UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
PACIFICNET INC.
--------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.0001 PER SHARE
--------------------------------------------------------------------------------
(Title of Class of Securities)
69511V207
--------------------------------------------------------------------------------
(CUSIP Number)
ROOM 3714, HONG KONG PLAZA, 188 CONNAUGHT ROAD WEST
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
JULY 29, 2003
--------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box .
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
(Continued on following pages)
(Page 1 of 5 Pages)
CUSIP No. 449-629-10-4 13D Page 2 of 9 Pages
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Kin Shing LI
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)
(b)
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Hong Kong SAR, People's Republic of China
--------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 1,150,000
SHARES -----------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
EACH -----------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 1,150,000
WITH -----------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,150,000
--------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.8%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 3 of 9 Pages
Item 1. Security and Issuer.
This statement relates to the common stock, par value $0.0001 per share
(the "Common Stock") of PacificNet Inc., a Delaware corporation (the
"Company"). The principal executive offices of the Company are located
at Room 3714, Hong Kong Plaza, 188 Connaught Road West, Hong Kong.
Item 2. Identity and Background.
(a) This statement is filed by Kin-Shing Li ("Mr. Li").
(b) The business address for Mr. Li is Room 3813, Hong Kong Plaza,
188 Connaught Road West, Hong Kong.
(c) Mr. Li is the Chairman and founder of International Elite Limited
(IEL), a corporation organized under the laws of the Cayman Islands
having its principal place of business at Room 3813, Hong Kong Plaza,
188 Connaught Road West, Hong Kong.
(d) Mr. Li has not, within the last five years, been convicted in any
criminal proceeding.
(e) Mr. Li has not, within the last of five years, been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction as a result of which he was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
(f) Mr. Li is a citizen of the People's Republic of China with permanent
residence in the Hong Kong Special Administrative Region.
Item 3. Source and Amount of Funds or Other Consideration.
Pursuant to a purchase agreement, dated July 29, 2003, Mr. Li purchased
1,150,000 shares of the Company's Common Stock in a private transaction
with a stockholder of the Company for an aggregate amount of
$4,600,000, reflecting a sale price of $4.00 per share.
The funds used in the purchase of the securities to which this
statement relates were personal funds of Mr. Li and were not borrowed
or otherwise obtained from any other person, natural or legal.
Item 4. Purpose of Transaction.
Mr. Li has acquired the securities of the Company for investment
purposes. While he may acquire additional securities, or dispose of
securities, of the Company from time to time in the open market, in
privately negotiated transactions with third parties or otherwise, he
has no current plans to do so. He has, however, participated in the
development of the proposal for the formation of the joint venture
described under Item 6 below, which, if approved by the shareholders of
the Company, would involve the issuance of additional securities of the
Company.
Page 4 of 9 Pages
Item 5. Interest in Securities of the Issuer.
(a) Mr. Li is the beneficial owner of the securities to which this
statement relates, namely 1,150,000 shares in the common stock of the
Company, which represents approximately 14.8% of the outstanding common
stock assuming exercise of all outstanding options and warrants. He is
not the beneficial owner of any other securities of the Company.
(b) Mr. Li has sole voting power and dispositive power over the shares
described in Item 5(a) above.
(c) Mr. Li has not, during the past 60 days, effected any transactions in
the common stock of the Company other than the purchase of the shares
described in Item 5(a) above.
(d) No other person is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of,
the shares described in Item 5(a) above.
(e) Not Applicable
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
In connection with his purchase of the shares described in Item 5(a)
above, Mr. Li entered into a Stock Purchase Agreement with the seller,
Sino Mart Management Limited, dated July 29, 2003, containing customary
representations and warranties.
In his capacity as a shareholder of International Elite Limited
("IEL"), Mr. Li is also a party to an Equity Joint Venture Contract
dated December 20, 2002 with PacificNet Management Limited, a
wholly-owned subsidiary of the Company ("PML"), to which agreement
certain other shareholders of IEL are also parties. Under the
provisions of that agreement, which by its terms is subject to and
conditioned upon the approval of the Company's shareholders, the
Company would issue 34,000,000 shares of its common stock to a joint
venture entity, 50.1% of the equity in which would be owned by PML.
Item 7. Materials to be Filed as Exhibits.
Exhibit 1. Stock Purchase Agreement
Page 5 of 9 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
Dated: August 4, 2003
Hong Kong
By: /s/ Kin-Shing Li
-------------------------------
Name: Kin-Shing Li
Page 6 of 9 Pages
EXHIBIT 1. Stock Purchase Agreement
EXHIBIT 1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made as of 29 July,
2003, by and between LI Kin Shing ("Purchaser"), Sino Mart Management Limited, a
British Virgin Islands corporation (the "Seller").
