over-the-counter in the "pink sheets" from July 1984 through August 1988.
Until 1985, Tamaron conducted business as an independent oil and gas
corporation engaged in the exploration for and development of oil and gas
primarily in the States of Colorado and Kansas. On October 15, 1985, the
Tamaron shareholders approved a one-for-twenty-five reverse split in Tamaron's
common stock. After the reverse split, Tamaron had 4,363,380 shares of common
stock issued and outstanding. On November 25, 1985, Tamaron acquired all of
the issued and outstanding shares of common stock of American General Homes,
Inc. (formerly "Sikes Jones Company"), a privately-held real estate
development company, in exchange for the issuance of a total of 2,550,000
restricted shares of Tamaron's common stock and 2,000,000 shares of preferred
stock convertible into common stock on a two-for-one basis. Because of the
failure of American General Homes, Inc., to perform as anticipated, the
transaction was rescinded in March 1986. In 1989, Tamaron ceased all business
activities and became inactive. Also in 1989, the Secretary of State of
Colorado dissolved Tamaron for failure to file its bi-annual corporate report
and pay the related fee.
After the dissolution on January 1, 1990, by the Colorado Secretary of
State of the first corporation organized under the name of "Tamaron Oil & Gas,
Inc.," on October 6, 1982, the surviving entity commenced business operations
on a limited scale in searching for business opportunities under the form of
business organization of a general partnership organized under Colorado law.
The general partnership, which was formed in Colorado by operation of law on
January 1, 1990, is referred to throughout this Form 10-SB/A Amendment as the
"Tamaron Oil & Gas Partnership." The Tamaron Oil and Gas Partnership conducted
limited business activities during the period from the date of dissolution of
the first corporation in 1990 until the organization of the second corporation
under the name of "Tamaron Oil & Gas, Inc.," on September 21, 1992, as a
successor to the first. The Company is the second corporation and operates
currently under the name of "Pacific Development Corporation."
Effective September 21, 1992, the date of its inception, the Company
entered into an agreement with Irwin Management Corp. ("IMC"), a financial
consulting firm solely-owned by Mr. Irwin Krushansky, the Company's and
Tamaron's former President and director and the beneficial owner of 20.6% of
the Company's issued and outstanding Common Stock, providing for the exchange
of 4,363,380 newly-issued, restricted shares of Common Stock of the Company for
the interests of all of the general partners (including IMC and Mr. Irwin
Krushansky) in Tamaron Oil & Gas Partnership (the "Partnership"), the general
partnership comprised of the former shareholders of Tamaron which existed
during the period commencing with the dissolution of Tamaron and terminating
with the organization of the Company as described in the paragraph hereinabove,
and their certificates representing all 4,363,380 shares of common stock of
Tamaron formerly issued and outstanding. On June 5, 1995, IMC distributed, via
the Company's transfer agent, the shares of Common Stock of the Company to
itself and the other general partners in the Partnership (including Mr. Irwin
Krushansky), the former shareholders of Tamaron, pro rata on the basis of one
share of Common Stock of the Company for each share of common stock of Tamaron
owned of record by each of them prior to Tamaron's dissolution.
The Company has generally been inactive, having conducted no business
operations except a limited search for business opportunities, since its
inception. The Company was organized on September 21, 1992, under the name of
"Tamaron Oil & Gas, Inc.," the same name of its predecessor corporation
dissolved by the Colorado Secretary of State in 1990, in order to maintain as
much continuity as possible between the predecessor and the successor
corporations. The
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Company's objective is to identify and evaluate merger or acquisition
candidates and structure and consummate a merger with or acquisition of a
privately-held company for the purpose of engaging in the business activities
of the target company. The Company, in its efforts to identify and evaluate
business opportunities, will not limit its search to any particular business or
industry. There can be no assurance that a merger, acquisition or other
business combination can be consummated with any candidate which might indicate
interest in such a business combination with the Company. In this regard, the
Company is no longer pursuing a potential business combination with the Zipper
Bicycle Engine Division of Seismic Engineering, Inc. ("Zipper Bicycle"), San
Diego, California, a private U.S. corporation engaged in the development,
manufacture and marketing of a two-horsepower engine capable of propelling a
bicycle, with which the Company had conducted preliminary negotiations. As of
the date hereof, the Company has no business opportunities.
Management is unable to predict whether or when, if ever, the Company
will complete a merger or acquisition transaction or other business combination
with a private company. In the event that the Company successfully concludes a
merger, acquisition or other business combination, the Company will pursue the
business activities of the target company. Further, because the business
combination proposed with a private company will likely be structured so as to
involve a change in control of the Company, it is probable that target company
management will replace the Company's executive officers and directors and that
the Company's business will be subject to control of target company management.
In that event, Company shareholders will depend entirely upon the business
judgment of the new members of management, with no information about their
business backgrounds or their intentions with respect to the Company's
operation. Messrs. Donald P. Dizon, Milton R. Polland and Francis S.K. Liu
were elected to the Company's Board of Directors at the 1995 Annual Meeting of
Shareholders to fill the vacancies in the Board of Directors created by the
resignations of Messrs. Irwin and Robert A. Krushansky and Ms. Helen S.
Krushansky. Further, at the regular meeting of the Board of Directors held
after the 1995 Annual Meeting, Messrs. Dizon, Polland and Liu were elected to
be executive officers of the Company. (See Item 5. "Directors, Executive
Officers, Promoters and Control Persons.")
Management intends to identify privately-financed entities currently
conducting active operations in any one of a broad range of fields as
candidates for a merger, acquisition or other business combination with the
Company, giving no priority to any particular business or industry. Management
believes any merger, acquisition or other business combination undertaken by
the Company will be limited to privately-financed prospects because a merger
with or acquisition of a private company is expected to be attractive to the
owners thereof, primarily, because they will receive a controlling number of
shares of common stock in a publicly-traded corporation in exchange for the
outstanding securities or assets of their company for less cost than would be
required for them to conduct an initial public offering. Depending upon, among
other things, the target company's financial position and future business
prospects, the Company's shareholders will in all likelihood hold no more than
5-10% of the Common Stock of the Company following any merger or acquisition.
Accordingly, any merger or acquisition effected by the Company can be expected
to have a significant dilutive effect on the percentage of shares of Common
Stock held by the Company's then-shareholders.
The final stage of any merger, acquisition or other business
combination will require the Company to retain the services of its counsel and
a qualified accounting firm in order to properly effect the merger, acquisition
or other business combination. The Company must furnish certain information
about significant acquisitions, which may require audited financial statements
for an acquired company with respect to one or more fiscal years, depending
upon the relative size of the acquisition. No assurance can be made that any
private company targeted by management as a merger or acquisition candidate
will have or be able to reasonably obtain the information and/or audited
financial statements required to be made publicly available. Consequently, if
any targeted acquisition prospect did not have and was unable to reasonably
obtain the requisite information
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and/or audited financial statements, such acquisition, although otherwise
extremely desirable, might not be undertaken by the Company because of the
applicability of the reporting requirements of the Securities Exchange Act of
1934, as amended. The Company may be expected to incur significant legal fees
and accounting costs and expenses during the final stages of a merger,
acquisition or other business combination, which would not be recoverable if a
decision was later made not to participate in a specific business opportunity.
Before making an investment decision, prospective investors in the
Company's Common Stock should carefully consider, along with other matters
referred to herein, the following risk factors inherent in and affecting the
business of the Company.
