SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
Registration Statement Under The Securities Act of 1933
BOULDER CAPITAL OPPORTUNITIES, INC.
(Exact name of registrant as specified in its charter)
COLORADO 84-1341980
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
4750 Table Mesa Drive
Boulder, Colorado 80303
(Address of principal executive offices) (Zip Code)
Consultation and Subscription Agreement
(Full name of the plan)
Gary S. Joiner, 4750 Table Mesa Drive,
Boulder, CO 80303
(Name and address of agent for service)
(303)494-3000
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Title of securities to be registered: Common Stock
Amount to be registered: 639,000 shares
Proposed maximum offering price per share: $0.0188
Proposed maximum aggregate offering price: $12,013.20
Amount of registration fee: $3.64
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The information required by Part I is included in documents sent
or given to participants in the Consultation Agreement Plan pursuant to
Rule 428(b)(1)
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Registrant is subject to the information requirements of the
Securities Exchange Act of 1934 and, in accordance therewith, files
reports with the Securities and Exchange Commission. The documents
listed below are hereby incorporated by reference in this Registration
Statement on Form S-8; and all documents subsequently filed by the
Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act, prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated
herein by reference in this Registration Statement on Form S-8, and shall
be a part hereof from the date of the filing of such documents.
(a) The annual report of the Registrant on Form 10-KSB for the fiscal
year ended April 30, 1997, filed pursuant to Section 13(a) of the
Securities Exchange Act of 1934.
(b) All other reports filed by the Registrant pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 since April 30, 1997.
(c) The description of common stock contained in Item 8 of Part I of
the Registrant's First Amended Registration Statement on Form 10-SB
filed pursuant to Section 12 of the Securities Exchange Act of 1934,
including any amendment or report filed for the purpose of updating
such description.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable
<PAGE>
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Frascona, Joiner and Goodman, P.C., is legal counsel for the
Company. Gary S. Joiner, is a shareholder of Frascona, Joiner and
Goodman, P.C., and is a selling shareholder.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Colorado law, the Company's Articles of Incorporation
provide that the Company will indemnify its directors and officers
against expenses and liabilities they incur to defend, settle, or satisfy any
civil or criminal action brought against them on account of their being
or having been Company directors or officers unless, in any such action,
they are adjudged to have acted with gross negligence or willful
misconduct. The Company's Articles of Incorporation also exclude
personal liability for its directors for monetary damages based upon any
violation of their fiduciary duties as directors, except as to liability for
any breach of the duty of loyalty, acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, acts
which constitute improper distributions to shareholders in violation of
Section 7-106-401 of the Colorado Business Corporation Act, or any
transaction from which a director receives an improper personal benefit.
This exclusion of liability does not limit any right which a director may
have to be indemnified and does not affect any director's liability under
federal or applicable state securities laws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Restricted securities of the Registrant are to be reoffered or
resold pursuant to this registration statement. Such securities were
initially offered and sold by the Registrant pursuant to an exemption
from registration under Rule 701. Such securities were issued pursuant
to written contracts and as compensation for bona fide services
performed, and were issued at a time when the Registrant was not
subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act.
ITEM 8. EXHIBITS.
The following documents are included as exhibits to this registration
statement:
4.1 - Articles of Incorporation
4.2 - Bylaws
23.1 - Consent of Counsel
23.2 - Consent of Accountant
27 - Financial Data Schedule
ITEM 9. UNDERTAKINGS
1. The undersigned Registrant hereby undertakes to file during any
period in which offers or sales are being made, a post-effective
amendment to this Registration Statement 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.
2. The undersigned Registrant hereby undertakes that, for the purpose
of determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
3. The undersigned Registrant hereby undertakes 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. The undersigned Registrant hereby undertakes that for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant section 13(a) or section 15(d) of
the Securities Exchange Act of 1934 (and where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
5. 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 the foregoing provisions, 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 counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
SIGNATURES
THE REGISTRANT. Pursuant to 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 for filing on Form S-8 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boulder, State of
Colorado, on August 15, 1997.
BOULDER CAPITAL OPPORTUNITIES, INC.
By:___________________________________
Robert Soehngen, President
(Signature and Title)
August 15, 1997
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
______________________________________
Robert Soehngen, President, Director, Principal Executive Officer
August 15, 1997<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
Registration Statement Under The Securities Act of 1933
BOULDER CAPITAL OPPORTUNITIES, INC.