RECITALS
WHEREAS, the Seller desires to sell, and Purchaser desires to purchase,
1,150,000 shares of common stock of Pacificnet Inc. (the "Company") from Seller
for the consideration and on the terms set forth in this Agreement.
NOW THEREFORE, in consideration of the terms and conditions contained
in this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties, intending to be
legally bound hereby, agree as follows:
SALE AND TRANSFER OF SHARES; CLOSING
THE SHARES. Subject to the terms and conditions hereof, the Seller
agrees to sell to Purchaser, and Purchaser agrees to purchase, 1,150,000 shares
of the Company's common stock, par value $ .0001 (the "Shares") at a price of
$4.00 per share (aggregating $4,600,000 (the "Purchase Price")) .
CLOSING. The purchase and sale (the "Closing") provided for in this
Agreement will take place within sixty (60) days after the execution of this
Agreement or at such other time and place as the parties may agree (the "Closing
Date").
CLOSING OBLIGATIONS. At the Closing, each Seller will deliver to
Purchaser certificates representing the Shares, duly endorsed (or accompanied by
duly executed stock powers). Also at the Closing, Purchaser shall pay the
Purchase Price to Seller by wire transfer or certified check.
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller represents and warrants to Purchaser that the following
statements are true, correct and complete as of the date hereof and the Closing
Date:
LEGAL CAPACITY AND AUTHORITY. The Seller has the full legal capacity
and authority to enter into this Agreement and to sell the Shares as
contemplated hereunder.
LIENS AND ENCUMBRANCES. The Shares to be sold by the Seller hereunder
are free and clear of all liens, claims and encumbrances.
AUTHORIZATION. All individual action on the part of Seller necessary
for (a) the authorization, execution, delivery and performance of this Agreement
by Seller, and (b) the performance of all of Seller's obligations hereunder has
been taken. This Agreement is a valid, legal and binding obligation of Seller,
enforceable according to its terms, except as may be limited by (i) applicable
bankruptcy, insolvency, reorganization or other similar laws of general
application relating to or affecting the enforcement of creditor rights, (ii)
laws and judicial decisions regarding indemnification for violations of federal
securities laws, and (iii) the availability of specific performance or other
equitable remedies.
Page 7 of 9 Pages
INVESTMENT REPRESENTATIONS.
Seller (i) is an "accredited investor," as that term is
defined in Regulation D under the Securities Act of 1933, as amended (the
"Securities Act"); (ii) has such knowledge, skill and experience in business and
financial matters, based on actual participation, that it is capable of
evaluating the merits and risks of an investment in the Company and the
suitability thereof as an investment for Seller; (iii) has received such
documents and information as it has requested and has had an opportunity to ask
questions of representatives of the Company concerning the terms and conditions
of the investment proposed herein, and such questions were answered to the
satisfaction of Seller; and (iv) is in a financial position to hold the Shares
indefinitely and is able to bear the economic risk and withstand a complete loss
of its investment in the Company.
Seller is acquiring the Shares for investment for its own
account and not with a view to, or for resale in connection with, any
distribution thereof.
Seller understands that the Shares have not been registered
under applicable state or federal securities laws. Seller acknowledges that by
virtue of the provisions of certain rules respecting "restricted securities"
promulgated by the Securities and Exchange Commission, the Shares will be
required to be held indefinitely, unless and until registered under the
Securities Act and applicable state securities laws, or unless an exemption from
the registration requirements of the Securities Act and applicable state
securities laws is available, in which case Seller may still be limited as to
the number of Shares that may be sold.
BROKERS OR FINDERS. Seller has incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller that the following
statements are true, correct and complete as of the date hereof and the Closing
Date:
LEGAL CAPACITY AND AUTHORITY. Purchaser has the full legal capacity and
authority to enter into this Agreement and to purchase the Shares as
contemplated hereunder.
AUTHORIZATION. All individual action on the part of Purchaser necessary
for (a) the authorization, execution, delivery and performance of this Agreement
by Purchaser, and (b) the performance of all of Purchaser's obligations
hereunder has been taken. This Agreement is a valid, legal and binding
obligation of Purchaser, enforceable according to its terms, except as may be
limited by (i) applicable bankruptcy, insolvency, reorganization or other
similar laws of general application relating to or affecting the enforcement of
creditor rights, (ii) laws and judicial decisions regarding indemnification for
violations of federal securities laws, and (iii) the availability of specific
performance or other equitable remedies.
INVESTMENT REPRESENTATIONS.