1. No Operating History or Revenues and Minimal Assets. The
Company, having been organized on September 21, 1992, as the successor to a
corporation organized under the name of "Tamaron Oil & Gas, Inc.," which
operated, primarily, as an independent oil and gas corporation from the date of
its inception on October 6, 1982, until the corporation's dissolution by the
Colorado Secretary of State in 1990, has had no operating history nor any
revenues or earnings from operations. The Company has no significant assets or
financial resources and there can be no assurance that it will achieve
profitable operations in the future from a merger with, or acquisition of,
another business entity. Unless and until the consummation of a merger or
acquisition transaction or other business combination, the Company is expected
to sustain operating expenses without corresponding revenues. Thus, the
Company will continue to incur a net operating loss which will continue to
increase until it acquires or merges with another company with profits, of
which there is no assurance. As a result of the Company's operations and
until the Company succeeds, if ever, in consummating a merger or acquisition
transaction or other business combination, shareholders' equity in the Company,
which is minimal or negative at present, can be expected to become increasingly
negative in accordance with the continued increase in the Company's net
operating loss. (See FINANCIAL STATEMENTS.)
2. Speculative Nature of the Company's Business. The Company's
business is the identification and evaluation of merger or acquisition
candidates and the structuring and consummation of a merger, acquisition or
other business combination with a suitable candidate. In the event that the
Company is successful in completing a merger, acquisition or other business
combination, of which there is no assurance, its future success will be
dependent to a great extent on the financial condition and management of the
company with which the Company merges or which it acquires, and numerous other
factors beyond its control. While management intends to seek a merger with or
acquisition of a privately-held entity having an established operating history,
there can be no assurance that the Company will be successful in locating
acquisition or merger prospects meeting such criterion. It is not known if any
acquisition or merger prospect can, in fact, be acquired or, if acquired, be
profitable. Because of the limited funding available to pursue a business
combination, any entity successfully acquired by or merged with the Company is
likely to be small, undercapitalized and have a history of losses or only
marginal profitability.
3. Scarcity of and Competition for Business Opportunities and
Combinations. The Company is, and will continue to be, an insignificant
participant in the business of seeking mergers with, and acquisitions of, small
privately-held entities. A large number of established and well-financed
entities, including venture capital firms, are active in mergers and
acquisitions of private companies which may be desirable target candidates for
the Company, and have recently increased their merger and acquisition
activities. Nearly all such entities are substantially larger and have more
substantial histories, backgrounds, experience and records of successful
operations; greater financial resources, technical expertise, managerial
capabilities and other resources; more employees; and more extensive facilities
than the Company now has or will have in the foreseeable future. Accordingly,
such companies are in a better position to finance the effort to locate and
evaluate candidates and structure a merger or acquisition transaction and to
offer cash, which the Company is presently incapable of offering, in any merger
or acquisition transaction or other
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business combination. Consequently, the Company will be at a competitive
disadvantage in identifying suitable merger or acquisition candidates and
successfully completing a merger, acquisition or other business combination.
Moreover, the Company will also compete in seeking merger or acquisition
candidates with numerous small publicly-held companies which have completed
public offerings for the purpose of engaging in mergers or acquisitions with
private entities. The Company will assuredly encounter intense competition in
seeking to consummate a business combination with a private company.
4. Absence of an Agreement for Business Combination or Other
Transaction. The Company has no arrangement, agreement or understanding with
respect to the acquisition of, or merger with, any existing business entity.
The Company is no longer pursuing a potential business combination with Zipper
Bicycle, San Diego, California, a private U.S. corporation engaged in the
development, manufacture and marketing of a two-horsepower engine capable of
propelling a bicycle, with which it had conducted preliminary negotiations.
There can be no assurance that the Company will be successful in identifying
and evaluating other suitable merger or acquisition candidates or in concluding
a merger or acquisition transaction or other business combination with any such
candidate. There is no assurance that the Company will be able to negotiate a
merger, acquisition or other business combination on terms favorable to the
Company. Further, the Company's shareholders will have no opportunity to
evaluate or have a voice in the determination of the business with which the
Company may merge or which it may acquire. Accordingly, the Company's
day-to-day business decisions will be made by management which has not
formulated any specific plans with respect to the nature of merger or
acquisition prospects or the structure of a merger or acquisition or other
business combination.
5. No Standards or Criteria for Any Business Combination.
Management has not established a specific length of operating history or a
specific level of earnings, assets or net worth for a target company below
which it would not consider a merger with, or acquisition of, such company.
Accordingly, management may cause the Company to acquire or merge with a
private firm having no significant operating history, losses, limited or no
potential for earnings, limited assets and/or negative net worth. Inasmuch as
the Company has failed to establish minimum quantitative standards concerning
earnings, net worth, assets or other objective criteria, Company shareholders
will be subject to a higher degree of risk in any merger or acquisition
undertaken by the Company. Although the Company intends to acquire or merge
with the best possible target company which management is able to identify,
there can be no assurance that any target company ultimately selected will have
a specified level of assets, earnings or net worth, a specific length of
operating history or any potential for earnings.
6. Conflicts of Interest. Because of existing and/or potential
future associations of the Company's executive officers and directors in
various capacities with other firms involved in a range of business activities
and because of the limited or minimal amount of time and effort which is
expected to be devoted to the Company by such persons, there are existing and
potential continuing conflicts of interest in their acting as executive
officers and/or directors of the Company. The Company's executive officers
and/or directors will not be able to devote a significant amount of time or
effort to the business and affairs of the Company because of their simultaneous
participation in, employment by and/or commitments to other firms involved in a
range of business activities. In addition, all of the Company's executive
officers and/or directors are or may become, in their individual capacities,
officers, directors, controlling shareholders and/or partners of other entities
engaged in a variety of businesses which are engaged, or may in the future
engage, in various transactions, or compete directly, with the Company.
Conflicts of interest and transactions which are not at arm's-length may arise
in the future because the Company's executive officers and/or directors are
involved in the management of any company which transacts business, or competes
directly, with the Company. There are existing and potential conflicts of
interest, including time, effort and corporate opportunity, involved in the
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participation by the Company's executive officers and directors in other
business entities and transactions.
7. Reporting Requirements May Delay or Preclude Acquisition. As
a company subject to Section 13 of the Securities Act of 1934, as amended (the
"Exchange Act"), the Company must furnish certain information about significant
acquisitions, which may require audited financial statements for an acquired
company with respect to one or more fiscal years, depending upon the relative
size of the acquisition. Consequently, if any targeted acquisition prospect
did not have and was unable to reasonably obtain the requisite information
and/or audited financial statements, such acquisition, although otherwise
extremely desirable, might not be undertaken by the Company because of the
applicability of the reporting requirements of the Exchange Act. Further, it
is anticipated that the investigation of specific business opportunities and
the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments, which will necessitate substantial management
time and attention and substantial costs for accountants, attorneys and/or
others, may delay the consummation of any proposed merger, acquisition or other
business combination with an attractive candidate. If a decision was made not
to participate in a specific business opportunity, the costs theretofore
incurred in the related investigation would not be recoverable. Furthermore,
even if an agreement was reached for the Company's participation in a specific
business opportunity, the failure to consummate that transaction could result
in the loss to the Company of the related costs incurred.
8. Change in Control; Reduction in Percentage Ownership of
Existing Shareholders Following Business Combination. Management contemplates
that an acquisition, merger or other business combination will be completed on
terms requiring the issuance of previously authorized and unissued shares of
the Company's Common Stock to shareholders of the target company. In this
connection, the number of authorized shares of Common Stock of the Company was
increased from 20,000,000, to 100,000,000, shares on August 14, 1995. The
issuance of shares of the Company's Common Stock in those circumstances will
result in substantial dilution to the present shareholders of their percentage
ownership interests in the Company, and may result in the further dilution of
the per share book value of the Company's Common Stock. Assuming, among other
things, the target company's assets, earnings, net worth and other relevant
data to be sufficiently attractive, it is likely that the Company will be
required to issue shares to target company shareholders such that these persons
will obtain a controlling interest in the Company.
