LARGO VISTA GROUP LTD
Filing Type: 10SB12G/A
Description: Amended Registration Statement
Filing Date: Jan 14, 2000
Period End: N/A
Primary Exchange: N/A
Ticker: N/A
Table of Contents
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10SB12G/A
Table1 4
Table2 13
Table3 18
Table4 18
Table5 19
Table6 22
Table7 22
Table8 23
Table9 23
Balance Sheet Assets 27
Balance Sheet Liabilities 27
Cash Flow Statement 28
Table13 29
Balance Sheet Assets2 33
Table15 33
Income Statement 34
Table17 36
Balance Sheet Liabilities2 36
Cash Flow Statement2 38
Table20 39
Table21 43
Table22 43
Income Statement2 44
Table24 65
10SB12G/A
1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 10-SB A1
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g)
OF THE SECURITIES EXCHANGE ACT OF 1934
_______________________
LARGO VISTA GROUP, LTD.
(Exact name of Registrant as specified in its Charter)
Nevada 76-0434-540
(State of Incorporation) (IRS Employer ID No.)
4570 Campus Drive, Newport Beach, California 92660
(Address of principal executive offices)
(949) 252-2180
(Registrant's telephone number)
Securities to be registered pursuant to Section 12(g) of the Act:
211,582,554 Common shares
Securities registered pursuant to Section 12(b) of the Act: None
Title of Each Class Name of Each Exchange
to be Registered on which registered
Common Stock, $0.001 par value - OTC Bulletin Board
Item 1. DESCRIPTION OF BUSINESS
INTRODUCTION
1. Largo Vista Group, Ltd., a Nevada corporation ("Largo Vista,"),
operates through its wholly owned subsidiary, Everlasting International
Ltd. ("Everlasting"), a Nevada corporation. Everlasting operates and owns a
66.67% interest in a joint venture company in China, operated under the
name "Kunming Xinmao Petrochemical Industry Co. Ltd." ("Xinmao or the
Company"). Xinmao is principally engaged in the business of purchasing and
reselling liquid petroleum gas ("LPG") in the retail and wholesale markets
to both residential and commercial consumers in Yunnan Province of South
China. Xinmao operates a storage depot and has office headquarters in the
City of Kunming. All of the Company's property and equipment is located in
China.
Largo Vista was originally incorporated on January 16, 1987 in Nevada under
the name, "The George Group". On January 9, 1989, The George Group
acquired Waste Service Technologies, Inc. ("WST"), an Oregon corporation.
On the same day The George Group filed a name change in Nevada and changed
its name to WST. WST's plan of business was to become an environmental
service company. It listed its stock and began trading on OTC Bulletin
Board.
On April 15, 1994, WST acquired Largo Vista, Inc., a California
corporation, and on the same day filed a name change in Nevada to change
WST's name to Largo Vista Group, Ltd. At the time of acquisition Largo
Vista filed a change of name with the OTC Bulletin Board and received a new
CUSIP number and symbol ("LGOV"). Largo Vista originally planned to
develop housing in China, but, after shipping two factory built homes to
China, never fully implemented the plans due to unanticipated financing,
environmental and regulatory complications.
On December 26, 1996, Largo Vista acquired Everlasting International Ltd.
("Everlasting"), a Nevada Corporation, which owns a 66.67% interest in
Kunming Xinmao Petrochemical Industry Co., Ltd. ("Xinmao"), mentioned
above. Everlasting acquired this asset from Proton Technology Corporation
Limited, a Bahamas Corporation ("Proton"), in which Mr. Deng Shan, a
director and principal shareholder of Largo Vista, is the principal
shareholder. The acquisition of the 66.67% interest in the Xinmao Joint
Venture by Everlasting was accounted for as an asset purchase transaction.
Everlasting compared the estimated fair market value of the assets acquired
to the depreciated book value of the assets on the Joint Venture's books
and records in China, and found no significant difference. As a result,
66.67% of the depreciated book value of the China Joint Venture assets were
taken on to Everlasting's books as the fair value for the stock issued.
Subsequently, Largo Vista acquired 100% of Everlasting from Proton in a
stock for stock exchange. In connection with this transaction, the assets
on the books of Everlasting were not adjusted, and these values are now
consolidated with Largo Vista's.
