U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES AND EXCHANGE ACT OF 1934 for the Quarterly
period ended September 30, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 for the transition
period from _______ to _______.
COMMISSION FILE NO. 000-29933
TRANSAMERICAN HOLDINGS, INC.
______________________________________________
(Name of Small Business Issuer in its Charter)
Nevada, U.S.A. 77-0434471
_________________________________ _________________________________
(State or other Jurisdiction (IRS Employer Identification No.)
of Incorporation or Organization)
9601 Wilshire Boulevard, Suite 620, Beverly Hills, California 90210
___________________________________________________________________
(Address of principal executive offices)
(310) 271-9911
___________________________
(Issuer's telephone number)
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.YES [X] NO [ ]
As of the date of this filing, the Company had 18,471,090 shares of Common Stock
issued and 17,446,090 shares of Common Stock outstanding.
TRANSAMERICAN HOLDINGS, INC.
FORM 10-QSB
for the quarter ended September 30, 2003
TABLE OF CONTENTS
Part I. Financial Information
Item 1. Financial Statements
Balance Sheet as of September 30, 2003 (unaudited).
Statements of Operations for the three and nine months
ended September 30, 2003 (unaudited) and September 30, 2002
(unaudited) and from inception on July 22, 1996 to September 30,
2003 (unaudited).
Statement of Stockholders' Equity for the Period from inception to
September 30, 2003 (unaudited).
Statements of Cash Flows for the nine months ended September 30,
2003 (unaudited) and September 30, 2002 (unaudited) and from
inception on July 22, 1996 to September 30, 2003 (unaudited).
Notes to Financial Statements.
Item 2. Managements Discussion and Analysis or Plan of Operation
Item 3. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security holders
Item 5. Other Information
Item 6. Exhibits and reports on form 8-K
SIGNATURES
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This quarterly report on form 10-QSB contains "forward- looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Statements of our intentions, beliefs,
expectations or predictions for the future, denoted by the words "believes,"
"expects," "may," "should," "seeks," "pro forma," "anticipates," "intends" and
similar expressions are forward-looking statements that reflect our current
views about future events and are subject to risks, uncertainties and
assumptions.
We wish to caution readers that these forward-looking statements are not
guarantees of future performance and involve risks and uncertainties. Actual
events or results may differ materially from those discussed in the
forward-looking statements as a result of various factors, including, without
limitation, the risk factors and other matters contained in this annual report
generally. All subsequent written and oral forward- looking statements
attributable to us or persons acting on our behalf are expressly qualified in
their entirety by the cautionary statements included in this document. We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
FINANCIAL STATEMENTS
THREE MONTHS ENDED SEPTEMBER 30, 2003
CONTENTS
Page
Financial Statements:
Balance Sheet 4
Statements of Operations 5
Statement of Stockholders' Equity 6
Statements of Cash Flows 7
Notes to Financial Statements 8-10
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET - SEPTEMBER 30, 2003
(UNAUDITED)
ASSETS
Current assets -
cash $ 64,391
Property and equipment, net of accumulated depreciation 5,218
Cash - restricted 32,866
Other assets 10,000
_________
$ 112,475
=========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses $ 13,872
Due to related parties 37,640
___________
Total current liabilities $ 51,512
Convertible loans payable, related party, net of
unamortized discount of $31,986 391,058
Stockholders' deficit:
Common stock, $.001 par value, 100,000,000 shares
authorized, 18,471,090 issued and 17,446,090 outstanding 17,621
Subscriptions receivable (83,750)
Additional paid-in capital 1,923,891
