FROST HANNA CAPITAL GROUP INC, SB-2/A, 1997-03-25

FROST HANNA CAPITAL GROUP INC
SB-2/A, 1997-03-25
BLANK CHECKS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 24, 1997.

Registration No. 333-19401

================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

-----------------

AMENDMENT NO. 2 TO

FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

-----------------
FROST HANNA CAPITAL GROUP, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
FLORIDA 6799 65-0701248
-------------------- -------------- ----------------
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)

</TABLE>
FROST HANNA CAPITAL GROUP, INC.
327 PLAZA REAL, SUITE 319
BOCA RATON, FLORIDA 33432
TELEPHONE (407) 367-1079

(Address, including Zip Code, and telephone number, including
area code, of registrant's principal executive offices)
MARK J. HANNA
PRESIDENT
FROST HANNA CAPITAL GROUP, INC.
327 PLAZA REAL, SUITE 319
BOCA RATON, FLORIDA 33432
TELEPHONE (407) 367-1079
(Name, address, including Zip Code,
and telephone number,
including area code, of agent for service)

Please send copies of all communications to:

TEDDY D. KLINGHOFFER, ESQ. GUY P. LANDER, ESQ.
STEARNS WEAVER MILLER WEISSLER GOLDSTEIN & DIGIOIA, LLP
ALHADEFF & SITTERSON, P.A. 369 LEXINGTON AVENUE
150 WEST FLAGLER STREET NEW YORK, NEW YORK 10017
SUITE 2200 (212) 599-3322
MIAMI, FLORIDA 33130
(305) 789-3200

Approximate date of commencement of proposed sale to the public: AS
SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same Offering [ ].
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same Offering [ ].
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box [ ].

- --------------------------------------------------------------------------------

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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2
FROST HANNA CAPITAL GROUP, INC.

CROSS-REFERENCE SHEET

<TABLE>
<CAPTION>
FORM SB-2
ITEM NO. ITEM CAPTION LOCATION IN PROSPECTUS
-------- ------------ ----------------------
<S> <C> <C>
1. Front of Registration Statement and Outside Front Cover Facing Page of the Registration Statement
Page of Prospectus . . . . . . . . . . . . . . . . . . and Cover Page of Prospectus

2. Inside Front and Outside Back Cover Pages of Prospectus Inside Front and Outside Back Cover Pages
of Prospectus

3. Summary Information and Risk Factors . . . . . . . . . Prospectus Summary; Risk Factors

4. Use of Proceeds . . . . . . . . . . . . . . . . . . . . Use of Proceeds

5. Determination of Offering Price . . . . . . . . . . . . Underwriting

6. Dilution . . . . . . . . . . . . . . . . . . . . . . . Dilution

7. Selling Security Holders . . . . . . . . . . . . . . . Not Applicable

8. Plan of Distribution . . . . . . . . . . . . . . . . . Cover Page and Inside Cover Page to
Prospectus; Underwriting

9. Legal Proceedings . . . . . . . . . . . . . . . . . . . Legal Proceedings

10. Directors, Executive Officers, Promoters and Control Management of the Company
Persons . . . . . . . . . . . . . . . . . . . . . . . .

11. Security Ownership of Certain Beneficial Owners and Principal Shareholders
Management . . . . . . . . . . . . . . . . . . . . . .

12. Description of Securities . . . . . . . . . . . . . . . Description of Securities

13. Interests of Named Experts and Counsel . . . . . . . . Legal Matters; Experts

14. Disclosure of Commission Position on Indemnification Underwriting; Undertakings
for Securities Act Liabilities . . . . . . . . . . . .

15. Organization Within Last Five Years . . . . . . . . . . Risk Factors; Proposed Business; Certain
Transactions

16. Description of Business . . . . . . . . . . . . . . . . Prospectus Summary; Risk Factors;
Proposed Business

17. Management's Discussion and Analysis or Plan of Management's Discussion and Analysis or
Operation . . . . . . . . . . . . . . . . . . . . . . . Plan of Operations

18. Description of Property . . . . . . . . . . . . . . . . Proposed Business

19. Certain Relationships and Related Transactions . . . . Risk Factors; Proposed Business; Certain
Transactions

20. Market for Common Equity and Related Stockholder Description of Securities; Risk Factors;
Matters . . . . . . . . . . . . . . . . . . . . . . . . Prospectus Summary

21. Executive Compensation . . . . . . . . . . . . . . . . Management of the Company

22. Financial Statements . . . . . . . . . . . . . . . . . Financial Statements
</TABLE>
<PAGE> 3
FROST HANNA CAPITAL GROUP, INC.

CROSS-REFERENCE SHEET

<TABLE>
<CAPTION>
FORM SB-2
ITEM NO. ITEM CAPTION LOCATION IN PROSPECTUS
-------- ------------ ----------------------
<S> <C> <C>
23. Changes in and Disagreements with Accountants on Not Applicable
Accounting and Financial Disclosure . . . . . . . . . .