(Exact name of registrant as specified in its charter)
COLORADO 84-1341980
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
4750 Table Mesa Drive
Boulder, Colorado 80303
(Address of principal executive offices) (Zip Code)
EXHIBIT LIST
<TABLE>
<CAPTION>
Item No. Description
<S> <C>
4.1 Articles of Incorporation
4.2 Bylaws
23.1 Consent of Counsel
23.2 Consent of Accountant
27 Financial Data Schedule
<PAGE>
EXHIBIT 4.1 - Articles of Incorporation of the Registrant
Incorporated by reference from annual report of Registrant
on Form 10-KSB for the fiscal year ended April 30, 1997, filed pursuant
to Section 13(a) of the Securities Exchange Act of 1934.
EXHIBIT 4.2 - Bylaws of the Registrant
Incorporated by reference from annual report of Registrant
on Form 10-KSB for the fiscal year ended April 30, 1997, filed pursuant
to Section 13(a) of the Securities Exchange Act of 1934.
EXHIBIT 23.1 Consent of Counsel
August 15, 1997
Board of Directors
Boulder Capital Opportunities, Inc.
Gentlemen:
We hereby consent to being named in the Registration
Statement as the attorneys who will pass upon legal matters in
connection with the sale of the shares referred to therein, and to the
filing of our opinion as an Exhibit to the Registration Statement.
Frascona, Joiner & Goodman, P.C.
By: /s/ Gary S. Joiner
Boulder, Colorado
EXHIBIT 23.2 Consent of Independent Certified Public
Accountants
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8 of our report dated July 10, 1997,
relating to the financial statements of Boulder Capital Opportunities, Inc.
(a development stage Company) as of April 30, 1997, for the year then
ended and for the period from April 22, 1996 (inception) to April 30,
1997.
Stark Tinter & Associates, LLC
August 18, 1997
Englewood, Colorado
EXHIBIT 27 Financial Data Schedule
Incorporated by reference from annual report of Registrant
on Form 10-KSB for the fiscal year ended April 30, 1997, filed pursuant
to Section 13(a) of the Securities Exchange Act of 1934.
<PAGE>
____________________________________________
PROSPECTUS
____________________________________________
BOULDER CAPITAL OPPORTUNITIES, INC.
("Company" or "Issuer")
An Offering of 639,000 Shares of the
Common Stock of the Company.
(Title and Amount of Offering)
These securities are offered for the account of certain of the Company's
security holders, as set forth more fully herein.
See "Risk Factors" beginning on page 4 for a discussion of certain risks
associated with an investment in the securities offered hereby. The
securities offered involve a high degree of risk.
___________________________________________
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.
____________________________________________
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Underwriting Proceeds to
Price to discounts and Issuer or other
Public commissions persons
<S> <C> <C> <C>
Per Share $0.0188 - $0.0188
Total $ 12,013.20 - $12,013.20
</TABLE>
August 15, 1997
The Company is subject to the informational requirements
imposed by the Securities Exchange Act of 1934. In accordance with the
1934 Act, the Company files reports and other information with the
Securities and Exchange Commission.
Reports and other information can be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at the
Commission's regional offices located at 7 World Trade Center, 13th
Floor, New York, NY 10048, and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60621. Copies of such material may
also be obtained, at prescribed rates, from the Public Reference Section
of the Commission at 450 Fifth Street N.W, Washington, D.C. 20549.
The Company's securities are not currently listed on any national
securities exchange, and there is not currently any public market for
resale of such securities.
The Issuer undertakes to provide, at its own expense, and upon
written or oral request by any person, including a beneficial owner, who
receives this Prospectus, a copy of any and all information incorporated
herein by reference (not including exhibits to the information that is
incorporated by reference unless such exhibits are specifically
incorporated by reference into the information incorporated in this
Prospectus). Such requests should be directed to: Robert Soehngen,
4750 Table Mesa Drive, Boulder, Colorado, 80303; Tel.: (303)442-1021.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the information
appearing elsewhere in this Prospectus. See "Risk Factors" for
information prospective investors should consider.
The Company. The Company was incorporated under the laws
of the State of Colorado on April 22, 1996, under the name of Boulder
Capital Opportunities, Inc., for the purpose of being a capital market
access vehicle. It was formed with limited capital and its business plan
at the time of formation was to seek to complete a merger or acquisition
transaction with a company or enterprise desiring to become a public
corporation.