Deficit accumulated during development stage (2,135,357)
Treasury stock, 175,000 shares at cost (52,500)
___________
Total stockholders' deficit (330,095)
_________
$ 112,475
=========
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
From inception on
For the three months ended For the nine months ended July 22, 1996 to
September 30, 2003 September 30, 2002 September 30, 2003 September 30, 2002 September 30, 2003
__________________ __________________ __________________ __________________ __________________
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net revenues $ - $ - $ - $ - $ -
Cost of sales - - - - -
___________ ___________ ___________ ___________ ____________
Gross profit - - - - -
General and administrative
expenses 203,567 174,069 720,631 336,358 2,154,200
___________ ___________ ___________ ___________ ____________
Net loss from operations before
interest income and other
expense (203,567) (174,069) (720,631) (336,358) (2,154,200)
Interest income - 246 381 4,405 37,511
Amortization of discount on
convertible loans (12,114) - (18,668) - (18,668)
___________ ___________ ___________ ___________ ____________
Net loss $ (215,681) $ (174,069) $ (738,918) $ (336,358) $ (2,135,357)
=========== =========== =========== =========== ============
Net loss per share, basis
and diluted $ (0.01) $ (0.01) $ (0.04) $ (0.02)
=========== =========== =========== ===========
Weighted average number of
shares outstanding, basic
and diluted 17,621,090 16,477,612 17,621,090 16,373,837
=========== =========== =========== ===========
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' DEFICIT
Deficit
Additional accumulated Total
Common stock paid-in Subscription during Treasury stockholders'
Shares Amount capital receivable development stage stock equity (deficit)
______ ______ __________ ____________ _________________ ________ _______________
Balance at July 22 1996
(inception) $ - $ - $ - $ - $ - $ - $ -
Issuance of common stock
for cash during July
1996 (restated for
forward stock split) 2,000,000 2,000 3,000 5,000
Issuance of common stock
in exchange for
services in November
1999 100,000 100 100
Issuance of common stock
for cash during
November 1999 9,200,000 9,200 9,200
Accumulated net loss for
the period
from July 22, 1996
(inception) to
December 31, 1999 (5,100) (5,100)
____________ ________ __________ ____________ ______________ ________ __________
Balance at January 1,
2000 11,300,000 11,300 3,000 - (5,100) - 9,200
Issuance of common stock
for cash
during March 2000 1,445,090 1,445 296,100 297,545
Issuance of common stock
for cash
during April 2000 230,000 230 114,770 115,000
Issuance of common stock
for cash
during May 2000 1,918,000 1,918 670,790 672,708
Issuance of common stock
for cash
during June 2000 913,000 913 142,150 143,063
Issuance of common stock
for cash
during July 2000 465,000 465 226,337 (33,750) 193,052
Net loss for the year
ended
December 31, 2000 (319,992) (319,992)
____________ ________ __________ ____________ ______________ ________ __________
Balance at December 31,
2000 16,271,090 16,271 1,453,147 (33,750) (325,092) - 1,110,576
Issuance of common stock
for cash
during June 2001 50,000 50 99,929 (50,000) 49,979
Net loss for the year
ended
December 31, 2001 (563,404) (563,404)
____________ ________ __________ ____________ ______________ ________ __________
Balance at December 31,
2001 16,321,090 16,321 1,553,076 (83,750) (888,496) - 597,151
Issuance of common stock
for cash
during September 2002 800,000 800 199,170 199,970
Issuance of common stock
for cash
during October 2002 100,000 100 29,870 29,970
Issuance of common stock
for cash
during December 2002 400,000 400 90,165 90,565
Net loss for the year
ended
December 31, 2002 (507,943) (507,943)
____________ ________ __________ ____________ ______________ ________ __________
Balance December 31,
2002 17,621,090 17,621 1,872,281 (83,750) (1,396,439) - 409,713
Purchase of treasury
stock (unaudited) (52,500) (52,500)
Beneficial conversion
feature related to
loans to related
party (unaudited) 65,555 65,555
Extinguishment of a