24. Indemnification of Directors and Officers . . . . . . . Indemnification of Directors and Officers

25. Other Expenses of Issuance and Distribution . . . . . . Other Expenses of Issuance and
Distribution

26. Recent Sales of Unregistered Securities . . . . . . . . Recent Sales of Unregistered Securities

27. Exhibits . . . . . . . . . . . . . . . . . . . . . . . Exhibits

28. Undertakings . . . . . . . . . . . . . . . . . . . . . Undertakings
</TABLE>

<PAGE> 4

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED FEBRUARY 24, 1997

PROSPECTUS

FROST HANNA CAPITAL GROUP, INC.

1,700,000 SHARES

Frost Hanna Capital Group, Inc. (the "Company") hereby offers (the
"Offering") 1,700,000 shares of common stock, par value $.0001 per share
("Common Stock"). Prior to this Offering, there has been no public market for
the Common Stock and there can be no assurance that any such market will develop
after this Offering or that, if developed, any such market will be sustained. It
is anticipated that the initial public offering price will be approximately
$6.00 per share. The initial public offering price has been arbitrarily
determined by negotiation between the Company and First Cambridge Securities
Corporation (the "Representative"), acting as representative of the several
underwriters identified elsewhere herein (the "Underwriters"), and does not bear
any relationship to such established valuation criteria as assets, book value or
prospective earnings. For information regarding the factors considered in
determining the initial public offering price of the Common Stock, see "Risk
Factors" and "Underwriting." The Company anticipates that trading of the Common
Stock will be conducted through what is customarily known as the "pink sheets"
and on the National Association of Securities Dealers, Inc.'s Electronic
Bulletin Board (the "Bulletin Board"). Any market for the Common Stock which may
result will likely be less well developed than if the Common Stock were traded
in NASDAQ or on an exchange. Subsequent to the closing of this Offering, the
Company shall prepare and file with the United States Securities and Exchange
Commission on Current Report Form 8-K an audited balance sheet of the Company
reflecting receipt by the Company of the proceeds of this Offering. Eighty
percent of the net proceeds of this Offering may be escrowed for an indefinite
period of time following the consummation of this Offering. In the event of
liquidation of the Company, investors may recoup only a portion of their initial
investment.

------------------------

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND IMMEDIATE
SUBSTANTIAL DILUTION. SEE "RISK FACTORS" AND "DILUTION" AT PAGES 11 AND 25. THIS
IS A "BLANK CHECK/BLIND POOL" OFFERING. SEE "RISK FACTORS" AT PAGES 11 THROUGH
23.

------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSIONS NOR HAS THE COMMISSION
NOR ANY STATE SECURITIES COMMISSIONS PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
=======================================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share................................... $ $ $
- -----------------------------------------------------------------------------------------------------------------------
Total(3).................................... $ $ $
=======================================================================================================================
</TABLE>

- ---------------

(1) The Company has also agreed to pay to the Representative a non-accountable
expense allowance (the "Non-Accountable Expense Allowance") equal to three
percent (3%) of the public offering price ($.18 per share). These figures do
not include additional compensation to the Representative in the form of a
stock purchase option to purchase for nominal consideration, up to 170,000
shares of Common Stock of the Company at an exercise price of 120% of the
initial public offering price per share during a four-year period commencing
one year after the date of this Prospectus. Additionally, the Company has
agreed to certain registration rights with respect to the shares of Common
Stock underlying the underwriter warrants and has agreed to certain
indemnification and contribution agreements with the Underwriters. See
"Underwriting."
(2) The proceeds to the Company set forth in the table on the cover page of the
Prospectus have been computed before deduction of costs that will be
incurred in connection with this Offering (excluding the Underwriting
Discount), including the Non-Accountable Expense Allowance, filing,
printing, legal, accounting, transfer agent and escrow agent fees
(collectively, the "Offering Costs"). The net proceeds to the Company, after
deducting the Underwriting Discount and the Offering Costs (the "Net
Proceeds"), are estimated to be $________, or $________ if the
over-allotment option (as described herein) is exercised in full.
(3) The Company has granted to the Underwriters a 45-day option to purchase up
to 255,000 additional shares of Common Stock upon the same terms and
conditions as set forth above, solely to cover over-allotments, if any (the
"over-allotment option"). If the over-allotment option is exercised in full
the total Price to Public, Underwriting Discount and Proceeds to Company
will be $________, $________ and $________, respectively. See
"Underwriting."