9. Probable Change in Management. The successful completion of a
merger, acquisition or other business combination with a private company will
in all likelihood result in the resignation or removal of the Company's
executive officers and directors then serving in those positions, i.e.,
currently, Messrs. Donald P. Dizon, Milton R. Polland and Francis S.K. Liu. The
resulting change in control of the Company will in all likelihood result in a
corresponding reduction in the participation by prior management in the future
affairs of the Company. The probability of the operation of the Company by the
target company's officers and directors after the consummation of a business
combination is expected to be the result of several factors, including, among
others, the minimal time commitment to the Company by its management, the
anticipated limited business experience of the Company's executive officers and
directors in the target company's business and the possible geographic
diversity between the location of the target company's offices and Company
management.
10. Time Availability of Management; Loss of Services of
Management May Affect Development of the Company's Business and Its Likelihood
of Continuing Operations. None of the Company's three executive officers and
directors will expend significant time or effort on the Company's business and
affairs. The evaluation and structuring of mergers, acquisitions and other
business combinations involve complicated business decisions requiring
qualitative and subjective evaluations by management and/or others. Present
management has no plans to utilize the services of consultants or outside
advisors to assist it in identifying or evaluating candidates for
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a business combination or in structuring the transaction. Further, none of the
Company's executive officers and directors has entered into written employment
agreements with the Company and none is expected to do so in the foreseeable
future. The Company anticipates that it will lose the services of Messrs.
Donald P. Dizon, Milton R. Polland and Francis S.K. Liu in the event of the
consummation of a merger, acquisition or other business combination with a
private company in accordance with its business plan. Notwithstanding the
combined limited time commitment of management, the loss of the services of any
of these individuals could have a significant adverse effect on the development
of the Company's business.
11. Tax Treatment to Be Applied to Any Potential Business
Combination. In the course of any merger, acquisition or other business
combination the Company may undertake, a substantial amount of attention will
be focused upon federal and state tax consequences to both the Company and the
candidate company. Under the provisions of federal and various state tax laws,
a qualified reorganization between business entities will afford the
participants significant tax deferrals. While the Company expects to undertake
any merger or acquisition so as to minimize federal and state tax consequences
to both parties, there is no guarantee that such business combination will meet
the statutory requirements of a reorganization or that the parties will obtain
the intended tax deferral upon a transfer of securities or assets. A
non-qualifying reorganization could result in the imposition of both federal
and state tax liability, which may have a substantial adverse effect on the
Company. There is no assurance that federal or state tax laws may not be
amended in the foreseeable future to preclude the Company from availing itself
of the deferral presently afforded business entities engaged in mergers and
acquisitions.
12. Requirement of Audited Financial Statements May Disqualify
Business Opportunities. The final stage of any merger, acquisition or other
business combination will require the Company to retain the services of a
qualified accounting firm in order to properly effect the merger, acquisition
or other business combination. Among other things, the Company, because of the
applicability of Section 13 of the Exchange Act, will be required to furnish
certain information about significant acquisitions, which may require audited
financial statements for the business acquired with respect to one or more
fiscal years, depending upon the relative size of the acquisition. No
assurance can be made that any private company targeted by management as a
merger or acquisition candidate will have or be able to reasonably obtain the
requisite audited financial statements. Regardless of the desirability of any
target company, the Company will in all likelihood be prevented from
consummating a business combination with a company which does not have or
proves incapable of reasonably obtaining the requisite audited financial
statements. Further, the Company may incur substantial management time and
attention and substantial costs for accountants prior to abandoning a proposed
business combination because of the target company's inability to obtain
audited financial statements, resulting in the loss to the Company of the
related costs incurred.
(B) BUSINESS OF ISSUER.
Since its inception, except for a limited search for business
opportunities conducted on behalf of the Company by its former President and
director, Mr. Irwin Krushansky, the Company has conducted no business
operations. Further, the Company has had no employees since its organization.
The 4,363,380 newly issued, restricted shares of Common Stock of the
Company received by Irwin Management Corp. in the reorganization effective
September 21, 1992, were distributed by IMC to the general partners in the
Tamaron Oil & Gas Partnership, the former shareholders of Tamaron (including
IMC and Mr. Krushansky), pro rata on the basis of one share of Common Stock of
the Company for each share of common stock of Tamaron issued and outstanding
prior to Tamaron's dissolution in 1990. In making the distribution and then
filing this Registration Statement on Form 10-SB in order to cause the shares
of the Company's Common Stock to
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become tradable publicly, IMC sought to make the former Tamaron shareholders
whole because their shares of Tamaron, a public company prior to its
involuntary dissolution by the Colorado Secretary of State in 1990 for failure
to file its bi-annual corporate report and pay the related fee, had become
worthless. This result was particularly unfair in each case where a former
Tamaron shareholder purchased the shares in Tamaron's 1984 intrastate offering
or in the over-the-counter market where Tamaron's common stock traded from
July 1984 through August 1988.
Accordingly, the 4,363,380 shares of the Company's Common Stock
presently issued and outstanding were distributed by IMC to itself and the
other former Tamaron shareholders (including Mr. Krushansky), in exchange for
their general partnership interests in the Partnership and their certificates
representing shares of Tamaron formerly issued and outstanding, without
registering or qualifying the shares under the "blue sky" or securities laws of
the various states in which the Company shareholders reside. The Company
relied upon exemptions from registration under federal and state securities
laws in connection with the distribution. The Company has reason to believe
that, with respect to the distribution of shares of Common Stock to certain
shareholders, an exemption from state law may not have been available. This
belief is based upon the fact that, with respect to the availability of state
law exemptions for the distribution of shares of Common Stock to shareholders
residing in certain states, the appropriate notices, applications and/or other
documents were not filed with, and/or the applicable fees were not paid to, the
appropriate state regulatory authorities and certain states restrict or
prohibit the initial offer and sale of securities of "blank check" companies to
residents of their states. If it is later determined that a state law
exemption was unavailable with respect to the distribution of shares of Common
Stock to any shareholder, the Company may be required to rescind the
distribution or take such other steps as may be necessary to comply with
applicable state securities laws. The Company has no present plans to make a
rescission offer of their shares of Common Stock to its present shareholders
because the Company, having received no cash for the shares distributed,
believes that it has no liability for the return to shareholders of any
invested funds. To the knowledge of management, no shareholder has threatened
litigation in connection with his receipt of unregistered shares of Common
Stock of the Company. The Company intends to ensure, through the use of, among
other measures, a legend(s) on the certificates representing shares of the
Company's Common Stock and "stop transfer" orders issued to the Company's
transfer agent, that secondary trading in the Common Stock does not occur in
any state where the shares are not registered or qualified or an exemption for
secondary trading is unavailable.