The historical chain-of-ownership of the asset is as follows: The Hong
Kong Company, formed under the laws of Hong Kong, was initially owned by
one individual, Chan Mau Tak. On November 8, 1995, Deng Shan, an
individual, purchased the Hong Kong Company from Chan Mau Tak. On December
20, 1996, the Hong Kong Co. was acquired from Deng Shan by Proton with
majority shareholder being Deng Shan. On December 21, 1996, Proton
transferred 100% of its interest in the Hong Kong Company to Everlasting
International Ltd., a Nevada Corporation. On April 29,1997, Largo Vista
shareholders consented to an acquisition and plan of reorganization
executed on December 26, 1996, wherein Largo Vista purchased 100% of the
stock of Everlasting from Proton Technology in a stock exchange
transaction.
2. Organization of the Company and Subsidiary
Xinmao, in operation and providing uninterrupted service to consumers since
1992, is in its third year of operation as a subsidiary of Largo Vista.
Xinmao is the only company that has private majority ownership, and a
private majority Board of Directors; and, is one of the largest LPG
distribution companies in the Yunnan Province in terms of end users.
On October 12, 1999, Largo Vista entered into a joint venture agreement
with the United Arab Petroleum Corporation ("UAPC"), named Largo Vista/UAPC
Partners, wherein LVG shall hold 51% of the assets and liabilities, and
shall share 51% of the income and expenses of the JV; and, UAPC 49%. The
purpose of the JV is to combine the resources and talents of each party to
develop a market for the sale of petrochemical products to be supplied by
middle-east sources, and principally Dubai. The JV plans to sell petroleum
products to customers in China, Vietnam and other countries throughout the
Pacific Rim. See exhibit __.
On December 12, 1999, Largo Vista/UAPC Partners entered into a joint
venture agreement with Mr. Ahmed Hasan Abdul Qahir Al Shaibani, Dubai,
United Arab Emirates (UAE), named Largo Vista Group, Ltd. (LLC of Dubai,
UAE). Largo Vista/UAPC Partners will hold 49% (Largo Vista 25% and UAPC
24%) of the assets and liabilities, and shall share 491% of the income and
expenses of the JV; and, Al Shaibani 51%. The objective of the JV is to
carry-on the trade of crude oil and refined oil products. The JV will have
headquarters in Dubai, and plans to focus sales of petroleum products in
China, Indochina and other Pacific Rim customers. See exhibit __.
3. Organization Chart
LVG
Largo Vista Group, Ltd.
Owns 100 % EIL
Owns 100 % LVI
Subsidiaries Joint Ventures
EIL LVI Joint Venture
Everlasting Largo Vista "Largo Vista/UAPC Partners"
International Inc.
Ltd. No Operations LVG owns 51%
Owns 66.67 % Presently UAPC owns 49%
Of "Xinmao"
To to
"Xinmao" Joint Venture
Kunming Xinmao Petrochemical "Largo Vista Group, Ltd."
Industru Co. Ltd., a (Limited Liability Company)
Chinese Joint Venture Dubai
JV Partners: Al Shaibani owns 51%
"Everlasting" - 66.67 %
Government Partner - 33.33 % LV/UAPC Partners = 49 %
Lvg owns 25 %
UAPC owns 24 %
LARGO VISTA GROUP, LTD.
EVERLASTING INTERNATIONAL, LTD.
(100% Owned Subsidiary of Largo Vista holding a)
66.67% Interest in the
Joint Venture
KUNMING XINMAO PETROCHEMICAL INDUSTRY CO., LTD.
(in which a)
33.3% Interest
is held by KUNMING FUEL GENERAL CO.
(Chinese Government Joint Venture Partner)
B. FINANCIAL INFORMATION BY
INDUSTRY SEGMENT AND CLASSES OF PRODUCTS
Registrant is in the purchasing and reselling segment of the liquid
petroleum gas ("LPG") market in China.
Year
1998 1997 1996
1 2 3
Sales to $1,476,971 $2,472,378 $0
Unaffiliated Customers:
Operating Loss $(506,694) (1) $(1,413,763) (1) $0
Identifiable Assets, Net $ 831,882 $ 1,179,527 $0
(1) The calculations of $506,694 and $1,179,527 operating losses for the
years 1998 and 1997, respectively, are net amounts reflecting deductions
for receivables write down of approximately $1,130,000 in 1997 versus
approximately $50,000 in 1998; and losses incurred in lawsuits of
approximately $400,000 in 1997.