The Company became a reporting company under the Securities
Exchange Act of 1934 on July 28, 1996, as a result of filing a
registration statement on Form 10-SB. Since that date, the Company has
filed all required periodical reports and as of the date hereof, is current
in its reporting obligations under the Securities Exchange Act of 1934.
The Company remains in the development stage and continues to
seek a merger or acquisition candidate.
There is not currently any public trading market for the
Company's securities. However, management is currently taking steps
necessary to initiate a public trading market in the Company's
outstanding common stock on the NASD Bulletin Board. As soon as the
Company is able to satisfy applicable eligibility requirements,
management intends to seek listing of the Company's outstanding
securities on NASDAQ and/or other recognized securities exchanges.
The Company maintains its principal executive offices at 4750
Table Mesa Drive, Boulder, Colorado 80303. Its telephone number is
(303)442-1021.
The Offering. A total of 639,000 shares of common stock are
being offered hereby at a price of $0.0188 per share, for the account of
certain of the Company's security holders (see "Selling Security
Holders").
The Company will not realize any net proceeds from the sale of
the shares offered hereby.
As of the date hereof, the Company has issued and outstanding a
total of 1,010,000 shares of common stock. Sale of shares in this
offering on behalf of selling security holders will not change the number
of issued and outstanding shares of the Company.
Summary Financial Data
<TABLE>
<CAPTION>
Year End Year End
4/30/97 4/30/96
<S> <C> <C>
Operating Statement Data
Revenue - -
Net Loss (6,523) (2,501)
Balance Sheet Data
Current Assets 1,174 6,249
Total Assets 2,594 8,024
Shareholders' Equity ( 999) 5,524
</TABLE>
The Company does not anticipate receipt of revenue from
operations until after completion of a merger or acquisition transaction,
and there is no assurance as to when or whether such a transaction will
be completed.
RISK FACTORS
Investment in the Company's securities involves substantial risks,
some of which are summarized below. Prospective investors should
carefully consider the following risk factors, among others, relating to the
Company prior to making an investment.
RISK FACTORS
POSSIBLE NEED FOR ADDITIONAL FINANCING. The
Company has very limited funds, and such funds may not be adequate to
take advantage of any available business opportunities. Even if the
Company's funds prove to be sufficient to acquire an interest in, or
complete a transaction with, a business opportunity, the Company may
not have enough capital to exploit the opportunity. The ultimate success
of the Company may depend upon its ability to raise additional capital.
The Company has not investigated the availability, source, or terms that
might govern the acquisition of additional capital and will not do so until
it determines a need for additional financing. If additional capital is
needed, there is no assurance that funds will be available from any source
or, if available, that they can be obtained on terms acceptable to the
Company. If not available, the Company's operations will be limited to
those that can be financed with its modest capital.
REGULATION OF PENNY STOCKS. The Company's
securities, when available for trading, will be subject to a Securities and
Exchange Commission rule that imposes special sales practice
requirements upon broker-dealers who sell such securities to persons
other than established customers or accredited investors. For purposes of
the rule, the phrase "accredited investors" means, in general terms,
institutions with assets in excess of $5,000,000, or individuals having a
net worth in excess of $1,000,000 or having an annual income that
exceeds $200,000 (or that, when combined with a spouse's income,
exceeds $300,000). For transactions covered by the rule, the broker-
dealer must make a special suitability determination for the purchaser and
receive the purchaser's written agreement to the transaction prior to the
sale. Consequently, the rule may affect the ability of broker-dealers to
sell the Company's securities and also may affect the ability of
purchasers in this offering to sell their securities in any market that might
develop therefor.
In addition, the Securities and Exchange Commission has adopted
a number of rules to regulate "penny stocks." Such rules include Rules
3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, and 15g-7 under the
Securities Exchange Act of 1934, as amended. Because the securities of
the Company may constitute "penny stocks" within the meaning of the
rules, the rules would apply to the Company and to its securities. The
rules may further affect the ability of owners of Shares to sell the
securities of the Company in any market that might develop for them.
Shareholders should be aware that, according to Securities and
Exchange Commission Release No. 34-29093, the market for penny
stocks has suffered in recent years from patterns of fraud and abuse.