Secondary trading in the Common Stock will not be possible in each
state until the shares are qualified for sale under the applicable securities
laws of that state or the Company verifies that an exemption, such as listing
in certain recognized securities manuals, is available for secondary trading in
that state. The Company intends to employ equitable arguments with each state
securities authority in seeking authorization for secondary trading in the
Company's Common Stock on the grounds that the Company is the successor to
Tamaron and that secondary trading in Tamaron's common stock would have been
permissible if the corporation had not been dissolved by the Colorado Secretary
of State. Nevertheless, there can be no assurance that the Company will be
successful in registering or qualifying the Common Stock for secondary trading,
or availing itself of an exemption for secondary trading in the Common Stock,
in any state. The Company understands that a number of states restrict or
prohibit the initial offer and sale, as well as any subsequent resale, of
securities of "blank check" companies to residents of their states. If the
Company failed to register or qualify, or obtain or verify an exemption for the
secondary trading of, the Common Stock in any particular state, the shares of
Common Stock could not be offered or sold to, or purchased by, a resident of
that state. In the event that a significant number of states refuse to permit
secondary trading in the Company's Common Stock, a public market for the Common
Stock will fail to develop and the shares could be deprived of any value.
As of the date hereof, the Company has not sought to register or
qualify the Common Stock for secondary trading, or avail itself of an exemption
for secondary trading in the Common
9
<PAGE> 10
Stock, in any state. The Company intends to register or qualify, or seek an
exemption for secondary trading in, the Common Stock in each of the thirty
states where the shareholders of the Company currently reside, as follows:
Arizona, California, Colorado, Delaware, Florida, Georgia, Illinois, Indiana,
Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Missouri, New Jersey,
New York, North Carolina, Oklahoma, Ohio, Oregon, Pennsylvania, South Dakota,
Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin and Wyoming. The
Company has not at this time determined whether it will seek to register,
qualify or obtain an exemption for the Common Stock in any state in addition to
the foregoing. Consequently, the Common Stock is not presently registered or
qualified in any state, and the Company has not verified the existence of or
obtained an exemption for subsequent trading in the Common Stock in any state.
As a result of this, it is not expected that a public market for the Common
Stock will develop or that the shareholders of the Company will be able to
resell their shares in any state in the near future.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Plan of Operations
Since its inception, the Company has conducted no business activities
except for a limited search for business opportunities. Since its
organization, the Company has had no item of revenue and general and
administration expenses totalling $4,344. The Company was formed as a
successor to Tamaron Oil & Gas, Inc., a company which operated under the same
name under which the Company was organized and which became publicly-traded in
1984, but lost its corporate status in 1990. The Company is now known as
"Pacific Development Corporation."
Because of the Company's extremely limited financial resources since
its inception, Mr. Irwin Krushansky, the Company's former President and
director and the beneficial owner of 20.6% of the Company's issued and
outstanding Common Stock, and Mr. S.K. Liu, the Secretary, Treasurer and a
director of the Company, have utilized their own resources to pursue business
opportunities and acquisitions on behalf of the Company.
Financial Condition, Capital Resources and Liquidity
As of the date hereof, the Company has insignificant assets and no
liabilities. The Company believes that it will be considered a strategic
merger candidate upon achieving the status of a public shell company, which is
not assured. Since the Company's inception, it has received $4,363 in cash
contributed as consideration for the issuance of shares of Common Stock.
Following inception, the Company exchanged 4,363,380 newly-issued, restricted
shares of Common Stock for the certificates representing all of the formerly
issued and outstanding shares of common stock of a predecessor corporation.
The predecessor company lost its corporate status and no value was assigned to
its common stock in the exchange.
The Company abandoned the pursuit of a potential business combination
with Zipper Bicycle, San Diego, California, a private U.S. corporation engaged
in the development, manufacture and marketing of a two-horsepower engine
capable of propelling a bicycle, with which it had engaged in preliminary
negotiations. The Company has no potential capital resources.
ITEM 3. DESCRIPTION OF PROPERTY.
The Company's executive offices are located at the offices of its
President and Chairman of the Board of Directors/Vice President, Messrs. Donald
P. Dizon and Milton R. Polland, 9903 Santa Monica Boulevard, Suite #564, Beverly
Hills, California 90212, and its telephone number is (310) 470-2431. The
Company owns no real or personal property.
10
<PAGE> 11
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information as of February 12, 1997,
regarding the ownership of the Company's Common Stock by each shareholder known
by the Company to be the beneficial owner of more than five percent of its
outstanding shares of Common Stock, each director and all executive officers
and directors as a group. Except as otherwise indicated, each of the
shareholders has sole voting and investment power with respect to the shares of
Common Stock beneficially owned.
<TABLE>
<CAPTION>
AMOUNT
NAME AND ADDRESS OF BENEFICIALLY PERCENT OF
BENEFICIAL OWNER OWNED CLASS
- ----------------------------------- ----------- ----------
<S> <C> <C>
Irwin Krushansky 900,000 (1) 20.6%
7706 East Napa Place
Denver, Colorado 80237
Small Business Venture Corp. 800,000 18.3%
c/o Mr. Don Thompson
P.O. Box 344A
Rural Route #3
Independence, Kansas 67301
Michael L. Ehrlich 232,000 5.3%
7541 South Uinta Place
Englewood, Colorado 80112
Donald P. Dizon -0- 0.0%
9903 Santa Monica Boulevard, Suite #564
Beverly Hills, California 90212
Milton R. Polland -0- 0.0%
9903 Santa Monica Boulevard, Suite #564
Beverly Hills, California 90212
Francis S.K. Liu -0- 0.0%
1991 Southwest Marine Drive
Vancouver, British Columbia
V6P-6B3
All Executive Officers and Directors as -0- 0.0%
a Group (three persons)
</TABLE>
- ------------------
(1) Includes 700,000 shares of Common Stock owned of record by Irwin
Management Corp., a Colorado corporation owned 100% by Irwin
Krushansky.
Changes in Control
If the Company is successful in consummating a business combination
with a merger or acquisition candidate, it is anticipated that approximately
90-95% of the shares of Common Stock of the Company issued and outstanding
immediately after the consummation of the business
11
<PAGE> 12
combination will be owned of record and beneficially by the shareholders of
such candidate. In the event of the consummation of a business combination
with a candidate for a business combination, it is expected that all of the
executive officers and directors of the Company will resign and the new
management of the Company will control its affairs and policies. Neither the
Company's Articles of Incorporation nor its By-Laws provide for cumulative
voting. Since the election of directors and all other questions requiring
shareholder approval will be decided by majority vote (except as otherwise
provided by the Articles of Incorporation and By-Laws of the Company and the
laws of the State of Colorado), the Company's existing shareholders will not
have the ability to elect any directors or approve or reject matters submitted
to shareholders and will lose effective control of the Company after the
consummation of a business combination.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
EXECUTIVE OFFICERS AND DIRECTORS
Set forth below are the names, ages, positions with the Company and
business experiences of the executive officers and directors of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION(S) WITH COMPANY
- ---------------- --- ---------------------------------------------------
<S> <C> <C>
Donald P. Dizon 33 President and Director
Milton R. Polland 85 Chairman of the Board of Directors, Vice President and
Director
Francis S.K. Liu 60 Secretary, Treasurer and Director
</TABLE>
- -------------------
*The above-named persons may be deemed to be "promoters" and "parents"
of the Company, as those terms are defined under the Rules and Regulations
promulgated under the Securities Act of 1933, as amended.
All directors hold office until the next annual meeting of the
Company's shareholders and until their successors have been elected and
qualify. Officers serve at the pleasure of the Board of Directors. None of
the executive officers and directors of the Company are expected to devote
significant time or effort to identifying and evaluating business opportunities
for the Company. Management anticipates, but cannot assure, that an acceptable
candidate for a merger or acquisition with the Company can be identified within
not more than one year from the date hereof.
FAMILY RELATIONSHIPS
Mr. Donald P. Dizon is the grandson of Mr. Milton R. Polland. Except
for the aforementioned relationship, there are no family relationships between
or among the executive officers and directors of the Company.