portion of the conver-
tible loan to related
party (unaudited) (13,945) (13,945)
Net loss for the nine
months ended
September 30, 2003 (unaudited) (738,918) (738,918)
____________ ________ __________ ____________ ______________ ________ __________
Balance at September 30,
2003 17,621,090 $ 17,621 $1,923,891 $ (83,750) $ (2,135,357) $(52,500) $ (330,095)
============ ======= ========== ============ ============== ======== ==========
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
From inception on
For the nine months ended July 22, 1996 to
September 30, 2003 September 30, 2002 September 30, 2003
__________________ __________________ __________________
(Unaudited) (Unaudited) (Unaudited)
Cash flows provided by (used for) operating
activities:
Net loss $ (738,918) $ (331,953) $ (2,135,357)
Adjustments to reconcile net loss to net cash
provided by (used for) operating activities:
Depreciation 738 9,145 7,027
Issuance of common stock for services - - 94,500
Reserve for bad debt - 4,725 136,725
Amortization of discount on convertible loans 18,668 - 18,668
Changes in assets and liabilities:
(Increase) decrease in assets:
Interest receivable - (2,362) (2,362)
Other assets - - (10,000)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses - 85 13,872
__________ __________ ____________
Total adjustments 19,406 11,593 258,430
__________ __________ ____________
Net cash used for operating activities (719,512) (320,360) (1,876,927)
Cash flows provided by (used for) investing
activities:
Acquisition of property and equipment - (100) (12,245)
Notes receivable - 8,041 (132,000)
Notes receivable, related parties - 137,906 (241,723)
Restricted cash - (1,373) (32,866)
Payments from related parties 239,360 - 239,360
__________ __________ ____________
Net cash provided by investing activities 239,360 144,474 (179,474)
__________ __________ ____________
Cash flows provided by (used for) financing
activities:
Proceeds from sale of common stock - 199,970 1,711,652
Proceeds from note payable, officer - (21,540) 21,540
Payment on note payable, officer - - (21,540)
Proceeds from convertible loans payable,
related party 590,000 - 590,000
Payment on convertible loans payable, related
party (166,000) (166,000)
Advances from related parties 37,640 - 37,640
Purchase of treasury stock (52,500) - (52,500)
__________ __________ ____________
Net cash used for financing activities 409,140 178,430 2,120,792
__________ __________ ____________
Net increase (decrease) in cash (71,012) 2,544 64,391
Cash, beginning of year 135,403 192,949 -
__________ __________ ____________
Cash, end of period $ 64,391 $ 195,493 $ 64,391
========== ========== ============
Supplemental disclosure of non-cash investing
and financing activities:
Write-off of investment in Lebanese time
share. $2,200,000
==========
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2003
(1) ORGANIZATION AND DESCRIPTION OF BUSINESS:
TransAmerican Holdings, Inc. (formerly known as Health Research, Ltd.)
(the "Company") was incorporated under the laws of the state of Nevada
on July 22, 1996, and is conducting its operations in California. The
Company has been in the development stage and was inactive until
November 1999, at which time current management became involved. On
November 15, 1999, the Company changed its name to TransAmerican
Holdings, Inc. The sole purpose of the Company at this time is to raise
capital and to locate and acquire a private on going business.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
INTERIM FINANCIAL INFORMATION:
The accompanying financial statements include all adjustments
(consisting of only normal recurring accruals), which are, in the
opinion of management, necessary for a fair presentation of the results
of operations for the periods presented. Interim results are not
necessarily indicative of the results to be expected for a full year.
The financial statements should be read in conjunction with the
financial statements included in the annual report of TransAmerican
Holdings, Inc. on Form 10-KSB for the year ended December 31, 2002.
