UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 5 TO
FORM F-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
GREYSTONE INTERNATIONAL LIMITED
(formerly 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.)
c/o Givens Hall Bank and Trust, Ltd., Genesis Building, 3rd Floor,
Jennet Street, Grand Cayman, Cayman Islands, (809) 949-8142
(Address and telephone number of principal executive offices)
c/o Givens Hall Bank and Trust, Ltd., Genesis Building, 3rd Floor,
Jennet Street, Grand Cayman, Cayman Islands, (809) 949-8142
(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: Schonfeld & Weinstein, L.L.P.
63 Wall Street, Suite 1801
New York, New York 10005
(212) 344-1600
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.
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
TOTAL
$8.62
(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 $30,000
pursuant to the Company's bridge financing. The Bridge Warrants are not
included in this Registration Statement. For a list of the holders of the
Bridge Warrants, see "Certain Transactions."
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 Offering
Price Price
6. Dilution Dilution
7. Selling Security Holders Not Applicable
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
<PAGE>
PROSPECTUS
GREYSTONE INTERNATIONAL LIMITED
(formerly Zeron International Limited)
(a Cayman Islands Corporation)
4,000 Shares of Common Stock Offered at $6.25 per Share
Greystone 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.
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
"Greystone 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 immediately 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.")
GREYSTONE INTERNATIONAL LIMITED
c/o Givens Hall Bank and Trust, Ltd.
Genesis Building, 3rd Floor
Jennet Street, Grand Cayman, Cayman Islands
(809) 949-8142
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..............................
The Company...................................
The Offering..................................
Offering in Compliance with Rule 419..........
Enforceability of Civil Liabilities...........
High Risk Factors.............................
Determination of Offering Price...............
Use of Proceeds...............................
SUMMARY FINANCIAL INFORMATION...................
INVESTORS' RIGHTS AND SUBSTANTIVE PROTECTION
UNDER RULE 419..................................
Deposit of Offering Proceeds and Securities...
Prescribed Acquisition Criteria...............
Post-Effective Amendment......................
Reconfirmation Offering.......................
Release of Deposited Securities and
Deposited Funds...............................
HIGH RISK FACTORS...............................
DILUTION........................................
USE OF PROCEEDS.................................
CAPITALIZATION..................................
PROPOSED BUSINESS...............................
History and Organization......................
Plan of Operation.............................
Evaluation of Business Combination............
Business Combination..........................
Regulation ...................................
Taxation......................................
Employees.....................................
Facilities....................................
MANAGEMENT......................................
Biography.....................................
Other Blank Check Companies...................
Conflicts of Interest.........................
Remuneration..................................
Management Involvement........................
Management Control............................
STATEMENT AS TO INDEMNIFICATION.................
MARKET FOR THE COMPANY'S COMMON STOCK...........
CERTAIN TRANSACTIONS............................
PRINCIPAL STOCKHOLDERS..........................
DESCRIPTION OF SECURITIES.......................
Common Stock.................................
Preferred Stock..............................
Bridge Warrants..............................
Future Financing.............................
Reports to Stockholders......................
Dividends....................................
Transfer Agent...............................
COMPARISON U.S. AND CAYMAN ISLANDS CORPORATE LAW
PLAN OF DISTRIBUTION............................
EXPIRATION DATE.................................
LITIGATION......................................
LEGAL OPINIONS..................................
EXPERTS.........................................
FURTHER INFORMATION.............................
FINANCIAL STATEMENTS............................
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
GREYSTONE INTERNATIONAL LIMITED (the "Company"), was organized under the
laws of the Cayman Islands on March 22, 1995 under the name Zeron
International Limited. The Company's name was changed pursuant to a meeting
of the Company's Board of Directors on February 23, 1997. 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 c/o Givens Hall Bank and Trust, Ltd.,
Genesis Building, 3rd Floor, Jennet Street, Grand Cayman, Cayman Islands. The
Company's phone number is (809) 949-8142.
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.
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. Two (2) 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.
September 30 , 1997
Statement of Income Data:
Net Sales .................. $ - 0 -
Net Income ................. $ (50)
Net Income Per Share ....... $ - 0 -
Shares Outstanding ......... 396,000
As of Sept. 30, 1997 After Offering
Balance Sheet Data
Working Capital ............ $ (23,584) $ 1,416
Total Assets ............... $ 34,093 $26,762
Long Term Debt ............. $ - 0 - $ - 0 -
Total Liabilities........... $ 32,331 $ - 0 -
Shareholders' Equity ....... $ 1,762 $26,762
<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 under the name Zeron
International Limited, and has had no operations to date. The Company's name
was changed to Greystone International Limited on February 23, 1997. 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 March 31, 1997, the Company
had assets of $32,243 and $32,331 of liabilities. There was $1,591 available
in the Company's treasury as of March 31, 1997. 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.")