BUSINESS EXPERIENCE
Donald P. Dizon serves as the President of Pacific Intermediaries,
Inc., a California corporation with offices in Beverly Hills, California, which
is engaged in insurance consulting, reinsurance placement and underwriting
management. He has been a self-employed insurance broker, specializing in
construction and garage-related business, operating under the name of D.P.
Insurance Services in Beverly Hills, California, since 1990. He served, from
1987 through 1994, as the Corporate Secretary for Central Pacific Assurance,
Ltd. (Reinsurance), with responsibilities
12
<PAGE> 13
for marketing and development of reinsurance, management of the company's
investment portfolio and contracts with property and casualty companies for
excess and quota share business. Mr. Dizon was employed as the office manager
for International Travel Corp. from 1982 through 1987. He attended the
University of Southern California, Los Angeles, California, from September 1981
through May 1982 and from September through December 1983. Mr. Dizon attended
the University of Colorado at Boulder from September 1982 through May 1983.
Milton R. Polland has served as the "Roving" Ambassador from the
Republic of the Marshall Islands since September 30, 1992, and as the
Ambassador to the Republic of Mexico from the Republic of the Marshall Islands
since 1993. Mr. Polland has owned The Polland Company, Ltd., an actuarial and
management consulting firm, since 1952. Since his appointment in 1988, Mr.
Polland has served as the Special Envoy and, since 1979, as the Economic
Advisor to the Republic of the Marshall Islands and to President Amata Kabua of
the Marshall Islands until his death on December 20, 1996 and since then to the
new President Imata Kabrio. He also serves as a director of the Airline of the
Marshall Islands ("A.M.I."). Mr. Polland has served as the Chairman of the
Board of Directors of Pacific Assurance Limited Reinsurance Intermediaries of
Nevada since 1989 and as the President and a director of Central Pacific
Assurance Ltd. of Nevada, a consulting firm, since 1986. From 1982 through
April 1995, he served as the Chairman of the the Board of Directors of Pacific
Intermediaries, Incorporated of Nevada, a reinsurance placement company, and as
the Chairman of the Board of Directors and President of Pacific Casualty
Insurance Company of the Republic of the Marshall Islands, a reinsurance
company located in the Marshall Islands. He is listed in "Who's Who in
American Politics." Mr. Polland attended Marquette University, Milwaukee,
Wisconsin, from 1931 to 1933, and received his L.L.B. degree in law from
Milwaukee Law School, Milwaukee, Wisconsin, in 1936.
Francis S.K. Liu has been involved, primarily, in the restaurant
business and property development in Vancouver, British Columbia, Canada, since
1981. Since August 1989, he has served as the Deputy President and a partner
of Fortune House Investments Ltd., Vancouver, British Columbia, Canada, which
owns and operates five Chinese restaurants located in British Columbia, Canada,
including the Grand Fortune Restaurant, the Fortune House Restaurant, the Grand
Honour Restaurant and the Grand Royal Restaurant, Vancouver, and the Fortune
House Seafood Restaurant, Burnaby. Mr. Liu has owned and served as the
President of F.T.R. Restaurant Corporation since October 1986. Since May 1991,
he has owned and served as the President of Grand Fortune Restaurant Ltd.,
Vancouver, British Columbia, Canada. Mr. Liu, since October 1993, has been the
President and a partner of Grand Honour Restaurant Ltd., Vancouver, British
Columbia, Canada. He also serves as the President of Grand Royal Restaurant
Ltd. and as the Vice President of Fortune House Restaurant Ltd., Vancouver,
British Columbia, Canada, and as the Vice President of Fortune House Seafood
Restaurant, Ltd., Burnaby, British Columbia, Canada. He has served, since
March 1995, as a director of Grand Royal Investments (Oakridge) Inc.,
Vancouver, British, Columbia.
CONSULTANTS
Mr. Irwin Krushansky, former President and director of the Company and
the beneficial owner of 20.6% of the Company's issued and outstanding Common
Stock, has national contacts in the business community; has in the past
practiced accounting with several certified public accounting firms; and, since
1969, has owned and operated a consulting firm to private and public companies
specializing in finance, marketing and sales, administration, short-term and
long-term business strategies, structuring business transactions and
diversification. Mr. Krushansky has used networking with his contacts in the
business community to identify potential candidates for a merger with or
acquisition by the Company. Accordingly, present management has no plans to
retain, utilize or compensate any independent consultants or outside advisers,
except for its legal counsel and independent accountant, to perform services
for the Company in connection with the consummation of the proposed business
combination with a private company or otherwise. Messrs. Donald P. Dizon,
Milton R. Polland and Francis S.K. Liu are expected to resign as
13
<PAGE> 14
executive officers and directors of the Company in the event of the
consummation of a business combination between the Company and a private
company. There can be no assurance that new management of the Company would not
effect a change in the Company's policy with regard to the utilization of the
services of consultants and outside advisers to accomplish its business
objectives.
NO PREVIOUS BLANK CHECK OFFERINGS
There are no previous "blank check" offerings in which the Company's
executive officers and directors, all of whom may be deemed to be promoters of
the Company, have been involved.
ITEM 6. EXECUTIVE COMPENSATION.
No compensation, including but not limited to consulting and finders
fees and salaries, will be paid and no profit transactions, such as sales, in
whole or in part, of Company insiders' stock positions to the private company,
the Company and/or the principals thereof, will occur in connection with the
Company's proposed acquisition of a private company by means of a stock
exchange transaction or other means. Further, no other methods of payment or
compensation will be employed in connection with the business combination by
which the insiders or current shareholders of the Company will receive funds,
stock, other assets or anything of value, whether tangible or intangible.
EXECUTIVE COMPENSATION
Except as provided herein, no cash or non-cash compensation was
awarded to, earned by or paid to any executive officer or director of the
Company for all services rendered in all capacities to the Company during the
fiscal years ended December 31, 1994, 1995 and 1996.
The Company does not provide officers with pension, stock appreciation
rights, long-term incentive or other plans and has no intention of implementing
any such plans for the foreseeable future.
COMPENSATION OF DIRECTORS
Directors do not receive compensation pursuant to any standard
arrangement for their services as directors.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Irwin Management Corp., a financial consulting firm solely-owned by
Mr. Irwin Krushansky, the Company's and Tamaron's former President and director
and the beneficial owner of 20.6% of the Company's issued and outstanding
Common Stock, and a general partner in the Tamaron Oil & Gas Partnership,
received a total of 4,363,380 shares of Common Stock in the reorganization
effective September 21, 1992, pursuant to which the Company exchanged a total
of 4,363,380 newly-issued, restricted shares of its Common Stock for all of
the interests in the Partnership, which existed during the period commencing
with the dissolution of Tamaron and terminating with the organization of the
Company, together with the certificates representing all 4,363,380 shares of
common stock of Tamaron issued and outstanding prior to Tamaron's dissolution
in 1990. IMC distributed the shares of Common Stock of the Company received in
the exchange to itself and the other general partners in the Partnership,
the former shareholders of Tamaron (including Mr. Krushansky), pro rata on a
one-for-one basis. As a result of the
14
<PAGE> 15
distribution, IMC and Mr. Krushansky received 700,000 and 200,000 shares of
Common Stock, respectively.
On May 11, 1995, IMC contributed $4,363 to the Company as
consideration for the issuance by the Company to IMC effective September 21,
1992, of 4,363,380 shares of the Company's Common Stock in the reorganization
described hereinabove.
ITEM 8. DESCRIPTION OF SECURITIES.