DEVELOPMENT STAGE ENTERPRISE:
The Company is a development stage enterprise as defined by the
Financial Accounting Standards Board's ("FASB") Statement of Financial
Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by
Development Stage Enterprises." The Company is devoting substantially
all of its present efforts to establish a new business. All losses
accumulated since inception of the Company have been considered as part
of the Company's development stage activities
NEW ACCOUNTING PRONOUNCEMENTS:
During April 2003, the FASB issued SFAS No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities",
effective for contracts entered into or modified after June 30, 2003,
except as stated below and for hedging relationships designated after
June 30, 2003. In addition, except as stated below, all provisions of
this Statement should be applied prospectively. The provisions of this
Statement that relate to Statement 133 implementation issues that have
been effective for fiscal quarters that began prior to June 15, 2003,
should continue to be applied in accordance with their respective
effective dates. In addition, paragraphs 7(a) and 23(a), which relate
to forward purchases or sales of when-issued securities or other
securities that do not yet exist, should be applied to both existing
contracts and new contracts entered into after June 30, 2003. The
Company does not participate in such transactions, however, is
evaluating the effect of this new pronouncement, if any, and will adopt
SFAS No. 149 within the prescribed time.
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2003
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
NEW ACCOUNTING PRONOUNCEMENTS, CONTINUED:
During May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and
Equity", effective for financial instruments entered into or modified
after May 31, 2003, and otherwise is effective at the beginning of the
first interim period beginning after June 15, 2003. This Statement
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and
equity. It requires that an issuer classify a freestanding financial
instrument that is within its scope as a liability (or an asset in some
circumstances). Many of those instruments were previously classified as
equity. Some of the provisions of this Statement are consistent with
the current definition of liabilities in FASB Concepts Statement No. 6,
"Elements of Financial Statements". The Company is evaluating the
effect of this new pronouncement and will adopt SFAS No. 150 within the
prescribed time.
(3) TREASURY STOCK:
During March 2003, a total of 175,000 shares of treasury stock were
purchased from three shareholders. Treasury stock is stated at cost and
consists of the 175,000 shares as of September 30, 2003.
(4) DUE TO RELATED PARTIES:
Due to related parties consists of amounts advanced from a major
shareholder to cover operating costs. The note is non-interest bearing
and due on demand.
(5) CONVERTIBLE LOANS PAYABLE, RELATED PARTY, WITHOUT INTEREST:
A summary is as follows:
April 15, 2003 issuance $ 84,000
June 1, 2003 issuance 40,000
June 2, 2003 issuance 100,000
June 8, 2003 issuance 20,000
June 9, 2003 issuance 30,000
July 3, 2003 issuance 150,000
_________
424,000
Less unamortized discount 32,942
_________
$ 391,058
=========
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2003
(5) CONVERTIBLE LOANS PAYABLE, RELATED PARTY, WITHOUT INTEREST, CONTINUED:
On April 15, 2003, the Company issued a $250,000 non-interest bearing
convertible loan payable due April 15, 2004. All or any portion of the
convertible debenture can be converted into fully paid shares of the
Company's $.001 par value common only at the due date or later. The
conversion or purchase price of the common stock indebtedness shall be
90% of the market price of the Company's common stock at the time of
conversion. Cash proceeds from the convertible debenture amounted to
$250,000. The Company repaid $166,000 in June 2003 without penalty. The
value of the conversion feature was estimated to be $27,778, which was
to be amortized over the life of the loan. Upon early payment of the
convertible loan, $13,945 of unamortized discount was charged to
additional paid-in capital. For the nine months ending September 30,
2003, $5,020 has been amortized to amortization expense.
On June 1, 2003, the Company issued a $40,000 non-interest bearing
convertible loan payable due June 1, 2004. All or any portion of the
convertible debenture can be converted into fully paid shares of the
Company's $.001 par value common only at the due date or later. The
conversion or purchase price of the common stock indebtedness shall be
90% of the market price of the Company's common stock at the time of
conversion. Cash proceeds from the convertible debenture amounted to
$40,000. The value of the conversion feature was estimated to be
$4,444, which will be amortized over the life of the loan. For the nine
months ending September 30, 2003, $1,465 has been amortized to
amortization expense.