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 partner, 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.
Rose-Marie Fox, President, 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
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. (See
"MANAGEMENT - Conflicts of Interest" and "MANAGEMENT - Other Blank Check
Companies."). 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 one (1) year 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, 1996.
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 two
(2) 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 September 30, 1997,
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, Peter Anderson,
Secretary and a director, is a resident of the Cayman Islands, and John B.
Benbow, director and 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. 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. 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. 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 September 30 , 1997
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 September 30 , 1997 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
<PAGE>
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. (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
September 30, 1997 , and as adjusted to give effect to the sale of 4,000
Shares offered by the Company.
September 30 , 1997
____________________________
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 $ (218) $ (218)
__________ __________
Total stockholders' equity $ 1,762 $ 26,762
Total capitalization $ 1,762 $ 26,762
<PAGE>
PROPOSED BUSINESS
History and Organization
The Company was organized under the laws of the Cayman Islands on March
22, 1995 under the name "Zeron International Limited". The Company's name was
changed pursuant to resolution passed by the Board of Directors on February
23, 1997. 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 Givens
Hall Bank and Trust Ltd., located at Genesis Building, 3rd Floor, Jennet
Street, Grand Cayman, Cayman Islands 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 Givens Hall Bank and Trust Ltd. 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
Rose-Marie Fox 45 President, 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 Director
Grand Cayman, BWI
____________________
(1) May be deemed "Promoters" of the Company, as that term is defined under
the Securities Act of 1933.
BIOGRAPHY
Rose-Marie Fox, 45, has been Treasurer and a director of the Company since
September 11, 1995. Ms. Fox has served as President of the Company since
January 22, 1997. 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, and a director since January 22, 1997. 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 are no blank check affiliates seeking a combination
candidate. (See "MANAGEMENT - Conflicts of Interest").
Conflicts of Interest
No member of management is currently affiliated or associated with any
blank check company. 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 any member of management
is faced with the issue of determining which of the blank check companies with
which he/she is affiliated to present a potential Target Business, he/she
plans to present the
Target Business to the Company in whose capacity he/she was acting when he/she
learned of that Target Business. In the event a potential Target Business
comes to a member of management's
attention without regard to his/her affiliation with any blank check company,
he/she will have full and unfettered discretion to choose the blank check
company to which he/she will present the candidate.
This is based on an oral agreement between management and the Company.
Management intends to present each Business Combination candidate to the
shareholders for their approval. (See "HIGH RISK FACTORS - Conflicts of
Interest.")
Prior Blank Check Companies
Rose-Marie Fox, President, Treasurer, and a director of the Company, is a
director of SinoAmerican Telecom Inc. (formerly known as Jupiter Acquisitions,
Inc.), a telecommunications and paging company with operations in Hong Kong
and the People's Republic of China, since August 1995. Jupiter Acquisitions,
Inc. commenced its initial public offering on July 7, 1993, selling 16,000
shares of common stock at $6.25 per share for a total of $100,000. On August
17, 1995, Jupiter Acquisitions, Inc. acquired 100% of Remote Communications
Inc. in exchange for 4,117,033 shares (representing 85.8%) of Jupiter
Acquisitions, Inc. The name of that company was subsequently changed to
SinoAmerican Telecom Inc. The management of Jupiter Acquisitions, Inc.
resigned upon the merger with Reomote Communications Inc. Ms. Fox was not a
director of Jupiter Acquisitions, Inc. prior to such merger.
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 under the name Zeron International Limited. The name of the Company was
changed to Greystone International Limited on February 23, 1997. 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 President, 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) One World Capital Partners Limited is 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.
<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%
63 Wall Street
Suite 1801
New York, NY 10005
Andrea Weinstein(5) 2,667 .7% .7%
63 Wall Street
Suite 1801
New York, NY 10005
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 President, Treasurer and a Director of the Company. She
is also the Managing Director of Cornerstone Financial Corporation, a holder
of the Bridge Warrants.
(3) One World Capital Partners Limited is a private investment company.
The principal shareholder of One World Capital Partners Limited is Ultima
Investors Limited, a private investment company.