Purchaser (i) is an "accredited investor," as that term is
defined in Regulation D under the Securities Act; (ii) has such knowledge, skill
and experience in business and financial matters, based on actual participation,
that it is capable of evaluating the merits and risks of an investment in the
Company and the suitability thereof as an investment for Purchaser; (iii) has
received such documents and information as it has requested and has had an
opportunity to ask questions of representatives of the Company concerning the
terms and conditions of the investment proposed herein, and such questions were
answered to the satisfaction of Purchaser; and (iv) is in a financial position
to hold the Shares for an indefinite time and is able to bear the economic risk
and withstand a complete loss of its investment in the Company.
Page 8 of 9 Pages
Purchaser is acquiring the Shares for investment for its own
account and not with a view to, or for resale in connection with, any
distribution thereof.
Purchaser understands that the Shares have not been registered
under applicable state or federal securities laws. Purchaser acknowledges that
by virtue of the provisions of certain rules respecting "restricted securities"
promulgated by the Securities and Exchange Commission, the Shares will be
required to be held indefinitely, unless and until registered under the
Securities Act and applicable state securities laws, or unless an exemption from
the registration requirements of the Securities Act and applicable state
securities laws is available, in which case Purchaser may still be limited as to
the number of such Shares that may be sold. The certificates for the Shares will
bear a conspicuous legend in substantially the form set forth below.
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
UNDER ANY STATE SECURITIES LAWS. NO TRANSFER, SALE, ASSIGNMENT, OR
OTHER DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE OR ANY
INTEREST THEREIN MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES LAWS OR (B) IF THE COMPANY HAS BEEN
FURNISHED WITH AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO
THE COMPANY, TO THE EFFECT THAT NO REGISTRATION IS REQUIRED BECAUSE OF
THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS."
BROKERS OR FINDERS. Purchaser has incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement.
MISCELLANEOUS
MODIFICATION OF AGREEMENT; SALE OF INTEREST. This Agreement may not be
modified, altered or amended, except by an agreement in writing signed by
Purchaser and Sellers. Without the prior written consent of the other party,
which consent shall not be unreasonably withheld, no party hereto may sell,
assign or transfer this Agreement, any rights, titles, interests, remedies,
powers, obligations and/or duties hereunder, including by operation of law.
EXPENSES. Each party shall bear its own expenses in connection with the
transactions contemplated by this Agreement.
PARTIES. This Agreement shall be binding upon and inure to the benefit
of the successors and permitted assigns of Sellers and Purchaser.
ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties.
NOTICES. Unless otherwise specified herein, all such notices, requests,
consents, approvals and demands given or made in connection with the terms and
provisions of this Agreement shall be deemed to have been given or made when
personally delivered, or, if mailed, upon the earlier of actual receipt by the
addressee or three days after sent by registered or certified mail, postage
prepaid, or, in the case of overnight courier service (which may be utilized
hereunder), when delivered by the overnight courier company to the respective
address specified above, or, in the case of facsimile transmission (which may be
utilized hereunder), after receipt by the respective addressee in each case to
the appropriate addresses and telecopier numbers set forth below or to such
other addresses and telecopier numbers as a party may designate by notice to the
other parties:
Seller:
SINO MART MANAGEMENT LIMITED
Room 3714, Hong Kong Plaza, 188 Connaught Road West, Hong Kong
PURCHASER:
LI Kin Shing
Room 3813, Hong Kong Plaza, 188 Connaught Road West, Hong Kong
Page 9 of 9 Pages
GOVERNING LAW. This agreement shall be governed by and construed under
the laws of Hong Kong SAR without giving effect to any choice or conflict of law
provision or rule that would cause the application of the laws of any
jurisdiction other than Hong Kong SAR.
JURISDICTION; SERVICE OF PROCESS. Any action or proceeding seeking to
enforce any provision of, or based on any right arising out of, this Agreement
may be brought against any of the parties in the courts of Hong Kong SAR.
COUNTERPARTS. This Agreement may be executed in a number of identical
counterparts, each of which, for all purposes, is to be deemed an original, and
all of which collectively constitute one agreement, but in making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart. A facsimile or photocopy of an executed counterpart of this
Agreement shall be sufficient to bind the party or parties whose signature(s)
appear thereon.
FURTHER ASSURANCES. Each party will execute and deliver such further
agreements, documents and instruments and take such further action as may be
reasonably requested by the other party to carry out the provisions and purposes
of this Agreement.
TERMINATION; SURVIVAL. The provisions of this Agreement, including
without limitation the representations, warranties and covenants of the parties,
shall survive the Closing.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered as of
the day and year first written above.
PURCHASER:
By: /s/ Li Kin Shing
-----------------------------------
Name: LI Kin Shing
SELLER:
SINO MART MANAGEMENT LIMITED
By: /s/ ChoSam Tong
-----------------------------------
Name: ChoSam Tong
Title: Managing Director