UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO
FORM F-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ZERON INTERNATIONAL LIMITED
(Name of small business issuer in its charter)
Cayman Islands 6770 Not Applicable
(State or jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification
organization) No.)
4 Park Road, Tremont House, Hamilton HM11, Bermuda (441) 292-3781
(Address and telephone number of principal executive offices)
4 Park Road, Tremont House, Hamilton HM11, Bermuda (441) 292-3781
(Address of Principal place of business or
intended principal place of business)
Rose-Marie Fox, 354 East 50th Street, New York, N.Y.(212) 593-0360
(Name, address, and telephone number of agent for service in the United
States)
Approximate date of proposed sale to the public as soon as practicable after
the effective date of this Registration Statement and Prospectus.
By: Joel Schonfeld, Esq.
26 Court Street, (Suite 810)
Brooklyn, New York 11242
The registrant hereby amends this registration statement
on such date or dates as may be necessary to delay its effective date until
the registrant shall file a further amendment which specifically states that
this registration statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
CALCULATION OF REGISTRATION FEE
Title of Each Class of Amount Proposed Proposed Amount of
Securities Being Being Maximum Maximum Registration
Registered Registered Offering Aggregate Fee
Price Per Offering
Share (1) Price(1)
Shares of Common Stock 4,000 $6.25 $ 25,000$ 8.62
Bridge Warrants issued 300,000 $.001 $ 300$ .87 prior to
the
Offering(2)
Common Stock 300,000 $6.26 $1,875,000 $ 646.56
Underlying
Bridge Warrants(2)
TOTAL $ 656.05
(1) Estimated for purposes of computing the registration fee pursuant to
Rule 457.
(2) On October 3, 1995, the Company issued 300,000 Bridge Warrants to
three persons pursuant to notes issued for an aggregate amount of $300,000
pursuant to the Company's bridge financing. The Bridge Warrants, as well as
the underlying stock, are included in this Registration Statement. The
holders of the Bridge Warrants are aware that Regulation C is applicable to
secondary sales by such persons. For a list of such persons, see "Selling
Securityholders."
-ii-
<PAGE>
Cross Reference Sheet Pursuant to Rule 404 (c)
Showing the Location In Prospectus of
Information Required by Items of Form F-1
Part I. Information Required in Prospectus
Item
No. Required Item Location or Caption
1. Front of Registration Statement Front of
Registration
and Outside Front Cover of Statement and outside
Prospectus front cover of
Prospectus
2. Inside Front and Outside Back Inside Front Cover
Page
Cover Pages of Prospectus of Prospectus and
Outside
Front cover Page of
Prospectus
3. Summary Information and Risk Prospectus Summary;
Factors High Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Determination of
Price Offering Price
6. Dilution Dilution
7. Selling Security Holders Selling
Securityholders
8. Plan of Distribution Plan of Distribution
9. Description of Securities Description of
Securities
to be Registered
10. Interests of Named Experts Legal Opinions;
Experts
and Counsel
11. Information with Respect to Proposed Business;
the Registrant Litigation; Principal
Shareholders;
Management; Certain
Transactions
12. Disclosure of Commission Statement as to
Position on Indemnification Indemnification
For Securities Act Liabilities
-iii- <PAGE>
PROSPECTUS
ZERON INTERNATIONAL LIMITED
(a Cayman Islands Corporation)
4,000 Shares of Common Stock Offered at $6.25 per Share
Zeron International Limited, a Cayman Island corporation (the
"Company"), is hereby offering for sale 4,000 shares of common stock, $.001
par value per share (the "Shares) (Common Stock") at a purchase price of
$6.25 per Share (the "Offering"). The Shares shall be sold exclusively by
the Company on a "best-efforts, all or none basis" for a period of ninety
(90) days (which may be extended an additional ninety (90) days). (See
"Description of Securities"). This offering shall be conducted directly by
the Company without the use of a professional underwriter or securities
dealer. The Company's offering is being made in compliance with Rule 419 of
Regulation C, pursuant to which the offering proceeds and the securities to
be issued to purchasers will be placed in an escrow account (the "Escrow
Account") until the offering has been reconfirmed by the Company's
shareholders and a Business Combination (as hereinafter defined) consummated
in accordance with the provisions of such Rule. Pursuant to Rule 3a51-1(d)
under the Securities Exchange Act, the securities being offered hereto
constitute "penny stock," and as such, certain sales restrictions apply to
these securities. (See "Risk Factors"). Up to 30% of the Offering may be
purchased by officers, directors, current shareholders of the Company and any
of their affiliates or associates.
This prospectus also relates to a secondary offering of 300,000
bridge warrants and their underlying shares by certain selling
securityholders (the "Selling Securityholders") (the "Secondary Offering").
Each bridge warrant enables the holder to purchase one share of Common Stock
at the price of $6.25 (the "Bridge Warrants") during the period commencing on
the later of the consummation of a Business Combination by the Company or one
year from the date of this prospectus and ending seven years from the date of
this prospectus. The holders of the Bridge Warrants have agreed not to
transfer them until after the consummation of a Business Combination and not
to exercise them until 90 days after such consummation. Prior to the
Effective Date, the securities to be offered by the Selling Securityholders
(the "Selling Securityholders' Securities" or "Secondary Securities") will be
deposited in the Escrow Account and will be released from such account and
returned to the Selling Securityholders only (i) upon consummation of a
Business Combination (as hereinafter defined) in accordance with Rule 419, or
(ii) contemporaneously with the return of Deposited Funds (as hereinafter
defined) to the investors in this offering in the event a Business
Combination is not consummated by (18 months after the date of
this prospectus). The Secondary Offering will not commence until after the
Company's offering has been reconfirmed by the shareholders, a Business
Combination has been consummated and the proceeds of the Company's offering
released from escrow and disbursed to the Company in accordance with the
provisions of Rule 419 of Regulation C.
See "RISK FACTORS" for a discussion of certain factors which should
be considered by prospective investors.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Price to Proceeds to
the Public the Company(2)
Per Share $ 6.25 $ 6.25
TOTAL (1) $25,000.00 $25,000.00
(1) These Shares are offered by the Company on a "best-efforts,
all or none basis".
Pursuant to the terms of an escrow agreement (the "Escrow
Agreement"), upon receipt by the Company, investors' funds will
immediately be deposited in the Escrow Account which will be
maintained by Atlantic Liberty Savings, 186 Montague Street,
Brooklyn, New York, 11201 (the "Escrow Agent"). All investors'
checks, money orders or wire transfers must be made payable to
"Zeron International Limited, and Atlantic Liberty Savings, as
Escrow Agent." Unless all 4,000 Shares have been sold, and $25,000
in payment therefor has been received in the Escrow Account within
90 days from the date hereof (the "Offering Period"), or within an
additional 90 days if the Offering Period is extended by the
Company (the "Extended Offering Period"), all funds held in the
Escrow Account will be returned to investors in full, without
interest thereon or deduction therefrom.
Upon the sale of all 4,000 Shares within the Offering Period
(or the Extended Offering Period), other terms of the Escrow
Agreement which have been included therein to comply with Rule 419
(the "Rule 419 Escrow Provisions") will govern the treatment of the
Shares purchased by investors and the investors' funds tendered in
payment thereof. Pursuant to the Rule 419 Escrow Provisions, the
Common Stock certificates evidencing the Shares are to be issued in
the respective names of the investors and promptly deposited into
the Escrow Account upon issuance. The investors' funds will remain
as deposited in the Escrow Account except for up to 10% of the
amount on deposit after such payments which may be released to the
Company under Rule 419 (the "Deposited Funds.")
Rule 419 permits 10% of the proceeds to be disbursed to
the Company from the Rule 419 Escrow Account prior to the
consummation of a Business Combination. The Company is entitled to
10% of the Deposited Funds of this offering, and the Company's
current management intends to request release of these funds from
the Escrow Account. The Company will receive the remainder of the
Deposited Funds in the event a Business Combination is consummated
pursuant to the provisions of Rule 419.
(2) Before deducting offering expenses which include: Blue Sky
fees, legal fees, accounting fees, printing fees, filing fees,
estimated at $29,605.17. These offering expenses will be taken
from funds in the Company's treasury.
THE COMPANY IS CONDUCTING A BLANK CHECK OFFERING SUBJECT
TO THE COMMISSION'S RULE 419 OF REGULATION C. THE OFFERING
PROCEEDS, WHICH WILL BE $25,000.00, AND THE SECURITIES PURCHASED BY
INVESTORS MUST BE DEPOSITED INTO AN ESCROW ACCOUNT (THE "DEPOSITED
FUNDS" AND "DEPOSITED SECURITIES," RESPECTIVELY). WHILE HELD IN
THE ESCROW ACCOUNT, THE DEPOSITED SECURITIES MAY NOT BE TRADED OR
TRANSFERRED. EXCEPT FOR AN AMOUNT UP TO 10% OF THE DEPOSITED
FUNDS, $2,500, OTHERWISE RELEASABLE UNDER THE RULE, THE DEPOSITED
FUNDS AND THE DEPOSITED SECURITIES MAY NOT BE RELEASED UNTIL AN
ACQUISITION IS MADE WHICH MEETS THE CRITERIA SPECIFIED IN RULE 419,
AND A SUFFICIENT NUMBER OF INVESTORS RECONFIRM THEIR INVESTMENT IN
ACCORDANCE WITH RULE 419's PROCEDURES. PURSUANT TO THESE
PROCEDURES, A NEW PROSPECTUS, WHICH DESCRIBES AN ACQUISITION
CANDIDATE AND ITS BUSINESS AND INCLUDES AUDITED FINANCIAL
STATEMENTS, WILL BE DELIVERED TO ALL INVESTORS. THE COMPANY MUST
RETURN THE PRO RATA PORTION OF THE DEPOSITED FUNDS TO ANY INVESTOR
WHO DOES NOT ELECT TO REMAIN AN INVESTOR. UNLESS A SUFFICIENT
NUMBER OF INVESTORS ELECT TO REMAIN SO, ALL INVESTORS WILL BE
ENTITLED TO THE RETURN OF THEIR PRO RATA PORTION OF THE DEPOSITED
FUNDS AND NONE OF THE DEPOSITED SECURITIES WILL BE ISSUED TO
INVESTORS. IN THE EVENT AN ACQUISITION IS NOT CONSUMMATED WITHIN
18 MONTHS OF THE EFFECTIVE DATE, THE DEPOSITED FUNDS WILL BE
RETURNED ON A PRO RATA BASIS TO ALL INVESTORS. (SEE "INVESTORS'
RIGHTS AND SUBSTANTIVE PROTECTIONS UNDER RULE 419.")
AS INDICATED ABOVE, THE COMPANY'S OFFERING IS SUBJECT TO
THE PROVISIONS OF RULE 419. WHILE HELD IN THE ESCROW ACCOUNT, RULE
15g-8 UNDER THE SECURITIES EXCHANGE ACT OF 1934 MAKES IT UNLAWFUL
FOR ANY PERSON TO SELL OR OFFER TO SELL THE DEPOSITED SECURITIES
(OR ANY INTEREST IN OR RELATED TO THE DEPOSITED SECURITIES). THUS,
INVESTORS ARE PROHIBITED FROM MAKING ANY ARRANGEMENTS TO SELL THE
DEPOSITED SECURITIES UNTIL THEY ARE RELEASED FROM THE ESCROW
ACCOUNT (SEE "HIGH RISK FACTORS.")
ZERON INTERNATIONAL LIMITED
4 Park Road, Tremont House
Hamilton HM11, Bermuda
The date of this Prospectus is .<PAGE>
THESE SECURITIES ARE HIGHLY SPECULATIVE, INVOLVE A HIGH
DEGREE OF RISK, AND SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN
AFFORD TO LOSE THEIR ENTIRE INVESTMENT. SEE "HIGH RISK FACTORS"
FOR SPECIAL RISKS CONCERNING THE COMPANY AND "DILUTION" FOR
INFORMATION CONCERNING DILUTION OF THE BOOK VALUE OF THE INVESTORS'
SHARES FROM THE PUBLIC OFFERING PRICE.
THE SHARES HAVE BEEN REGISTERED ONLY IN THE STATE OF NEW
YORK, AND MAY ONLY BE TRADED IN SUCH STATE AND THE DISTRICT OF
COLUMBIA, AND IN ANY FOREIGN COUNTRY THAT PERMITS TRADING OF
SECURITIES WITHOUT REGISTRATION THEREOF. PURCHASERS OF SUCH
SECURITIES EITHER IN THIS OFFERING OR IN ANY SUBSEQUENT TRADING
MARKET WHICH MAY DEVELOP MUST BE RESIDENTS OF NEW YORK OR THE
DISTRICT OF COLUMBIA. THE COMPANY WILL AMEND THIS PROSPECTUS FOR
THE PURPOSE OF DISCLOSING ADDITIONAL STATES, IF ANY, IN WHICH THE
COMPANY'S SECURITIES ARE REGISTERED. (SEE "HIGH RISK FACTORS -
STATE LAW VIOLATIONS.")
PRIOR TO THIS OFFERING THERE HAS BEEN NO PUBLIC MARKET
FOR THE COMMON STOCK OF THE COMPANY. THERE IS NO ASSURANCE THAT
ANY TRADING MARKET IN THESE SECURITIES WILL EVER DEVELOP.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement (the
"Registration Statement") on Form F-1 under the Securities Act of
1933 with respect to the Shares offered hereby. This prospectus
does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. The
Company will be subject to the reporting requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"), but is
currently not a reporting company. The Company will file periodic
reports voluntarily in the event that its obligation to file such
reports is suspended under Section 15(d) of the Exchange Act. The
reports and other information filed by the Company may be inspected
and copied at the public reference facilities of the Commission in
Washington, D.C., at prescribed rates. Descriptions contained in
this prospectus as to the contents of any contract or other
document filed as an exhibit to the Registration Statement are not
necessarily complete and each such description is qualified by
reference to such contract or document.
The Company intends to furnish to its stockholders, after
the close of each fiscal year, an annual report relating to the
operations of the Company and containing audited financial
statements examined and reported upon by an independent certified
public accountant. In addition, the Company may furnish to
stockholders such other reports as may be authorized, from time to
time, by the Board of Directors. The Company's year end is
December 31.
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY
ANY SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS
SHALL NOT UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE
HAS NOT BEEN ANY CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE
DATE HEREOF; HOWEVER, ANY CHANGES THAT MAY HAVE OCCURRED ARE NOT
MATERIAL TO AN INVESTMENT DECISION. IN THE EVENT THERE HAS BEEN
ANY MATERIAL CHANGES IN THE AFFAIRS OF THE COMPANY, A POST-
EFFECTIVE AMENDMENT WILL BE FILED. THE COMPANY RESERVES THE RIGHT
TO REJECT ANY ORDER, IN WHOLE OR IN PART, FOR THE PURCHASE OF ANY
OF THE SHARES OFFERED HEREBY.
Until 90 days after the date when the Deposited Funds and Deposited
Securities are released from the Escrow Account, all dealers
effecting transactions in the Common Stock, whether or not
participating in this distribution, may be required to deliver a
prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters with respect to
their unsold allotments or subscriptions.
<PAGE>
TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY.............................. 7
The Company................................... 7
The Offering.................................. 7
Offering in Compliance with Rule 419.......... 8
Enforceability of Civil Liabilities........... 8
High Risk Factors............................. 9
Determination of Offering Price............... 9
Use of Proceeds............................... 9
SUMMARY FINANCIAL INFORMATION................... 10
INVESTORS' RIGHTS AND SUBSTANTIVE PROTECTION
UNDER RULE 419.................................. 11
Deposit of Offering Proceeds and Securities... 11
Prescribed Acquisition Criteria............... 12
Post-Effective Amendment...................... 12
Reconfirmation Offering....................... 13
Release of Deposited Securities and
Deposited Funds............................... 13
HIGH RISK FACTORS............................... 14
DILUTION........................................ 27
USE OF PROCEEDS................................. 29
CAPITALIZATION.................................. 31
PROPOSED BUSINESS............................... 32
History and Organization...................... 32
Plan of Operation............................. 32
Evaluation of Business Combination............ 34
Business Combination.......................... 35
Regulation ................................... 38
Taxation...................................... 38
Employees..................................... 38
Facilities.................................... 38
MANAGEMENT...................................... 39
Biography..................................... 39
Other Blank Check Companies................... 41
Conflicts of Interest......................... 41
Remuneration.................................. 41
Management Involvement........................ 42
Management Control............................ 42
STATEMENT AS TO INDEMNIFICATION................. 42
MARKET FOR THE COMPANY'S COMMON STOCK........... 43
CERTAIN TRANSACTIONS............................ 44
PRINCIPAL STOCKHOLDERS.......................... 46
SELLING SECURITYHOLDERS......................... 48
DESCRIPTION OF SECURITIES....................... 50
Common Stock................................. 50
Preferred Stock.............................. 50
Bridge Warrants.............................. 50
Future Financing............................. 51
Reports to Stockholders...................... 51
Dividends.................................... 51
Transfer Agent............................... 52
COMPARISON U.S. AND CAYMAN ISLANDS CORPORATE LAW 52
PLAN OF DISTRIBUTION............................ 54
EXPIRATION DATE................................. 55
LITIGATION...................................... 56
LEGAL OPINIONS.................................. 56
EXPERTS......................................... 56
FURTHER INFORMATION............................. 56
FINANCIAL STATEMENTS............................ 57
PROSPECTUS SUMMARY
The following is a summary of certain information
contained in this prospectus and is qualified in its entirety by
the more detailed information and financial statements (including
notes thereto) appearing elsewhere in the prospectus and in the
Registration Statement. Investors should carefully consider the
information set forth in this prospectus under the heading "High
Risk Factors".
The Company
ZERON INTERNATIONAL LIMITED (the "Company"), was
organized under the laws of the Cayman Islands on March 22, 1995.
