U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-QSB
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(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 June 30, 2001
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
of Incorporation or Organization) Identification No.)
9601 Wilshire Boulevard, Suite 620, Beverly Hills, California 90210
(Address of principal executive offices)
(310) 271-4159
(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 approximately
16,321,090 shares of Common Stock issued and outstanding.
TRANSAMERICAN HOLDINGS, INC.
FORM 10-QSB
for the quarter ended June 30, 2001
TABLE OF CONTENTS
Part I. Financial Information
- -------
Item 1. Financial Statements
Balance Sheet as of June 30, 2001 (unaudited).
Statements of Operations for the three and six months
ended June 30, 2001 (unaudited) and June 30, 2000
(unaudited) and from inception on July 22, 1996 to June
30, 2001 (unaudited).
Statement of Stockholders' Equity for the Period from
inception to June 30, 2001 (unaudited).
Statements of Cash Flows for the six months ended June
30, 2001 (unaudited) and June 30, 2000 (unaudited) and
from inception on July 22, 1996 to June 30, 2001
(unaudited).
Notes to Financial Statements.
Item 2. Managements Discussion and Analysis or Plan of
Operation
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," "will," "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
ITEM 1. FINANCIAL STATEMENTS.
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
FINANCIAL STATEMENTS
JUNE 30, 2001
CONTENTS
Page
Financial Statements:
Balance Sheet 2
Statement of Operations 3
Statement of Stockholders' Equity 4
Statement of Cash Flows 5
Notes to Financial Statements 6-7
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET - JUNE 30, 2001
(UNAUDITED)
ASSETS
Current assets:
Cash $ 647,257
Other receivables 18,006
Notes receivable 60,000
Notes receivable, related parties 145,000
-----------
Total current assets $ 870,263
Property and equipment, net of
accumulated depreciation and amortization 9,969
Cash - restricted 30,665
-----------
$ 910,897
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 37,000
10% note payable, officer 5,000
-----------
Total current liabilities $ 42,000
Stockholders' equity:
Common stock; $.001 par value, 100,000,000
shares authorized, 16,321,090 shares
issued and outstanding $ 16,321
Subscriptions receivable (83,750)
Additional paid-in capital 1,553,076
Deficit accumulated during development stage (616,750)
-----------
Total stockholders' equity 868,897
-----------
$ 910,897
===========
1
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
From inception on
For the three months ended July 22, 1996 to
June 30, 2001 June 30, 2000 June 30, 2001
--------------- -------------- -----------------
(Unaudited) (Unaudited) (Unaudited)
Net revenues $ - $ - $ -
Cost of sales - - -
--------------- -------------- -----------------
Gross profit - - -
General and administrative
expenses 185,762 75,903 637,967
--------------- -------------- -----------------
Net Loss from operations
before interest income (185,762) (75,903) (637,967)
Interest income 8,145 - 21,217
Net loss $ (177,617) $ (75,903) $ (616,750)
=============== ============== =================
Net loss per share,
basic and diluted $ (0.01) $ (0.01)
=============== ==============
Weighted average number
of shares outstanding,
basic and diluted 16,321,090 11,569,962
=============== ==============
2
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
From inception on
For the six months ended July 22, 1996 to
June 30, 2001 June 30, 2000 June 30, 2001
--------------- -------------- -----------------
(Unaudited) (Unaudited) (Unaudited)
Net revenues $ - $ - $ -
Cost of sales - - -
--------------- -------------- -----------------
Gross profit - - -
General and administrative
expenses 312,960 186,354 637,967
--------------- -------------- -----------------
Net Loss from operations
before interest income (312,960) (186,354) (637,967)
Interest income 21,217 1,971 21,217
Net loss $ (291,743) $ (184,383) $ (616,750)
=============== ============== =================
Net loss per share,
basic and diluted $ (0.02) $ (0.01)
=============== ==============
Weighted average number
of shares outstanding,
basic and diluted 16,321,090 13,071,976
=============== ==============
3
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' EQUITY
Deficit
accumulated Total