Such patterns include (i) control of the market for the security by one or
a few broker-dealers that are often related to the promoter or issuer; (ii)
manipulation of prices through prearranged matching of purchases and
sales and false and misleading press releases; (iii) "boiler room" practices
involving high-pressure sales tactics and unrealistic price projections by
inexperienced sales persons; (iv) excessive and undisclosed bid-ask
differentials and markups by selling broker-dealers; and (v) the wholesale
dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses.
The Company's management is aware of the abuses that have occurred
historically in the penny stock market. Although the Company does not
expect to be in a position to dictate the behavior of the market or of
broker-dealers who participate in the market, management will strive
within the confines of practical limitations to prevent the described
patterns from being established with respect to the Company's securities.
NO OPERATING HISTORY. The Company was formed in April
of 1996 for the purpose of registering its common stock under the 1934
Act and acquiring a business opportunity. The Company has no
operating history, revenues from operations, or assets other than cash
from private sales of stock. The Company faces all of the risks of a new
business and the special risks inherent in the investigation, acquisition, or
involvement in a new business opportunity. The Company must be
regarded as a new or "start-up" venture with all of the unforeseen costs,
expenses, problems, and difficulties to which such ventures are subject.
NO ASSURANCE OF SUCCESS OR PROFITABILITY. There
is no assurance that the Company will acquire a favorable business op-
portunity. Even if the Company should become involved in a business
opportunity, there is no assurance that it will generate revenues or profits,
or that the market price of the Company's Common Stock will be
increased thereby.
POSSIBLE BUSINESS - Not Identified and Highly Risky. The
Company has not identified and has no commitments to enter into or
acquire a specific business opportunity and therefore can disclose the
risks and hazards of a business or opportunity that it may enter into in
only a general manner, and cannot disclose the risks and hazards of any
specific business or opportunity that it may enter into. An investor can
expect a potential business opportunity to be quite risky. The Company's
acquisition of or participation in a business opportunity will likely be
highly illiquid and could result in a total loss to the Company and its
stockholders if the business or opportunity proves to be unsuccessful.
TYPE OF BUSINESS ACQUIRED. The type of business to be
acquired may be one that desires to avoid effecting its own public
offering and the accompanying expense, delays, uncertainties, and federal
and state requirements which purport to protect investors. Because of the
Company's limited capital, it is more likely than not that any acquisition
by the Company will involve other parties whose primary interest is the
acquisition of control of a publicly traded company. Moreover, any
business opportunity acquired may be currently unprofitable or present
other negative factors.
IMPRACTICABILITY OF EXHAUSTIVE INVESTIGATION.
The Company's limited funds and the lack of full-time management will
likely make it impracticable to conduct a complete and exhaustive
investigation and analysis of a business opportunity before the Company
commits its capital or other resources thereto. Management decisions,
therefore, will likely be made without detailed feasibility studies,
independent analysis, market surveys and the like which, if the Company
had more funds available to it, would be desirable. The Company will
be particularly dependent in making decisions upon information provided
by the promoter, owner, sponsor, or others associated with the business
opportunity seeking the Company's participation. A significant portion
of the Company's available funds may be expended for investigative
expenses and other expenses related to preliminary aspects of completing
an acquisition transaction, whether or not any business opportunity
investigated is eventually acquired.
LACK OF DIVERSIFICATION. Because of the limited financial
resources that the Company has, it is unlikely that the Company will be
able to diversify its acquisitions or operations. The Company's probable
inability to diversify its activities into more than one area will subject the
Company to economic fluctuations within a particular business or
industry and therefore increase the risks associated with the Company's
operations.
POSSIBLE RELIANCE UPON UNAUDITED FINANCIAL
STATEMENTS. The Company generally will require audited financial
statements from companies that it proposes to acquire. No assurance can
be given, however, that audited financials will be available to the
Company. In cases where audited financials are unavailable, the
Company will have to rely upon unaudited information received from
target companies' management that has not been verified by outside
auditors. The lack of the type of independent verification which audited
financial statements would provide, increases the risk that the Company,
in evaluating an acquisition with such a target company, will not have the
benefit of full and accurate information about the financial condition and
operating history of the target company. This risk increases the prospect
that the acquisition of such a company might prove to be an unfavorable
one for the Company or the holders of the Company's securities.