On June 2, 2003, the Company issued a $100,000 non-interest bearing
convertible loan payable due June 2, 2004. All or any portion of the
convertible debenture can be converted into fully paid shares of the
Company's $.001 par value common only at the due date or later. The
conversion or purchase price of the common stock indebtedness shall be
90% of the market price of the Company's common stock at the time of
conversion. Cash proceeds from the convertible debenture amounted to
$100,000. The value of the conversion feature was estimated to be
$11,111, which will be amortized over the life of the loan. For the
nine months ending September 30, 2003, $3,632 has been amortized to
amortization expense.
On June 8, 2003, the Company issued a $20,000 non-interest bearing
convertible loan payable due June 8, 2004. All or any portion of the
convertible debenture can be converted into fully paid shares of the
Company's $.001 par value common only at the due date or later. The
conversion or purchase price of the common stock indebtedness shall be
90% of the market price of the Company's common stock at the time of
conversion. Cash proceeds from the convertible debenture amounted to
$20,000. The value of the conversion feature was estimated to be
$2,222, which will be amortized over the life of the loan. For the nine
months ending September 30, 2003, $689 has been amortized to
amortization expense.
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2003
(5) CONVERTIBLE LOANS PAYABLE, RELATED PARTY, WITHOUT INTEREST, CONTINUED:
On June 9, 2003, the Company issued a $30,000 non-interest bearing
convertible loan payable due June 9, 2004. All or any portion of the
convertible debenture can be converted into fully paid shares of the
Company's $.001 par value common only at the due date or later. The
conversion or purchase price of the common stock indebtedness shall be
90% of the market price of the Company's common stock at the time of
conversion. Cash proceeds from the convertible debenture amounted to
$30,000. The value of the conversion feature was estimated to be
$3,333, which will be amortized over the life of the loan. For the nine
months ending September 30, 2003, $1,026 has been amortized to
amortization expense.
On July 3, 2003, the Company issued a $150,000 non-interest bearing
convertible loan payable due July 3, 2004. All or any portion of the
convertible debenture can be converted into fully paid shares of the
Company's $.001 par value common only at the due date or later. The
conversion or purchase price of the common stock indebtedness shall be
90% of the market price of the Company's common stock at the time of
conversion. Cash proceeds from the convertible debenture amounted to
$150,000. The value of the conversion feature was estimated to be
$16,667, which will be amortized over the life of the loan. For the
nine months ending September 30, 2003, $4,030 has been amortized to
amortization expense.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
MANAGEMENT'S DISCUSSION AND ANALYSIS.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management's Discussion and Analysis of Financial Condition and Results of
Operations discusses the Company's financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. On an on-going
basis, management evaluates its estimates and judgments, including those related
to reserves and financial operations. Management bases its estimates and
judgments on historical experiences and on various other factors that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions. The most significant
accounting estimates inherent in the preparation of the Company's financial
statements include estimates as to the appropriate carrying value of certain
assets and liabilities which are not readily apparent from other sources,
primarily allowance for doubtful accounts and recording of assets from related
parties. These accounting policies are described at relevant sections in this
discussion and analysis and in the notes to the financial statements included in
our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2002.
RESULTS OF OPERATIONS
Three months ended September 30, 2003 as compared to September 30, 2002.
REVENUES
We are a development stage company. There were no revenues for the three months
ended September 30, 2003 and September 30, 2002.
GENERAL AND ADMINISTRATIVE EXPENSES
Total expenses amounted to $203,567 for the three months ended September 30,
2003, as compared to $174,069 at September 30, 2002. The expenses resulted
primarily from costs incurred by the Company in the ordinary course of business
and in our review of potential acquisition candidates.
LOSS FROM OPERATIONS
The Company incurred a loss from operations of $203,567 for the quarter ended
September 30, 2003, as compared to $174,069 at September 30, 2002.
Net loss
The Company had a net loss of $215,681 or $(0.01) per share for the three months
ended September 30, 2003 as compared to $174,069 or $(0.01) per share for the
three months ended September 30, 2002.
Nine months ended September 30, 2003 as compared to September 30, 2002.