The Company was organized as a vehicle to acquire or merge with a
business or company, (the "Target Business") (a "Business
Combination"). Management believes that the Company's
characteristics as an enterprise with liquid assets, nominal
liabilities, and flexibility in structuring will make the Company
an attractive combination candidate. None of the Company's
officers, directors, promoters, their affiliates or associates have
had any preliminary contact or discussions and there are no present
plans, proposals, arrangements or understandings with any
representative of the owners of any business regarding the
possibility of an acquisition or merger transaction. The Company
does not intend to engage in the business of investing, reinvesting
or trading in securities as its primary business or pursue any
business which would render the Company an "investment company"
pursuant to the Investment Company Act of 1940.
Since organization of the Company, its activities have
been limited to the sale of initial shares in connection with its
organization and its preparation in producing a registration
statement and prospectus for its initial public offering. The
Company will not engage in any substantive commercial business
following the offering. (See "Proposed Business.")
The Company maintains its office at 4 Park Road, Tremont
House, Hamilton HM11, Bermuda. The Company's phone number is (441)
292-3781.
The Offering
Securities offered....... 4,000 Shares of Common Stock, $.001
par value, being offered at $6.25 per
Share. (See "Description of
Securities".)
Common Stock outstanding
prior to the offering...... 396,000 shares.
Common Stock to be
outstanding after
the offering............... 400,000 shares.
<PAGE>
Offering Conducted in Compliance with Rule 419
The Company is a blank check company and consequently
this offering is being conducted in compliance with the
Commission's Rule 419. Investors have certain rights and will
receive the substantive protection provided by the rule. To that
end, the securities purchased by investors and the funds received
in the offering will be deposited and held in the Escrow Account
until an acquisition meeting specific criteria is completed
(hereinafter the "Deposited Funds" and "Deposited Securities".)
Before the acquisition can be completed and before the Deposited
Funds and Deposited Securities can be released to the Company and
the investors, respectively, the Company is required to update the
Registration Statement with a post-effective amendment, and within
the five days after the effective date thereof, the Company is
required to furnish investors with the prospectus produced thereby
containing the terms of a reconfirmation offer and information
regarding the proposed acquisition candidate and its business,
including audited financial statements. According to Rule 419,
investors must have no fewer than 20 and no more than 45 business
days from the effective date of the post-effective amendment to
decide to reconfirm their investment and remain an investor or
alternately, require the return of their investment, minus certain
deductions. Any investor not making any decision within said 45
day period will automatically have his investment funds returned.
The rule further provides that if the Company does not complete an
acquisition meeting the specified criteria within 18 months of the
Effective Date, all of the Deposited Funds in the Escrow Account
must be returned to investors. If the offering period is extended
to its limit (6 months), the Company will have only 12 months in
which to consummate a merger or acquisition. (See "Investors'
Rights and Substantive Protection Under Rule 419 - Reconfirmation
Offering.")
Enforceability of Civil Liabilities
The Company is incorporated in the Cayman Islands. Three
(3) of the Company's officers and directors, as well as the
Company's Cayman Islands counsel are resident outside of the United
States (See "MANAGEMENT" and "LEGAL OPINIONS"). All or a
substantial portion of the assets of such persons may be located
outside the United States. As a result, it may be difficult for
investors to effect service of process within the United States
upon such person or to realize against them upon judgements of
courts of the United States predicated upon civil liability
provisions of the Federal securities laws of the United States, or
solely upon the Federal securities laws. The Company has been
advised by Quin & Hampson, Barristers and Attorneys-at-Law, Harbour
Centre, 3rd Floor, P.O. Box 1348, Cayman Island, BWI, its Cayman
Islands counsel, that judgements obtained in the United States
courts in relation to liabilities predicated upon the federal
securities laws of the United States will not be automatically
enforced in the Cayman Islands and there will necessarily have to
be a re-examination of the issues by the Cayman Islands court to
determine liability or enforceability in the Cayman Islands.
Furthermore, the Company has been advised by Quin & Hampson that
actions based solely on the United States Federal securities laws
will not be actionable in the Cayman Islands, unless such actions
are based on fraud, negligence or breach of duties of officers or
directors of the corporation.
High Risk Factors
Investments in the securities of the Company are highly
speculative, involve a high degree of risk, and should be purchased
only by persons who can afford to lose their entire investment.
See "High Risk Factors" for special risks concerning the Company
and "Dilution" for information concerning dilution of the book
value of the investors shares from the public offering. (See "High
Risk Factors" and "Dilution.")
Determination of Offering Price
The offering price of $6.25 per Share for the Shares
offered hereby has been arbitrarily determined by the Company.
This price bears no relation to the Company's assets, book value,
or any other customary investment criteria, including the Company's
prior operating history. Among factors considered by the Company
in determining the offering price were estimates of the Company's
business potential, the limited financial resources of the Company,
the amount of equity and control desired to be retained by the
present shareholders, the amount of dilution to public investors
and the general condition of the securities markets. (See "High
Risk Factors.")
Use of Proceeds
Of the $25,000 offering proceeds deposited into the
Escrow Account (the "Deposited Funds"), 10% ($2,500) may be
released to the Company prior to a reconfirmation offering whereby
investors reconfirm their investment in accordance with procedures
proscribed by Rule 419. (See "Investors' Rights and Substantive
Protection Under Rule 419 - Reconfirmation Offering.") The Company
is entitled to such funds, and the Company's current management
intends to request release of these funds from the Escrow Account.
The Company will receive the remainder of the Deposited Funds in
the event a Business Combination is consummated pursuant to the
provisions of Rule 419. The Deposited Funds will remain in the
non-interest-bearing Escrow Account maintained by Atlantic Liberty
Savings, which bank is to act as Escrow Agent pursuant to Rule 419
of Regulation C. No portion of the Deposited Funds will be
expended to acquire a Target Business. The Deposited Funds will be
transferred to the Target Company when a Business Combination is
effected. The Company has incurred $32,331 in debt in connection
with its organizational activities. Management is not aware of any
circumstances under which this policy, through their own
initiative, may be changed. Accordingly, no portion of the
proceeds are being used to repay debt. Based on an oral agreement
amongst members of management, management may not accrue
compensation prior to the consummation of a Business Combination.
Management is not aware of any circumstances under which such
policy through their own initiative may be changed. Since the role
of present management after a Business Combination is uncertain,
the Company has no ability to determine what remuneration, if any,
will be paid to such persons after such Business Combination. (See
"Use of Proceeds.")
SUMMARY FINANCIAL INFORMATION
The following is a summary of the Company's consolidated financial
information and is qualified in its entirety by the audited financial
statements appearing herein.
10 Months
Ended January 31, 1996
Statement of Income Data:
Net Sales ............... $ - 0 -
Net Income............... $ (18)
Net Income Per Share..... $ - 0 -
Shares Outstanding....... 396,000
As of After
January 31, 1996 Offering
Balance Sheet Data.........
Working Capital.......... $ (11,464) $ 13,536
Total Assets............. $ 34,293 $ 26,962
Long Term Debt........... $ 0 $ 0
Total Liabilities........ $ 32,331 $ 0
Shareholders' Equity..... $ 1,962 $ 26,962
<PAGE>
4 Months
Ended June 30, 1996
Statement of Income Data:
Net Sales ............... $ - 0 -
Net Income............... $ - 0 -
Net Income Per Share..... $ - 0 -
Shares Outstanding....... 396,000
As of After
June 30, 1996 Offering
Balance Sheet Data.........
Working Capital.......... $ (19,491) $ 5,509
Total Assets............. $ 34,293 $ 26,962
Long Term Debt........... $ 0 $ 0
Total Liabilities........ $ 32,331 $ 0
Shareholders' Equity..... $ 1,962 $ 26,962
<PAGE>
INVESTORS' RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE 419
Deposit of Offering Proceeds and Securities
Rule 419 requires that offering proceeds after deduction
for underwriting commissions, underwriting expenses and dealer
allowances, if any, and the securities purchased by investors in
this offering, be deposited into an escrow or trust account (the
"Deposited Funds" and "Deposited Securities," respectively)
governed by an agreement which contains certain terms and
provisions specified by the Rule. Under Rule 419, the Deposited
Funds and Deposited Securities will be released to the Company and
to the investors, respectively, only after the Company has met the
following three basic conditions. First, the Company must execute
an agreement(s) for an acquisition(s) meeting certain prescribed
criteria. Second, the Company must file a post-effective amendment
to the Registration Statement which includes the terms of a
reconfirmation offer that must contain conditions prescribed by the
rules. The post-effective amendment must also contain information
regarding the acquisition candidate(s) and its business(es),
including audited financial statements. Third, the Company must
conduct the reconfirmation offer and satisfy all of the prescribed
conditions, including the condition that a certain minimum number
of investors must elect to remain investors. After the Company
submits a signed representation to the escrow agent that the
requirements of Rule 419 have been met and after the acquisition(s)
is consummated, the escrow agent can release the Deposited Funds
and Deposited Securities.
Accordingly, the Company has entered into an escrow
agreement with Atlantic Liberty Savings, 186 Montague Street,
Brooklyn, New York, 11201 (the "Escrow Agent") which provides that:
(1) The proceeds are to be deposited into the Escrow
Account maintained by the Escrow Agent promptly upon receipt. Rule
419 permits 10% of the Deposited Funds to be released to the
Company prior to the reconfirmation offering. The Deposited Funds
and dividends thereon, if any, are to be held for the sole benefit
of the investors and can only be invested in bank deposits, in
money market mutual funds or federal government securities or
securities for which the principal or interest is guaranteed by the
federal government.
(2) All securities issued in connection with the
offering and any other securities issued with respect to such
securities, including securities issued with respect to stock
splits, stock dividends or similar rights are to be deposited
directly into the Escrow Account promptly upon issuance. The
identity of the investors are to be included on the stock
certificates or other documents evidencing the Deposited
Securities. The Deposited Securities held in the Escrow Account
are to remain as issued, and are to be held for the sole benefit of
the investors who retain the voting rights, if any, with respect to
the Deposited Securities held in their names. The Deposited
Securities held in the Escrow Account may not be transferred,
disposed of nor any interest created therein other than by will or
the laws of descent and distribution, or pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code of
1986 or Table 1 of the Employee Retirement Income Security Act.
(3) Warrants, convertible securities or other derivative
securities relating to Deposited Securities held in the Escrow
Account may be exercised or converted in accordance with their
terms; provided that, however, the securities received upon
exercise or conversion together with any cash or other
consideration paid in connection with the exercise or conversion
are to be promptly deposited into the Escrow Account.
(4) The securities to be offered by the Selling
Securityholders will be deposited in a separate subaccount within
the Escrow Account prior to effectiveness of the registration
statement relating to the Company's offering, and while held in
such account will be subject to the same transfer restrictions as
are applicable to the Deposited Securities. The Selling
Securityholders' Securities may not be released from such
subaccount or the escrow account until (i) the Deposited Securities
are released to the investors in the Company's Offering, or (ii)
all Deposited Funds have been returned to the investors in the
Company's Offering in the event a Business Combination has not been
consummated within 18 months after the date of this prospectus.
Prescribed Acquisition Criteria
Rule 419 requires that before the Deposited Funds and the
Deposited Securities can be released, the Company must first
execute an agreement to acquire an acquisition candidate(s) meeting
certain specified criteria. The agreement(s) must provide for the
acquisition(s) of a business(es) or assets for which the fair value
of the business represents at least 80% of the offering proceeds,
excluding any underwriting commissions, underwriting expenses and
dealer allowances payable to non-affiliates. The Agreement(s) must
include, as a condition precedent to their consummation, a
requirement that the number of investors representing 80% of the
maximum offering proceeds must elect to reconfirm their investment.
For purposes of the offering, the fair value of the business(es) or
assets to be acquired must be at least $20,000 (80% of $25,000).
Post-Effective Amendment
Once the agreement(s) governing the acquisition(s) of a
business(es) meeting the above criteria has been executed, Rule 419
requires the Company to update the registration statement with a
post-effective amendment. The post-effective amendment must
contain information about the proposed acquisition candidate(s) and
its business(es), including audited financial statements, the
results of this offering and the use of the funds disbursed from
the Escrow Account. The post-effective amendment must also include
the terms of the reconfirmation offer mandated by Rule 419. The
reconfirmation offer must include certain prescribed conditions
which must be satisfied before the Deposited Funds and Deposited
Securities can be released from escrow.
Reconfirmation Offering
The reconfirmation offer must commence after the
effective date of the post-effective amendment. Pursuant to Rule
419, the terms of the reconfirmation offer must include the
following conditions:
(1) The prospectus contained in the post-effective
amendment will be sent to each investor whose securities are held
in the Escrow Account within 5 business days after the effective
date of the post-effective amendment.
(2) Each investor will have no fewer than 20 and no more
than 45 business days from the effective date of the post-effective
amendment to notify the Company in writing that the investor elects
to remain an investor.
(3) If the Company does not receive written notification
from any investor within 45 business days following the Effective
Date, the pro rata portion of the Deposited Funds (and any related
interest or dividends) held in the Escrow Account on such
investor's behalf will be returned to the investor within 5
business days by first class mail or other equally prompt means.
(4) The acquisition(s) will be consummated only if a
minimum number of investors representing 80% of the maximum
offering proceeds, equaling $20,000 (80% of $25,000) elect to
reconfirm their investment.
(5) If a consummated acquisition (s) has not occurred by
(18 months from the date of this
prospectus), the Deposited Funds held in the Escrow Account shall
be returned to all investors on a pro rata basis within 5 business
days by first class mail or other equally prompt means.
Release of Deposited Securities and Deposited Funds
The Deposited Funds and Deposited Securities may be
released to the Company and the investors, respectively, after:
(1) The Escrow Agent has received a signed representation
from the Company and any other evidence acceptable by the Escrow
Agent that:
(a) The Company has executed an agreement for the
acquisition(s) of a Target Business(es) for which the fair market
value of the business represents at least 80% of the maximum
offering proceeds and has filed the required post-effective
amendment;
(b) The post-effective amendment has been declared
effective, that the mandated reconfirmation offer having the
conditions prescribed by Rule 419 has been completed and that the
Company has satisfied all of the prescribed conditions of the
reconfirmation offer.
(2) The acquisition(s) of the business(es) with the fair
value of at least 80% of the maximum proceeds ($20,000).
HIGH RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE IN NATURE AND
INVOLVE AN EXTREMELY HIGH DEGREE OF RISK AND SHOULD BE PURCHASED
ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT.
SEE "DILUTION" FOR INFORMATION CONCERNING DILUTION OF THE BOOK
VALUE OF THE INVESTORS' SHARES FROM THE PUBLIC OFFERING.
1. Anticipated Change in Control and Management. If the
initial public offering is completely sold, management and current
shareholders, including counsel for the Company, will own
approximately 99% of the Common Stock of the Company. Therefore,
management and current shareholders would continue to control the
Company and be able to elect all the directors to the board. Upon
the successful completion of a Business Combination, the Company
anticipates that it will have to issue to the Target Company
authorized but unissued Common Stock in the Company which when
issued will comprise a majority of the then issued and outstanding
shares of Common Stock of the Company. Therefore, the Company
anticipates that upon the consummation of a Business Combination
there will be a change of control in the Company which will most
likely result in the resignation or removal of the Company's
present officers and directors. If there is a change in
management, no assurance can be given as to the experience or
qualification of such persons either in the operation of the
Company's activities or in the operation of the business, assets or
property being acquired. (See "Proposed Business.")
2. New Business Development Stage. The Company was
incorporated under the laws of the Cayman Islands on March 22,
1995, and has had no operations to date. The Company was formed to
serve as a vehicle to effect a Business Combination. There is no
assurance the Company's intended acquisition or merger activities
will be successful or result in revenue or profit to the Company.
Since the Company has not yet attempted to seek a Business
Combination, and due to the Company's lack of experience, there is
only a limited basis upon which to evaluate the Company's
prospectus for achieving its intended business objectives. The
Company faces all risks which are associated with any new business.
Any investment in this Company should be considered an extremely
high risk investment. As of the date of this prospectus, the
Company has not entered into or negotiated any arrangements for a
Business Combination with a Target Business. (See "Proposed
Business.")
3. Use of Proceeds. 90% of the net proceeds of this
offering, pursuant to Rule 419, must be held in escrow pending the
consummation of a Business Combination which transaction must occur
within eighteen (18) months of the Effective Date herein. The
funds from this offering may not be sufficient in order for the
Company to find a Business Combination. Rule 419 permits 10% of
the net proceeds to be disbursed to the Company from the Rule 419
Escrow Account prior to the consummation of a Business Combination.
The Company intends to request release of this money. In the event
the Company does not request release of these funds, the Company
will receive these funds in the event a business combination is
consummated in accordance with Rule 419. (See "Use of Proceeds",
"Business" and "Investors' Rights and Substantive Protection under
Rule 419.")
4. No Access to Investors' Funds While Held In Escrow .
The Company is offering for sale 4,000 Shares, at $6.25 per Share.
The maximum offering period is six months.
There is no commitment by any other person to purchase
all or any portion of the Shares offered hereby, and consequently
there is no assurance that all 4,000 Shares will be sold during the
Offering Period. Investors have no right to the return or the use
of their funds and cannot earn interest thereon until conclusion of
the offering which may continue for a period of up to six months
after the Effective Date. Even upon the sale of the 4,000 Shares,
the investors funds (reduced to reflect payments for expense
amounts, if any, otherwise released as permitted by Rule 419) may
remain in the Escrow Account, which is non-interest bearing, and
the investors will have no right to the return of or the use of
their funds for a period of 18 months from the Effective Date.
Investors will be offered return of their pro rata
portion of the funds held in escrow only in connection with the
reconfirmation offering required to be conducted upon execution of
an agreement to acquire a target business which represents 80% of
the maximum offering proceeds. If the Company is unable to locate
a Target Business meeting the above acquisition criteria, investors
will have to wait 18 months from the Effective Date before a pro
rata portion of their funds is returned without interest thereon.
5. Failure of Sufficient Number of Investors to
Reconfirm Investment. A Business Combination with a Target
Business cannot be consummated unless, in connection with the
reconfirmation offering required by Rule 419, the Company can
successfully convince a sufficient number of investors representing
80% of the maximum offering proceeds to elect to reconfirm their
investments. If, after completion of the reconfirmation offering,
a sufficient number of investors do not reconfirm their investment,
the business combination will not be consummated. In such event,
none of the Deposited Securities held in escrow will be issued and
the Deposited Funds will be returned to investors on a pro rata
basis.