Moreover, the Company will be subject to the reporting provisions
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and thus will be required to furnish certain information about
significant acquisitions, including audited financial statements for any
business that it acquires. Consequently, acquisition prospects that do not
have, or are unable to provide reasonable assurances that they will be
able to obtain, the required audited statements would not be considered
by the Company to be appropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable. Should the Company,
during the time it remains subject to the reporting provisions of the
Exchange Act, complete an acquisition of an entity for which audited
financial statements prove to be unobtainable, the Company would be
exposed to enforcement actions by the Securities and Exchange
Commission (the "Commission") and to corresponding administrative
sanctions, including permanent injunctions against the Company and its
management. The legal and other costs of defending a Commission
enforcement action are likely to have material, adverse consequences for
the Company and its business. The imposition of administrative
sanctions would subject the Company to further adverse consequences.
In addition, the lack of audited financial statements would prevent
the securities of the Company from becoming eligible for listing on
NASDAQ, the automated quotation system sponsored by the National
Association of Securities Dealers, Inc., or on any existing stock exchange.
Moreover, the lack of such financial statements is likely to discourage
broker-dealers from becoming or continuing to serve as market makers
in the securities of the Company. Without audited financial statements,
the Company would almost certainly be unable to offer securities under
a registration statement pursuant to the Securities Act of 1933, and the
ability of the Company to raise capital would be significantly limited
until such financial statements were to become available.
OTHER REGULATION. An acquisition made by the Company
may be of a business that is subject to regulation or licensing by federal,
state, or local authorities. Compliance with such regulations and
licensing can be expected to be a time-consuming, expensive process and
may limit other investment opportunities of the Company.
LACK OF CONTINUITY IN MANAGEMENT. Following
completion of the sale of shares offered hereby, it is anticipated that the
current officer and director of the Company will resign, and that his
successor or successors will be selected by the new controlling
shareholders. Accordingly, persons who purchase shares in this offering
must do so without knowing the identity or background of the
Company's new officers and directors.
INDEMNIFICATION OF OFFICERS AND DIRECTORS. The
Company's Articles of Incorporation provide for the indemnification of
its directors, officers, employees, and agents, under certain circumstances,
against attorney's fees and other expenses incurred by them in any
litigation to which they become a party arising from their association
with or activities on behalf of the Company. The Company will also
bear the expenses of such litigation for any of its directors, officers,
employees, or agents, upon such person's promise to repay the Company
therefor if it is ultimately determined that any such person shall not have
been entitled to indemnification. This indemnification policy could result
in substantial expenditures by the Company which it will be unable to
recoup.
DIRECTOR'S LIABILITY LIMITED. The Company's Articles
of Incorporation exclude personal liability of its directors to the Company
and its stockholders for monetary damages for breach of fiduciary duty
except in certain specified circumstances. Accordingly, the Company will
have a much more limited right of action against its directors than
otherwise would be the case. This provision does not affect the liability
of any director under federal or applicable state securities laws.
COMPETITION. The search for potentially profitable business
opportunities is intensely competitive. The Company expects to be at a
disadvantage when competing with many firms that have substantially
greater financial and management resources and capabilities than the
Company. These competitive conditions will exist in any industry in
which the Company may become interested.
NO FORESEEABLE DIVIDENDS. The Company has not paid
dividends on its Common Stock and does not anticipate paying such divi-
dends in the foreseeable future.
NO PUBLIC MARKET EXISTS. There is no public market for
the Company's common stock, and no assurance can be given that a
market will develop or that a shareholder ever will be able to liquidate
his investment without considerable delay, if at all. If a market should
develop, the price may be highly volatile. Factors such as those
discussed in this "Risk Factors" section may have a significant impact
upon the market price of the securities offered hereby. Owing to the low
price of the securities, many brokerage firms may not be willing to effect
transactions in the securities. Even if a purchaser finds a broker willing
to effect a transaction in these securities, the combination of brokerage
commissions, state transfer taxes, if any, and any other selling costs may
exceed the selling price. Further, many lending institutions will not
permit the use of such securities as collateral for any loans.
BLUE SKY CONSIDERATIONS. Because the securities
registered hereunder have not been registered for resale under the blue
sky laws of any state, the holders of such shares and persons who desire
to purchase them in any trading market that might develop in the future,
should be aware that there may be significant state blue-sky law
restrictions upon the ability of investors to sell the securities and of
purchasers to purchase the securities. Some jurisdictions may not under
any circumstances allow the trading or resale of blind-pool or "blank-
check" securities. Accordingly, investors should consider the secondary
market for the Company's securities to be a limited one.