------------------------

THE SHARES OF COMMON STOCK ARE BEING OFFERED BY THE UNDERWRITERS, SUBJECT TO
PRIOR SALE, WHEN, AS AND IF DELIVERED TO AND ACCEPTED BY THEM, SUBJECT TO
APPROVAL OF CERTAIN LEGAL MATTERS BY COUNSEL FOR THE UNDERWRITERS AND CERTAIN
OTHER CONDITIONS. THE UNDERWRITERS RESERVE THE RIGHT TO WITHDRAW, CANCEL OR
MODIFY SUCH OFFER AND TO REJECT ANY ORDER IN WHOLE OR IN PART. IT IS EXPECTED
THAT DELIVERY OF CERTIFICATES WILL BE MADE AGAINST PAYMENT THEREFOR ON OR ABOUT
__________ , 1997, IN NEW YORK, NEW YORK.

------------------------

FIRST CAMBRIDGE(TM)

First Cambridge Securities Corporation

THE DATE OF THIS PROSPECTUS IS __________ , 1997

<PAGE> 5
ESCROW OF 80% OF THE NET PROCEEDS DERIVED HEREBY

UPON COMPLETION OF THIS OFFERING, 80% OF THE NET PROCEEDS THEREFROM
WILL BE PLACED IN AN ESCROW ACCOUNT (THE "ESCROW FUND"), WITH FIDUCIARY TRUST
INTERNATIONAL OF THE SOUTH, AS ESCROW AGENT, SUBJECT TO RELEASE UPON THE
EARLIER OF (i) WRITTEN NOTIFICATION BY THE COMPANY OF ITS NEED FOR ALL OR
SUBSTANTIALLY ALL OF SUCH NET PROCEEDS FOR THE PURPOSE OF IMPLEMENTING A
BUSINESS COMBINATION (AS HEREINAFTER DEFINED); OR (ii) THE EXERCISE BY CERTAIN
SHAREHOLDERS OF THE REDEMPTION OFFER (AS HEREINAFTER DEFINED). THE COMPANY
INTENDS TO USE THE ESCROW FUND (INCLUDING ANY INTEREST EARNED THEREON) ONLY IN
CONNECTION WITH THE OPERATIONS OF AN ACQUIRED BUSINESS (AS HEREINAFTER DEFINED)
AND ACCORDINGLY ALL FUNDS EXPENDED BY THE COMPANY PRIOR TO THE CONSUMMATION OF
A BUSINESS COMBINATION WILL BE DERIVED FROM THE NET PROCEEDS NOT PLACED IN THE
ESCROW FUND OR OTHER SOURCES OF FUNDING NOT YET KNOWN. IN THE EVENT THE
COMPANY REQUIRES ADDITIONAL FINANCING, THERE CAN BE NO ASSURANCES THAT SUCH
FINANCING WILL BE AVAILABLE ON ACCEPTABLE TERMS, IF AT ALL. ADDITIONALLY, IN
THE EVENT THE COMPANY REQUIRES IN EXCESS OF 20% OF THE NET PROCEEDS FOR
OPERATIONS, MESSRS. FROST AND HANNA HAVE UNDERTAKEN TO WAIVE THEIR SALARIES
UNTIL THE CONSUMMATION BY THE COMPANY OF A BUSINESS COMBINATION. IN THE EVENT
OF THE EXERCISE OF THE REDEMPTION OFFER, OR LIQUIDATION OF THE COMPANY AS A
RESULT OF THE COMPANY'S FAILURE TO CONSUMMATE A BUSINESS COMBINATION, INVESTORS
MAY ONLY RECOUP A PORTION OF THEIR INVESTMENT. SEE "RISK FACTORS" AND
"PROPOSED BUSINESS."

INVESTOR FUNDS MAY BE ESCROWED FOR AN INDEFINITE PERIOD OF TIME

INVESTORS' FUNDS MAY BE ESCROWED FOR AN INDEFINITE PERIOD OF TIME
FOLLOWING THE CONSUMMATION OF THIS OFFERING. FURTHER, THERE CAN BE NO
ASSURANCES THAT THE COMPANY WILL EVER CONSUMMATE A BUSINESS COMBINATION.
ALTHOUGH MESSRS. FROST AND HANNA HAVE AGREED TO WAIVE THEIR SALARIES IN THE
EVENT ALL OF THE NET PROCEEDS OF THIS OFFERING OTHER THAN THE ESCROW FUND ARE
EXPENDED AND THE COMPANY HAS NOT CONSUMMATED A BUSINESS COMBINATION, THE
COMPANY CURRENTLY HAS NO PLANS OR ARRANGEMENTS WITH RESPECT TO THE POSSIBLE
ACQUISITION OF ADDITIONAL FINANCING WHICH MAY BE REQUIRED TO CONTINUE THE
OPERATIONS OF THE COMPANY IN THE EVENT ALL OF THE FUNDS OTHER THAN THE ESCROW
FUND ARE EXPENDED AND THE COMPANY HAS NOT CONSUMMATED A BUSINESS COMBINATION.
IN THE EVENT ALL OF THE FUNDS OTHER THAN THE ESCROW FUND ARE EXPENDED AND THE
COMPANY HAS NOT CONSUMMATED A BUSINESS COMBINATION, MESSRS. FROST, HANNA,
BAXTER AND ROSENBERG MAY CONSIDER LOANING TO THE COMPANY FUNDS FOR OPERATIONS,
OTHER THAN THE PAYMENT OF SALARIES TO MESSRS. FROST AND HANNA. ALTHOUGH THERE
ARE NO PLANS OR ARRANGEMENTS WITH RESPECT TO SUCH LOANS, MESSRS. FROST, HANNA,
BAXTER AND ROSENBERG DO NOT CURRENTLY ANTICIPATE SUCH LOANS, IF ANY, TO BE MADE
ON TERMS OTHER THAN UPON MARKET INTEREST RATES. THERE CAN BE NO ASSURANCES
THAT MESSRS. FROST, HANNA, BAXTER AND ROSENBERG WILL MAKE SUCH LOANS TO THE
COMPANY OR, IF MADE, THAT SUCH LOANS WILL BE MADE ON TERMS FAVORABLE TO THE
COMPANY.