Up to 30% of the Shares may be purchased by officers,
directors, current shareholders of the Company and any of their
affiliates or associates. Shares purchased by such insiders will
be included in determining whether investors representing 80% of
the maximum offering proceeds elect to reconfirm their investment.
The substantive benefit of an objective 80% reconfirmation by
investors may be reduced, as it is likely that such insiders will
elect to reconfirm a proposed Business Combination.
6. Extremely Limited Capitalization. As of June 30,
1996, the Company had assets of $34,293 and $32,331 of liabilities.
There was $12,841 available in the Company's treasury as of June
30, 1996. Upon the sale of all the Shares in this offering, the
Company will receive net proceeds of approximately $25,000, all of
which must be deposited in the Escrow Account. $2,500 may be used
by the Company as capital in order to seek a Business Combination.
The Company's management intends to request release of these funds
from escrow. In the event the Company does not request release of
these funds, the Company will receive the funds in the event a
Business Combination is consummated in accordance with Rule 419.
The costs of conducting the Company's business activities will be
paid by the money in the Company's treasury. Assuming suitable
prospects are identified, if ever, the Company may be unable to
complete an acquisition or merger due to a lack of sufficient
funds. Therefore, the Company may require additional financing in
the future in order to consummate a Business Combination. Such
financing may consist of the issuance of debt or equity securities.
The Company can not give any assurances that such funds will be
available, if needed, or whether they will be available on terms
acceptable to the Company. It is unlikely that the Company will
need additional funds, but it may occur if a Target Company insists
the Company obtain additional capital. Such financing will not
occur without shareholder approval. The Company has borrowed funds
from its officers, directors or current shareholders in the past,
and may do so in the future. If the Company does not consummate an
acquisition or purchase within 18 months of the Effective Date, the
Company must return all the funds, minus certain deductions, back
to the investors. (See "Use of Proceeds," "Proposed Business," and
"Investors' Rights and Substantive Protection Under Rule 419.")
7. No Transfer of Escrowed Securities. No transfer or
other disposition of the Deposited Securities shall be permitted
other than by will or the laws of descent and distribution, or
pursuant to a qualified domestic relations order as defined by the
Internal Revenue Code of 1986 as amended, or Title 7 of the
Employee Retirement Income Security Act, or the rules thereunder.
Pursuant to Rule 15g-8, it is unlawful for any person to sell or
offer to sell the securities (or any interest in or related to the
securities) held in the Rule 419 Escrow Account other than pursuant
to a qualified domestic relations order (i.e., divorce
proceedings). Therefore, any and all contracts for sale to be
satisfied by delivery of the Deposited Securities (e.g. contracts
for sale on a when as, and if issued basis) and sales of derivative
securities to be settled by delivery of the securities are
prohibited. It is further prohibited to sell any interest in the
Deposited Securities (or any derivative securities) whether or not
physical delivery is required. (See "Investors' Rights and
Substantive Protection Under Rule 419.") In addition, no transfer
or other disposition of the Bridge Warrants held in the Rule 419
Escrow Account is permitted until the Offering has been reconfirmed
by the Company's shareholders and a Business Combination
consummated in accordance with the provisions of Rule 419 (See
"SELLING SECURITYHOLDERS").
8. No Assurances of a Public Market. Pursuant to Rule
419, all securities purchased in an offering by a blank check
company, as well as securities issued in connection with an
offering to underwriters, promoters or others as compensation or
otherwise, must be placed in the Rule 419 Escrow Account. These
securities will not be released from escrow until the consummation
of a merger or acquisition as provided for in Rule 419. There is
no present market for the Common Stock of the Company and there is
no likelihood of any active and liquid public trading market
developing following the release of securities from the Rule 419
account. Thus, shareholders may find it difficult to sell their
shares. To date, neither the Company nor anyone acting on its
behalf has taken any affirmative steps to request or encourage any
broker dealer to act as a market maker for the Company's Common
Stock. Further, there have been no discussions or understandings,
preliminary or otherwise, between the Company or anyone acting on
its behalf and any market maker regarding the participation of any
such market maker in the future trading market, if any, for the
Company's Common Stock. Present management of the Company has no
intention of seeking a market maker for the Company's Common Stock
at any time prior to the reconfirmation offer to be conducted prior
to the consummation of a Business Combination. The officers of the
Company after the consummation of a Business Combination may employ
consultants or advisors to obtain such market makers. Management
expects that discussions in this area will ultimately be initiated
by the management of the Company in control of the entity after a
Business Combination is reconfirmed by the stockholders. There is
no likelihood of any active and liquid trading market for the
Company's Common Stock developing. (See "Market for the Company's
Common Stock" and "Investors' Rights and Substantive Protection
Under Rule 419.")
9. Unspecified Industry and Acquired Business;
Unascertained Risks. To date, the Company has not selected any
particular industry in which to concentrate its Business
Combination efforts. In relation to its competitors, the Company
is and will continue to be an insignificant participant in the
business of seeking Business Combinations. A large number of
established and well-financed entities, including venture capital
firms, have recently increased their merger and acquisition
activities. Nearly all such entities have significantly greater
financial resources, technical expertise and managerial
capabilities than the Company and, consequently, the Company will
be at a competitive disadvantage in identifying suitable merger or
acquisition candidates and successfully consummating a proposed
merger or acquisition. Also, the Company will be competing with a
large number of other small, blank check companies. (See
"Conflicts of Interest - Management's Fiduciary Duty" and
"Business.")
10. Conflict of Interest - Management's Fiduciary
Duties. A conflict of interest may arise between management's
personal pecuniary benefits and management's fiduciary duty to the
shareholders of the Company. Investors should note that the
present shareholders of the Company, which include counsels'
interest, will own approximately 99% of the Company after the
offering is completed and would therefore have continuing control
of the Company. Joel Schonfeld, counsel to the Company, and Andrea
Weinstein, Mr. Schonfeld's associate, own 5,333 and 2,667 shares of
the Company's common stock, respectively. Mr. Schonfeld's shares
comprise 1.3% of the outstanding shares before the offering, and
1.3% after the offering. Ms. Weinstein's shares comprise .7% of
the outstanding shares before and after the offering. Johann Wong,
President of the Company and one of its directors, through One
World Asset Management Limited, a Bermuda corporation wholly owned
by him, is the investment manager of One World Capital Partners
Limited, which owns 97,000 Shares, comprising 24.5% before the
offering, and 24.3% after the offering. Rose-Marie Fox, Treasurer
and a director of the Company owns 97,000 Shares, which comprise
24.5% of the outstanding shares before the offering, and 24.3%
after the offering. Thus, Management of the Company beneficially
owns 97,000 shares, which comprise 24.5% of the Company before the
offering and 24.3% after the offering. Further, Management's
interest in their own pecuniary benefits may at some point
compromise their fiduciary duty to the Company's shareholders. No
proceeds from this offering will be used to purchase directly or
indirectly any shares of the Common Stock owned by management or
any present shareholder, director or promoter. (See "Management.")
11. Conflicts of Interest. The Company's directors and
officers are or may become, in their individual capacities,
officers, directors, controlling shareholders and/or partners of
other entities engaged in a variety of businesses. Each officer
and director of the Company is engaged in business activities
outside of the Company, and the amount of time they will devote to
the Company's business will only be about 10 to 20 hours each per
month. There exists potential conflicts of interest including,
among other things, time, effort and Business Combinations with
such other business entities. Conflicts with other blank check
companies with which members of Management are or may become
affiliated in the future may arise in the pursuit of Business
Combinations. To aid the resolution of such conflicts, the Company
will adopt a procedure whereby a special meeting of the Company's
shareholders will be called to vote upon a Business Combination
with an affiliated entity, and shareholders who also hold
securities of such affiliated entity will be required to vote their
shares of the Company's stock in the same proportion as the
Company's publicly held shares are voted. Such procedure shall be
in the form of an oral agreement between Management and the
Company.
Potential conflicts of interest may exist where there are
competing searches for combination candidates among blank check
affiliates. Currently, Johann Wong, President of the Company and
one of its directors, is the only member of Management involved in
other blank check companies. Mr. Wong is an officer and director
of Mars Acquisitions, Inc., and Juno Acquisitions, Inc., blank
check companies. On March 15, 1996, Juno Acquisitions, Inc. signed
a merger agreement with Crijen Inc., a Canadian company, and on
June 19, 1996, Juno Acquisitions, Inc.'s post-effective amendment
reflecting the acquisition of Crijen Inc. was declared effective by
the Securities and Exchange Commission. Approval of this merger is
awaiting shareholder reconfirmation. Mr. Wong is also an officer
and director of Neptune Acquisitions, Inc., Saturn Acquisitions,
Inc., and Athena Acquisitions, Inc., former blank check companies.
However, none of these three companies was able to consummate a
Business Combination within the 18 month period proscribed by Rule
419, and each has returned all deposited funds to its Rule 419
investors. (see "MANAGEMENT - Conflicts of Interest" and
"MANAGEMENT - Other Blank Check Companies."). Additionally, One
World Capital Partners Limited, a shareholder and Bridge Warrant
holder of the Company, is a shareholder and warrant holder of Mars
Acquisitions, Inc., Athena Acquisitions, Inc., Neptune
Acquisitions, Inc., Juno Acquisitions, Inc. and Saturn
Acquisitions, Inc. Mr. Wong, through One World Asset Management
Limited, a Bermuda corporation wholly owned by him, is the
investment manager of One World Capital Partners Limited. Mr.
Wong's involvement in other blank check companies may result in a
conflict of interest, as may any future involvement by other member
of Management in other blank check companies. To the extent Mr.
Wong is made aware of a potential Target Business, he plans on
presenting said Target Business to the blank check company in whose
capacity he was acting as an officer or director when he was
presented with such a business opportunity. The Company has agreed
that when potential Target Businesses are brought to the officers
and directors not in their capacity as officers and directors of
the Company, the Company will not have priority to review these
opportunities and ventures. In the event a potential Target
Business is brought to the attention of a member of Management
without regard to his/her affiliation with any particular blank
check company, Management has full discretion to choose the blank
check company to which they will present the Target Business.
Management and the Company have entered into an oral agreement to
this effect.
There is presently no requirement contained in the
Company's Articles of Association, Memorandum of Association or
minutes which requires that officers and directors of the Company
disclose to the Company Target Businesses which come to their
attention. The officers and directors do, however, have a
fiduciary duty of loyalty to the Company to disclose to the Company
any Target Businesses which come to their attention in their
capacity as an officer and/or director of the Company or otherwise.
Included in this duty would be Target Businesses which the person
learns about through his/her involvement as an officer and director
of another Company. The Company will not purchase the assets of
any Company which is beneficially owned by any officer, director,
promoter or affiliate or associate of this Company. Management
plans on examining a Target Business's financial statements
(including balance sheets, statements of cash flow, stockholders'
equity, etc.), its assets and liabilities and its projections for
future growth. This information will also be considered by the
shareholders who, based on this information, will determine, as
part of the Rule 419 reconfirmation offering, whether a merger with
such a Target Business is "beneficial" to the Company. (See
"Management.")
Management may hire consultants to introduce the Company
to a Target Business. Management has no specific criteria for
hiring such consultants; it will depend on the Business Combination
proposed by them. As of the date hereof, the Company has had no
discussions with or entered into any agreements with, a particular
consultant.
Pursuant to an oral agreement among management, no cash
finder's fees may be paid to anyone, nor will the Company issue any
securities (debts or equity) as finder's fees. While no finder's
fees or other acquisition related compensation may be paid to
officers or directors of the Company from revenues or other funds
of a Target Business or by the issuance of debt or equity of such
an entity, such compensation may be paid to affiliates or
associates of the Company's officers and directors.
12. Potential Related Party Business Combination. The
Company may acquire a business in which the Company's promoters,
management or their affiliates own a beneficial interest. In such
event, such transaction may be considered a related party
transaction not at arms-length. No related party transaction is
presently contemplated. If in the event a related party
transaction is contemplated sometime in the future, the Company
intends to seek shareholder approval through a vote of
shareholders. However, shareholders objecting to any such related
party transaction will be able only to request the return of the
pro-rata portion of their invested funds held in escrow in
connection with the reconfirmation offering to be conducted in
accordance with Rule 419 upon execution of the acquisition
agreement.
13. Possible Disadvantages of Blank Check Offering. The
Company's business may involve the acquisition of or merger with a
company which does not need substantial additional capital but
which desires to establish a public trading market for its shares.
A company which seeks the Company's participation in attempting to
consolidate its operations through a merger, reorganization, asset
acquisition, or some other form of combination may desire to do so
to avoid what they may deem to be adverse consequences of
themselves undertaking a public offering. Factors considered may
include time delays, significant expense, loss of voting control
and the inability or unwillingness to comply with various federal
and state laws enacted for the protection of investors. In making
an investment in the Company, investors should recognize that they
may be doing so under terms which may ultimately be less favorable
than making an investment directly in a company with a specific
business. Investors herein may not be afforded an opportunity to
specifically approve or consent to any particular stock buy-out
transaction. (See "Proposed Business.")
14. Lack of Market Research or Identification of
Acquisition or Merger Candidate. The Company has neither conducted
nor have others made available to it results of market research
concerning the feasibility of a Business Combination with a Target
Business. Therefore, management has no assurances that market
demand exists for an acquisition or merger as contemplated by the
Company. Management has not identified any particular industry or
specific business within an industry for evaluation by the Company.
There is no assurance the Company will be able to form a Business
Combination with a Target Business on terms favorable to the
Company. (See "Proposed Business.")
15. Success Dependent on Management. The Company's
officers and director have limited experience in the business
activities in which the Company intends to engage. Management
believes it has sufficient experience to implement the Company's
plan, although there is no assurance that additional managerial
assistance will not be required. Success of the Company depends on
the active participation of its officers. These officers have not
entered into employment agreements with the Company and they are
not expected to do so in the foreseeable future. The Company has
not obtained key man life insurance on any of its officers or
directors. (See "Proposed Business", "Management" and "Use Of
Proceeds.")
16. No Current Contemplated Business Combinations. As
of the date of this prospectus, none of the Company's officers,
directors, promoters, their affiliates or associates have had any
preliminary contact or discussions and there are no present plans,
proposals, arrangements or understandings with any representatives
of the owners of any business (Target Business) regarding the
possibility of a Business Combination.
17. Lack of Diversification. In the event the Company
is successful in identifying and evaluating a suitable Business
Combination, the Company will in all likelihood, be required to
issue its Common Stock in an acquisition or merger transaction.
Inasmuch as the Company's capitalization is limited and the
issuance of additional Common Stock will result in a dilution of
interest for present and prospective shareholders, it is unlikely
the Company will be capable of negotiating more than one
acquisition or merger. Consequently, the Company's lack of
diversification may subject the Company to economic fluctuation
within a particular industry in which a Target Company conducts
business. (See "Proposed Business.")
18. Regulation. Although the Company will be subject to
regulation under the Securities Act of 1933 and the Securities
Exchange Act of 1934, management believes the Company will not be
subject to regulation under the Investment Company Act of 1940.
The regulatory scope of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), was enacted principally for
the purpose of regulatory vehicles for pooled investments in
securities, extends generally to Companies primarily in the
business of investing, reinvesting, owning, holding or trading
securities. The Investment Company Act may, however, also be
deemed to be applicable to a Company which does not intend to be
characterized as an Investment Company but which, nevertheless,
engages in activities which may be deemed to be within the
definition of the scope of certain provisions of the Investment
Company Act. The Company believes that its principle activities
will not subject it to regulation under the Investment Company Act.
Nevertheless, there can be no assurances that the Company will not
be deemed to be an Investment Company. The funds may be invested
primarily in certificates of deposit, interest bearing savings
accounts or government securities. In the event the Company is
deemed to be an Investment Company, the Company may be subject to
certain restrictions relating to the Company's activities,
including restrictions on the nature of its investments and the
issuance of securities. The Company 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.
19. Taxation. In the course of any acquisition or
merger the Company may undertake, a substantial amount of attention
will be focused upon federal and state tax consequences to both the
Company and the "target" company. Presently, under the provisions
of federal and various state tax laws, a qualified reorganization
between business entities will generally result in tax-free
treatment to the parties to the reorganization. While the Company
expects to undertake any merger or acquisition so as to minimize
federal and state tax consequences to both the Company and the
"target" company, there is no assurance that such Business
Combination will meet the statutory requirements of a
reorganization or that the parties will obtain the intended
tax-free treatment upon a transfer of stock or assets.
Additionally, in the event the Target Business is domiciled outside
the United States, the reorganization will be subject to the tax
laws of that foreign nation. A non-qualifying reorganization could
result in the imposition of both federal and state taxes which may
have a substantial adverse effect on the Company. (See "PROPOSED
BUSINESS - Regulation" and "Taxation.")
20. No Dividends. The Company was only recently
organized, has no earnings, and has paid no dividends to date.
Since the Company was formed as a blank check company with its only
intended business being the search for an appropriate Business
Combination, the Company does not anticipate having any earnings
until such time that a Business Combination is effected. However,
there are no assurances that upon the consummation of a Business
Combination, the Company will have earnings or issue dividends.
Therefore, it is not expected that cash dividends will be paid, if
at all, to stockholders until after a Business Combination is
effected. (See "Dividends.")
21. Restricted Resale of the Securities. The 396,000
shares of the Company's Common Stock presently issued and
outstanding as of the date hereof are "restricted securities" as
that term is defined under the Securities Act of 1933 (the
"Securities Act"), as amended, and in the future may be sold in
compliance with Rule 144 of the Securities Act, or pursuant to a
Registration Statement filed under the Securities Act. Rule 144
provides, in essence, that a person holding restricted securities
for a period of two (2) years may sell those securities in
unsolicited brokerage transactions or in transactions with a market
maker, in an amount equal to one (1%) percent of the Company's
outstanding Common Stock every three (3) months. Sales of
unrestricted shares by affiliates of the Company are also subject
to the same limitation upon the number of shares that may be sold
in any three (3) month period. If all the Shares offered herein
are sold, the holders of the restricted shares may each sell 3,960
shares during any three (3) month period after November 15, 1997.