REVENUES
We are a development stage company. There were no revenues for the nine months
ended September 30, 2003 and September 30, 2002.
GENERAL AND ADMINISTRATIVE EXPENSES
Total expenses amounted to $720,631 for the nine months ended September 30,
2003, as compared to $336,358 at September 30, 2002. The expenses resulted
primarily from costs incurred by the Company in the ordinary course of business
and in our review of potential acquisition candidates.
LOSS FROM OPERATIONS
The Company incurred a loss from operations of $720,631 for the nine months
ended September 30, 2003, as compared to $336,358 at September 30, 2002.
Net loss
The Company had a net loss of $738,918 or $(0.04) per share for the nine months
ended September 30, 2003 as compared to $336,358 or $(0.02) per share for the
nine months ended September 30, 2002.
LIQUIDITY AND CAPITAL RESOURCES
In the third quarter of 2002, TransAmerican entered into two separate definitive
agreements, one for the acquisition of an on-going construction and
architectural design firm in Saudi Arabia and one for the acquisition of a
resort project in Lebanon that is in the final stages of construction and whose
operations are expected to commence in the fourth quarter of 2003. Both of these
agreements, however, have been rescinded by management due to general
instability in the region and as the other parties were unable to complete their
due diligence. Furthermore, the Company eliminated the $2,200,000 investment and
related party payable from its balance sheet in the second quarter of 2003
related to the Lebanese project. Notwithstanding the foregoing, we are in
advanced negotiations with several other domestic and international entities
with going businesses in varied sectors of the market. We expect to conclude at
least one of these transactions in the first quarter of 2004.
PLAN OF OPERATION.
TransAmerican intends to seek and acquire assets or shares of an entity actively
engaged in a business that generates revenues in exchange for our securities. We
have identified potential business opportunities and have entered into
discussions with several companies. However, we have not yet entered into any
definitive agreements or understandings as of the date of this filing.
GENERAL BUSINESS PLAN
TransAmerican's purpose is to seek and acquire an interest in business
opportunities presented to us by persons or firms who or which desire to seek
the advantages of an Issuer who has complied with the 1934 Act. In our search
for a business opportunity, we will not restrict our selection to any specific
business, industry, or geographic region and we may participate in a business
venture of any kind or nature. This discussion of the proposed business is
purposefully general and is not meant to restrict our unlimited discretion to
search for and enter into potential business opportunities.
Due to general economic conditions, rapid technological advances being made in
some industries and shortages of available capital, management believes that
there are numerous firms seeking the benefits of an issuer who has complied with
the 1934 Act. Such benefits may include facilitating or improving the terms on
which additional equity financing may be sought, providing liquidity for
incentive stock options or similar benefits to key employees, providing
liquidity (subject to restrictions of applicable statutes) for all shareholders
and other factors.
Management believes that TransAmerican will be able to offer owners of
acquisition candidates the opportunity to acquire an interest in an issuer who
has complied with the 1934 Act without incurring the cost and time required to
conduct an initial public offering. The owners of the business opportunity will,
however, incur significant legal and accounting costs in connection with the
acquisition of a business opportunity, including the costs of preparing and
filing required reports on Form 8-K, 10-QSB and 10-KSB, agreements and related
reports and documents. The 1934 Act specifically requires that any merger or
acquisition candidate comply with all applicable reporting requirements, which
include providing audited financial statements to be included within the filings
relevant to complying with the 1934 Act.