OFFERING NOT CONDUCTED IN ACCORDANCE WITH
CERTAIN BLANK CHECK REGULATIONS

THE COMPANY'S OFFERING IS NOT BEING CONDUCTED IN ACCORDANCE WITH RULE
419 PROMULGATED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION"). ACCORDING TO THE COMMISSION, RULE 419 WAS DESIGNED TO
"STRENGTHEN REGULATION OF SECURITIES OFFERINGS BY BLANK CHECK COMPANIES WHICH
CONGRESS HAS FOUND TO HAVE BEEN COMMON VEHICLES FOR FRAUD AND MANIPULATION IN
THE PENNY STOCK MARKET." SEE SECURITIES ACT RELEASES NO. 6891 (APRIL 17,
1991), 48 SEC DOCKET 1131, AND NO. 6932 (APRIL 13, 1992), 51 SEC DOCKET 0382.
PURSUANT TO RULE 419, A "BLANK CHECK" COMPANY IS DEFINED AS (A) A DEVELOPMENT
STAGE COMPANY THAT HAS NO SPECIFIC BUSINESS PLAN OR HAS INDICATED THAT ITS
BUSINESS PLAN IS TO ENGAGE IN A MERGER OR ACQUISITION WITH AN UNIDENTIFIED
COMPANY OR COMPANIES; AND (B) A COMPANY WHICH ISSUES A "PENNY STOCK," MEANING
ANY EQUITY SECURITIES THAT, AMONG OTHER THINGS, (I) ARE NOT QUOTED IN THE
NASDAQ SYSTEM; OR (II) IN THE CASE OF A COMPANY WHICH HAS BEEN IN CONTINUOUS
OPERATION FOR LESS THAN THREE

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<PAGE> 6

YEARS, HAS NET TANGIBLE ASSETS (I.E., TOTAL ASSETS LESS INTANGIBLE ASSETS AND
LIABILITIES) OF LESS THAN $5,000,000, AS DEMONSTRATED BY THE COMPANY'S MOST
RECENT FINANCIAL STATEMENTS THAT HAVE BEEN AUDITED AND REPORTED ON BY AN
INDEPENDENT PUBLIC ACCOUNTANT. ALTHOUGH THE COMPANY IS A "BLANK CHECK"
COMPANY, IT IS NOT SUBJECT TO RULE 419 BECAUSE THE COMPANY'S NET TANGIBLE
ASSETS AFTER THIS OFFERING WILL BE GREATER THAN $5,000,000. SEE SECURITIES ACT
RELEASE NO. 7024 (OCTOBER 25, 1993), 55 SEC DOCKET 722. ACCORDINGLY, INVESTORS
IN THIS OFFERING WILL NOT RECEIVE THE SUBSTANTIVE PROTECTIONS PROVIDED BY RULE
419. THERE CAN BE NO ASSURANCES THAT THE COMMISSION, THE UNITED STATES
CONGRESS OR STATE LEGISLATURES WILL NOT ENACT LEGISLATION WHICH WILL PROHIBIT
OR RESTRICT THE SALE OF SECURITIES OF "BLANK CHECK" COMPANIES. SEE "PROPOSED
BUSINESS -- CERTAIN SECURITIES LAW CONSIDERATIONS" AND "RISK FACTORS."

ESCROW FUND NOT TO BE USED FOR SALARIES, CONSULTING FEES OR REIMBURSABLE
EXPENSES

NO FUNDS (INCLUDING ANY INTEREST EARNED THEREON) WILL BE DISBURSED
FROM THE ESCROW FUND FOR THE PAYMENT OF SALARIES, CONSULTING FEES OR
REIMBURSEMENT OF EXPENSES INCURRED ON THE COMPANY'S BEHALF BY THE COMPANY'S
OFFICERS AND DIRECTORS. OTHER THAN THE FOREGOING, THERE IS NO LIMIT ON THE
AMOUNT OF SUCH REIMBURSABLE EXPENSES, AND THERE WILL BE NO REVIEW OF THE
REASONABLENESS OF SUCH EXPENSES BY ANYONE OTHER THAN THE COMPANY'S BOARD OF
DIRECTORS, ALL OF WHOM MAY ALSO BE OFFICERS OF THE COMPANY. IN NO EVENT WILL
THE ESCROW FUND (INCLUDING ANY INTEREST EARNED THEREON) BE USED FOR ANY PURPOSE
OTHER THAN IMPLEMENTATION OF A BUSINESS COMBINATION OR FOR PURPOSES OF THE
REDEMPTION OFFER. SEE "RISK FACTORS," "USE OF PROCEEDS AND "CERTAIN
TRANSACTIONS."

