1SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13
OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1997
( ) TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 33-3272-W
LOTUS PACIFIC, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State of organization)
52-1947160
(I.R.S. Employer Identification Number)
200 Centennial Avenue, Suite 1, Piscataway, New Jersey 08854
(Address of principal executive offices)
(908) 885-1970
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the proceeding 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.
(1) Yes__X__ No____
(2) Yes _X__ No____
As of March 31, 1997, the Registrant had outstanding 26,937,054
shares of Common Stock, par value $.001 per share and 4,300
shares of Series A Preferred Stock.
LOTUS PACIFIC, INC.
Table of Contents
PART I Financial Information
Item 1:
Consolidated Balance Sheets (4)
Consolidated Statement of Operation (5)
Consolidated Statement of Cash Flows (6)
Item 2:
Management's Discussion and Analysis of Financial
Condition and Results of Operations (8)
PART II Other Information (8)
Part I
FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting
principles for interim financial information and the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles
for completing financial statements. In the opinion of
management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included.
LOTUS PACIFIC, INC.
CONSOLIDATED BALANCE SHEETS (Note 1)
March 31, 1997
(Unaudited)
ASSETS
March 31, 1997 March 31, 1996
CURRENT ASSETS
Cash $ 450,414 $ 331,656
Accounts receivable 131,390 69,972
Other receivable 0 224,107
Inventories 0 399,201
Prepaid expenses 474 17,045
Total Currents Assets 582,278 1,041,981
FIXED ASSETS (NET) 4,323 320,352
CONSTRUCTION IN PROCESS 0 6,568
OTHER ASSETS 172,395 (Note 2) 0
Organization costs 1,614 21,351
TOTAL ASSETS 760,609 1,390,252
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITY
Short-term loans 0 542,169
Notes payable 0 16,887
Accounts payable 326,022 226,016
Taxes payable 1,991 (21,016)
Advances from customers 0 3,874
Other payable 0 166,797
Total Current Liabilities 328,012 934,727
MINORITY INTEREST 0 73,495
STOCKHOLDERS' EQUITY
Preferred Stock, $.001 par value,
100,000 shares authorized,
issued and outstanding 4 4
Common Stock, $.001 par value,
50,000,000 shares authorized,
issued and outstanding 26,937 26,937
Additional paid-in capital 367,717 358,823
Retained Earnings (Deficit) 37,939 (3,735)
Total Stockholders' Equity 432,597 382,029
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY 760,609 1,390,252
The accompanying notes are an integral part of these
consolidated financial statements.
LOTUS PACIFIC, INC.
CONSOLIDATED STATEMENT OF OPERATIONS FOR
THE THREE MONTH ENDING MARCH 31, 1997
March 31, 1997 March 31, 1996
Sales $ 590,099 $ 349,443
Cost of Goods Sold 524,691 257,645
Gross Profit 65,408 91,797
Operating Expenses 22,247 47,135
Income from Operations 43,161 44,662
Other income (Expenses), Net
Miscellaneous Income (Expense)
Interest Expense, Net 1,830 (13,452)
Net Income 44,991 31,210
Minority Interest Income 0 8,658
Consolidated Net Income 44,991 22,552
Gain/Loss Per Share 0.00 0.00
LOTUS PACIFIC, INC.
STATEMENT OF CASH FLOWS FOR
THE THREE MONTHS ENDING
MARCH 31, 1997
March 31, 1997 March 31, 1996
CASH FLOW FROM OPERATION ACTIVITIES
Net Income $ 44,991 $ 22,552
Increase in accounts payable 325,979 116,033
Increase in other payable 0 3,599
Increase in accumulated depreciation 185 44,511
Increase in tax payable 1,991 874
Increase in accounts receivable (131,390) (7,923)
Increase in prepaid expenses (474) 2,197
Increase in inventory 0 14,089
Increase in other receivable 0 (59,187)
Net Cash Flow From Operations 241,282 114,193
CASH FLOW FROM INVESTING ACTIVITIES:
Increase in minority interest 0 8,656
Issue common stocks 0 0
Acquisition of equipment (4,422) 0
Organization cost (1,699) 0
Net Cash Flow From Financing Activitie (6,121) 8,656
CASH FLOW FROM FINANCING ACTIVITIES:
Increase in notes payable 0 (37,831)
Increase in loan payable 0 0
Net Cash Flow from Financing Activities 0 (37,831)
NET INCREASE IN CASH AND CASH EQUIVALENTS 235,160 107,571
CASH & CASH EQUIVALENT AT
BEGINNING OF THE PERIOD 215,254 224,085
CASH & CASH EQUIVALENT
IN ENDING OF THE PERIOD 450,414 331,656
Notes to Financial Statements:
Note 1. The consolidated financial statements include the
financial statements for Lotus Pacific, Inc. and its two wholly
owned subsidiaries, Richtime Far East Ltd. and Regent
Electronics Corp. Pooling of interest method is used in
consolidation, which is in accordance with APBO 16.
Note 2. The Company recorded its 5% investments in Rightiming
Electronics Corp. at cost, which is $ 172,395.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Change of Management
In January 1997, the Company changed all of directors and
officers as a result of the change in the majority ownership.
The new management has extensive experience in international
trade, particularly in the Far East Asia. The Company's new
business operation is closely tied to the expertise that the new
management brought to the firm. A Form 8-K regarding the names
and experience of the newly elected directors and officers was
filed with SEC on January 28, 1997.
Establishment of Subsidiaries
In January, 1997, the Company set up a wholly owned subsidiary,
Richtime Far East Ltd., in Hong Kong. The Company invested $
100,000 in Richtime as its starting capital, and appointed James
Liu as its President and James Yao as its Treasurer and
Secretary. The purpose of setting up Richtime is to make the
Company operational in garment industry, and particularly in
high-quality sports wear.
In January, 1997, the Company incorporated another wholly owned
subsidiary, Regent Electronics Corp., in the State of Delaware.
The company appointed James Yao as its President and Gu Huang as
its Treasurer and Secretary. The subsidiary is actively looking
into opportunities of getting access to China's market of
consumer electronics products.
Results of Operation
Starting from January 1997, Richtime Far East Ltd., the
Company's wholly owned subsidiary, is operating import and
export business in garment in Hong Kong. Garment industry is a
highly competitive industry, and market access requires
targeting at specialty in design and manufacture for a startup
company. As a test of market access, Richtime focuses on import
and export of high-quality sports wear, in which the management
of Richtime has many years of experiences.
Basically, Richtime takes customer orders mainly from the U.S.
and European countries, and contracted the orders to the
manufacturers located in Nanjing City, Jiangsu Province and
other China's cities. The result of the first quarter's
operation brought into the Company about $ 59,800 net income.
The management of Richtime is looking for expanding
opportunities.
During the past three months, Regent Electronics Corp., the
Company's wholly owned subsidiary, did not have business
operations. The subsidiary, however, is actively looking for
opportunities in manufacturing and marketing internet-related
products in China and other Far East Asian countries.
PART II
OTHER INFORMATION
Item 1 Legal Proceedings
None.
Item 2 Change of Securities
None.
Item 3 Defaults Upon Senior Securities
None.
Item 4 Submission of Matters to A Vote of Security Holder
None.
Item 5 Other Information
None.
Item 6 Exhibits and Reports on Form 8-K
A Form 8-K was filed with SEC on January 28, 1997.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
by the undersigned hereunto duly authorized.
Lotus Pacific, Inc.
/s/ James Yao, President
/s/ Gu Huang, Secretary & Treasurer
Dated: April 15, 1997