Description of Capital Stock
The Company's authorized capital stock consists of 100,000,000 shares
of common stock, $.001 par value per share (the "Common Stock"), and 50,000,000
shares of preferred stock, $.50 par value per share (the "Preferred Stock").
Description of Common Stock
All shares of Common Stock have equal voting rights and, when validly
issued and outstanding, are entitled to one vote per share in all matters to be
voted upon by shareholders. The shares of Common Stock have no preemptive,
subscription, conversion or redemption rights and may be issued only as
fully-paid and nonassessable shares. Cumulative voting in the election of
directors is not permitted; which means that the holders of a majority of the
issued and outstanding shares of Common Stock represented at any meeting at
which a quorum is present will be able to elect the entire Board of Directors
if they so choose and, in such event, the holders of the remaining shares of
Common Stock will not be able to elect any directors. In the event of
liquidation of the Company, each shareholder is entitled to receive a
proportionate share of the Company's assets available for distribution to
shareholders. All shares of the Company's Common Stock issued and outstanding
are fully-paid and nonassessable.
Dividends
Holders of shares of Common Stock are entitled to share pro rata in
dividends and distributions with respect to the Common Stock when, as and if
declared by the Board of Directors out of funds legally available therefor.
The Company has not paid any dividends on its Common Stock and intends to
retain earnings, if any, to finance the development and expansion of its
business. Future dividend policy is subject to the discretion of the Board of
Directors and will depend upon a number of factors, including future earnings,
capital requirements and the financial condition of the Company.
Transfer Agent
The Transfer Agent for the Company's Common Stock is United Stock
Transfer, Inc., 13275 East Fremont Place, Suite #302, Englewood, Colorado
80112-3910.
Description of Preferred Stock
Shares of Preferred Stock may be issued from time to time in one or
more series as may be determined by the Board of Directors. The voting powers
and preferences, the relative rights of
15
<PAGE> 16
each such series and the qualifications, limitations and restrictions thereof
shall be established by the Board of Directors, except that no holder of
Preferred Stock shall have preemptive rights. The Company has no outstanding
Preferred Stock, and the Board of Directors does not plan to issue any for the
foreseeable future unless the issuance thereof shall be in the best interests
of the Company.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS.
(A) MARKET INFORMATION.
There has been no established public trading market for the Common
Stock since the Company's inception on September 21, 1992.
(B) HOLDERS.
As of February 12, 1997, the Company had 329 shareholders of record of
its 4,363,380 issued and outstanding shares of Common Stock, $.001 par value.
(C) DIVIDENDS.
The Company has never paid or declared any dividends on its Common
Stock and does not anticipate paying dividends in the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS.
The Company knows of no legal proceedings to which it is a party or to
which any of its property is the subject which are pending, threatened or
contemplated or any unsatisfied judgments against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
In January 1996, the Company engaged Roger Chung-Ho Wu ("Roger Wu"),
Certified Public Accountant, 15536 East Gale Avenue, Hacienda Heights,
California 91745, as its independent accountant to replace Bailey Saetveit &
Co., P.C. ("Bailey Saetveit"), 12835 East Arapahoe Road, Suite #600,
Englewood, Colorado 80112; which firm resigned as the Company's independent
accountant. Bailey Saetveit's report on the Company's financial statements as
of, and for the years ended, December 31, 1993, and 1994, and as of May 12,
1995, and for the periods from January 1 to May 12, 1995, and from inception
(September 21, 1992) to May 12, 1995, contained no adverse opinion or
disclaimer of opinion and was not modified as to uncertainty, audit scope or
accounting principles. The Board of Directors of the Company approved the
retention of Roger Wu, C.P.A., after the resignation of Bailey Saetveit. There
were no
16
<PAGE> 17
disagreements with Bailey Saetveit on any matter of accounting principles or
practices, financial statement disclosure, auditing scope or procedure or any
other matter which, if not resolved to the former accountant's satisfaction,
would have caused it to make reference to the subject matter of the
disagreement in connection with its report.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
Effective September 21, 1992, the Company, in a reorganization, issued
a total of 4,363,380 restricted shares of its Common Stock to Irwin Management
Corp., a financial consulting firm owned 100% by Mr. Irwin Krushansky, the
Company's and Tamaron's former President and director and the beneficial owner
of 20.6% of the Company's issued and outstanding Common Stock, for immediate
distribution to the general partners in the Tamaron Oil & Gas Partnership
(including IMC and Mr. Krushansky), a general partnership which existed during
the period commencing with the dissolution of Tamaron and terminating with the
organization of the Company. The general partners in the Partnership were the
former shareholders of Tamaron prior to its dissolution in 1990. The 4,363,380
newly-issued, restricted shares of Common Stock of the Company were exchanged
in the reorganization for the general partners' interests in the Partnership
and their certificates representing all 4,363,380 shares of common stock of
Tamaron issued and outstanding prior to the corporation's dissolution. The
distribution of the shares of Common Stock by IMC to itself and the other
former Tamaron shareholders was made pro rata on the basis of one share of
Common Stock of the Company for each share of common stock of Tamaron owned of
record by them prior to Tamaron's dissolution. The Company's issuance to and
exchange with IMC of 4,363,380 shares of the Company's Common Stock in the
reorganization for the distribution by IMC to itself and the other former
Tamaron shareholders was made by the Company in reliance upon the exemption
from registration contained in Section 4(2) promulgated under the Securities Act
of 1933, as amended, for sales and other transfers of securities by an issuer
deemed not to involve a public offering.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VII of the Company's Articles of Incorporation contains
provisions providing for the indemnification of directors and officers of the
Company as follows:
(a) The corporation shall indemnify any person who was or is a
party, or is threatened to be made a party, to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, actually and reasonably
incurred by him in connection with such action, suit or proceeding, if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding, by judgment,
order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not of itself create a presumption that the person did not
act in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation and, with respect to any
criminal action or proceeding, had reasonable cause to believe his conduct was
unlawful.
(b) The corporation shall indemnify any person who was or is a
party, or is threatened to be made a party, to any threatened, pending or
completed action or suit by or in the right of the corporation, to procure a
judgment in its favor by reason of the fact that he is or was a director,
17
<PAGE> 18
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit, if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the corporation, except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the performance
of his duty to the corporation, unless, and only to the extent that, the court
in which such action or suit was brought shall determine upon application, that
despite the adjudication of liability, but in view of all circumstances of the
case, such person is fairly and reasonably entitled to indemnification for such
expenses which such court deems proper.
(c) To the extent that a director, officer, employee or agent of
the corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in Sections (a) and (b) of this
Article, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under Sections (a) or (b) of this Article
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the officer,
director and employee or agent is proper in the circumstances, because he has
met the applicable standard of conduct set forth in Sections (a) or (b) of this
Article. Such determination shall be made (i) by the Board of Directors by a
majority vote of a quorum, consisting of directors who were not parties to such
action, suit or proceeding, or, (ii) if such a quorum is not obtainable, or
even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (iii) by the affirmative
vote of the holders of a majority of the shares of stock entitled to vote and
represented at a meeting called for such purpose.
(e) Expenses (including attorneys' fees) incurred in defending a
civil or criminal action, suit or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit or proceeding, as
authorized in Section (d) of this Article, upon receipt of an understanding by
or on behalf of the director, officer, employee or agent to repay such amount,
unless it shall ultimately be determined that he is entitled to be indemnified
by the corporation as authorized in this Article.
(f) The Board of Directors may exercise the corporation's power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under this
Article.