Additionally, Rule 144 requires that an issuer of securities make
available adequate current public information with respect to the
issuer. Such information is deemed available if the issuer
satisfies the reporting requirements of sections 13 or 15(d) of the
Securities and Exchange Act of 1934 and of Rule 15c2-11 thereunder.
Rule 144(k) also permits the termination of certain restrictions on
sales of restricted securities by persons who were not affiliates
of the Company at the time of the sale and have not been affiliates
in the preceding three (3) months. Such persons must satisfy a
three (3) year holding period. There is no limitation on such
sales and there is no requirement regarding adequate current public
information. Investors should be aware that sales under Rule 144
or 144(k), or pursuant to a Registration Statement filed under the
Act, may have a depressive effect on the market price of the
Company's securities in any market which may develop for such
shares.
22. Arbitrary Determination of Offering Price. The
initial offering price of $6.25 per Share has been arbitrarily
determined by the Company, and bears no relationship whatsoever to
the Company's assets, earnings, book value or any other objective
standard of value. Among the factors considered by the Company
were the lack of operating history of the Company, the proceeds to
be raised by the offering, the amount of capital to be contributed
by the public in proportion to the amount of stock to be retained
by present stockholders, the relative requirements of the Company,
and the current market conditions in the over-the-counter market.
23. Control by Present Management and Shareholders.
Assuming the sale of all the Shares offered, the Shares of Common
Stock purchased by the public will represent approximately 1% of
the Company's outstanding Common Stock after the completion of this
offering. Therefore, the present stockholders, which includes
counsel for the Company and its management, will own a 99% interest
in the corporation and will continue to be able to elect all of the
Company's directors, appoint its officers, and control the
Company's affairs and operations. The Company's Articles of
Association do not provide for cumulative voting. There are no
arrangements, agreements or understandings between non-management
shareholders and management under which non-management shareholders
may directly or indirectly participate in or influence the
management of the Company's affairs or to exercise their voting
rights to continue to elect the current directors. Non-management
shareholders will exercise their voting rights to continue to elect
the current directors to the Company's board. (See "Principal
Stockholders", "Dilution" and "Description of Securities").
24. Immediate Substantial Dilution. As of June 30,
1996, the net tangible book value of the Company's Common Stock was
approximately $.0 per share, substantially less than the $6.25 per
share to be paid by the public investors. In the event all the
Shares are sold, public investors will sustain an immediate
dilution of approximately $6.25 per share in the book value of
public investors' holdings. (See "Dilution.")
25. Purchase of Shares. The Company's officers,
directors, current shareholders and any of their affiliates or
associates may purchase a portion of the Shares offered in this
offering. The aggregate number of Shares which may be purchased by
such persons shall not exceed 30% of the number of Shares sold in
this offering. Such purchases may be made in order to close the
"all or nothing" offering. Shares purchased by the Company's
officers, directors and principal shareholders will be acquired for
investment purposes and not with a view towards distribution.
26. State Law Violations. The Company will use its best
efforts to ensure that sales of Shares will only occur in those
states in which such sales would not be a violation of any of said
states laws. The Company will notify the Transfer Agent to aid in
such compliance. The Company's securities may be sold in New York
State and the District of Columbia only, and maybe be resold by
investors in New York and the District of Columbia only.
27. Business Combination Through A Leveraged
Transaction. The Company is not prohibited from consummating a
Business Combination through a leveraged transaction. However,
investors should be aware that such a transaction could result in
the Company's assets being mortgaged and possibly foreclosed. The
use of leverage to consummate a Business Combination may reduce the
ability of the Company to incur additional debt, make other
acquisitions or declare dividends. Such leverage may also subject
the Company's operations to strict financial controls and
significant interest expense.
28. Penny Stock Regulation. Broker-dealer practices in
connection with transactions in "penny stocks" are regulated by
certain penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks generally are equity securities with a
price of less than $5.00 (other than securities registered on
certain national securities exchanges or quoted on the NASDAQ
system, provided that current price and volume information with
respect to transactions in such securities is provided by the
exchange or system). The penny stock rules require a broker-
dealer, prior to a transaction in a penny stock not otherwise
exempt from the rules, to deliver a standardized risk disclosure
document prepared by the Commission that provides information about
penny stocks and the nature and level of risks in the penny stock
market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the
transaction, and monthly account statements showing the market
value of each penny stock held in the customer's account. In
addition, the penny stock rules require that prior to a transaction
in a penny stock not otherwise exempt from such rules the broker-
dealer must make a special written determination that the penny
stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure
requirements may have the effect of reducing the level of trading
activity in the secondary market for a stock that becomes subject
to the penny stock rules. If the Company's Common Stock becomes
subject to the penny stock rules, investors in this offering may
find it more difficult to sell their shares.
Rights of Shareholders under Cayman Islands Law May Be
Different Than in U.S. Jurisdictions
29. General. The Company's corporate affairs are
governed by its Memorandum and Articles of Association and by the
Companies Law (Revised) of the Cayman Islands. Principles of law
relating to such matters as the validity of corporate procedures,
the fiduciary duties of the Company's management, directors and
controlling shareholders, and the rights of the Company's
shareholders may differ from those that would apply if the Company
was incorporated in a jurisdiction within the United States.
Further, the rights of shareholders under Cayman Islands law may
not be as clearly established as the rights of shareholders under
legislation or judicial precedent in existence in most United
States jurisdictions. Thus, the public shareholders of the Company
may have more difficulty in protecting their interest in the face
of actions by the management, directors or controlling shareholders
than they might have as shareholders of a corporation incorporated
in a United States jurisdiction. See "Comparison of United States
and Cayman Islands Corporate Laws."
30. Enforceability of Civil Liabilities/Ability to Serve
Process. The courts of the Cayman Islands will not automatically
enforce a judgement of the United States courts for liabilities
which were predicated upon the securities laws of the United
States. Such a matter would have to be examined by a court in the
Cayman Islands and a new action commenced. Furthermore, Johann
Wong, President and a director of the Company, is a Canadian
citizen and a resident of Bermuda, and Peter Anderson, Secretary
and a director, is a resident of the Cayman Islands, and John B.
Benbow, assistant secretary, is a resident of the Cayman Islands.
No assurances can be given that potential litigants and/or
investors who wish to commence litigation against Mr. Wong, Mr.
Anderson or Mr. Benbow in their director and/or managerial
capacities, will be capable of effecting valid service of process
on them, or, if litigation is commenced and judgement rendered
against Mr. Wong, Mr. Anderson or Mr. Benbow that such judgement
would ever be enforced. Additionally, no assurances can be given
that any foreign court would enforce judgements secured in United
States court against Mr. Wong, Mr. Anderson or Mr. Benbow. The
Company has not received any opinion of counsel on these matters.<PAGE>
DILUTION
The net tangible book value of the Company as of June 30, 1996 was
$.0. Net tangible book value is the net tangible assets of the
Company (total assets less total liabilities and intangible assets)
(See "Financial Statements.") As of June 30, 1996 there were
396,000 shares of the Company's Common Stock outstanding (See
"Certain Transactions").
Dilution represents the difference between the public offering
price and the net tangible book value per share immediately after
the completion of the public offering. The following table
illustrates this dilution:
Public offering price per share.......................... $6.25
Net tangible book value per share before offering........ $ 0
Net tangible book value per share after offering......... $ 0
Increase per share attributable to shares offered hereby. $ 0
Dilution to public investors............................. $6.25
Money Net tangible
received for book value per
# shares shares before share before
before offering offering offering
396,000 $ 1,980 $ 0
- -------------------------------------------------------------
Total Net tangible
Total Amount of Book Value
# of Shares Money Received Per Share
After Offering For Shares After Offering
400,000 $ 26,980 $ 0
Increase
Net Tangible Net tangible Per Share
Book Value Per Book Value Attributed
Share After Shares Before To Shares
Offering Offering Offered Hereby
$ 0 $ 0 $ 0
- -------------------------------------------------------------
Net tangible
Book Value Per
Public Offering Share After Dilution to
Price Per Share Offering Public Investors
$6.25 $ 0 $ 6.25
As of the date of this prospectus, the following table sets forth
the percentage of equity to be purchased by public investors in
this offering compared to the percentage of equity to be owned by
the present stockholders, and the comparative amounts paid for the
shares by the public investors as compared to the total
consideration paid by the present stockholders of the Company.
(See "Certain Transactions" and footnotes to "Financial
Statements.")
Approx.
Percent Approx.
Total Percent
Public Shares Shares Total Total
Stockholders Purchased Outstanding(1) Consideration Consideration
New Investors 4,000 1% $ 25,000 93%
Existing(1)
Shareholders 396,000 99% $ 1,980 7%
(1) 396,000 Shares of Common Stock were sold prior to this
offering at $.005 per Share. In addition, 300,000 warrants were
issued pursuant to a Bridge Financing. These Bridge Warrants and
the underlying shares are being registered hereto. (See "Certain
Transactions")
<PAGE>
USE OF PROCEEDS
The gross proceeds of this offering will be $25,000.
Pursuant to Rule 15c2-4 under the Securities Exchange Act of 1934
(the "Exchange Act"), all of these proceeds must be held in escrow
until all of the Shares are sold. Pursuant to Rule 419 under the
Securities Act, after all of the Shares are sold, 10% of the
Deposited Funds ($2,500) may be released from escrow to the
Company. The Company intends to request release of this 10%. In
the event that the Company does not request release of these funds,
the Company will receive these funds in the event a Business
Combination is consummated in accordance with Rule 419. Pursuant
to Rule 419, upon the consummation of a Business Combination and
the reconfirmation thereof which reconfirmation offering must
precede such consummation, $25,000 (plus any interest or dividends
received, but less any portion disbursed to the Company pursuant to
Rule 419(b)(2)(vi) and less any amount returned to investors who
did not reconfirm their investment pursuant to Rule 419) will be
released to the Company.
Approximate
Approximate Percentage
Amount Total
Escrowed funds pending
Business Combination (1)(2)
$22,500 90%
(1) Does not include the estimated $29,605.17 of offering
expenses.
(2) The Company expects to request release of 10% of the Deposited
Funds ($2,500) pursuant to Rule 419.
While the Company presently anticipates that it will be
able to locate and consummate a Business Combination, which adheres
to the criteria discussed under "Investors' Rights and Substantive
Protection Under Rule 419", if the Company determines that a
Business Combination requires additional funds, it may seek such
additional financing through loans, issuance of additional
securities or through other financing arrangements. No such
financial arrangements presently exist, and no assurances can be
given that such additional financing will be available or, if
available, whether such additional financing will be on terms
acceptable to the Company. Persons purchasing Shares in this
offering will not, unless required by law, participate in the
determination of whether to obtain additional financing or as to
the terms of such financing. Because of the Company's limited
resources, it is likely that the Company will become involved in
only one Business Combination.
The Company does not intend to advertise or promote the
Company. Instead, the Company's management will actively search
for potential Target Businesses. In the event management decides
to advertise (in the form of an ad in a legal publication) to
attract a Target Business, the cost of such advertising will be
assumed by management.
Upon the consummation of a Business Combination, the
Company anticipates that there will be a change in the Company's
management, which management may decide to change the policies as
to the use of proceeds as stated herein. The Company's present
management anticipates that the Deposited Funds will be used by the
post-merger management at its sole discretion. No compensation will
be paid or due or owing to any officer or director until after a
Business Combination is consummated. Such policy is based upon an
oral agreement among management. Management is unaware of any
circumstances under which such policy through their own initiative
may be changed. The Company is not presently considering any
outside individual for a consulting position; however, the Company
cannot rule out the need for outside consultants in the future. No
decisions have been made as to payment of these consultants.
Present management of the Company will not make any loans
of the $2,500 available from the Deposited Funds of this offering,
nor will present management borrow funds and use either the
Company's working capital or Deposited Funds as security for such.
This policy is based upon an oral agreement among management.
Management is unaware of any circumstances under which such policy
through their own initiative may be changed. Once the Deposited
Funds are released from escrow the then existing management may
loan the proceeds or borrow funds and use the proceeds as security
for such loan, on terms it deems appropriate.
The proceeds received in this offering will be put into
the Escrow Account pending consummation of a Business Combination
and reconfirmation by investors. Such Deposited Funds will be in
an insured depository institution account in either a certificate
of deposit, interest bearing savings account or in short term
government securities as placed by Atlantic Liberty Savings.
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as
of June 30, 1996, and as adjusted to give effect to the sale of
4,000 Shares offered by the Company.
June 30, 1996
____________________________
Actual As Adjusted
__________ ___________
Long-term debt $ 0 $ 0
Stockholders' equity:
Common stock, $.001 par value;
authorized 75,000,000 shares,
issued and outstanding
396,000 shares and 400,000
shares, as adjusted; $ 396 $ 400
Preferred Stock, $.001
par value; authorized
15,000,000 shares, issued
and outstanding, 0
Additional paid-in capital $ 1,584 $ 26,580
Deficit accumulated during
the development period $ (18) $ (18)
__________ __________
Total stockholders' equity $ 1,962 $ 26,962
Total capitalization $ 1,962 $ 26,962
<PAGE>
PROPOSED BUSINESS
History and Organization
The Company was organized under the laws of the Cayman
Islands on March 22, 1995. Since inception, the primary activity
of the Company has been directed to organizational efforts and
obtaining initial financing. The Company was formed as a vehicle
to pursue a Business Combination. The Company has not engaged in
any preliminary efforts intended to identify a possible Business
Combination and has neither conducted negotiations concerning, nor
entered into a letter of intent concerning any such Target
Business.
The Company's initial public offering will comprise 4,000
Shares of Common Stock at a purchase price of $6.25 per Share.
The Company is filing this registration statement in
order to effect a public offering for its securities. (See
"Description of Securities.")
Plan of Operation
The Company was organized for the purposes of creating a
corporate vehicle to seek, investigate and, if such investigation
warrants, engaging in Business Combinations presented to it by
persons or firms who or which desire to employ the Company's funds
in their business or to seek the perceived advantages of
publicly-held corporation. The Company's principal business
objective will be to seek long-term growth potential in a Business
Combination venture rather than to seek immediate, short-term
earnings. The Company will not restrict its search to any specific
business, industry or geographical location, and the Company may
engage in a Business Combination.
The Company does not currently engage in any business
activities which provide any cash flow. The costs of identifying,
investigating, and analyzing Business Combinations will be paid
with money in the Company's treasury. Persons purchasing shares in
this offering and other shareholders will most likely not have the
opportunity to participate in any of these decisions. The
Company's proposed business is sometimes referred to as a "blank
check" company because investors will entrust their investment
monies to the Company's management before they have a chance to
analyze any ultimate use to which their money may be put. Although
substantially all of the Deposited Funds of this offering are
intended to be utilized generally to effect a Business Combination,
such proceeds are not otherwise being designated for any specific
purposes. Pursuant to Rule 419, prospective investors who invest
in the Company will have an opportunity to evaluate the specific
merits or risks of only the Business Combination management decides
to enter into. Cost overruns will be borne proportionately by all
current shareholders of the Company. Such cost overruns will not
be charged to the Company, but will be funded through current
shareholders' voluntary contribution of capital. This is based on
an oral agreement between current shareholders and the Company.
The Company may seek a Business Combination in the form
of firms which have recently commenced operations, are developing
companies in need of additional funds for expansion into new
products or markets, are seeking to develop a new product or
service, or are established businesses which may be experiencing
financial or operating difficulties and are in need of additional
capital. A Business Combination may involve the acquisition of,
or merger with, a Company which does not need substantial
additional capital but which desires to establish a public trading
market for its shares, while avoiding what it may deem to be
adverse consequences of undertaking a public offering itself, such
as time delays, significant expense, loss of voting control and
compliance with various Federal and State securities laws.
The Company will not acquire a Target Business unless the
fair value of the Target Business represents 80% of the maximum
offering proceeds (the "Fair Market Value Test.") To determine the
fair market value of a Target Business, the Company's management
will examine the audited financial statements (including balance
sheets and statements of cash flow and stockholders' equity) of any
candidate, focusing attention on a potential Target Business's
assets, liabilities, sales and net worth. In addition, management
of the Company will participate in a personal inspection of any
potential Target Business. If the Company determines that the
financial statements of a proposed Target Business does not clearly
indicate that the Fair Market Value Test has been satisfied, the
Company will obtain an opinion from an investment banking firm
(which is a member of National Association of Securities Dealers,
Inc., (the "NASD") with respect to the satisfaction of such
criteria. (See "Investors' Rights and Substantive Protection Under
Rule 419.")
Based upon management's experience with and knowledge of
blank check companies, the probable desire on the part of the
owners of target businesses to assume voting control over the
Company (to avoid tax consequences or to have complete authority to
manage the business) will almost assure that the Company will
combine with just one target business. Management also anticipates
that upon consummation of a Business Combination, there will be a
change in control in the Company which will most likely result in
the resignation or removal of the Company's present officers and
directors.
None of the Company's officers or directors have had any
preliminary contact or discussions with any representative of any
other entity regarding a Business Combination. Accordingly, any
Target Business that is selected may be a financially unstable
Company or an entity in its early stage of development or growth
(including entities without established records of sales or
earnings), the Company will become subjected to numerous risks
inherent in the business and operations of financially unstable and
early stage or potential emerging growth companies. In addition,
the Company may effect a Business Combination with an entity in an
industry characterized by a high level of risk, and although
management will endeavor to evaluate the risks inherent in a
particular industry or Target Business, there can be no assurance
that the Company will properly ascertain or assess all significant
risks. (See "High Risk Factors.")
Management anticipates that it may be able to effect only
one potential Business Combination, due primarily to the Company's
limited financing. This lack of diversification should be
considered a substantial risk in investing in the Company because
it will not permit the Company to offset potential losses from one
venture against gains from another.
