Transnational Automotive Group (OTCBB: TAMG)
Transnational Automotive Group filed a Quarterly Report on July 17, 2006 in which they presented a discussion of their current business. It was accompanied by an unaudited financial statements for the three months ended May 31, 2006 and 2005 which were prepared by management, without audit.
On March 15, 2006, TAMG began implementation of an Agreement with the government of the Republic of Cameroon to provide urban bus transportation to cities throughout the country and to provide bus transportation between the cities. Under the terms of the Agreement Parker Transnational Industries, Cameroon (”PTIC”) was established to operate the bus system. PTIC is owned 66% by the Company and 34% by the City of Yaoundé along with the Cameroon Ministry of Hydrocarbons.
In Cameroon, urbanites have been without urban bus transportation for over 11 years. Under the terms of the Agreement signed on October 12, 2005, the Company, through PTIC, will initially provide bus service in the capital city of Yaoundé, and then subsequently provide service in the port city of Douala followed by similar service in other urban centers.
The city of Yaoundé also delivered to PTIC an agreement for the use of the Yaoundé city bus depot and office building used by the previous bus operator. The depot is currently being renovated and prepared to service the new bus fleet. The bus depot has an estimated value of $5.5M USD.
The Agreement specifies that the government will contribute other significant urban properties to PTIC and further enhance the underlying asset value of the venture.
LeBus is the brand name given to PTIC for its urban transportation system. PTIC operating as LeBus has accomplished the following:
LeBus began the start-up phase for establishing an urban bus transportation system in the Capital city of Yaoundé in Cameroon in January 2006.
LeBus has completed its planning and has gained consensus from the Ministry of Transport and the Yaoundé Urban Council for the bus routes in Yaoundé.
LeBus has completed recruiting, screening and the selection process for the first 70 drivers for the Yaoundé bus system.
LeBus has completed the creation of its training program for bus drivers.
LeBus has completed the first phase of the clean-up and renovation of the bus depot that the Government provided to PTIC to house, support and maintain the city buses.
The Government of Cameroon has earmarked $1,000,000 USD for the refurbishment and renovation of the bus depot facility.
In addition to the bus depot the Government of Cameroon has indicated that it is ready to turn over its Ministerial Building Number 1 to PTIC as part of the Government of Cameroon’s contribution. Seventeen city buses have been manufactured and are scheduled to load in Shanghai during the first week of June 2006 for shipment to Cameroon.
LeCar is the brand name given to the Company’s inter urban coach bus business in Cameroon. The Company is preparing to enter into the inter-urban bus market in Cameroon by opening up a service between the Capital city of Yaoundé and the business center of Douala.
The following has been accomplished by PTIC operating as LeCar:
The feasibility study and business plan for the first phase of this business has been completed. The first 11 coaches (inter-city buses) have been manufactured and are being shipped to Cameroon. A funding organization in Cameroon has expressed interest in funding the venture.
On April 5, 2006 PTIC signed a Memorandum of Understanding (MOU) with the Zonda Industrial Group of China for the provision of buses, bus parts, vehicle assembly and sales in Africa, international promotion and sales of Zonda vehicles and automotive technical cooperation.
The Zonda Group is a Chinese industrial concern that manufactures buses, automotive tooling and equipment and industrial goods. It is ranked 705 of the 1000 largest Chinese companies and is the 10th largest equipment manufacturer in the country. Zonda recently won an award at the Shanghai BusWorld Asia 2006 Exhibition for the best bus appearance design.
The Company contracted to purchase the 28 buses for LeBus and LeCar from Zonda for its African operations. The Company has committed to provide over 540 vehicles scheduled for assembly and delivery to Cameroon over the next year to support the first phase of the public transport contract it signed with the Cameroon government in October 2005. The first phase includes the establishment of an urban transport system in the Capital of Yaoundé. The entire contract ultimately calls for a transport system for all Cameroon urban centers.
Results of Operations
Comparison of the three months ended May 31, 2006 with the three months ended May 31, 2005. No revenue was recorded for the three months period ended May 31, 2006 and no revenue was recorded during the same period of the prior year. Net loss for the three months period ended May 31, 2006 was $(930,846) compared to a loss of $(14,871) in the three months ended May 31, 2005. The expenditures reflected in the loss represent the Company’s efforts to maintain an office and to have a visible presence in its on going development of its business opportunity.
To date, the Company has generated no revenues and has accumulated losses since inception of $3,513,255.
Financial Position at May 31, 2006:
The Company’s working capital position remained improved at May 31, 2006 with current liabilities less than current assets of $1,354,650 creating working capital of $64,481. At the Company’s year ended February 28, 2006 the Company had a working capital deficit of $(667,608).
Liquidity and Capital Resource
The Company has financed its expenses and costs thus far through the increase in its accounts payable, payments made by others for the Company and by the settlement of the payable amounts with shares of common stock of the Company. The Company plans to utilize debt and/or equity financing to fund its short-term and long-term needs. The availability of future financings will depend on market conditions. A portion of the funds may be used to grow the business through acquisition of other businesses. There can be no assurance that the Company will be able to continue as a going concern or achieve material revenues or profitable operations. No material commitments for capital expenditures were made other than the commitment to pay $200,000 per month for the lease to purchase twenty eight buses commencing ninety one days after delivery of the buses to Cameroon. The accompanying financial statements have been prepared assuming the Company will continue as a going concern.
The Company intends to finance the Company from the issuance of treasury stock followed by debt financing as necessary to continue the growth of operations.
Special Note Regarding Forward Looking Statements Certain statements in this report and elsewhere (such as in other filings by the Company with the Securities and Exchange Commission (”SEC”), press releases, presentations by the Company of its management and oral statements) may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and “should,” and variations of these words and similar expressions, are intended to identify these forward-looking statements. Actual results may materially differ from any forward-looking statements. Factors that might cause or contribute to such differences include, among others, competitive pressures and constantly changing technology and market acceptance of the Company’s products and services. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Source:
Transnational Automotive Group, Inc.
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