C. BUSINESS
1. Terms of Xinmao Joint Venture
The Kunming Xinmao Petrochemical Co., Ltd. ("Xinmao") is a Joint Venture
formed under the laws of the People's Republic of China. The Xinmao Joint
Venture commenced business in August of 1992, but has yet to achieve
profitable operations.
Term: Twenty years, commencing on August 28, 1992.
Parties: Party A is the Kunming Fuel General Co. ("Government Partner ") as
to a 33.33% interest with a "registered capital" investment of US $641,000.
Party B is Everlasting International, Ltd as to a 66.67% interest, with a
"registered capital" investment of US $1,283,400.
General Provisions: Government Partner has a general responsibility to
support Everlasting in its duties.
The Joint Venture is an independent entity with an independent accounting
system. An audit of the Joint Venture's financial records is conducted
annually by an auditor registered in China. Fiscal year of Joint Venture
is January 1 to December 31.
Everlasting is, subject to the terms and conditions of an operating
agreement set forth below, responsible for the general management of Xinmao
including: Procurement of equipment and raw materials, equipment
installation, testing and technical training, hiring a management staff,
production and technical processes and other duties entrusted to it.
This Operating Agreement was made between the Government Partner and the
Hong Kong Company on August 28, 1992, for a term of ten years, ending on
August 28, 2002. Everlasting, as purchasor of the Hong Kong Company, is
responsible to manage the day-to-day operations of Xinmao and assume sole
responsibility for its profits and losses.
Each party under Chinese law would normally participate in the profits and
losses of the Joint Venture according to its proportionate share of
contribution. However, this provision was changed by the Operating
Agreement, which provides that Xinmao is to pay the Government Partner 9
million Yuan (RMB) during the term of the Agreement as follows:
3.5 million Yuan for the first 3 years;
1.5 million Yuan per year for the 4th and 5th years;
500,000 Yuan per year from the 6th through the 10th years
The Company negotiated this agreement to provide flexibility and encourage
future investment and expansion by precluding the payment of large a sum of
money to the Government Partner. To date, the Government Partner has been
paid 4.1mm RMB, and the balance due is 3.4mm RMB. No payment has been made
since 1/24/98 due to several factors. Since the government partner has
recovered more than its initial capital contribution, it has not urged
Xinmao to make up past due payments due to the difficulties Xinmao has
faced during 1997 and 1998 including record high LPG prices and a chaotic
and unstable developing market. This liability has been accrued on the
books of Xinmao.
The Government Partner has indicated a willingness to sell to Largo Vista
an additional 28.33 % which would result in Largo Vista owning 95% and the
Chinese partner owning 5% of the joint venture. Largo Vista had negotiated
in July and August of 1998, an agreement with the Chinese Partner in the
Xinmao Joint Venture, to acquire an additional 28.33% interest in the
Joint Venture for a cash purchase of 5mm RMB. Unfortunately, Largo Vista
was unable to raise sufficient funds to complete this acquisition at that
time. As a result, as of this date, Largo Vista continues to own 66-2/3%
interest in Xinmao. There is currently no binding contract in place to
acquire a further interest in Xinmao.
2. Government License Held
The Xinmao Company holds a unique license issued by Chinese Central
Government (National Industrial and Commercial Registration Administration
of China). This license is most valuable because it permits the Company to
operate across provincial borders; whereas, competitors of the Company are
restricted to the geographic area in which they are located. In addition,
the license permits the Company to process domestic crude oil and sell its
by-products; to process and sell LPG to retail domestic and industrial
customers; to manufacture cylinders, stoves, water heaters, and cigarette
lighters and their accessories; and to provide services in inspection and
maintenance of stoves and cylinders for safety and quality.
Xinmao is a Sino-Foreign Joint Venture registered with the government as
having foreign ownership. This registration permits foreign investment to
legally flow into China, and allows funds to legally flow out of China
including loan repayments, interest payments and dividends. Xinmao is one
of the few known Sino-Foreign Joint Ventures licensed to sell petroleum
products in the retail market.
Xinmao also holds a general contractors license intended for construction
of pipeline projects. As a part of its overall strategy to expand its LPG
market in China, management intends to expand its business in the future
beyond its current core business of purchasing and reselling LPG, utilizing
its various licensing authorities.