Common stock Additional during stock-
---------------------- paid-in Subscription development holders'
Shares Amount capital receivable stage equity
----------------------------------------------------------------------------------
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
---------- -------- ----------- --------- --------- -----------
Net loss for the
three months ended
March 31, 2001
(Unaudited) (114,041) (114,041)
---------- -------- ----------- --------- --------- -----------
Balance at
March 31, 2001
(Unaudited) 16,271,090 $ 16,271 $ 1,453,147 $ (33,750) $(439,133) $ 996,535
---------- -------- ----------- --------- --------- -----------
Issuance of common stock
for cash during
June 2001 50,000 50 99,929 (50,000) 49,979
Net loss for the
three months ended
June 30, 2001
(Unaudited) (177,617) (177,617)
---------- -------- ----------- --------- --------- -----------
Balance at
June 30, 2001
(Unaudited) 16,321,090 $ 16,321 $ 1,553,076 $ (83,750) $(616,750) $ 868,897
========== ======== =========== ========= ========= ===========
3
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
From inception on
For the six months ended July 22, 1996 to
June 30, 2001 June 30, 2000 June 30, 2001
--------------- -------------- -----------------
(Unaudited) (Unaudited) (Unaudited)
Cash flows provided by
(used for) operating
activities:
Net loss $ (291,743) $ (184,383) $ (616,750)
Adjustments to reconcile net
income (loss) to net cash
provided by (used for)
operating activities:
Issue common stock for
services - 94,500 94,500
Depreciation 1,070 - 2,073
Changes in assets and liabilities:
(Increase) decrease in assets:
Other receivable (18,006) (10,000) (18,006)
Accounts payable
and accrued expenses 18,239 10,000 37,000
--------------- -------------- -----------------
Total adjustments 1,303 0 115,567
--------------- -------------- -----------------
Net cash (used for)
operating activities (290,440) (89,883) (501,183)
--------------- -------------- -----------------
Cash flows provided by
(used for) investing
activities:
Acquisition of property
and equipment (2,014) - (12,042)
Note receivable - - (60,000)
Notes receivable,
related party (130,000) - (145,000)
Restricted cash - - (30,665)
--------------- -------------- -----------------
Net cash (used for)
investing activities (132,014) - (247,707)
--------------- -------------- -----------------
Cash flows provided by
(used for) financing
activities:
Proceeds from sale
of common stock 49,979 1,367,045 1,391,147
Receipts (payments on)
Note payable, officer (5,000) - 5,000
--------------- -------------- -----------------
Net cash provided by
financing activities 44,979 1,367,045 1,396,147
--------------- -------------- -----------------
Net increase (decrease) in cash (377,475) 1,277,162 647,257
Cash and cash equivalents,
beginning of period 1,024,732 9,200 -
--------------- -------------- -----------------
Cash and cash equivalents,
end of period $ 647,257 $ 1,286,362 $ 647,257
=============== ============== =================
4
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
(1) Summary of Significant Accounting Policies:
Interim Financial Statements:
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. (the "Company") on Form
10-KSB for the year ended December 31, 2000.
General:
TransAmerican Holdings, Inc., formerly Health Research,
Ltd., was incorporated under the laws of the state of
Nevada on July 22, 1996, and is conducting its
operations in California.
Business Activity:
The Company has been in 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.
Use of Estimates:
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 disclosure of contingent assets and liabilities at
the date of the financial statements and the reported
amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Fair Value:
Unless otherwise indicated, the fair values of all
reported assets and liabilities which represent
financial instruments, none of which are held for
trading purposes, approximate the carrying values of
such amounts.
Cash:
Equivalents
-----------
For purposes of the statement of cash flows, cash
equivalents include all highly liquid debt instruments
with original maturities of three months or less which
are not securing any corporate obligations.
Concentration
-------------
The Company maintains its cash in bank deposit accounts
which, at times, may exceed federally insured limits.