(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 partner.
(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>
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.
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 apprize 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
partner, 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>
<PAGE>
GREYSTONE INTERNATIONAL LIMITED
FINANCIAL STATEMENTS
(A Development Stage Company)
For the Period March 22, 1995 (Date of Inception)
to September 30, 1996; and Otober 1, 1996 to September 30, 1997
and January 1, 1997 to March 31, 1997
<PAGE>
GREYSTONE INTERNATIONAL LIMITED
INDEX TO AUDITED FINANCIAL STATEMENTS
Page
. Independent Auditor's Report
. Balance Sheet as of September 30, 1996
(audited)and September 30, 1997 (audited)
. Statement of Income for the period March 22,
1995(Date of Inception) to September 30, 1996
(audited); October 1, 1996 to September 30, 1997
(audited)
Statement of Stockholders' Equity for the period
March 22, 1995 (Date of Inception) to
September 30, 1996
(audited); October 1, 1996
to September 30, 1997 (audited)
. Statement of Cash Flows for the period March 22,
1995(Date of Inception) to
September 30, 1996
(audited); October 1, 1996
to September 30, 1997 (audited)
. Notes to Financial Statements for the period
March 22, 1995 (Date of Inception) to
September 30, 1996
; October 1, 1996
to September 30, 1997
JEROME GOLDBERG
Certified Public Accountant
2940 Ocean Parkway
Brooklyn, New York 11234
The Board of Directors
Greystone International Limited
Independent Auditor's Report
I have audited the accompanying balance sheet of Greystone International
Limited (a development stage company) as of September 30, 1996 , and
as of September 30, 1997 and the related statements of operations,
stockholders' equity and cash flows from March 22, 1995 (date of inception) to
September 30, 1996 ; and October 1, 1996 to September 30, 1997
. 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 Greystone International
Limited (a development stage company) at September 30, 1996 and September
30, 1997 , and the results of its operations and its cash flows from March
22, 1995 (date of inception) to September 30, 1996; and October 1, 1996 to
September 30, 1997 in conformity with generally accepted accounting
principles.
/s/ Jerome Goldberg
Jerome Goldberg
Certified Public Accountant
Dated: December 18, 1997
Brooklyn, New York
<PAGE>
GREYSTONE INTERNATIONAL LIMITED
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF
SEPTEMBER 30,1996 AND SEPTEMBER 30,1997
(Audited)
September 30, September
30,
1997 1996
CURRENT ASSETS:
Cash $ 1,441 $ 7,524
Other Assets:
Deferred Offering Costs 26,726 20,843
Organization Costs 5,926
5,926
32,652 26,769
Total Assets $34,093 $34,293
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Loan Payable $32,331 $32,331
Total Liabilities 32,331 32,331
Stockholders' Equity
75,000,000 Shares Common Stock
$.001 Par, Authorized, Issued and
outstanding 396,000 shares at $.001
per share. 396 396
Additional paid in capital 1,584 1,584
Preferred stock, $.001 par value
15,000,000 shares authorized, issued
and outstanding 0 shares. - 0 - - 0 -
Deficit accumulated during
development stage. (218) (18)
Total Stockholders' Equity 1,762 1,962
<PAGE>
GREYSTONE INTERNATIONAL LIMITED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF INCOME
FOR THE PERIODS MARCH 22, 1995 (Date of Inception) TO SEPTEMBER 30,1996
(audited)
AND THE YEAR OCTOBER 1,1996 TO SEPTEMBER 30,1997
(audited)
October 1, 1996 March 23, 1995
To To
September 30, 1997 September
30, 1996
Income from Operations $ - 0 - $ - 0 -
Costs and Operating Expenses 200 18
Net Income (Loss) $(200) $ (18)
<PAGE>
GREYSTONE INTERNATIONAL LIMITED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIODS MARCH 22, 1995 (Date of Inception)
TO SEPTEMBER 30,1996 AND OCTOBER 1,1996 TO SEPTEMBER 30,1997
(Audited)
Common Stock $.001
Number of Par Paid-In
Shares Value Capital Total
Issued March 23, 1995 396,000 $396 $1,584 $1,980
Net Income (Loss) For Period
March 22,1995 (date of inception) to September 30,1996
(18)
Balance, September 30, 1996 396,000 $1,962
Net Income (Loss) For Period $(200)
October 1,1996 to September 30,1997
Balance, September 30, 1997 396,000
$1,762
PAGE><PAGE
<PAGE>
GREYSTONE INTERNATIONAL LIMITED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIODS MARCH 22, 1995 (Date of Inception) TO
SEPTEMBER 30,1996 (AUDITED) AND THE YEAR OCTOBER 1, 1996 TO SEPTEMBER 30,
1997
(AUDITED)