NO PRIOR CONTACT WITH OTHER FIRMS REGARDING POSSIBLE BUSINESS COMBINATIONS

NONE OF THE COMPANY'S OFFICERS, DIRECTORS, 10% SHAREHOLDERS, PERSONS
WHO DIRECTLY OR INDIRECTLY CONTROL, ARE CONTROLLED BY OR ARE UNDER COMMON
CONTROL WITH, THE COMPANY OR PERSONS WHO MAY BE DEEMED PROMOTERS OF THE COMPANY
HAVE HAD ANY PRELIMINARY CONTACT OR DISCUSSIONS WITH ANY REPRESENTATIVE OF ANY
OTHER FIRM REGARDING THE POSSIBILITY OF A BUSINESS COMBINATION BETWEEN THE
COMPANY AND SUCH OTHER FIRM.

MATERIAL PERSONS

THE OFFICERS AND DIRECTORS OF THE COMPANY ARE THE ONLY PERSONS WHO
HAVE BEEN INSTRUMENTAL IN ARRANGING THE CAPITALIZATION OF THE COMPANY TO DATE.
NONE OF THE OFFICERS OR DIRECTORS OF THE COMPANY ARE ACTING AS NOMINEES FOR ANY
PERSONS OR ARE OTHERWISE UNDER THE CONTROL OF ANY PERSON OR PERSONS. OTHER
THAN CERTAIN COMPENSATION TO BE PAID BY THE COMPANY TO EACH OF MESSRS. FROST
AND HANNA, THERE ARE NO AGREEMENTS, AGREEMENTS IN PRINCIPLE, OR UNDERSTANDINGS
WITH REGARD TO COMPENSATION TO BE PAID BY THE COMPANY TO ANY OFFICER OR
DIRECTOR OF THE COMPANY.

STATE SECURITIES REGULATION
THE COMPANY HAS MADE APPLICATION TO REGISTER OR AN EXEMPTION FROM
REGISTRATION WILL BE OBTAINED FOR THE SHARES OF COMMON STOCK ONLY IN THE STATES
OF COLORADO, DELAWARE, FLORIDA, ILLINOIS, MARYLAND, NEW YORK, OREGON, RHODE
ISLAND, SOUTH CAROLINA AND UTAH AND THE SHARES OF COMMON STOCK MAY ONLY BE
TRADED IN SUCH JURISDICTIONS. THERE CAN BE NO ASSURANCES THAT THE SHARES WILL
BE ELIGIBLE FOR SALE IN SUCH JURISDICTIONS. PURCHASERS OF THE SHARES OF COMMON
STOCK EITHER IN THIS OFFERING OR IN ANY SUBSEQUENT TRADING MARKET WHICH MAY
DEVELOP MUST BE RESIDENTS OF THE STATES OF COLORADO, DELAWARE, FLORIDA,
ILLINOIS, MARYLAND, NEW YORK, OREGON, RHODE ISLAND, SOUTH CAROLINA AND UTAH,
UNLESS AN APPLICABLE EXEMPTION IS AVAILABLE OR A BLUE SKY APPLICATION HAS BEEN
FILED AND ACCEPTED. THE COMPANY WILL AMEND THIS PROSPECTUS FOR THE PURPOSE OF
DISCLOSING ADDITIONAL STATES, IF ANY, IN WHICH THE SHARES OF COMMON STOCK WILL
HAVE BEEN REGISTERED OR WHERE AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

-3-
<PAGE> 7
OFFICER AND DIRECTOR INTRODUCTIONS TO REPRESENTATIVE

OFFICERS AND DIRECTORS OF THE COMPANY MAY INTRODUCE THE REPRESENTATIVE
TO PERSONS TO CONSIDER THIS OFFERING AND SUBSCRIBE FOR SHARES OF COMMON STOCK
EITHER THROUGH THE REPRESENTATIVE, OTHER UNDERWRITERS OR THROUGH PARTICIPATING
DEALERS. AS A RESULT OF SUCH INTRODUCTIONS, SUCH PERSONS MAY BE LIKELY TO
PURCHASE SHARES OF COMMON STOCK. IN THIS CONNECTION, OFFICERS AND DIRECTORS OF
THE COMPANY WILL NOT RECEIVE ANY COMMISSIONS OR ANY OTHER COMPENSATION IN
CONNECTION WITH THE OFFERING OF SHARES OF COMMON STOCK.