The Company has not experienced any losses in such
accounts.
5
TRANSAMERICAN HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2001
(1) Summary of Significant Accounting Policies, Continued:
Property and Equipment:
Property and equipment are stated at cost. Expenditures
for maintenance and repairs are charged to earnings as
incurred, whereas, additions, renewals, and betterments
are capitalized. When property and equipment are
retired or otherwise disposed of, the related cost and
accumulated depreciation are removed from the
respective accounts, and any gain or loss is included
in operations. Depreciation is computed using the
straight-line method over the estimated useful lives of
the related assets.
Comprehensive Income:
The Company does not have other comprehensive income.
Comprehensive loss consists of net loss from
operations.
Development Stage Enterprise:
The Company is a development stage company as defined
in Statement of Financial Accounting Standards 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 TransAmerican
Holdings (Note 1) have been considered as part of the
Company's development stage activities.
Net Loss Per Share:
The Company has adopted Statement of Financial
Accounting Standard No. 128, Earnings per Share ("SFAS
No. 128"), which is effective for annual and interim
financial statements issued for periods ending after
December 15, 1997. Net loss per share has been
computed using the weighted average number of shares
outstanding. As of June 30, 2001, the Company had no
dilutive common stock such as stock options.
(2) Acquisition of Certified Satellite Installers, Inc.:
Effective June 29, 2001, the Company entered into an
agreement to acquire 80% of the outstanding capital shares
of Certified Satellite Installers, Inc. ("CSI") in exchange
for the issuance of up to 2,000,000 shares of restricted
TransAmerican Common Stock and a capital infusion of
$100,000. The exact number of TransAmerican shares to be
issued will be determined based upon completion of an audit
of CSI as of the date of acquisition and the net profits of
CSI over the twelve-month period following the date of
acquisition.
The acquisition will be accounted for using the purchase
method of accounting and the excess of the purchase price
over the fair value of the net assets acquired will be
allocated to goodwill, which will be periodically reviewed
by management for impairment in value and charged to
operations, if appropriate.
Pro forma information as if the acquisition had taken place
at the beginning of the reporting period has not been
presented, as the historical operating results of CSI are
not yet practicably determinable.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.
Management's Discussion and Analysis.
Results of Operations
Three months ended June 30, 2001 as compared to June 30, 2000.
Revenues
We are a development stage company. There were no revenues
for the three months ended June 30, 2001 and June 30, 2000.
General and Administrative Expenses
Total expenses amounted to $185,762 and $312,960 for the
three and six months ended June 30, 2001, as compared to $75,903
and $186,354 for the three and six months ended June 30, 2000.
The increase in expenses resulted primarily from costs associated
with our acquisition of Certified Satellite Installers, Inc.
("CSI"), and from professional fees 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 $291,743 for
the six months ended June 30, 2001, as compared to $184,383 at
June 30, 2000.
Net loss
The Company had a net loss of $177,617 or $(0.01) per share
for the three months ended June 30, 2001 as compared to $75,903
or $(0.01) per share for the three months ended June 30, 2000.
Liquidity and Capital Resources
In addition to our acquisition of CSI, we have executed
several letters of intent and are in advanced negotiations with
various other domestic and international entities. These letters
of intent and negotiations are with going businesses in varied
sectors of the market. We hope to conclude at least one more of
these acquisitions in the third quarter of 2001.
Presently, TransAmerican has no earnings from operations,
and we will continue to sustain nominal losses until CSI becomes
profitable and/or we acquire other income-generating businesses.
We have sufficient working capital to cover our operating costs
until we start generating income and/or we conclude an
acquisition of an on-going business that generates income.
Plan of Operation.