October 1, 1996 March
23, 1995
To To
September 30, 1997 September 30,1996
Increase (Decrease) in cash and
cash equivalents
Cash Flows from Operating Activities:$ (200) $ (18)
Cash Flows from Investing Activities:$ - 0 -$ - 0 -
Cash Flows from Financing Activities:
Proceeds from issuance of common stock$ - 0 - $ 1,980
Deferred Offering Costs $ (5,883) $ (20,843)
Organization Costs Incurred $ - 0 - $ ( 5,926)
Net Cash Provided By Financing Activities $ (6,083) $(24,807)
Cash Flows from changes in assets
and liabilities:
Loans Payable $ - 0 - $ 32,331
Net Increase in Cash and Cash
Equivalents $ (6,083) $ 7,524
Cash at Beginning of Period $ 7,524 $ - 0 -
Cash and Cash Equivalents at end of year$ 1,441 $ 7,524
<PAGE>
<PAGE>
GREYSTONE INTERNATIONAL LIMITED
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF
SEPTEMBER 30,1996 AND SEPTEMBER 30,1997
(Audited)
September 30, September
30,
1997 1996
CURRENT ASSETS:
Cash $ 1,441 $ 7,524
Other Assets:
Deferred Offering Costs 26,726 20,843
Organization Costs 5,926
5,926
32,652 26,769
Total Assets $34,093 $34,293
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Loan Payable $32,331 $32,331
Total Liabilities 32,331 32,331
Stockholders' Equity
75,000,000 Shares Common Stock
$.001 Par, Authorized, Issued and
outstanding 396,000 shares at $.001
per share. 396 396
Additional paid in capital 1,584 1,584
Preferred stock, $.001 par value
15,000,000 shares authorized, issued
and outstanding 0 shares. - 0 - - 0 -
Deficit accumulated during
development stage. (218)
(18)
Total Stockholders' Equity 1,762 1,962
GREYSTONE INTERNATIONAL LIMITED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF INCOME
FOR THE PERIODS MARCH 22, 1995 (Date of Inception) TO SEPTEMBER 30,1996
(audited)
AND THE YEAR OCTOBER 1,1996 TO SEPTEMBER 30,1997
(audited)
October 1, 1996 March 23,
1995
To To
September 30, 1997 September 30, 1996
Income from Operations $ - 0 - $ - 0 -
Costs and Operating Expenses 200 18
Net Income (Loss) $(200) $ (18)
<PAGE>
GREYSTONE INTERNATIONAL LIMITED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIODS MARCH 22, 1995 (Date of Inception)
TO SEPTEMBER 30,1996 AND OCTOBER 1,1996 TO SEPTEMBER 30,1997
(Audited)
Common Stock $.001
Number of Par Paid-In
Shares Value Capital Total
Issued March 23, 1995 396,000 $396 $1,584
$1,980
Net Income (Loss) For Period
March 22,1995 (date of inception) to September
30,1996
(18)
Balance, September 30, 1996
396,000 $1,962
Net Income (Loss) For Period $
(200)
October 1,1996 to September 30,1997
Balance, September 30, 1997 396,000
$1,762
PAGE><PAGE
<PAGE>
GREYSTONE INTERNATIONAL LIMITED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIODS MARCH 22, 1995 (Date of Inception) TO
SEPTEMBER 30,1996 (AUDITED) AND THE YEAR OCTOBER 1, 1996 TO SEPTEMBER 30,
1997
(AUDITED)
October 1, 1996 March 23, 1995
To To
September 30,
1997 September 30,1996
Increase (Decrease) in cash and
cash equivalents
Cash Flows from Operating Activities:$ (200) $ (18)
Cash Flows from Investing Activities:$ - 0 -$ - 0 -
Cash Flows from Financing Activities:
Proceeds from issuance of common stock$ - 0 - $ 1,980
Deferred Offering Costs $ (5,883) $ (20,843)
Organization Costs Incurred $ - 0 - $ ( 5,926)
Net Cash Provided By Financing Activities $ (6,083) $(24,807)
Cash Flows from changes in assets
and liabilities:
Loans Payable $ - 0 - $ 32,331
Net Increase in Cash and Cash
Equivalents $ (6,083) $ 7,524
Cash at Beginning of Period $ 7,524 $ - 0 -
Cash and Cash Equivalents at end of year$ 1,441 $ 7,524
<PAGE> GREYSTON INTERNATIONAL LIMITED
( As Development Stage
Company )
NOTE TO FINANCIAL STATEMENT
FOR THE PERIOD FROM March 22,1995 (
Date of Inception)
TO September 30,1996; and October
1, 1996 to September 30,1997
1. ORGANIZATION OF THE COMPANY
The Company was incorporated in the Cayman Island on March 22, 1995 under the
name Zeron
International Limited. 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 seek potential business ventures which in the
opinion of management
will provide a profit to the Company. Such involvement can be in the term of
the acquisition of existing business and/or the acquisition of assets to
establish business for the Company. Present
management of the Company does not expect to become involved as management in
the aforement
ioned business and will hire presently unknown and unidentified individuals as
management for the aforementioned business
The Company's only activities to date by have been the acquisition of funds