NO OFFICER OR DIRECTOR OF THE COMPANY TO PURCHASE SHARES IN THIS OFFERING

NO OFFICER OR DIRECTOR OF THE COMPANY, OR ANY BUSINESS ENTITY IN WHICH
SUCH OFFICER OR DIRECTOR IS AN OFFICER, DIRECTOR OR GREATER THAN 10%
SHAREHOLDER SHALL PURCHASE ANY OF THE SHARES OF COMMON STOCK IN THIS OFFERING.

POTENTIAL CONSIDERATIONS INVOLVING UNDERWRITERS AND AFTER-MARKET TRADING

THE REPRESENTATIVE DOES NOT HAVE ANY DISCRETIONARY POWER OVER ANY OF
ITS CUSTOMERS' ACCOUNTS IN CONNECTION WITH THIS OFFERING. HOWEVER, INASMUCH AS
A SUBSTANTIAL AMOUNT OF THE REGISTERED SECURITIES OF THE COMPANY ISSUED IN THIS
OFFERING MAY BE DISTRIBUTED TO CUSTOMERS OF THE UNDERWRITERS, AND SUBSEQUENTLY,
THESE PERSONS, AS CUSTOMERS OF THE UNDERWRITERS, MAY BE EXPECTED TO ENGAGE IN
TRANSACTIONS FOR THE SALE OR PURCHASE OF REGISTERED SECURITIES OF THE COMPANY,
SHOULD THE UNDERWRITERS DETERMINE TO MAKE A MARKET, AND SHOULD A MARKET DEVELOP
FOR THE COMPANY'S SECURITIES, THE UNDERWRITERS MAY INITIALLY BE EXPECTED TO
EXECUTE A SUBSTANTIAL PORTION OF THE TRANSACTIONS IN THE SECURITIES OF THE
COMPANY. THEREFORE, THE UNDERWRITERS MAY BE, FOR THE FORESEEABLE FUTURE, A
DOMINATING INFLUENCE, AND THEREAFTER A FACTOR OF DECREASING IMPORTANCE FOR THE
COMPANY'S SECURITIES, SHOULD A MARKET ARISE FOR THE COMPANY'S SECURITIES.

IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SHARES
OF COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

INVESTORS SHOULD CAREFULLY REVIEW THE FINANCIAL STATEMENTS WHICH ARE AN
INTEGRAL PART OF THIS PROSPECTUS.

-4-
<PAGE> 8
PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be
read in conjunction with, the more detailed information and financial
statements (including the notes thereto) appearing elsewhere in this
Prospectus. Each prospective investor is urged to read this Prospectus in its
entirety.

THE COMPANY

Business Objectives. The Company was formed to seek to effect a
merger, exchange of capital stock, asset acquisition or other similar business
combination (a "Business Combination") with an operating or development stage
business (an "Acquired Business"). The business objective of the Company is to
seek to effect a Business Combination with an Acquired Business which the
Company believes has significant growth potential. The Company will not engage
in any substantive commercial business immediately following this Offering and
for an indefinite period of time following this Offering. The Company has no
plan, proposal, agreement, understanding or arrangement to acquire or merge
with any specific business or company, and the Company has not identified any
specific business or company for investigation and evaluation. The Company
intends to utilize cash (to be derived from the proceeds of this Offering),
equity, debt or a combination thereof in effecting a Business Combination. As
a result of, among other things, management's broad discretion with respect to
the specific allocation of the Net Proceeds of this Offering, this Offering may
be characterized as a "blank check" offering. While the Company may, under
certain circumstances, seek to effect Business Combinations with more than one
Acquired Business, it will not expend less than 80% of the Net Proceeds of this
Offering (approximately $6,983,600, assuming an initial offering price of $6.00
per share and no exercise of the over-allotment option) plus interest earned
thereon (less any amounts payable by the Company pursuant to the Redemption
Offer, as hereinafter defined) (the "Threshold Amount") upon the consummation
of its first Business Combination. Consequently, it is likely that the Company
will have the ability to effect only a single Business Combination.

To date, the Company's efforts have been limited to organizational
activities. The implementation of the Company's business plans are wholly
contingent upon the successful sale of the shares of Common Stock offered
hereby. See "Proposed Business."