(g) The indemnification provided by this Article shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under these Articles of Incorporation, the By-Laws, agreements,
vote of the shareholders or disinterested directors, or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, officer, employee, or agent and shall inure to the benefit of heirs
and personal representatives of such a person.
18
<PAGE> 19
PART F/S
The Financial Statements of Pacific Development Corporation required
by Regulation S-X commence on page F-1 hereof in response to Part F/S of this
Form 10-SB/A Amendment to the Registration Statement on Form 10-SB and are
incorporated herein by this reference.
PART III
ITEM 1. INDEX TO EXHIBITS.
<TABLE>
<CAPTION>
ITEM
NUMBER DESCRIPTION
- ------ -------------------------------------------------
<S> <C>
2.1* Articles of Incorporation of Tamaron Oil & Gas, Inc., filed October 6, 1982.
2.2* Articles of Amendment to the Articles of Incorporation of Tamaron Oil & Gas, Inc., filed September 22, 1983.
2.3* Articles of Amendment to the Articles of Incorporation of Tamaron Oil & Gas, Inc., filed October 16, 1985.
2.4* By-Laws of Tamaron Oil & Gas, Inc.
2.5* Articles of Incorporation of Tamaron Oil & Gas, Inc., filed September 21, 1992.
2.6* Articles of Amendment to the Articles of Incorporation of Tamaron Oil & Gas, Inc., filed April 13, 1995.
2.7* By-Laws of Tamaron Oil & Gas, Inc.
2.8* Articles of Amendment to the Articles of Incorporation of Tamaron Oil & Gas, Inc., filed August 14, 1995.
7.1* Agreement, dated as of September 21, 1992, between Tamaron Oil & Gas, Inc., a Colorado corporation
organized on September 21, 1992, and Irwin Management Corp.
16* Letter and consent of Bailey Saetveit & Co., P.C.
27 Financial Data Schedule
</TABLE>
- ------------------
* Previously filed.
ITEM 2. DESCRIPTION OF EXHIBITS.
The documents required to be filed as Exhibit Numbers 2 and 7 in Part
III of Form 1-A filed as part of this Form 10-SB/A Amendment to the
Registration Statement on Form 10-SB are listed in Item 1 of this Part III
above. No documents are required to be filed as Exhibit Numbers 3, 5 or 6 in
Part III of Form 1-A, and the reference to such Exhibit Numbers is therefore
omitted. No additional exhibits are filed hereto.
19
<PAGE> 20
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this Form 10-SB/A Amendment to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized.
PACIFIC DEVELOPMENT CORPORATION
(Registrant)
Date: February 12, 1997 By: /s/ DONALD P. DIZON
--------------------------
Donald P. Dizon, President
20
<PAGE> 21
PACIFIC DEVELOPMENT CORPORATION
(FORMERLY TAMARON OIL & GAS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 1993, 1994 AND 1995
AND SIX MONTHS ENDED JUNE 30, 1996
<PAGE> 22
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditor's Report F-2
Report of Independent Accountants F-3
Financial Statements:
Balance Sheets F-4
Statement of Operations F-5
Statements of Stockholders' Equity F-6
Statements of Cash Flows F-7
Notes to Financial Statements F-8
</TABLE>
F-1
<PAGE> 23
INDEPENDENT AUDITOR'S REPORT
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
PACIFIC DEVELOPMENT CORPORATION
I have audited the accompanying balance sheet of Pacific Development
Corporation (formerly Tamaron Oil & Gas, Inc.) (a development stage
enterprise), as of December 31, 1995, and the related statements of income,
stockholders' equity and cash flows for the year then ended. These financial
statements are the responsibilities of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted the audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pacific Development
Corporation (a development stage enterprise), as of December 31, 1995, and the
results of their operations and their cash flows for the year then ended in
conformity with generally accepted accounting principles.
The financial statements of Pacific Development Corporation (a development
stage enterprise), as of December 31, 1994 and 1993 were audited by other
accountants who expressed an unqualified opinion on them in their report dated
May 25, 1995. I have not audited or reviewed the 1994 and 1993 financial
statements and, accordingly, do not express an opinion or any other form of
assurance on them.
Roger Chung-Ho Wu
Certified Public Accountant
Hacienda Heights, California
February 23, 1996
F-2
<PAGE> 24
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE STOCKHOLDERS
TAMARON OIL & GAS, INC.
We have audited the accompanying balance sheets of Tamaron Oil & Gas, Inc. (a
development stage enterprise) as of December 31, 1993 and 1994 and the related
statements of operations, stockholders' equity, and cash flows for the years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standard. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tamaron Oil & Gas, Inc. (a
development stage enterprise), as of December 31, 1993 and 1994 and the results
of its operations and its cash flows for the periods then ended, in conformity
with generally accepted accounting principles.
Barley Saetveit & Co., P.C.
Englewood, Colorado
May 25, 1995
F-3
<PAGE> 25
PACIFIC DEVELOPMENT CORPORATION
(FORMERLY TAMARON OIL & GAS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
-------- --------------------------------
1996 1995 1994 1993
-------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 19 $ 19 $ -- $ --
-------- -------- -------- --------
Total Assets, all current $ 19 $ 19 $ -- $ --
======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES: $ -- $ -- $ -- $ --
-------- -------- -------- --------
COMMITMENTS AND CONTINGENCIES:
STOCKHOLDERS' EQUITY:
Preferred stock - par value $.50;
50,000,000 shares authorized;
no shares issued and
outstanding -- -- -- --
Common stock - par value $.001;
100,000,000 shares authorized;
4,363,380 shares issued and
outstanding 4,363 4,363 4,363 4,363
Common stock subscribed -- -- (4,363) (4,363)
Deficit accumulated during
the development stage (4,344) (4,344) -- --
-------- -------- -------- --------
Total Stockholders' equity 19 19 -- --
-------- -------- -------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 19 $ 19 $ -- $ --
======== ======== ======== ========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-4
<PAGE> 26
PACIFIC DEVELOPMENT CORPORATION
(FORMERLY TAMARON OIL & GAS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
CUMULATIVE
FROM INCEPTION
FOR THE SIX SEPTEMBER 21,
MONTHS ENDED FOR THE YEARS ENDED 1992
JUNE 30, DECEMBER 31, TO JUNE 30,
---------- ------------------------------------ ----------
1996 1995 1994 1993 1996
---------- ---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUE $ -- $ -- $ -- $ -- $ --
GENERAL AND
ADMINISTRATIVE EXPENSES -- -- -- -- 4,344
---------- ---------- ---------- ---------- ----------
NET INCOME (LOSS) $ -- $ (4,344) $ -- $ -- $ (4,344)
========== ========== ========== ========== ==========
NET INCOME (LOSS)
PER SHARE $ -- $ (*) $ -- $ -- $ (*)
========== ========== ========== ========== ==========
WEIGHTED AVERAGE
SHARES OUTSTANDING 4,363,380 4,363,380 4,363,380 4,363,380 4,363,380
========== ========== ========== ========== ==========
</TABLE>
*Less than $.01 per share
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-5
<PAGE> 27
PACIFIC DEVELOPMENT CORPORATION
(FORMERLY TAMARON OIL & GAS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
DEFICIT
COMMON STOCK ACCUMULATED
--------------------------- DURING
NUMBER COMMON STOCK DEVELOPMENT
OF SHARES AMOUNT SUBSCRIBED STAGE TOTAL
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Shares issued for Exchange
on September 21, 1992 4,363,380 $ 4,363 $ (4,363) $ -- $ --
Net income -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Balance, December 31, 1992 4,363,380 4,363 (4,363) -- --
Net income -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Balance, December 31, 1993 4,363,380 4,363 (4,363) -- --
Net income -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Balance, December 31, 1994 4,363,380 4,363 (4,363) -- --
Proceeds from Common
Stock Subscribed -- -- 4,363 -- 4,363
Net income (loss) -- -- -- (4,344) (4,344)
------------ ------------ ------------ ------------ ------------
Balance, December 31, 1995 4,363,380 4,363 -- (4,344) 19
Net income, six months ended
June 30, 1996 (unaudited) -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Balance, June 30, 1996
(unaudited) 4,363,380 $ 4,363 $ -- $ (4,344) $ 19
============ ============ ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-6
<PAGE> 28
PACIFIC DEVELOPMENT CORPORATION
(FORMERLY TAMARON OIL & GAS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
CUMULATIVE
FROM INCEPTION
FOR THE SIX SEPTEMBER 21,
MONTHS ENDED FOR THE YEARS ENDED 1992
JUNE 30, DECEMBER 31, TO JUNE 30,
---------- ------------------------------------ ----------
1996 1995 1994 1993 1996
---------- ---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) from
development stage
operations $ -- $ (4,344) $ -- $ -- $ (4,344)
FINANCING ACTIVITIES:
Proceeds from sale of
common stock,
$.001 per share -- 4,363 -- -- 4,363
---------- ---------- ---------- ---------- ----------
NET INCREASE IN CASH -- 19 -- -- 19
CASH, beginning of period 19 -- -- -- --
---------- ---------- ---------- ---------- ----------
CASH, end of period $ 19 $ 19 $ -- $ -- $ 19
========== ========== ========== ========== ==========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-7
<PAGE> 29
PACIFIC DEVELOPMENT CORPORATION
(FORMERLY TAMARON OIL & GAS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated in September 1992 under the laws of the State of
Colorado, to be the successor to a corporation of the same name which was
dissolved by the Secretary of State of Colorado in 1990.