from the sale of its Common Stock to its officers , directors and others
investors and the Bridge Financing. The Board
of Directors has voted to authorize the fill of a registration statement and
prospectus on Form F-1
to effect a initial public offering in order its securities to the public. As
of September 30,1997, the
Company has not yet commenced operation .
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 prospect 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 officer ,
director, controlling shareholders in a variety of business including other
"blank check" companies.
There exists potential conflicts of interest including, among other things,
time, effort and corporate
opportunity involved in participation wit 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 organizational costs
were $5,926 as of September 30,1997,
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 $26,726 as of September
30,1997
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 September 30, 1996 and
September 30, 1997, and the results of operations and cash flows for periods
ending September 30 , 1996 and September 30, 1997. Results for the period
ended September 30, 1996 and September 30, 1997 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 Givens Hall
Bank and Trust, Ltd., Genesis Building, 3rd Floor, Jennet Street, Grand
Cayman, Cayman Islands, 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
Rose-Marie Fox, President, 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.
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 September 30, 1997, the Company had $30,000 in notes, pursuant to the
Bridge Financing, as well as a $2,331 loan for incorporation costs.
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.
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
63 Wall Street
Suite 1801
New York, NY 10005
Andrea Weinstein(6) 2,667 $13.33
63 Wall Street
Suite 1801
New York, NY 10005
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) 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, President,
Treasurer and a director of the Company, is also the Managing Director of
Cornerstone Financial Corporation.
(4) One World Capital Partners Limited is a private investment company.
The principal of One World Capital Partners Limited is Ultima Investments
Limited, a private investment company.
(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 partner.
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.
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 New York, State of New York , on September 8, 1997.
GREYSTONE INTERNATIONAL LIMITED
By: Rose-Marie Fox
Rose-Marie Fox, President,
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.
Rose-Marie
Fox
Rose-Marie Fox DATED January 15, 1998
President, Treasurer, Director
Peter D. Anderson
Peter D. Anderson DATED January 15, 1998
Secretary, Director
John B. Benbow
John B. Benbow DATED January 15, 1998
Assistant Secretary, Director
<PAGE>
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
5th March 1998
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
USA
Dear Sirs,
Greystone International Limited
We have acted as the Cayman Islands attorneys for Greystone 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
authorized 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.
<PAGE>
United States Securities and Exchange Commission
5th March 1998
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
5th March 1998
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 authorized 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
Quin & Hampson
<PAGE>
<PAGE>
JEROME GOLDBERG
Certified Public Accountant
2940 Ocean Parkway
Brooklyn, New York 11234
The Board of Directors
Greystone International Limited
Re: Greystone International Limited
I, Jerome Goldberg, a certified public accountant, do hereby consent to the
use of my opinion dated December 18, 1997 to Greystone 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
JEROME GOLDBERG, CPA
Dated: December 18, 1997
Brooklyn, New York
PAGE
<PAGE>
To: The Board of Directors of
Greystone International Limited
c/o Givens Hall Bank and Trust Ltd.
Genesis Building, 3rd Floor
Jennet Street
Grand Cayman, Cayman Islands
Re: Greystone International Limited
We, Quin & Hampson, hereby consent to the use of our opinion dated 5th March
1998, to Greystone 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
QUIN & HAMPSON
Barristers and Attorneys-at-Law
Dated this 5th day of March 1998.
Grand Cayman, Cayman Islands, B.W.I.