DETERMINATION OF OFFERING PRICE.
The offering price of $0.0188 per share for the shares offered
hereby was determined based upon negotiations between the selling
security holders and California Brokerage Services, Inc., which, in
November, 1996, executed a letter of intent to acquire a controlling
interest in the Company. Numerous factors were involved in establishing
the agreed-upon price, including the following:
a. There is no established public trading market for the common
stock of the Company. Although the Company has filed an Information
Statement pursuant to Rule 15c2-11 under the Securities Exchange Act
of 1934 with the NASD requesting permission for its outstanding
common stock to trade on the NASD OTC Bulletin Board, there is no
assurance that the necessary approvals will be granted, or if granted, that
a public trading market will develop in the Company's common stock.
b. The Company was initially formed as a public shell by Robert
Soehngen, its President, who is one of the selling shareholders. The
common stock being offered hereby on behalf of the selling security
holders was acquired by them as compensation for services rendered to
the Company in conjunction with its organization. The value placed
upon such shares at issuance was an agreed-upon amount of $0.0025 per
share.
c. The prospective purchasers of the shares offered hereby are
persons designated by California Brokerage Services, Inc. As of the date
that the selling price was determined, the Company had virtually no
assets, and a net book value per share of approximately zero (0).
SELLING SECURITY HOLDERS.
The following security holders are selling shares under this
Prospectus:
<TABLE>
<CAPTION>
Name/RelationshipAmount Amount Amount Percentage
to Registrant Owned Offered of Class of Class
Owned Owned After
After Distribution
Distri-
bution
<S> <C> <C> <C> <C>
Robert Soehngen-570,000504,000 66,000 6.53
Officer, Director
and Principal
Shareholder
Gary S. Joiner50,000 45,000 5,000 0.5
Dean F. Sessions50,000 45,000 5,000 0.5
Grant W. Peck 50,000 45,000 5,000 0.5
SELLING SECURITY
HOLDERS AS
A CLASS 720,000 639,000 81,000 8.02
</TABLE>
PLAN OF DISTRIBUTION.
The securities offered hereby are to be offered solely to designated
purchasers selected by the Company, and are not to be offered through any
underwriters or through the selling efforts of brokers or dealers. All of the
securities are to be offered for cash at a price of $0.0188 per share, and no
compensation is to be paid to any underwriter, broker or dealer. Accordingly,
the selling security holder shall receive proceeds equal to the full offering
price, without deduction for selling expenses or other expenses of the offering.
DESCRIPTION OF SECURITIES.
The securities offered hereby are common stock, and are part of a class of
securities of the Company which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
The Company is authorized to issue 100,000,000 shares of common stock
and 10,000,000 shares of preferred stock. As of the date hereof, 1,010,000
shares of common stock and no shares of preferred stock are issued and
outstanding.
INTERESTS OF NAMED EXPERTS AND COUNSEL.
Frascona, Joiner and Goodman, P.C., 4750 Table Mesa Drive, Boulder,
Colorado 80303 is counsel for the Company. Gary S. Joiner, is a shareholder of
Frascona, Joiner and Goodman, P.C., and is one of the selling security holders
named herein (See "SELLING SECURITY HOLDERS").
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE.
The following documents are incorporated by reference herein:
(1) The Registrant's latest annual report on Form 10-KSB, including financial
statements for the fiscal year ended July 31, 1997.
(2) All other reports of the Registrant filed pursuant to Section 13(a) or
15(d) since the end of the fiscal year ending July 31, 1997.
(3) The description of the common stock of the Registrant which is contained
in a registration statement filed under the Exchange Act, including any
amendments or reports filed for the purpose of updating such description.
All documents subsequently filed by the Registrant pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, and prior to the termination of this
offering shall be deemed to be incorporated herein by reference.
INDEMNIFICATION OF OFFICERS AND DIRECTORS.
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 the foregoing provisions of its Articles of Incorpora
tion,
Bylaws, 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
counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate
jurisdiction the question whether such indemnification by it is against public
policy
as expressed in the Act and will be governed by the final adjudication of such
issue.