The Company anticipates that the selection of a Business
Combination will be complex and extremely risky. Because of
general economic conditions, rapid technological advances being
made in some industries, and shortages of available capital,
management believes that there are numerous firms seeking even the
limited additional capital which the Company will have and/or the
benefits of a publicly traded corporation. Such perceived benefits
of a publicly traded corporation may include facilitating or
improving the terms on which additional equity financing may be
sought, providing liquidity for the principals of a business,
creating a means for providing incentive stock options or similar
benefits to key employees, providing liquidity (subject to
restrictions of applicable statutes) for all shareholders, and
other factors. Potentially available Business Combinations may
occur in many different industries and at various stages of
development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely
difficult and complex.
Evaluation of Business Combinations
The analysis of Business Combinations will be undertaken
by or under the supervision of the officers and directors of the
Company, none of whom is a professional business analyst. (See
"Management.") Management intends to concentrate on identifying
preliminary prospective Business Combinations which may be brought
to its attention through present associations. In analyzing
prospective Business Combinations, management will consider such
matters as the available technical, financial, and managerial
resources; working capital and other financial requirements;
history of operation, if any; 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 perceived public recognition or acceptance or products,
services, or trades; name identification; and other relevant
factors. Officers and directors of the Company will meet
personally with management and key personnel of the firm sponsoring
the business opportunity as part of their investigation. To the
extent possible, the Company intends to utilize written reports and
personal investigation to evaluate the above factors.
Since the Company will be subject to Section 13 or 15 (d)
of the Securities Exchange Act of 1934, it will be required to
furnish certain information about significant acquisitions,
including audited financial statements for the Company(s) acquired,
covering one, two or three years depending upon the relative size
of the acquisition. Consequently, acquisition prospects that do
not have or are unable to obtain the required audited statements
may not be appropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable. In the event the
Company's obligation to file periodic reports is suspended under
Section 15(d), the Company intends on voluntarily filing such
reports.
It may be anticipated that any Business Combination will
present certain risks. Many of these risks cannot be adequately
identified prior to selection, and investors herein must,
therefore, depend on the ability of management to identify and
evaluate such risks. In the case of some of the potential
combinations available to the Company, it may be anticipated that
the promoters thereof have been unable to develop a going concern
or that such business is in its development stage in that it has
not generated significant revenues from its principal business
activity prior to the Company's merger or acquisition, and there is
a risk, even after the consummation of such Business Combinations
and the related expenditure of the Company's funds, that the
combined enterprises will still be unable to become a going concern
or advance beyond the development stage. Many of the Combinations
may involve new and untested products, processes, or market
strategies which may not succeed. Such risks will be assumed by
the Company and, therefore, its shareholders.
Business Combinations
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger,
consolidation, reorganization, joint venture, or licensing
agreement with another corporation or entity. It may also purchase
stock or assets of an existing business.
Investors should note that any merger or acquisition
effected by the Company can be expected to have a significant
dilutive effect on the percentage of shares held by the Company's
then-shareholders, including purchasers in this offering. On the
consummation of a Business Combination, the Target Business will
have significantly more assets than the Company; therefore,
management plans to offer a controlling interest in the Company to
the Target Business. While the actual terms of a transaction to
which the Company may be a party cannot be predicted, it may be
expected that the parties to the business transaction will find it
desirable to avoid the creation of a taxable event and structure
the acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code of 1954, as
amended (the "Code") in the event the Target Company is a United
States corporation. In order to obtain tax-free treatment under the
Code, it may be necessary for the owners of the acquired business
to own 80% or more of the voting stock of the surviving entity. In
such event, the shareholders of the Company, including investors in
this offering, would retain less than 20% of the issued and
outstanding shares of the surviving entity, which would be likely
to result in significant dilution in the equity of such
shareholders. In the event the Target Company is incorporated in
the United States, management of the Company may choose to avail
the Company of these provisions. Investors in this offering will
retain less than 1% of the combined entity after a tax free
exchange. In addition, a majority of all of the Company's
directors and officers may, as part of the terms of the acquisition
transaction, resign as directors and officers. (See "High Risk
Factors" and "Dilution.") In the event the Target Business is
domiciled in a country other than the United States or the Cayman
Islands, the tax laws of that country may effect whether or not the
Business Combination is "tax-free."
Management will not actively negotiate or otherwise
consent to the purchase of any portion of their Common Stock as a
condition to or in connection with a proposed Business Combination
unless such a purchase is requested by a Target Company as a
condition to a merger or acquisition. The officers and directors
of the Company who own Common Stock have agreed to comply with this
provision which is based on an oral agreement among management.
Management is unaware of any circumstances under which such policy
through their own initiative may be changed. (See "Management").
It is anticipated that any securities issued in any such
reorganization would be issued in reliance on exemptions from
registration under applicable federal and state securities laws.
In some circumstances, however, as a negotiated element of this
transaction, the Company may agree to register such securities
either at the time the transaction is consummated, under certain
conditions, or at specified times thereafter. The issuance of
substantial additional securities and their potential sale into any
trading market which may develop in the Company's Common Stock may
have a depressive effect on such market.
As a part of the Company's investigation, officers and
directors of the Company will meet personally with management and
key personnel, visit and inspect material facilities, obtain
independent analysis or verification of certain information
provided, check references of management and key personnel, and
take other reasonable investigative measures, to the extent of the
Company's limited financial resources and management expertise.
The manner of the Business Combination will depend on the
nature of the Target Business, the respective needs and desires of
the Company and other parties, the management of the Target
Business opportunity, and the relative negotiating strength of the
Company and such other management.
If at any time prior to the completion of this offering
the Company enters negotiations with a possible merger candidate
and such a transaction becomes probable, then this offering will be
suspended so that an amendment can be filed which will include
financial statements (including balance sheets and statements of
cash flow and stockholders' equity) of the proposed target.
The Company will not purchase the assets of any company
which is beneficially owned by any officer, director, promoter or
affiliate or associate of the Company. Furthermore, the Company
intends to adopt a procedure whereby a special meeting of the
Company's shareholders will be called to vote upon a Business
Combination with an affiliated entity, and shareholders who also
hold securities of such affiliated entity will be required to vote
their shares of the Company's stock in the same proportion as the
Company's publicly held shares are voted. The Company's officers
and directors have not approached and have not been approached by
any person or entity with regard to any proposed business ventures
with respect to the Company. The Company will evaluate all
possible Business Combinations brought to it. If at any time a
Business Combination is brought to the Company by any of the
Company's promoters, management, or their affiliates or associates,
disclosure as to this fact will be included in the post-effective
amendment, thereby allowing the public investors the opportunity to
fully evaluate the Business Combination.
The Company will remain an insignificant player among the
firms which engage in Business Combinations. There are many
established venture capital and financial concerns which have
significantly greater financial and personnel resources and
technical expertise than the Company. In view of the Company's
combined limited financial resources and limited management
availability, the Company will continue to be at a significant
competitive disadvantage compared to the Company's competitors.
Also, the Company will be competing with a large number of other
small, blank check public companies located throughout the United
States.
The Company does not intend to advertise or promote the
Company. Instead, the Company's management will actively search
for potential Target Businesses. In the event management decides
to advertise (in the form of an ad in a legal publication) to
attract a Target Business, the cost of such advertising will be
assumed by management.
Regulation
The Investment Company Act defines an "investment company" as an
issuer which is or holds itself out as being engaged primarily in
the business of investing, reinvesting or trading of securities.
While the Company does not intend to engage in such activities, the
Company could become subject to regulations under the Investment
Company Act in the event the Company obtains or continues to hold
a minority interest in a number of enterprises. The Company could
be expected to incur significant registration and compliance costs
if required to register under the Investment Company Act.
Accordingly, management will continue to review the Company's
activities from time to time with a view toward reducing the
likelihood the Company could be classified as an "Investment
Company."
Taxation
The Cayman Islands are free from personal income tax,
corporate income tax, capital gains tax, value added tax,
employment tax, withholding tax, sales tax, gift tax, estate tax,
inheritance tax, death duties, succession duties, and annual
property taxes.
Employees
The Company presently has no employees. Each officer and
director of the Company is engaged in business activities outside
of the Company, and the amount of time they will devote to the
Company's business will only be between five (5) and twenty (20)
hours per person per month. Upon completion of the public
offering, it is anticipated that the President and the other
officers and directors of the Company will devote the time
necessary each month to the affairs of the Company until a
successful business opportunity has been acquired.
Facilities
The Company is presently utilizing office space at the
offices of Johann Wong, located at 4 Park Road, Tremont House,
Hamilton HM11, Bermuda at no cost to the Company. Such arrangement
is expected to continue after completion of this offering only
until a Business Combination is consummated, although there is
currently no such agreement between the Company and Mr. Wong. The
Company at present owns no equipment, and does not intend to own
any upon completion of this offering.
MANAGEMENT
The officers and directors of the Company, and further
information concerning them are as follows:
Name Age Position
Johann Wong 36 President, Director
Tremont House
4 Park Road
Hamilton, HM11 Bermuda
Rose-Marie Fox 45 Treasurer, Director
354 E. 50th Street
New York, NY 10022
Peter D. Anderson(1) 40 Secretary, Director
P.O. Box 923
Grand Cayman, BWI
John B. Benbow(1) 47 Assistant Secretary
P.O. Box 923
Grand Cayman, BWI
____________________
(1) May be deemed "Promoters" of the Company, as that term is
defined under the Securities Act of 1933.
BIOGRAPHY
Johann Wong, 36, has been President and a director of the Company
since September 11, 1995. Since May 1993, Mr. Wong has held
several positions with Tremont Advisers, Inc., a public company in
the business of specialized multi-manager investment advisory
services, with over $1.6 billion under advisement. Mr. Wong is
currently president of Tremont (Bermuda) Limited, a wholly owned
subsidiary of Tremont Advisers, Inc. Since July 1985, Mr. Wong has
been and is an officer, director or shareholder of several private
investment firms, including One World Asset Management Limited, a
Bermuda investment advisory firm and investment manager to One
World Capital Partners Limited, a private Bermuda based investment
fund. From May 1992 to July 1995, Mr. Wong served as a director of
Advanced Orthopedic Technologies, Inc. (AOTI-OTC), a public company
engaged in the business of providing professional prosthetic and
orthotic services to the general public. From January 1993 to
August 1995, he was a director of Brandt Technologies, Inc. (BTIQ-
OTC), a public company that designs, sells and manufactures
equipment and provides installation services to the glass container
industry. From June 1992 to January 1994, Mr. Wong was a director
of Vista Technologies (formerly Mercury Acquisitions, Inc.), a
Nevada corporation. Since May 1994, Mr. Wong has been treasurer
and a director of Neptune Acquisitions, Inc., formerly a blank
check company incorporated under the laws of the State of Nevada.
From June 1994 to the present, Mr. Wong has been treasurer and a
director of Juno Acquisitions, Inc., a blank check company
incorporated under the laws of the State of Nevada. Since August
1994, Mr. Wong has been treasurer and a director of Saturn
Acquisitions, Inc., formerly a blank check company incorporated
under the laws of the State of Nevada. Mr. Wong has been treasurer
and a director of Mars Acquisitions, Inc., a former blank check
company incorporated in Nevada, since October 1994. Mr. Wong has
been an officer and director of Athena Acquisitions, Inc., formerly
a blank check company incorporated in Nevada, since May 1994.
Neptune Acquisitions, Inc., Juno Acquisitions, Inc., Saturn
Acquisitions, Inc., Mars Acquisitions, Inc. and Athena
Acquisitions, Inc. all filed registration statements with the
Securities and Exchange Commission on Form S-1. However, the 18
month period in which a blank check company must consummate a
Business Combination has passed for Athena Acquisitions, Inc.,
Neptune Acquisitions, Inc. and Saturn Acquisitions, Inc., and each
of these companies has returned its offering proceeds to the Rule
419 investors. On March 15, 1996, Juno Acquisitions, Inc. signed
a merger agreement with Crijen Inc., a Canadian company, and on
June 19, 1996, Juno Acquisitions, Inc.'s post-effective amendment
reflecting the acquisitions of Crijen Inc. was declared effective
by the Securities and Exchange Commission. Approval of this merger
is awaiting shareholder reconfirmation. Mr. Wong is a Chartered
Financial Analyst.
Rose-Marie Fox, 45, has been Treasurer and a director of the
Company since September 11, 1995. Since 1992, Ms. Fox has been
Managing Director of Cornerstone Financial Corporation, a private
investment firm located in New York City. She has been President
of Cornerstone Technologies Corp. since 1990. Ms. Fox has been a
director of SinoAmerican Telecom Inc. (formerly Jupiter
Acquisitions, Inc.), a telecommunications and paging company with
operations in Hong Kong and the People's Republic of China since
August 1995. Ms. Fox serves on the advisory board of Edelson
Technology Partners, a venture capital firm that manages corporate
funds of AT&T, 3M, ABB, Ford and Reed Elsevier, among others. Ms.
Fox received her Master's in Business Administration from Wharton
Business School, and a Bachelor's degree from Manhatanville
College.
Peter D. Anderson, 40, has been Secretary and a director of the
Company since September 11, 1995. He has been a partner of Benbow
Anderson Co., chartered accountants located on Grand Cayman, since
1988. Mr. Anderson has been a director and assistant manager of
Givens Hall Bank & Trust, Ltd., a bank trust company located on
Grand Cayman, since 1988. Mr. Anderson is a graduate of Queens
University, Belfast, Northern Ireland, and received his
qualification as a chartered accountant from the Institute of
Ireland.
John B. Benbow, 47, has been Assistant Secretary of the Company
since September 11, 1995. Since 1990, Mr. Benbow has been a
partner of Benbow Anderson Co., chartered accountants located on
Grand Cayman. From 1990 to the present, Mr. Benbow has been a
director and general manager of Givens Hall Bank & Trust, Ltd., a
bank and trust company on Grand Cayman. Mr. Benbow was granted a
fellow of the Institute of Chartered Accountants in England and
Whales in 1981. He is a graduate of Liverpool University Medical
School.
Other Blank Check Companies
Competing searches for combination candidates among blank
check affiliates may present conflicts of interest. Management
intends to present each Business Combination candidate to the
shareholders for their approval. Currently, there is one (1) blank
check affiliate seeking a combination candidate: Mars
Acquisitions, Inc., of which Mr. Wong is President, Treasurer and
a director. Mars Acquisitions, Inc.'s initial public offering was
declared effective by the Securities and Exchange Commission on
August 10, 1995. Pursuant to this offering, 4,000 shares were
offered at $6.25 per share for a total of $25,000. Mr. Wong is
President, Treasurer and a director of Juno Acquisitions, Inc., a
blank check company whose initial public offering was declared
effective by the Securities and Exchange Commission on January 23,
1995. Pursuant to that offering, 8,000 shares of common stock were
offered at $6.25 per share for a total of $50,000. On March 15,
1996 Juno Acquisitions, Inc., signed an acquisition agreement with
Crijen Inc., a Canadian company, and June 19, 1996, Juno
Acquisitions, Inc.'s post-effective amendment, which amendment
reflected the acquisition of Crijen Inc., was declared approved by
the Securities and Exchange Commission. Approval of this
acquisition is awaiting shareholder reconfirmation. Neptune
Acquisitions, Inc.; Saturn Acquisitions, Inc.; and Athena
Acquisitions, Inc. are blank check companies which were unable to
consummate a Business Combination within the 18 month period
proscribed by Rule 419. Johann Wong, President of the Company, is
an officer and director of Neptune Acquisitions, Inc., Juno
Acquisitions, Inc., Saturn Acquisitions, Inc., Athena Acquisitions,
Inc. and Mars Acquisitions, Inc. The initial blank check offering
of Vista Technologies, Inc. (formerly Mercury Acquisitions, Inc.)
was declared effective by the Securities and Exchange Commission on
June 1, 1993, and closed in December 1993, yielding $22,000, net of
expenses. The offering consisting of 8,000 common shares at $6.25
per share. Sale of control of the company was effectuated in
February 1994 to four (4) foreign investors who intended to
identify business opportunities in the field of eye care and
corrective surgery. Johann Wong served as a director of Vista
Technologies, Inc. from June 15, 1992 until January 1994.
Subsequent to the sale of control, Vista Technologies, Inc.
obtained additional equity capital in private placement sales of
its equity securities and has continued its acquisitions of
controlling interests of operating subsidiaries in the field of eye
care and corrective surgery. Vista Technologies, Inc. (formerly
Mercury Acquisitions, Inc.) is a company incorporated under the
laws of the State of Nevada. Athena Acquisition, Inc.'s initial
public offering pursuant to which 4,000 shares of common stock were
offered at $6.25 per share for a total of $25,000 was declared
effective by the Securities and Exchange Commission on December 21,
1994. The initial public offering of Neptune Acquisitions, Inc.
was declared effective on December 21, 1994. 4,000 shares of
common stock were offered at $6.25 per share. Saturn Acquisitions,
Inc.'s initial public offering was declared effective by the
Securities and Exchange Commission on December 19, 1994. 4,000
shares of common stock were sold at $6.25 per share. (See
"MANAGEMENT - Conflicts of Interest").
Conflicts of Interest
Aside from Johann Wong, an officer and director of Juno
Acquisitions, Inc. and Mars Acquisitions, Inc., blank check
companies, no member of management is currently affiliated or
associated with any blank check company. Other members of
management may become involved with other blank check companies in
the future. A potential conflict of interest may occur in the
event of such involvement. In the event Mr. Wong is faced with the
issue of determining which of the blank check companies with which
he is affiliated to present a potential Target Business, he plans
to present the Target Business to the Company in whose capacity he
was acting when he learned of that Target Business. In the event
a potential Target Business comes to Mr. Wong's attention without
regard to his affiliation with any blank check company, Mr. Wong
will have full and unfettered discretion to choose the blank check
company to which he will present the candidate. This is based on
an oral agreement between Mr. Wong and the Company. The other
members of Management have entered into an oral agreement to
resolve any similar conflicts of interest in the same manner.
Management intends to present each Business Combination candidate
to the shareholders for their approval. (See "HIGH RISK FACTORS -
Conflicts of Interest.")
Remuneration
No officer or director of the Company has received any
cash remuneration since the Company's inception, and none is to
receive or accrue any remuneration or reimbursements of expenses
from the Company upon completion of this offering. No remuneration
of any nature has been paid for or on account of services rendered
by a director in such capacity. None of the officers and directors
intends to devote more than 20 hours a month of his time to the
Company's affairs.