Involvement of Certain Principals in Prior "Blank Check" Companies.
The officers and directors of the Company have held similar positions in three
other "blank check" companies (i.e., a development stage company that has no
specific business plan or has indicated that its business plan is to engage in
a merger or acquisition with an unidentified company), each of which has
consummated a Business Combination as of the date of this Prospectus. There
can be no assurance that the Company will ever be able to effect a Business
Combination or that the type of business or the performance of the Acquired
Business, if any, will be similar to that of these other "blank check"
companies. Further, the results of such "blank check" companies are not
indicative in any manner of the possible future results of the Company.
Certain information with respect to each such prior Business Combination that
the officers and directors of the Company have been involved, as obtained from
each such company's respective filings with the Commission, is set forth below:

<TABLE>
<CAPTION>
Date of
Initial Trading Market
Name of Public Date of Business and
Acquired Business Offering Combination Nature of Business Ticker Symbol
- ------------------------------------ ----------------- ------------------ ---------------------------- -----------------
<S> <C> <C> <C> <C>
Sterling Health Care Group, Inc. February 9, 1993 May 31, 1994 Providing physician contract NASDAQ (FPAM)
and Sterling Healthcare, Inc. management services for
(currently operating pursuant to a hospital emergency
subsequent merger as, "FPA Medical departments
Management Inc.")
</TABLE>

-5-
<PAGE> 9
<TABLE>
<CAPTION>
Date of
Initial Trading Market
Name of Public Date of Business and
Acquired Business Offering Combination Nature of Business Ticker Symbol
- ------------------------------------ -------------------- ------------------- -------------------- --------------------
<S> <C> <C> <C> <C>
LFS Acquisition Corp. (currently September 26, 1993 January 3, 1996 Operating children's Bulletin Board (KIDM)
operating as, "Kids Mart, Inc.") apparel stores

Pan American World Airways, Inc. March 21, 1994 September 23, 1996 Airline industry AMEX (PAA)
(currently operating as, "Pan Am
Corporation")
</TABLE>

Messrs. Richard B. Frost, Mark J. Hanna and Marshal E. Rosenberg,
executive officers and directors of the Company, were also officers and
directors of Frost Hanna Halpryn Capital Group, Inc., a Florida corporation
("Frost Hanna Halpryn") and "blank check" company whose initial public offering
of securities closed in February 1993. Frost Hanna Halpryn raised net proceeds
of approximately $6,100,000 through the issuance of 1,175,500 shares of Common
Stock at $6.00 per share in such initial public offering. Frost Hanna Halpryn
consummated a Business Combination with Sterling Healthcare Group, Inc., a
Florida corporation, and Sterling Healthcare, Inc., a Texas corporation
(collectively, "Sterling Healthcare") on May 31, 1994 in which both such
entities merged with and into a wholly-owned subsidiary of Frost Hanna Halpryn.
In connection with such merger, Frost Hanna Halpryn changed its name to
Sterling Healthcare, Inc. ("Sterling") (the "Sterling Business Combination").
The principal business activity of Sterling is providing physician contract
management services for hospital emergency departments. Upon consummation of
the Sterling Business Combination, (i) the former Sterling Healthcare
shareholders were issued Sterling common stock which constituted approximately
52% of the outstanding shares of Sterling common stock (assuming full exercise
of all outstanding options and warrants to purchase Sterling common stock) and
(ii) Messrs. Frost and Hanna resigned from their officer and director positions
of Sterling and Mr. Rosenberg resigned from his position of Vice President and
Treasurer and remained as a member of the Sterling Board of Directors until
December 1994. In October, 1996, Sterling consummated a business combination
with FPA Medical Management Inc. ("FPAM") pursuant to which, among other
things, each share of Sterling common stock was exchanged for .951 shares of
FPAM common stock. FPAM provides regional healthcare management services.
FPAM currently trades under the symbol "FPAM" in the NASDAQ National Market.
The closing price of FPAM common stock on February 18, 1997 was $23.375
per share.

Messrs. Frost, Hanna, Rosenberg and Donald H. Baxter, also an
executive officer and director of the Company, were also officers and directors
of Frost Hanna Acquisition Group, Inc., a Florida corporation ("Frost Hanna
Acquisition") and "blank check" company whose initial public offering of
securities closed in September 1993. Frost Hanna Acquisition raised net
proceeds of approximately $6,519,800 through the issuance of 1,265,000 shares
of Common Stock at $6.00 per share in such initial public offering. To
minimize any potential conflicts of interest which may have arisen as a result
of the relationship between such persons' positions with Frost Hanna Halpryn,
Frost Hanna Acquisition was prohibited from analyzing or considering any
possible Business Combination opportunities until Frost Hanna Halpryn became a
party to a letter of intent to consummate a Business Combination. Frost Hanna
Acquisition entered into a letter of intent in May 1995 with LFS Acquisition
Corp., a Delaware corporation ("LFS"), and on January 3, 1996 consummated a
Business Combination with LFS in which LFS merged with and into a wholly-owned
subsidiary of Frost Hanna Acquisition. In connection with such merger, Frost
Hanna Acquisition changed its name to Kids Mart, Inc. ("Kids Mart") (the "Kids
Mart Business Combination"). Upon consummation of the Kids Mart Business
Combination (i) the former LFS shareholders were issued Kids Mart common stock
which constituted approximately 62% of the outstanding shares of Kids Mart
common stock (assuming full exercise of all outstanding options and warrants to
purchase Kids Mart common stock) and (ii) Messrs. Frost, Hanna, Baxter and
Rosenberg resigned from their positions as officers and directors of Kids Mart.
Kids Mart operates a chain