The analysis of new business opportunities will be undertaken by, or under the
supervision of, the officers and directors of the Company. Management intends to
concentrate on identifying prospective business opportunities, which may be
brought to our attention through present associations with the Company's
officers and directors, or by our shareholders. In analyzing prospective
business opportunities, management will consider such matters as the available
technical, financial and managerial resources; working capital and other
financial requirements; history of operations; prospects for the future; nature
of present and expected competition; the quality and experience of management
services which may be available and the depth of that management; the potential
for further research, development, or exploration; specific risk factors not now
foreseeable but which then may be anticipated to impact the proposed activities
of the Company; the potential for growth or expansion; the potential for profit;
the public recognition of acceptance of products, services, or trades; name
identification; and other relevant factors. TransAmerican management expects to
meet personally with management and key personnel of the business opportunity as
part of our investigation. To the extent possible, we intend to utilize written
reports and personal investigation to evaluate the above factors. We will not
acquire or merge with any company for which audited financial statements cannot
be obtained within a reasonable period of time after closing of the proposed
transaction.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, TransAmerican
may become a party to a merger, consolidation, reorganization, joint venture or
licensing agreement with another corporation or entity. We may also acquire
stock or assets of an existing business. Any terms of sale of the shares
presently held by officers and/or directors of TransAmerican will be also
afforded to all other shareholders of the Company on similar terms and
conditions. Any and all such sales will only be made in compliance with the
securities laws of the United States and any applicable state.
It is anticipated that any securities issued in any such reorganization would be
issued in reliance upon exemption from registration under applicable federal and
state securities laws. In some circumstances, however, as a negotiated element
of the transaction, TransAmerican may agree to register all or a part of such
securities immediately after the transaction is consummated or at specified
times thereafter. If such registration occurs, of which there can be no
assurance, it will be undertaken by the surviving entity after the Company has
successfully consummated a merger or acquisition. The issuance of substantial
additional securities and their potential sale into a trading market, which may
develop in TransAmerican's securities, may have a depressive effect on the value
of our securities in the future.
As part of TransAmerican's investigation, officers and directors of the Company
will meet personally with management and key personnel, will visit and inspect
material facilities, obtain independent analysis or verification of certain
information provided, check references of management and key personnel, and take
other investigative measures as the Company's management may deem necessary. The
manner in which the Company participates in an opportunity will depend upon the
nature of the opportunity, the respective needs and desires of the Company and
other parties, the management of the opportunity and the relative negotiation
strength of the Company and such other management.
With respect to any merger or acquisition, negotiations with management of the
target company are expected to focus on the percentage of TransAmerican which
the target company shareholders would acquire in exchange for all of their
shareholdings in the target company depending upon, among other things, the
target company's assets and liabilities. The percentage ownership may be subject
to reduction in the event that we acquire a target company with substantial
assets. Any merger or acquisition effected by TransAmerican is expected to have
a dilutive effect on the percentage of shares held by TransAmerican's then
shareholders.
TransAmerican will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Generally, such
agreements will require specific representations and warranties by all of the
parties thereto, will specify certain events of default, will detail the terms
of closing and the conditions which must be satisfied by each of the parties
prior to and after such closing, will outline the manner of bearing costs,
including costs associated with the Company's attorneys and accountants, will
set forth remedies on default and will include miscellaneous other terms.
As stated, we will not acquire or merge with any entity which cannot provide
independent audited financial statements within a reasonable period of time
after closing of the proposed transaction. The Company is subject to all of the
reporting requirements included in the 1934 Act. Included in these requirements
is the affirmative duty of the Company to file independent audited financial
statements as part of its Form 8-K to be filed with the Securities and Exchange
Commission upon consummation of a merger or acquisition, as well as
TransAmerican's audited financial statements included in our annual report on
Form 10-K (or 10-KSB, as applicable). If such audited financial statements are
not available at closing, or within time parameters necessary to insure our
compliance with the requirements of the 1934 Act, or if the audited financial
statements provided do not conform to the representations made by the candidate
to be acquired in the closing documents, the closing documents will provide that
the proposed transaction will be rescinded, at the discretion of TransAmerican.
If such transaction is rescinded, the agreement will also contain a provision
providing for the acquisition entity to reimburse TransAmerican for all costs
associated with the proposed transaction.
To assist in the acquisition of a business opportunity, the Company may retain
outside consultants, attorneys or accountants, as we deem appropriate. We will
retain the services of these consultants, attorneys and accountants from time to
time on an "as needed" basis. At this time, there is no prior arrangement or
understanding regarding the engagement of any particular consultant for future
services.