The legal fee to be paid to Joel Schonfeld, counsel for
the corporation, is fifteen thousand dollars ($15,000), $7,500 of
which has been paid to Mr. Schonfeld prior to this offering. The
Company estimates it will pay Quin & Hampson, Barristers and
Attorneys-at-Law., the Company's Cayman Island counsel, an
approximate total of $8,000 for legal services.
Management Involvement
All of management has been involved in the Company's
affairs. Non-management shareholders are all acquaintances of
members of management. The Company has conducted no business as of
yet, and aside from the search for shareholders associated with the
Company's formation, management has done no work with or for the
Company. All of management will speak to business associates and
acquaintances and will search the New York Times, the Wall Street
Journal and other business publications for Target Businesses.
After the closing of this offering, all of management intends to
search for, consider and negotiate with a Target Business.
Management has not divided these duties among its members. No
member of management has any distinct influence over the others in
connection with their participation in the Company's affairs.
Management Control
Management may not divest themselves of ownership and
control of the Company prior to the consummation of an acquisition
or merger transaction. This policy is based on an oral agreement
among management. Management is not aware of any circumstances
under which such policy through their own initiative, may be
changed.
STATEMENT AS TO INDEMNIFICATION
The Companies Law (Revised) of the Cayman Islands
provides that the liability of the directors, managers, or the
managing director of a company may, if so provided by the company's
memorandum of association, be unlimited. Article 31 of the
Company's Articles of Association provides that the Company may, to
the fullest extend permitted by law, indemnify any an all directors
and officers.
Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers or
persons controlling the registrant pursuant to the foregoing
provisions, the registrant has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is
against the public policy as expressed in the Securities Act and is
therefore, unenforceable.
MARKET FOR THE COMPANY'S COMMON STOCK
Prior to the date hereof, there has been no trading
market for the Company's Common Stock. Pursuant to the
requirements of Rule 15g-8 of the Exchange Act, a trading market
will not develop prior to or after the effectiveness of this
prospectus or while the Common Stock under this offering is
maintained in escrow. The Common Stock under this offering will
remain in escrow until the Company's consummation of a Business
Combination pursuant to the requirements of Rule 419. There are
currently six (6) holders of the Company's outstanding Common
Stock. Current shareholders will own approximately 99% of the
outstanding shares upon completion of the offering and, as a
result, there is no likelihood of an active public trading market,
as that term is commonly understood, developing for the shares.
There can be no assurance that a trading market will develop upon
the consummation of a Business Combination and the subsequent
release of the Common Stock and other escrowed shares from escrow.
To date, neither the Company nor anyone acting on its behalf has
taken any affirmative steps to retain or encourage any broker
dealer to act as a market maker for the Company's Common Stock.
Further, there have been no discussions or understandings,
preliminary or otherwise, between the Company or anyone acting on
its behalf and any market maker regarding the participation of any
such market maker in the future trading market, if any, for the
Company's Common Stock. (See "HIGH RISK FACTORS - No Assurance of
a Public Market" and "HIGH RISK FACTORS - Control by Present
Management and Shareholders.")
Present management does not anticipate that any such
negotiations, discussions or understandings shall take place prior
to the execution of an acquisition agreement. Management expects
that discussions in this area will ultimately be initiated by the
party or parties controlling the entity or assets which the Company
may acquire. Such party or parties may employ consultants or
advisors to obtain such market maker but present management of the
Company has no intention of doing so at the present time.
There are currently outstanding 300,000 Bridge Warrants
to purchase a total of 300,000 shares of common stock of the
Company. The 396,000 shares of the Company's Common Stock
currently outstanding are "restricted securities" as that term is
defined in the Securities Act of 1933. Pursuant to Rule 144 of the
Securities Act, if all the Shares being offered hereto are sold,
the holders of the restricted securities may each sell 3,960 shares
during any three (3) month period after November 15, 1997. The
Company is offering 4,000 shares of its Common Stock at $6.25 per
Share. Dilution to the public investors after the public offering
shall be $6.25 per share (see "DILUTION.")
The legal fee to be paid to Joel Schonfeld is $15,000;
$7,500 of which has been paid as of the date hereof. The $7,500
paid to Mr. Schonfeld from the Company's treasury was part of the
$30,000 in proceeds raised from the Company's Bridge Financing.
The Company estimates that it will pay Quin and Hampson, Barristers
and Attorneys-at-Law, the Company's Cayman Islands counsel, a total
of approximately $8,000 for legal fees. This amount, too, shall be
paid out of the Bridge Financing proceeds.
CERTAIN TRANSACTIONS
The Company was incorporated under the laws of the Cayman Islands
on March 22, 1995. On November 15, 1995 the Company issued 396,000
shares to six (6) shareholders at $.005 per share, for a total of
$1,980. The current breakdown of share ownership by shareholder
may be found in the section on Principal Stockholders.
In October 3, 1995, the Company consummated its Bridge Financing in
order to pay certain organizational expenses, the costs of the
Bridge Financing and general costs of this Offering. The following
three (3) investors loaned the Company an aggregate of $30,000 and
were issued promissory notes in that amount (the "Notes"), which
Notes bear interest at the rate of 7% per annum, payable at the
consummation of a Business Combination.
Name Amount Amount of
of of Bridge Warrants
Investor Loan Issued
Cornerstone Financial Corporation(1) $15,000 150,000
Cook Capital Investments Ltd.(2) $ 7,500 75,000
One World Capital Partners Limited(3) $ 7,500 75,000
Total $30,000 300,000
(1) Rose-Marie Fox, the Company's Treasurer and director, is a
principal and the Managing Director of Cornerstone Financial
Corporation, a financial consulting company.
(2) Cook Capital Investments Ltd. is a private investment company.
(3) Johann Wong, the Company's President and a director, through
One World Asset Management Limited, a Bermuda corporation wholly
owned by him, is the investment manager of One World Capital
Partners Limited, a private investment company.
The above investors were issued an aggregate of 300,000 Bridge
Warrants. Each Bridge Warrant entitles the holder to purchase one
share of Common Stock for $6.25 during the period commencing on the
later of the consummation by the Company of its Business
Combination or one year from the date of this Prospectus and ending
seven years from the date of this Prospectus. The holders of the
Bridge Warrants have agreed not to transfer them until after the
consummation of a Business Combination and not to exercise them
until 90 days after such consummation. The Deposited Bridge
Warrants may not be sold or otherwise transferred until their
release from the Rule 419 Escrow Account. The Bridge Warrants and
the underlying Common Stock are hereby being registered.
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of the date
of this prospectus, and as adjusted to reflect the sale of the
shares offered hereby, by (i) each person who is known by the
Company to own beneficially more than 5% of the Company's
outstanding Common Stock; (ii) each of the Company's officers and
directors; and (iii) all directors and officers of the Company as
a group.
Name/Address Shares of Percent of Percent of
Beneficial Common Stock Class Owned Class Owned
Owner Beneficially Owned(6) Before Offering After Offering
Otto Tobler 97,000 24.5% 24.3%
Zurichbergstrasse 74
8044 Zurich
Switzerland
Rose-Marie Fox(1)(2) 97,000 24.5% 24.3%
354 East 50th St.
New York, NY 10022
One World Capital 97,000 24.5% 24.3%
Partners Limited(1)(3)
Tremont House
4 Park Road
Hamilton HM11 Bermuda
Cook Capital 97,000 24.5% 24.3%
Investments Ltd.(1)(4)
P.O. Box HM 370
Hamilton HM BX
Bermuda
Joel Schonfeld(5) 5,333 1.3% 1.3%
26 Court Street
Suite 810
Brooklyn, NY 11242
Andrea Weinstein(5) 2,667 .7% .7%
26 Court Street
Suite 810
Brooklyn, NY 11242
Total Officers 97,000 24.5% 24.3%
and Directors (1 Person)
Total 396,000 100% 99%
__________________________
(1) May be deemed "Promoters" of the Company, as that
term is defined under the Securities Act of 1933.
(2) Ms. Fox is Treasurer and a Director of the Company.
She is also the Managing Director of Cornerstone Financial
Corporation, a holder of the Bridge Warrants.
(3) Mr. Wong, the Company's President and a director,
through One World Asset Management Limited, a Bermuda corporation
wholly owned by him, is the investment manager of One World Capital
Partners Limited.
(4) The principals of Cook Capital Investments Ltd. are
David Raworth, P.O. Box 173, Road Town, Tortola, British Virgin
Islands, and Clive Dakin, P.O. Box 370, Hamilton, HM BX, Bermuda.
(5) Mr. Schonfeld is special counsel to the Company for
this Offering, and Ms. Weinstein is his associate.
(6) Each beneficial owner has sole voting power and sole
investment power over all his/her beneficially owed shares.
None of the current stockholders have received or will
receive any extra or special benefits that were not shared equally
(pro rata) by all holders of shares of the Company's stock.
<PAGE>
SELLING SECURITYHOLDERS
The Selling Securityholders are registering their Bridge Warrants
which are currently outstanding, as well as the shares of Common
Stock underlying the Bridge Warrants. Prior to the Effective Date,
the Selling Securityholders' Securities will be deposited in the
Escrow Account and will be released from such account and returned
to the Selling Securityholders only (i) upon consummation of a
Business Combination in accordance with Rule 419, or (ii)
contemporaneously with the return of Deposited Funds to the
investors in this offering in the event a Business Combination is
not consummated by (18 months after the date of this
prospectus). The Secondary Offering will not commence until after
the Company's offering has been reconfirmed by the shareholders, a
Business Combination has been consummated and the proceeds of the
Company's offering released from escrow and disbursed to the
Company in accordance with the provisions of Rule 419 of Regulation
C. The Selling Shareholders have agreed not to transfer the Bridge
Warrants until after the consummation of a Business Combination and
not to exercise them until 90 days after such consummation. Each
Bridge Warrant entitles the holder to purchase one (1) share of
common stock at the price of $6.25 per share during the period
commencing on the later of the consummation of a Business
Combination or one (1) year from the date of this Prospectus and
ending seven (7) years from the date of this Prospectus.
Name of Bridge Common Stock
Selling Warrants Being Underlying
Securityholder Registered Bridge Warrants
Cornerstone Financial 150,000 150,000
Corporation(1)
354 East 50th Street
New York, NY 10022
Cook Capital Investments Ltd.(2) 75,000 75,000
P.O. Box HM 370
Hamilton, HM BX, Bermuda
One World Capital Partners 75,000 75,000
Limited(3)
c/o Tremont House
4 Park Road
Hamilton HM11, Bermuda
Total 300,000 300,000
(1) The principals of Cornerstone Financial Corporation are Rose-
Marie Fox, 354 East 50th Street, New York, New York 10022, and
Andreas O. Tobler, 400 East 70th Street, #2703, New York, New York
10021. Ms. Fox, Treasurer and a director of the Company, is also
the Managing Director of Cornerstone Financial Corporation.
(2) The principals of Cook Capital Investments Ltd. are David
Raworth, P.O. Box 173, Road Town, Tortola, British Virgin Islands,
and Clive Dakin, P.O. Box 370, Hamilton, HM BX, Bermuda.
(3) Johann Wong, the Company's President and a director, through
One World Asset Management Limited, a Bermuda corporation wholly
owned by him, is the investment manager of One World Capital
Partners Limited.
<PAGE>
DESCRIPTION OF SECURITIES
Common Stock
The Company is authorized to issue seventy-five million
(75,000,000) shares of Common Stock, of which 396,000 shares were
issued and outstanding as of the date of this prospectus. Each
outstanding share of Common Stock is entitled to one vote, either
in person or by proxy, on all matters that may be voted upon by the
owners thereof at meetings of the stockholders.
The holders of Common Stock do not have preemptive,
subscription or conversion rights, or redemption or sinking fund
provisions applicable thereto, and are entitled to one vote per
share on all matters on which stockholders may vote at all meetings
of stockholders.
All shares of Common Stock which are the subject of this
offering, when issued, will be fully paid for and non-assessable,
with no personal liability attaching to the ownership thereof. At
the completion of this offering, the present officers and directors
and present shareholders will beneficially own 99% of the then
outstanding shares. Accordingly, after completion of this
offering, the present shareholders of the Company will be in a
position to control all of the affairs of the Company.
Preferred Stock
The Company has authorized fifteen million (15,000,000)
shares of preferred stock, $.001 par value. The Preferred shares
have no voting rights whatsoever, except as expressly required by
law. The preferred stock is convertible into common shares subject
to the terms and conditions fixed by the Board of Directors. The
holders of the preferred shares shall be entitled to receive
dividends, distributed ratably, before any dividends are declared
and paid to the holders of the shares of Common Stock. Holders of
preferred stock shall be entitled upon dissolution or liquidation
of the Company, to share in the assets of the Company, ratably,
before any such distribution is made to the holders of the Common
Shares.
Bridge Warrants
On October 3, 1995, the Company consummated its Bridge Financing in
order to pay certain organizational expenses, the costs of the
Bridge Financing and general costs of this offering. Three (3)
investors in the Bridge Financing loaned an aggregate of $30,000 to
the Company and were issued promissory notes in that amount,
bearing interest at the rate of 7% per annum and payable at the
consummation of a Business Combination, and 300,000 Bridge
Warrants. Each Bridge Warrant entitles the holder to purchase one
share of Common Stock for $6.25 during the period commencing on the
later of the consummation by the Company of its Business
Combination or one year from the date of this Prospectus. The
holders of the Bridge Warrants have agreed not to transfer them
until after the consummation of a Business Combination or one (1)
year from the date of this Prospectus, and not to exercise them
until 90 days after such consummation. The Deposited Bridge
Warrants may not be sold or otherwise transferred until their
release from the Rule 419 Escrow Account. The Company has agreed
to register the Bridge Warrants and the underlying Common Stock
under the Registration of which this Prospectus is a part.
Future Financing
In the event the proceeds of this offering are not
sufficient to enable the Company to successfully find a Business
Combination, the Company may seek additional financing. At this
time the Company believes that the proceeds of this offering will
be sufficient for such purpose and therefore does not expect to
issue any additional securities before the consummation of a
Business Combination. However, the Company may issue additional
securities, incur debt or procure other types of financing if
needed. The Company has not entered into any agreements, plans or
proposals for such financing and as of present has no plans to do
so. The Company will not use the Deposited Funds as collateral or
security for any loan or debt incurred. Further, the Deposited
Funds will not be used to pay back any loan or debts incurred by
the Company. If the Company does require additional financing,
there is no guarantee that such financing will be available to it
or if available that such financing will be on terms acceptable to
the Company. (See "Use of Proceeds.")
The Company has no present plans, proposals, arrangement
or understanding to recapitalize after the date of this Prospectus
through stock splits or stock dividends, through dividends or
transferable warrants, options or rights or through exchange
offers. There are no plans, proposals, arrangement or
understanding with respect to the sale or issuance of additional
securities after the completion of the offering, but prior to the
location of an acquisitions or merger candidate.
Reports to Stockholders
The Company intends to furnish its stockholders with
annual reports containing audited financial statements as soon as
practicable at the end of each fiscal year. The Company's fiscal
year ends on December 31st.
Dividends
The Company was only recently organized, has no earnings,
and has paid no dividends to date. Since the Company was formed as
a blank check company with its only intended business being the
search for an appropriate Business Combination, the Company does
not anticipate having any earnings until such time that a Business
Combination is reconfirmed by the stockholders. However, there are
no assurances that upon the consummation of a Business Combination,
the Company will have earnings or issue dividends. Therefore, it
is not expected that cash dividends will be paid to stockholders
until after a Business Combination is reconfirmed.
Transfer Agent
The Company has appointed Olde Monmouth Stock Transfer,
22 Claridge Drive, Middletown, New Jersey 07748, as the Transfer
Agent for the Company.
COMPARISON OF U.S. AND CAYMAN ISLANDS CORPORATE LAW
Under the laws of most jurisdictions in the United
States, majority and controlling shareholders generally have
certain fiduciary responsibilities to the minority shareholders.
Shareholder action must be taken in good faith and actions by
controlling shareholders which are obviously unreasonable may be
declared null and void.
Under Cayman Islands law, a shareholder may have two
distinct types of actions. The first is a personal action against
the Company in respect of a breach of the duties which the Company
owes to him/her. This personal action may be on behalf of
himself/herself and all other such members (shareholders) of the
corporation. The second action available to a shareholder arises
in situations where there is alleged fraud and the wrongdoers are
themselves, the majority shareholders and in control of the
Company. This is what is called a derivative action, namely
because it is in pursuit of a cause of action derived from and
exercised on behalf of the company because the alleged wrongdoers
controlled the company, thus preventing the normally appropriate
organ, that is the board of directors of the general meeting, from
causing the company itself to pursue it. The shareholder must
establish fraud on the minority and actual control by the alleged
wrongdoers.
The Companies Law (Revised) also has provisions which
relate to the protection of members/shareholders. For example, a
shareholder must be properly notified of meetings, and the company
must cause the proper books of accounts to be kept. Additionally,
the company can only act by special resolutions of the shareholders
in certain circumstances. Further provisions in the Companies Law
(Revised) provide that a shareholder can request the court to
appoint one or more inspectors to examine the affairs of the
company in certain cases.
As in most United States jurisdictions, the board of
directors of a Cayman Islands corporation is charged with the
management of the affairs of the corporation. In most United
States jurisdictions, directors owe a fiduciary duty to the
corporation and its shareholders, including a duty of care,
pursuant to which directors must properly apprise themselves of all
reasonably available information, and a duty of loyalty, pursuant
to which they must protect the interest of the corporation and
refrain from conduct that injures the corporation or its
stockholders or that deprives the corporation or its stockholders
of any profit or advantage. Many United States jurisdictions have
enacted various statutory provisions which permit the monetary
liability of directors to be eliminated or limited. While the
board of directors of a Cayman Islands corporation may have the
power to generally manage the affairs and the business of that
company, the Companies Law (Revised) has specific provisions which
provide for shareholder approval, which includes the amendment of
a company's memorandum of association or articles of association,
an increase or reduction in a company's authorized capital, and
winding up by consent of a company.