On June 29, 2001, TransAmerican completed the transactions
contemplated by the Agreement and Plan of Reorganization, dated
as of May 17, 2001 (the "Agreement"), among itself, Certified
Satellite Installers, Inc. ("CSI") and certain shareholders of
CSI. Pursuant to the Agreement, TransAmerican acquired 80% of
the issued and outstanding capital stock of CSI in exchange for
the issuance of up to 2,000,000 shares of restricted
TransAmerican Common Stock and a capital infusion of $100,000.
The total number of shares to be issued is contingent upon an
audit to be completed within 60 days and CSI's net profits over
the next twelve months.
Notwithstanding the foregoing, TransAmerican will continue
to seek and acquire assets or shares of entities actively engaged
in businesses that generate revenues in exchange for our
securities. To that end, we have identified potential business
opportunities and have entered into discussions and signed
Letters of Intent with several companies.
General Business Plan
TransAmerican's purpose is to seek and acquire interests 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 business opportunities, 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 Business 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 an 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
number of shares 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
ownership percentage of present shareholders 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 particular 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 an
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.
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.
During the quarter ended June 30, 2001, TransAmerican
completed a private placement whereby we sold 50,000 restricted
shares of the Company's Common Stock to two individual investors
at a price of $2.00 per share. Each of the shares of stock were
sold for cash. All of the investors are residents of foreign
countries, and the shares were purchased for investment purposes.
The shares were sold pursuant to a Regulation S exemption from
registration and all of the stock certificates have been affixed
with the appropriate legend restricting sales and transfers.
There were no underwriters, brokers or dealers involved in
connection with the sale and issuance of any of the TransAmerican
securities.
Each of the shareholders had a pre-existing personal or
business relationship with TransAmerican or one of our officers
or directors. By reason of their business experience, each has
been involved financially and by virtue of a time commitment in
business projects with the officers of the Company.
In July, 2001, subsequent to the close of the quarter ended
June 30, 2001, TransAmerican's Board of Directors approved a
resolution whereby the Company would issue 850,000 new shares of
TransAmerican Common Stock as part of our agreement for the
acquisition of Certified Satellite Installers, Inc. ("CSI"). Of
the 850,000 shares to be issued, 350,000 shares will be
distributed to the approximately 44 shareholders of CSI, while
the remaining 500,000 shares will be held in an escrow pending
the satisfactory results of a CSI audit. Assuming all of the
850,000 new shares are subsequently released to the CSI
shareholders, the Company will then have 17,171,090 shares of its
Common Stock issued and outstanding.
Exemption from Registration Relied Upon
Each of the above transactions was deemed by TransAmerican
to be exempt from registration under Section 4(2) of the
Securities Act of 1933, and Rule 145 (17 CFR Section 230.145) as
a transaction not involving any public offering. Except as noted
herein, no compensation or commissions were paid to any person in
connection with the issuance of the shares, and no underwriter,
broker or dealer participated in such sales. Each issuee in the
transactions described above made a written representation to
TransAmerican that he was acquiring the Company's stock for
investment purposes and not with a view to the resale or
redistribution thereof. Each stock certificate issued contains a
restrictive legend.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders in the
quarter covered by this report.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibits
None.
Reports on Form 8-K
On July 16, 2001, the Company filed a Current Report on Form
8-K reporting that the Company had completed the transactions
contemplated by the Agreement and Plan of Reorganization, dated
as of May 17, 2001 (the "Agreement"), among itself, Certified
Satellite Installers, Inc. ("CSI") and certain shareholders of
CSI. A copy of the Agreement was filed therewith as Exhibit 2.
Pursuant to the Agreement, TransAmerican acquired 80% of the
issued and outstanding capital stock of CSI in exchange for the
issuance of up to 2,000,000 shares of restricted TransAmerican
common stock and a capital infusion of $100,000. The total
number of shares to be issued is contingent upon an audit to be
completed within 60 days and CSI's net profits over the next
twelve months. The Company's press release announcing the
closing of this transaction was also filed as an Exhibit 99
thereto.
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: August 17, 2001 By: /s/ Najib E. Choufani
-------------------------
Najib E. Choufani
Chairman and CEO