INVESTMENT COMPANY ACT OF 1940
Although TransAmerican is subject to regulation under the Securities Act of
1933, as amended, and the 1934 Act, management believes the Company will not be
subject to regulation under the Investment Company Act of 1940 insofar as
TransAmerican will not be engaged in the business of investing or trading in
securities. In the event that TransAmerican engages in business combinations,
which result in the Company holding passive investment interests in a number of
entities, TransAmerican could be subject to regulation under the Investment
Company Act of 1940. In such event, TransAmerican would be required to register
as an investment company and could incur significant registration and compliance
costs. TransAmerican has obtained no formal determination from the Securities
and Exchange Commission as to the status of the Company under the Investment
Company Act of 1940 and, consequently, any violation of such Act would subject
TransAmerican to material adverse consequences. TransAmerican's Board of
Directors unanimously approved a resolution stating that it is the Company's
desire to be exempt from the Investment Company Act of 1940 under Regulation
3a-2 thereto.
THE SECURITIES ENFORCEMENT AND PENNY STOCK REFORM ACT OF 1990
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure relating to the market for penny stocks in connection with
trades in any stock defined as a penny stock. The Commission has adopted
regulations that generally define a penny stock to be any equity security that
has a market price of less than $5.00 per share, subject to certain exceptions.
Such exceptions include any equity security listed on NASDAQ and any equity
security issued by an issuer that has (i) net tangible assets of at least
$2,000,000, if such issuer has been in continuous operation for three years,
(ii) net tangible assets of at least $5,000,000, if such issuer has been in
continuous operation for less than three years, or (iii) average annual revenue
of at least $6,000,000, if such issuer has been in continuous operation for less
than three years. Unless an exception is available, the regulations require the
delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the risks associated with that
market.
FORWARD LOOKING INFORMATION.
This Quarterly Report on Form 10-QSB contains forward- looking statements within
the meaning of that term in the Private Securities Litigation Reform Act of 1955
(Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934). Additional written or oral forward-looking statements may
be made by the Company from time to time in filings with the Securities and
Exchange Commission or otherwise. Statements contained herein that are not
historical facts are forward-looking statements made pursuant to the safe harbor
provisions referenced above.
Forward-looking statements are inherently subject to risk and uncertainties,
some of which cannot be predicted or quantified based on current expectations.
Consequently, future events and actual results could differ materially from
those set forth in, contemplated by or underlying the forward-looking statements
contained in this Quarterly Report. The statements, and "Part I, Item 2,
Management's Discussion and Analysis or Plan of Operation", describe certain
factors, among others, which could contribute to or cause such differences.
Readers are cautioned not to place undue reliance on any forward-looking
statements contained herein, which speak only as of the date hereof. The Company
undertakes no obligation to publicly release the result of any revisions to
these forward- looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of unexpected
events.
ITEM 3. CONTROLS AND PROCEDURES.
As required by SEC rules, we have evaluated the effectiveness of the design and
operations of our disclosure controls and procedures as of the end of the period
covered by this quarterly report. This evaluation was carried out under the
supervision and with the participation of our management, including our
principal executive officer. Based on this evaluation, the officer has concluded
that the design and operation of our disclosure controls and procedures are
effective. There were no significant changes to our internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of the evaluation.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no legal proceedings threatened or pending, except such ordinary
routine matters which may be incidental to the business currently being
conducted by the Company.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
EXHIBITS
None.
REPORTS ON FORM 8-K
None.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant has caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
TRANSAMERICAN HOLDINGS, INC.
DATE: DECEMBER 17, 2003 BY: /s/ NAJIB CHOUFANI
______________________
Najib Choufani
Chairman, CEO & CFO
DATE: DECEMBER 17, 2003 BY: /S/ TAREK CHOUFANI
______________________
Tarek Choufani
Director