Directors of a Cayman Islands corporation owe a fiduciary
duty to both shareholders and creditors of the corporation. A
director of a Cayman Islands corporation has a duty to act in good
faith, to exercise his/her powers for a purpose in the best
interest of the company, to exercise unfettered discretion, to
avoid unfairness to any members of the corporation, and to avoid a
conflict between his/her duty to the corporation and his/her self
interest of the interests of another party. A director must not be
a party to the misapplication of company resources, including
property, corporate opportunity or confidential information.
The Companies Law (Revised) provides for unlimited
liability of directors and officers unless otherwise provided by a
company's memorandum of association.
The foregoing description of certain difference between
Cayman Islands and United States corporate laws is only a summary
and does not purport to be complete or to address every applicable
aspect of such laws. See "Enforceability of Civil Liabilities,"
and "RISK FACTORS - Rights of Shareholders under Cayman Islands Law
May Be Different Than in U.S. Jurisdictions."
<PAGE>
PLAN OF DISTRIBUTION
The Company hereby offers the right to subscribe for 4,000 Shares
at $6.25 per Share.
The Company proposes to offer the Shares directly on a "best
efforts, all or none basis", and no compensation is to be paid to
any person in connection with the offer and sale of the Shares.
The Company's officers and directors shall distribute prospectuses
related to this Offering. The Company estimates approximately 100
prospectuses shall be distributed in such a manner. Management
intends to distribute prospectus to acquaintances, friends and
business associates.
The Offering shall be conducted by Peter Anderson, the Company's
Secretary. Although the Company's officers and directors are
"associated persons" of the Company as that term is defined in Rule
3a4-1 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), they are deemed not to be brokers for the
following reasons: (1) the officers and directors are not subject
to statutory disqualifications as that terms is defined in Section
3(a)(39) of the Exchange Act at the time of his/her participation
in the sale of the Company's securities; (2) they will not be
compensated in connection with their participation in the sale of
the Company's securities by the payment of commission or other
remuneration based either directly or indirectly on transactions in
securities; (3) none of them are an associated person of a broker
or dealer at the time of his/her participation in the sale of the
Company's securities; and (4) each associated person shall restrict
his/her participation to the following activities:
(a) preparing any written communication or
delivering such communication through the mails or other means that
does not involve oral solicitation by the associated person of a
potential purchaser;
(b) responding to inquiries of potential
purchasers in a communication initiated by the potential
purchasers, provided however, that the content of such responses
are limited to information contained in a registration statement
filed under the Securities Act of 1933 or other offering document;
or
(c) performing ministerial and clerical work
involved in effecting any transaction.
As of the date of this Prospectus, no broker has been
retained by the Company in connection with the sale of securities
being offered hereby. In the event a broker who may be deemed an
Underwriter is retained by the Company, an amendment to the
Company's Registration Statement will be filed with the Securities
and Exchange Commission.
Neither the Company nor anyone acting on its behalf
including the Company's shareholders, officers, directors,
promoters, affiliates or associates will approach any broker-dealer
to act as a market maker or take any steps to request or encourage
a market in these securities either prior or subsequent to an
acquisition of any business opportunity. There have been no
preliminary discussions or understandings between the Company (or
anyone acting on its behalf) and any market maker regarding the
participation of any such market maker in the future trading market
(if any) for the Company's securities, nor does the Company have
any plans to engage in such discussions. The Company does not
intend to use consultants to obtain market makers. No member of
management, promoter or anyone acting at their direction will
recommend, encourage or advise investors to open brokerage accounts
with any broker-dealer that is obtained to make a market in the
Shares subsequent to the acquisition of any business opportunity.
The Company's investors shall make their own decisions regarding
whether to hold or sell their Shares. The Company shall not
exercise any influence over investors' decisions.
Method of Subscribing
Persons may subscribe by filling in and signing the
subscription agreement and delivering it, prior to the expiration
date (as defined below), to the Company. The subscription price of
$6.25 per Share must be paid in cash or by check, bank draft, money
order or wire transfer payable in United States dollars to the
order of the Company and Atlantic Liberty Savings, as Escrow Agent.
This offering is being made on a "best efforts, all or none basis."
Thus, unless all 4,000 shares are sold, none will be sold.
The Company's officers, directors, current shareholders
and any of their affiliates or associates may purchase a portion of
the Shares offered in this offering. The aggregate number of
Shares which may be purchased by such persons shall not exceed 30%
of the number of Shares sold in this offering. Such purchases may
be made in order to close the "all or nothing" offering. Shares
purchased by the Company's officers, directors and principal
shareholders will be acquired for investment purposes and not with
a view towards distribution.
EXPIRATION DATE
This offering will expire 90 days from the date of this
prospectus (or 180 days from the date of this prospectus if
extended by the Company).
LITIGATION
The Company is not presently a party to any litigation,
nor to the knowledge of management is any litigation threatened
against the Company which may materially affect the Company.
LEGAL OPINIONS
Quin & Hampson, Barristers and Attorneys-at-Law, Harbour
Centre, 3rd Floor, P.O. Box 1348, Cayman Island, BWI, the Company's
Cayman Island counsel, has rendered an opinion that the Company has
been duly incorporated under the laws of the Cayman Islands, and
that the Shares are validly issued and non-assessable. Joel
Schonfeld, special counsel to the Company, and his associate,
Andrea Weinstein, own a total of 8,000 shares of the Company's
common stock.
EXPERTS
The financial statements included in this prospectus have
been examined by Jerome Goldberg, independent certified public
accountant, as stated in his opinion given upon the authority of
that person as an expert in accounting and auditing.
FURTHER INFORMATION
The Company has filed with the Securities and Exchange
Commission (the "Commission"), a Registration Statement on Form F-1
with respect to this the securities offered by this prospectus.
This prospectus omits certain information contained in the
Registration Statement as permitted by the Rules and Regulations of
the Commission. Reports and other information filed by the Company
may be inspected at the public reference facilities of the
Commission in Washington, D.C., and copied at prescribed rates.
Statements contained in this prospectus as to the contents of any
contract or other document referred to are not complete and where
such contract or other document is an exhibit to the Registration
Statement, each such statement is deemed qualified and amplified in
all respects by the provisions of the exhibit.
<PAGE>
ZERON INTERNATIONAL LIMITED
FINANCIAL STATEMENTS
(A Development Stage Company)
For the Period March 22, 1995 (Date of Inception)
to January 31, 1996 and February 1, 1996
to June 30, 1996
<PAGE>
ZERON INTERNATIONAL LIMITED
INDEX TO AUDITED FINANCIAL STATEMENTS
Page
. Independent Auditor's Report . . . . . . . . . . . 62
. Balance Sheet as of January 31, 1996. . . . . . . 63
. Balance Sheet as of June 30, 1996. . . . . . . . 64
. Statement of Income for the period March 23, 1995
(Date of Inception) to January 31, 1996, and
for the period of February 1, 1996 to
June 30, 1996 . . . . . . . . . . . . . . . . . 65
Statement of Stockholders' Equity for the period
March 23, 1995 (Date of Inception) to
January 31, 1996. . . . . . . . . . . . . . . . 66
. Statement of Stockholders' Equity for the period
of February 1, 1996 to June 30, 1996. . . . . . . 67
. Statement of Cash Flows for the period March 23, 1995
(Date of Inception) to January 31, 1996 and
February 1, 1996 to June 30, 1996 . . . . . . . . 68
. Notes to Financial Statements for the period
March 23, 1995 (Date of Inception) to
January 31, 1996 and the period from
February 1, 1996 to June 30, 1996 . . . . . . . . 69
<PAGE>
JEROME GOLDBERG
Certified Public Accountant
2940 Ocean Parkway
Brooklyn, New York 11234
The Board of Directors
Zeron International Limited
4 Park Road, Tremont House
Hamilton HM11
Bermuda
Independent Auditor's Report
I have audited the accompanying balance sheet of Zeron
International Limited (a development stage company) as of January
31, 1996, and as of June 30, 1996 and the related statements of
operations, stockholders' equity and cash flows from March 22, 1995
(date of inception) to January 31, 1996, and from February 1, 1996
to June 30, 1996. These financial statements are the
responsibility of the Company's management. My responsibility is
to express an opinion on these financial statements based on my
audit.
I have conducted my audit in accordance with generally
accepted auditing standards. Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides
a reasonable basis for my opinion.
In my opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
Zeron International Limited (a development stage company) at
January 31, 1996 and June 30, 1996, and the results of its
operations and its cash flows from March 22, 1995 (date of
inception) to January 31, 1996, and from February 1, 1996 to June
30, 1996 in conformity with generally accepted accounting
principles.
Jerome Goldberg
Certified Public Accountant
Dated: July 22, 1996
Brooklyn, New York <PAGE>
ZERON INTERNATIONAL LIMITED
(A development stage company)
BALANCE SHEET
as of January 31, 1996
ASSETS
As of
January 31, 1996
Current Assets:
Cash $20,867
Other Assets:
Deferred offering costs $ 7,500
(Notes 1 and 2)
Organization costs
(Note 2) $ 5,926
$13,426
Total Assets $34,293
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Loan Payable (Note 6) $32,331
Total Liabilities $32,331
Stockholders' Equity (Note
1 and 2); 75,000,000
shares, common stock,
$.001 par value,
authorized; issued
and outstanding
396,000 shares at $.001
per share; $ 396
Additional paid in capital $ 1,584
Preferred Stock, $.001
par value, 15,000,000
shares authorized;
0 issued and outstanding
Accumulated Deficit $ (18)
$ 1,962
Total Liability and
Stockholders Equity $34,293
The accompanying notes are an integral part of these financial statements.<PAGE>
ZERON INTERNATIONAL LIMITED
(A development stage company)
BALANCE SHEET
as of June 30, 1996
ASSETS
As of
June 30, 1996
Current Assets:
Cash $12,840
Other Assets:
Deferred offering costs $15,527
(Notes 1 and 2)
Organization costs
(Note 2) $ 5,926
$21,453
Total Assets $34,293
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Loan Payable (Note 6) $32,331
Total Liabilities $32,331
Stockholders' Equity (Note
1 and 2); 75,000,000
shares, common stock,
$.001 par value,
authorized; issued
and outstanding
396,000 shares at $.001
per share; $ 396
Additional paid in capital $ 1,584
Preferred Stock, $.001
par value, 15,000,000
shares authorized;
0 issued and outstanding
Accumulated Deficit $ (18)
$ 1,962
Total Liability and
Stockholders Equity $34,293
The accompanying notes are an integral part of these financial statements.<PAGE>
ZERON INTERNATIONAL LIMITED
(A development stage company)
STATEMENT OF INCOME
For the Period March 23, 1995 (Date of Inception)
to January 31, 1996 and
February 1, 1996 to June 30, 1996
March 23, February 1,
1995 to 1996 to
January 1, June 30,
1996 1996
Costs and Operating Expenses ......... $ (18) $ - 0 -
Income from Operations ............... $ - 0 - $ - 0 -
Net Loss.............................. $ (18) $ - 0 -
The accompanying notes are an integral part of these financial
statements.<PAGE>
ZERON INTERNATIONAL LIMITED
(A development stage company)
STATEMENT OF STOCKHOLDER'S EQUITY
For the Period March 22, 1995 (Date of Inception)
to January 31, 1996
Shares Amount
Initial sale of Stock
November 15, 1995 for cash 396,000 $ 1,980
Net Loss For Period $ (18)
Balance as of
Jan. 31, 1996 396,000 $ 1,962
The accompanying notes are an integral part of these financial
statements.<PAGE>
ZERON INTERNATIONAL LIMITED
(A development stage company)
STATEMENT OF STOCKHOLDER'S EQUITY
For the Period February 1, 1996 to June 30, 1996
Shares Amount
Initial sale of Stock
November 15, 1995 for cash 396,000 $ 1,980
Accumulated Deficit $ (18)
Balance as of
June 30, 1996 396,000 $ 1,962
The accompanying notes are an integral part of these financial
statements.<PAGE>
ZERON INTERNATIONAL LIMITED
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Period March 23, 1995 (Date of Inception)
to January 31, 1996 and February 1, 1996 to
June 30, 1996
March 23, February 1,
1995 to 1996 to
January 31, June 30,
1996 1996
Increase (Decrease) in Cash
and Cash Equivalents
Cash Flows From:
Operating Activities $ (18) $ - 0 -
Investing Activities $ - 0 - $ - 0 -
Financing Activities:
Proceeds from issuance of
Common Stock $ 1,980 $ - 0 -
Deferred Offering Costs $ (7,500) $ (8,027)
Organization Costs $ (5,926) $ - 0 -
Net Cash Provided By
Financing Activities $(11,446) $ (8,027)
Change in Assets
and Liabilities:
Loans Payable $ 32,331 $ - 0 -
Net Increase in Cash and
Cash Equivalents $ 20,867 $ (8,027)
Cash and Cash Equivalents
at end of year $ 20,867
Cash at Beginning of Period $ 20,867
Cash and Cash Equivalents at End of Period $ 12,840
The accompanying notes are an integral part of these financial
statements.<PAGE>
ZERON INTERNATIONAL LIMITED
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD FROM March 22, 1995 (Date of Inception)
TO January 31, 1996 and February 1, 1996 to
June 30, 1996
1.ORGANIZATION OF THE COMPANY
The Company was incorporated in the Cayman Islands on March 22,
1995. Subsequent to incorporation, it issued and sold 396,000
shares of Common stock on November 15, 1995. The Shares were sold
for $.005 per share. The total amount of cash received by the
Company from the sale of all securities was $1,980.
The Company's business will be to seek potential business ventures
which in the opinion of management will provide a profit to the
Company. Such involvement can be in the terms of the acquisition
of existing businesses and/or the acquisition of assets to
establish businesses for the Company. Present management of the
Company does not expect to become involved as management in the
aforementioned businesses and will hire presently unknown and
unidentified individuals as management for the aforementioned
businesses.
The Company's only activities to date have been the acquisition of
funds from the sale of its Common Stock to its officers, directors,
and other investors and the Bridge Financing. The Board of
Directors has voted to authorize the filing of a registration
statement and prospectus on Form F-1 to effect a initial public
offering in order to offer its securities to the public. As of
June 30, 1996, the Company had not yet commenced operations.
As a result of its limited resources, the Company will, in all
likelihood, have the ability to effect only a single Business
Combination. Accordingly, the prospects for the Company's
success will be entirely dependent upon the future performance of
a single business.
The Company's directors and officers are or may become, in their
individual capacities officers, directors, controlling shareholders
in a variety of businesses including other "blank check" companies.
There exists potential conflicts of interest including, among other
things, time, effort and corporate opportunity involved in
participation with other business entities.
The Company's fiscal year-end is December 31st.
2. SIGNIFICANT ACCOUNTING POLICIES
Organization costs
Organization costs will be amortized on a straight line basis over
a five year period from the COMMENCEMENT OF OPERATIONS. The total
organization costs were $11,446 as of January 31, 1996 and #8,027
as of June 30, 1996.
Deferred Offering Costs
All costs to be incurred by the Company in connection with the
proposed public offering will be charged to additional
paid-in-capital upon the successful completion of the offering or
expended in the event the offering is not successful. Total
deferred offering costs were $7,500 as of January 31, 1996 and
$15,527 as of June 30, 1996.
Interim Financial Statements
In the opinion of management, the audited interim financial
statements reflect all adjustments necessary, consisting of normal
recurring adjustments, to present fairly the Company's financial
position at January 31, 1996 and June 30, 1996 and the results of
operations and cash flows for periods ending January 31, 1996 and
June 30, 1996. Results for the periods ended January 31, 1996 and
June 30, 1996 are not necessarily indicative of the results to be
expected for the entire fiscal year.
3. LEASES
The Company has no oral or written leases or freeholds of any kind
on any physical plant. The Company presently uses offices located
at 4 Park Road, Tremont House, Hamilton HM11, Bermuda, at no cost
to the Company. Such arrangement is expected to continue after
completion of this offering.
4. RULE 419 REQUIREMENTS
Rule 419 requires that offering proceeds after deduction for
underwriting commissions, underwriting expenses and dealer
allowances, if any, be deposited into an escrow or trust account
(the "Deposited Funds" and "Deposited Securities," respectively)
governed by an agreement which contains certain terms and
provisions specified by the Rule. Under Rule 419, the Deposited
Funds and Deposited Securities will be released to the Company and
to the investors, respectively, only after the Company has met the
following three basic conditions. First, the Company must execute
an agreement(s) for an acquisition(s) meeting certain prescribed
criteria. Second, the Company must file a post-effective amendment
to the registration statement which includes the terms of a
reconfirmation offer that must contain conditions prescribed by the
rules. The post-effective amendment must also contain information
regarding the acquisition candidate(s) and its business(es),
including audited financial statements. The Agreement(s) must
include, as a condition precedent to their consummation, a
requirement that the number of investors representing 80% of the
maximum proceeds must elect to reconfirm their investments. Third,
the Company must conduct the reconfirmation offer and satisfy all
of the prescribed conditions, including the condition that a
certain minimum number of investors must elect to remain investors.
The post-effective amendment must also include the terms of the
reconfirmation offer mandated by Rule 419. The reconfirmation
offer must include certain prescribed conditions which must be
satisfied before the Deposited Funds and Deposited Securities can
be released from escrow. After the Company submits a signed
representation to the Escrow Agent that the requirements of Rule
419 have been met and after the acquisition(s) is consummated, the
Escrow Agent can release the Deposited Funds and Deposited
Securities.
Accordingly, the Company has entered into an escrow agreement with
Atlantic Liberty Savings (the "Escrow Agent") which provides that:
(1) The net proceeds are to be deposited into
an escrow account maintained by Atlantic Liberty Savings
promptly upon receipt. The deposited proceeds and
interest or dividends thereon, if any, are to be held for
the sole benefit of the investors and can only be
invested in bank deposits, in money market mutual funds
or federal government securities or securities for which
the principal or interest is guaranteed by the federal
government.