3. The Product
As of December 30, 1998, according to information published by the Yunnan
Gas Association, in Yunnan Province there are approximately 1,000,000
households using some form of gas utility (town gas, natural gas and LPG).
About 65% or 650,000 households use LPG, and the number is increasing.
Approximately 160,000 household users reside in Kunming; and, there are
30,000 pipeline household users, 60% of which are within Kunming City, with
the balance residing in smaller cities within the Province. The
metropolitan population in Yunnan is 5.9 million with 3.2 million using gas
(1 household equates to 3.2 people) as a utility - a city gasification rate
of 54.2%. This rate increased by 7% over 1997, but still lags the national
average by 20%. LPG use accounts for about 65% of this total.
LPG consumption in Yunnan was approximately 68,000 metric tons, a net
increase over 1997 of 13,000 metric tons.
As a form of energy it is considered a very efficient fuel because in a
liquid state it provides a significant supply of energy in a comparatively
small volume. LPG is recognized for its transportability and ease-of-use.
It is a clean and environmentally friendly source of energy that has a
variety of residential, commercial, industrial and transportation uses. It
can be used at home for cooking and heating, replacing wood, kerosene, coal
and other environmentally unfriendly sources of energy. In fact,
environmental concerns have caused the outlaw of the use of coal in most
larger cities in China. Although LPG has some drawbacks such as high
combustibility, it requires great care in handling, and is subject to fire
and safety regulations, LPG remains one of the only viable sources of
energy for cooking and heating in Southern China. Management believes the
China LPG market is ripe for growth and expansion.
Most Chinese consumers have used of wood and coal all of their life
primarily for cooking only; however, they are slowly beginning to realize
the ease and convenience of also using LPG for heating and heating water.
Most consumers obtain LPG in 15 kg. cylinders, very similar to those used
for gas barbecues in the U.S. As LPG delivery systems, such as pipelines,
make use more convenient and simple, LPG consumption per capita should
increase significantly. In addition, management believes there will be
future opportunities in drying tobacco and operating factory machinery and
vehicles.
4. Markets
The China LPG market is broken down into three segments for purposes of
analysis:
1.Distribution method from the major LPG companies,
2.Method of delivery to the consumer, and
3.Black Market dealers
The Primary market segment is according to distribution method - that is
either retail-direct or wholesale-indirect. Retail distribution is
accomplished by the ten major LPG companies that deal directly with the end
user. Xinmao qualifies as one of the ten major LPG companies by its
ownership of rail tank cars; it is one of only five companies having depot
storage facilities of 1,000M3; and it has distribution of LPG to retail and
wholesale, and residential and commercial users.
The second market segment is according to the delivery vehicle used by the
user, such as bottle or cylinder, pipeline, or tank truck.
The bottle users may be either retail, purchasing directly from a major LPG
company, or wholesale, purchasing indirectly from a distributor of a major
LPG company. Bottle customers purchase LPG in 15 kg. cylinders or bottles
that must, by law, be filled to a minimum of 13.5 kg which is considered
full. Bottle users include residential, and commercial customers.
Residential consumption is by far the largest, with commercial restaurants
and caterers following second. There has been little industrial use of LPG
to date.
Pipeline users are considered retail-direct users. LPG flows directly into
a household via pipes from a central storage tank that is replenished as
necessary by a major LPG company. Pipeline users are billed according to
usage based on a meter in their living unit.
Tank truck or bulk sales are made to wholesale distributors who operate
small bottle filling stations. These distributors represent lower profit
margins but volume makes-up some of the difference. Bulk sales are
encouraged to cultivate the small wholesale distributors because of the
potential of acquiring their customer base in the future.
A third market segment, although temporary, must be considered because of
the negative impact it has on the LPG market. This segment is comprised of
the many small independent distributors and individuals who operate
illegally in what is referred to as the "black market" - most operating
without a license, violating safety laws, and unfairly profiting by short-
filling LPG bottles. These abusers create problems of unfair competition
for the Company. The Kunming LPG Administration is aware of these abuses,
but, unless a blatant case is presented to it, it is ignoring the problems
until the market consolidates to a greater degree.
According to information presented at the China LPG Conference '98
(February 26-27, 1998), LPG consumption in China has been growing at a
remarkable rate since the be |