The Company intends to register its common stock with the U.S. Securities and
Exchange Commission by filing Form 10-SB under Section 12(g) of the Securities
Exchange Act of 1934. The Company does not intend to sell additional shares or
raise capital in connection with the registration, and accordingly, expenses
incurred to complete the registration are charged to general and administrative
expenses.
DEVELOPMENT STAGE ENTERPRISE
Pacific Development Corporation, formerly Tamaron Oil & Gas, Inc., was
organized under the laws of the State of Colorado on September 21, 1992, to be
the successor to a corporation also named "Tamaron Oil & Gas, Inc.," which was
dissolved by the Colorado Secretary of State in 1990. The Company's objective
is to identify and evaluate merger or acquisition candidates and structure and
consummate a merger with or acquisition of a privately-held company. The
Company has generally been inactive, having conducted no business operations
except a limited search for business opportunities, since its inception. Since
reorganization the Company has had no revenues, no profits, no employees and is
in the development stage.
NAME CHANGE
On August 10, 1995, the Board of Directors approved changing the name of the
Company from Tamaron Oil & Gas, Inc. to "Pacific Development Corporation."
UNAUDITED INTERIM FINANCIAL STATEMENTS
In the opinion of management, the unaudited interim financial statements for
the six months period ended June 30, 1996, are presented on a basis consistent
with the audited financial statements and reflect all adjustments, consisting
only of normal recurring accruals, necessary for fair presentation of the
results of this period. The results of operations for the interim period ending
June 30, 1996 are not necessarily indicative of the results to be expected for
the year ended December 31, 1996.
CASH EQUIVALENTS
For purposes of the Statement of Cash Flows, cash equivalents are defined as
short-term, highly liquid investment purchased with original maturity of three
months or less.
F-8
<PAGE> 30
PACIFIC DEVELOPMENT CORPORATION
(FORMERLY TAMARON OIL & GAS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
Effective September, 1992, the Company adopted Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes. Under this method,
deferred income tax assets and liabilities are computed annually for
differences between the financial statement and tax bases of assets and
liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected
to be realized. Income tax expense is the tax payable or refundable for the
period plus or minus the change during the period in deferred tax assets and
liabilities.
For tax purposes, all start up expenses incurred through December 31, 1995 have
been capitalized and will be amortized once operations commence.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. Actual results could differ
from those estimates and assumptions.
EARNINGS PER SHARE
Earnings per share are based on the weighted average number of common shares
outstanding for the years ended December 31, 1995, 1994 and 1993 and the six
months ended June 30, 1996.
NOTE 2 - CAPITAL STOCK
On September 21, 1992, the Company issued 4,363,380 newly-issued, restricted
shares of common stock to the shareholders of the predecessor corporation for a
consideration of $4,363 and the exchange for the certificates representing all
of the formerly issued and outstanding shares of common stock of a predecessor
corporation. The predecessor company ceased all business activity and lost
its corporate status in 1990. It had no net assets, and no value was assigned
to its common stock in the exchange.
The Company's authorized capital stock includes 50,000,000 shares of
non-voting, non-cumulative convertible preferred stock at a par value of $.50
per share. No shares have been issued and outstanding since its organization.
F-9
<PAGE> 31
PACIFIC DEVELOPMENT CORPORATION
(FORMERLY TAMARON OIL & GAS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - CAPITAL STOCK (CONTINUED)
On August 10, 1995, the Company authorized an increase in the number of
authorized shares of common stock to 100,000,000 shares.
The Company's management is continuously seeking new acquisitions and mergers,
and/or purchase of other active companies through exchanging the Company's
shares of common stock and/or cash consideration.
F-10
<PAGE> 32
EXHIBIT INDEX
<TABLE>
<CAPTION>
ITEM
NUMBER DESCRIPTION
- ------ -------------------------------------------------
<S> <C>
2.1* Articles of Incorporation of Tamaron Oil & Gas, Inc., filed October 6, 1982.
2.2* Articles of Amendment to the Articles of Incorporation of Tamaron Oil & Gas, Inc., filed September 22, 1983.
2.3* Articles of Amendment to the Articles of Incorporation of Tamaron Oil & Gas, Inc., filed October 16, 1985.
2.4* By-Laws of Tamaron Oil & Gas, Inc.
2.5* Articles of Incorporation of Tamaron Oil & Gas, Inc., filed September 21, 1992.
2.6* Articles of Amendment to the Articles of Incorporation of Tamaron Oil & Gas, Inc., filed April 13, 1995.
2.7* By-Laws of Tamaron Oil & Gas, Inc.
2.8* Articles of Amendment to the Articles of Incorporation of Tamaron Oil & Gas, Inc., filed August 14, 1995.
7.1* Agreement, dated as of September 21, 1992, between Tamaron Oil & Gas, Inc., a Colorado corporation
organized on September 21, 1992, and Irwin Management Corp.
16* Letter and consent of Bailey Saetveit & Co., P.C.
27 Financial Data Schedule
</TABLE>
- ------------------
* Previously filed.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE FOUR MONTHS ENDED 4/31/96 AND FOR THE YEAR ENDED 12/31/95 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND THE
NOTES THERETO.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 4-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1996 JAN-01-1995
<PERIOD-END> JUN-30-1996 DEC-31-1995
<CASH> 19 19
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 19 19
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 19 19
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
0 0
0 0
<COMMON> 4,363 4,363
<OTHER-SE> (4,344) (4,344)
<TOTAL-LIABILITY-AND-EQUITY> 19 19
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 4,344
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 (4,344)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 0 (4,344)
<EPS-PRIMARY> 0 (.001)
<EPS-DILUTED> 0 (.001)
</TABLE>