(2) All securities issued in connection with
the offering and any other securities issued with respect
to such securities, including securities issued with
respect to stock splits, stock dividends or similar
rights are to be deposited directly into the Escrow
Account promptly upon issuance (the "Deposited
Securities") and the identity of the investors are to be
included on the stock certificates or other documents
evidencing the Securities. The Deposited Securities held
in the escrow account are to remain as issued and are to
be held for the sole benefit of the investors' who retain
the voting rights, if any, with respect to the securities
held in their names. The Deposited Securities held in
the Escrow Account may not be transferred, disposed of
nor any interest created therein other than by will or
the laws of descent and distribution, or pursuant to a
qualified domestic relations order as defined by the
Internal Revenue Code of 1986 or Table 1 of the Employee
Retirement Income Security Act.
(3) Warrants, convertible securities or other
derivative securities relating to securities held in the
Escrow Account may be exercised or converted in
accordance with their terms; provided that, however, the
securities received upon exercise or conversion together
with any cash or other consideration paid in connection
with the exercise or conversion are to be promptly
deposited into the Escrow Account.
Prescribed Acquisition Criteria
Rule 419 requires that before the Deposited Funds and the
Deposited Securities can be released, the Company must first
execute an agreement to acquire an acquisition candidate(s) meeting
certain specified criteria. The agreement(s) must provide for the
acquisition(s) of a business(es) or assets for which the fair value
of the business represents at least 80% of the maximum offering
proceeds. For purposes of the offering, the fair value of the
business(es) or assets to be acquired must be at least $20,000 (80%
of $25,000).
Post-Effective Amendment
Once the agreement(s) governing the acquisition(s) of a
business(es) meeting the above criteria has been executed, Rule 419
requires the Company to update the registration statement with a
post-effective amendment. The post-effective amendment must
contain information about: the proposed acquisition candidate(s)
and its business(es), including audited financial statements; the
results of this offering; and, the use of the funds disbursed from
the Escrow Account. The post-effective amendment must also include
the terms of the reconfirmation offer mandated by Rule 419. The
reconfirmation offer must include certain prescribed conditions
which must be satisfied before the Deposited Funds and Deposited
Securities can be released from escrow.
Reconfirmation Offering
The reconfirmation offer must commence after the
effective date of the post-effective amendment. Pursuant to Rule
419, the terms of the reconfirmation offer must include the
following conditions;
(1) The prospectus contained in the post-
effective amendment will be sent to each investor whose
securities are held in the Escrow Account within 5
business days after the effective date of the post-
effective amendment.
(2) Each investor will have no fewer than 20
and no more than 45 business days from the effective date
of the post-effective amendment to notify the Company in
writing that the investor elects to remain an investor.
(3) If the Company does not receive written
notification from any investor within 45 business days
following the effective date, the pro rata portion of the
Deposited Funds (and any related interest or dividends)
held in the Escrow Account on such investor's behalf will
be returned to the investor within 5 business days by
first class mail or other equally prompt means.
(4) The acquisition(s) will be consummated only
if a minimum number of investors representing 80% of the
maximum offering proceeds ($20,000) elect to reconfirm
their investment.
(5) If a consummated acquisition (s) has not
occurred by (18 months from
the date of this prospectus), the Deposited Funds held in
the Escrow Account shall be returned to all investors on
a pro rata basis within 5 business days by first class
mail or other equally prompt means.
Release of Deposited Securities and Deposited Funds
The Deposited Funds and Deposited Securities may be
released to the Company and the investors, respectively, after:
(1) The Escrow Agent has received a signed representation
from the Company and any other evidence acceptable by the Escrow
Agent that:
(a) The Company has executed an agreement for the
acquisition (s) of a Business (es) for which the fair market value
of the business represents at least 80% of the maximum offering
proceeds and has filed the required post-effective amendment;
(b) The post-effective amendment has been declared
effective, that the mandated reconfirmation offer having the
conditions prescribed by Rule 419 has been completed and that the
Company has satisfied all of the prescribed conditions of the
reconfirmation offer.
(2) The acquisition(s) of the business(es) with the fair
value of at least 80% of the maximum proceeds is consummated.
The Securities to be offered by the Selling Securityholders must be
deposited in the escrow account prior to effectiveness of the
registration statement relating to the Company's offering, and will
be released only after the offering is reconfirmed and an
acquisition transaction is effected or the net proceeds of the
offering returned to the investors in accordance with the
provisions of Rule 419. The Selling Securityholders' offering may
not commence until after an acquisition transaction has been
effected in accordance with the provisions of Rule 419.
5. RELATED PARTY TRANSACTIONS
Johann Wong, President and a director of the Company, through One
World Asset Management Limited, a Bermuda corporation wholly owned
by him, is the investment manager of One World Capital Partners
Limited. One World Capital Partners Limited owns 97,000 Shares,
and 75,000 Bridge Warrants, which, along with their underlying
75,000 shares of Common Stock, are being registered hereto.
Rose-Marie Fox, Treasurer and a director of the Company, is a
principal shareholder of the Company. Furthermore, Ms. Fox is a
principal of Cornerstone Financial Corporation, which owns 150,000
Bridge Warrants, exercisable for 150,000 shares of Common Stock,
all of which are being registered hereto.
Peter D. Anderson, a director and Secretary of the Company, is also
the Company's registered agent for the Cayman Islands. He will
receive $2,500 per year from the Company for this service.
6. LOAN AGREEMENTS
As of January 31, 1996 and June 30, 1996, the Company had $30,000
in notes, pursuant to the Bridge Financing, as well as a $2,331
loan for incorporation costs. The $30,000 Bridge Notes accrue
interest @ a rate of 7% per annum, with interest and principal due
and payable upon consummation of a Business Contribution. The
$2,331 note payable to Zeron Acquisitions II, Inc., accrues
interest @ a rate of 7% per annum, with interest and principal due
and payable upon consummation of a Business Combination.
7. ADDITIONAL INFORMATION
The Board of Directors passed a resolution on October 3, 1995
authorizing the Management of the Company to initiate steps to make
a public offering of the Company's securities, in order to raise
additional capital of $25,000.00. Management was granted authority
to file an F-1 Registration Statement with the Securities and
Exchange Commission and to register the securities in any state
jurisdictions that Management felt was required and appropriate.
It was furthermore resolved that the public offering would consist
of 4,000 Share to be offered at $6.25 per Share.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Expenses of Issuance and Distribution
The other expenses payable by the Registrant in
connection with the issuance and distribution of the securities
being registered are estimated as follows:
Escrow Fee................................$ 250.00
Securities and Exchange Commission
Registration Fee.........................$ 655.17
U.S. Legal Fees...........................$15,000.00
Cayman Islands Legal Fees.................$ 8,000.00
Accounting Fees...........................$ 1,000.00
Printing and Engraving....................$ 500.00
Blue Sky Qualification Fees and Expenses..$ 1,000.00
Miscellaneous.............................$ 400.00
Transfer Agent Fee........................$ 300.00
Cayman Registered Agent Fee...............$ 2,500.00
TOTAL.....................................$29,605.17
Item 14. Indemnification of Directors and Officers
The Companies Law (Revised) provides for unlimited
liability of directors and officers unless otherwise provided by a
company's memorandum of association.
The Memorandum and Articles of Association of the Company
include provisions for the protection of directors and officers.
Section 31 of the Company's Articles of Association states the
following:
31. Indemnity. The Company may to the fullest extent
permitted by Law, indemnify any and all directors and officers whom
it shall have power to indemnify from and against any and all
expenses, liabilities or other matter permitted by Law, and the
indemnification provided for shall not be deemed exclusive of any
other rights to which the persons so indemnified may be entitled
under any By-law, agreement, vote of shareholders or disinterested
directors or otherwise, both as to action in his official capacity
and as to action in another capacity by holding office, and shall
continue as to a person who has ceased to be a director or officer
and shall inure to the benefits of the heirs, executors and
administrators of such person.
<PAGE>
Item 15. Recent Sales of Unregistered Securities
The Company issued 396,000 shares on November 15, 1995 to its
initial stockholders for $1,980.
Name/Address
Consideration Shares
Beneficial Of Common Price
Owner Stock Purchased(2) Paid
Otto Tobler 97,000 $485.00
Zurichbergstrasse 74
8044 Zurich
Switzerland
Rose-Marie Fox(1)(3) 97,000 $485.00
354 East 50th St.
New York, NY 10022
One World Capital 97,000 $485.00
Partners Limited(1)(4)
Tremont House
4 Park Road
Hamilton HM11 Bermuda
Cook Capital 97,000 $485.00
Investments Ltd.(1)(5)
P.O. Box HM 370
Hamilton HM BX
Bermuda
Joel Schonfeld(6) 5,333 $ 26.67
26 Court Street
Suite 810
Brooklyn, NY 11242
Andrea Weinstein(6) 2,667 $ 13.33
26 Court Street
Suite 810
Brooklyn, NY 11242
Total Officers 97,000 $485.00
and Directors
(1 person)
<PAGE>
Additionally, 300,000 Bridge Warrants were issued to three persons
pursuant to Notes dated October 3, 1995. Each Bridge Warrant is
exercisable for one share of Common Stock at $6.25 per share for a
period commencing on the later of the consummation by the Company
of a Business Combination or one year from the date of the
Prospectus, and ending seven (7) years from the date of the
Prospectus. The holders of the Bridge Warrants have agreed not to
transfer them until after the consummation of a Business
Combination, and not to exercise them until 90 days after such
consummation.
Name/Address Amount of Bridge
of Bridge Warrant Holder(1) Warrants Owned(2)
Cornerstone Financial 150,000
Corporation(3)
354 East 50th Street
New York, NY 10022
One World Capital Partners Limited(4) 75,000
c/o Tremont House
4 Park Road
Hamilton HM11, Bermuda
Cook Capital Investments Ltd.(5) 75,000
P.O. Box HM 370
Hamilton, HM BX, Bermuda
__________________________
(1) May be deemed "Promoters" of the Company, as that
term is defined under the Securities Act of 1933.
(2) These Shares were sold under the exemption of
Section 4(2) of the Securities Act of 1933.
(3) The principals of Cornerstone Financial Corporation
are Rose-Marie Fox, 354 East 50th Street, New York, New York
10022, and Andreas O. Tobler, 400 East 70th Street, #2703, New
York, New York 10021. Ms. Fox, Treasurer and a director of the
Company, is also the Managing Director of Cornerstone Financial
Corporation.
(4) Johann Wong, the Company's President and a director,
through One World Asset Management Limited, a Bermuda corporation
wholly owned by him, is the investment manager of One World Capital
Partners Limited.
(5) The principals of Cook Capital Investments Ltd. are
David Raworth, P.O. Box 173, Road Town, Tortola, British Virgin
Islands, and Clive Dakin, P.O. Box 370, Hamilton, HM BX, Bermuda.
(6) Mr. Schonfeld is serving as special counsel to the
Company for this offering, and Ms. Weinstein is his associate.
Neither the Company nor any person acting on its behalf offered or
sold the securities by means of any form of general solicitation or
general advertising.
Each purchaser represented in writing that he/she acquired the
securities for his own account. A legend was placed on the
certificates stating that the securities have not been registered
under the Act and setting forth the restrictions on their
transferability and sale. Each purchaser signed a written agreement
that the securities will not be sold without registration under
the Act or exemption therefrom.
Item 16. EXHIBITS
3.1 Certificate of Incorporation.
3.2 By-Laws.
4.1 Specimen Certificate of Common Stock.
4.2 Specimen Copy of Bridge Warrants
4.3 Specimen Copy of Bridge Note
4.6 Form of Escrow Agreement.
5.0 Opinion of Counsel.
23.0 Accountant's Consent to Use Opinion.
23.1 Counsel's Consent to Use Opinion.
<PAGE>
Item 17.
UNDERTAKINGS
The registrant undertakes:
(1) To file, during any period in which offers or sales are being
made, post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10 (a)
(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the Effective Date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in the registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement, including (but not limited to) any
addition or deletion of managing underwriter;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
treated as a new registration statement of the securities offered,
and the offering of the securities at that time to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) To deposit into the Escrow Account at the closing,
certificates in such denominations and registered in such names as
required by the Company to permit prompt delivery to each purchaser
upon release of such securities from the Escrow Account in
accordance with Rule 419 of Regulation C under the Securities Act.
Pursuant to Rule 419, these certificates shall be deposited into an
escrow account, not to be released until a business combination is
consummated.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to any provisions
contained in its Certificate of Incorporation, or by-laws, or
otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
-This Space is Intentionally Left Blank-
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements of filing on Form F-1 and
authorized this registration statement to be signed on its behalf
by the undersigned, in the City of , State of
, on .
ZERON INTERNATIONAL LIMITED
BY:
Johann Wong, President
Rose-Marie Fox, Authorized U.S. Representative
In accordance with the requirements of the Securities Act of 1933,
this registration statement was signed by the following persons in
the capacities and on the dates stated.
Johann Wong DATED
President, Director
Peter D. Anderson DATED
Secretary, Director
Rose-Marie Fox DATED
Treasurer, Director
John B. Benbow DATED
Assistant Secretary
QUIN & HAMPSON Harbour Chambers,
Barristers & Attorneys at Law Third Floor, Harbour Centre,
P.O. Box 1348, George Town,
Cayman Islands, B.W.I.
Telephone (809) 949-4123
Facsimile (809) 949-4647
9th July, 1996
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
USA
Dear Sirs,
Zeron International Limited
We have acted as the Cayman Islands attorneys for Zeron
International Limited ("the Company") in connection with the
Registration Statement filed on Form F-1 under the Securities Act
of 1933, (the "Registration Statement") and the matters which are
determined by Cayman Islands law.
For the purposes of giving this opinion, we have examined:
(a) Copies of the Memorandum and Articles of Association of
the Company;
(b) Copies of the Register of Shareholders, Register
Director;
(c) A copy of the Minute Book of the Company;
and we have examined such further documents and made such enquiries
as were necessary as a basis for this opinion.
In giving this opinion we have assumed,
1) the authenticity of documents submitted to us and the
conformity with the original documents of all documents
submitted to us as copies;
2) that the Registration Statement will be duly executed in
the form of the copies considered for this opinion, and
will be duly delivered by the authorised persons for and
on behalf of the Company; and
3) that the Registration Statement is legal and enforceable
under the laws of the United States of America.
United States Securities and Exchange Commission
9th July, 1996
Page 2
Based on our examination and enquiries referred to, and the
assumptions set out herein, and subject to the qualifications set
out below, we are of the opinion that:
(a) The Company is validly established existing and of good
standing under the laws of the Cayman Islands.
(b) The Company has the corporate power and authority to
enter into and perform its obligations under the
Registration Statement.
(c) All corporate or other actions required to be taken by or
on behalf of the Company to authorize the Company to
enter into and perform its obligations under the
Registration Statement have been duly and properly taken.
(d) The execution, delivery and performance by the Company of
the Registration Statement, and the fulfillment of the
terms thereof do not and will not result in a breach of
any of the terms or provisions of, or constitute a
default under, or conflict with:
(i) to the best of our knowledge, any judgement,
decree, order or award of any Cayman Islands
Court; governmental body or arbitrator by which
the Company is bound;
(ii) any Cayman Islands law, rule or regulation
applicable to the Company;
(iii) the Memorandum and Articles of Association of
the Company.
(e) To ensure the legality, validity, enforceability or
admissibility in evidence in the Cayman Islands, it is
not necessary that the Registration Statement be
recorded, no declaration, filing or registration with any
court, governmental agency or other authority or body in
the Cayman Islands need be made; no consent, licence,
permit, order, decree, authorization or approval of any
such authority or body is required; no stamp or similar
tax need be paid; and no other action or thing need be
obtained or performed.
United States Securities and Exchange Commission
9th July, 1996
Page 3
(f) The Company is subject to the laws of the Cayman Islands
and its property and/or assets do not enjoy any right of
immunity from any judicial proceedings;
(g) The Registration Statement and the entry into and
performance of the obligations by the Company is not
contrary to the public policy of the Cayman Islands;
(h) There are no tax implications, as the Cayman Islands are
free from personal income tax, corporate income tax,
capital gains tax, value added tax, estate tax. There
are no Exchange Control Regulations or restrictions.
(i) The shares being registered by the Company are authorised
by the Company's Memorandum and Articles of Association,
but have yet to be issued. When issued, these shares
will be legally issued, fully paid-up share capital and
non-assessable, and as such, the shareholders' liability
will be limited to the amount of such shares.
This opinion is given subject to the following qualifications:
(i) this opinion relates only to the laws of the Cayman
Islands in force at today's date. We express no opinion
with regard to the laws of any other jurisdiction;
(ii) this opinion does not constitute any representation
expressed or implied regarding the financial condition of
the Company.
The undersigned hereby consents to the use of this opinion in
connection with the Registration Statement filed, and its inclusion
as an exhibit accompanying such Registration Statement.
Yours faithfully,
Quin & Hampson
JEROME GOLDBERG
Certified Public Accountant
2940 Ocean Parkway
Brooklyn, New York 11234
The Board of Directors
Zeron International Limited
4 Park Road, Tremont House
Hamilton HM11
Bermuda
Re: Zeron International Limited
I, Jerome Goldberg, a certified public accountant, do hereby
consent to the use of my opinion dated July 22, 1996 to Zeron
International Limited, to be used and filed in connection with the
F-1 Registration Statement and Prospectus, as filed with the
Securities and Exchange Commission. I also consent to the use of
my name under the caption "Experts" in the above-mentioned
Registration Statement.
JEROME GOLDBERG, CPA
Dated: July 22, 1996
Brooklyn, New York
<PAGE>
To: The Board of Directors of
Zeron International Limited
4 Park Road, Tremont House
Hamilton HM 11
BERMUDA
Re: Zeron International Limited
We, Quin & Hampson, hereby consent to the use of our opinion dated
9th July, 1996, to Zeron International Limited to be used and filed
in connection with the F-1 Registration Statement and Prospectus,
as filed with the Securities and Exchange Commission.
QUIN & HAMPSON
Barristers and Attorneys-at-Law
Dated this 9th day of July, 1996.
Grand Cayman, Cayman Islands, B.W.I.