-6-
<PAGE> 10

of 200 infant's and children's apparel stores in 20 states under the names of
"Kids Mart" and "Little Folks." In September 1996, Kids Mart closed 97 stores
and fired 600 workers, which resulted in a $5.4 million charge in its third
quarter. Kids Mart's Quarterly Report on Form 10-Q for the quarter ending
October 26, 1996 included a going concern qualification from Kids Mart's
independent auditors, and reported, among other things, an accumulated deficit
of $28,713,000, that Kids Mart's current liabilities exceeded its current assets
by $20,613,000 and that it had a stockholders' deficiency of $15,930,000, all as
of October 26, 1996. Additionally, the Form 10-Q reported that Kids Mart
remained in violation of covenants under its credit facility with Foothill
Capital Corporation, its largest secured creditor. All loans made pursuant to
Kids Mart's credit facility with Foothill Capital Corporation are secured by
substantially all of Kids Mart's assets. On January 10, 1997, Kids Mart filed
for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for
the District of Delaware (97-42(PJW) In Re LFS Acquisition Corporation,
Kidsmart, Inc., Holtzman's Little Folk Shop, Inc.). The closing price of Kids
Mart common stock on February 18, 1997 was $0.015 per share.

Messrs. Frost, Hanna, Baxter and Rosenberg were also officers and
directors of Frost Hanna Mergers Group, Inc., a Florida corporation ("Frost
Hanna Mergers") and "blank check" company whose initial public offering of
securities closed in March 1994. Frost Hanna Mergers raised net proceeds of
approximately $10.1 million through the issuance of 1,955,000 shares of Common
Stock at $6.00 per share in such initial public offering. To minimize any
potential conflicts of interest which may have arisen as a result of the
relationship between such persons' positions with Frost Hanna Halpryn and Frost
Hanna Acquisition, Frost Hanna Mergers was prohibited from analyzing or
considering any possible Business Combination opportunities until Frost Hanna
Halpryn and Frost Hanna Acquisition each became parties to a letter of intent
to consummate a Business Combination. Frost Hanna Mergers entered into a
letter of intent on January 29, 1996 with Pan American World Airways, Inc., a
Florida corporation ("PAWA"), and on September 23, 1996, consummated a Business
Combination with PAWA in which PAWA merged with and into a wholly-owned
subsidiary of Frost Hanna Mergers. In connection with such merger, Frost Hanna
Mergers changed its name to Pan Am Corporation ("Pan Am") (the "Pan Am Business
Combination"). Upon consummation of the Pan Am Business Combination, (i) the
former PAWA shareholders were issued shares of Pan Am common stock which
constituted approximately 72% of the outstanding shares of Pan Am common stock
(assuming full exercise of all outstanding warrants and options to purchase
shares of Pan Am common stock) and (ii) Messrs. Frost and Hanna resigned from
their executive officer positions with Pan Am but currently remain as members
of the Pan Am Board of Directors and Messrs. Baxter and Rosenberg resigned from
their executive officer and director positions with Pan Am. PAWA was a newly
organized corporation established to operate a new low-fare full service
airline under the "Pan Am" name, serving selected long-haul routes between
major United States cities. Pan Am initiated flight service on September 26,
1996. Pan Am common stock began trading on the American Stock Exchange on
September 24, 1996 and trades under the symbol PAA. The closing price of Pan
Am common stock on February 18, 1997 was $8.063 per share.

Escrow of Offering Proceeds. Upon completion of this Offering, 80% of
the Net Proceeds therefrom (approximately $6,983,600, assuming an initial
offering price of $6.00 per share and no exercise of the over-allotment option)
will be placed in an interest bearing escrow account (the "Escrow Fund") with
Fiduciary Trust International of the South, as escrow agent, subject to release
upon the earlier of (i) written notification by the Company of its need for all
or substantially all of the Escrow Fund for the purpose of implementing a
Business Combination; or (ii) the exercise by certain shareholders of the
Redemption Offer (as hereinafter defined). Any interest earned on the Escrow
Fund shall remain in escrow and be used by the Company either (i) following a
Business Combination in connection with the operations of an Acquired Business
or (ii) in connection with the distribution to the shareholders through the
exercise of the Redemption Offer or the liquidation of the Company. In the
event the Company requires in excess of 20% of the Net Proceeds for operations,
Messrs. Frost and Hanna have undertaken to waive their salaries until the
consummation by the Company of a Business Combination. Investors' funds may be
escrowed for an indefinite period of time following the consummation of this
Offering. Further, there can be no assurances that the Company will ever
consummate a Business Combination. In the event of the exercise of the
Redemption Offer, investors may only recoup a portion of their investment. The
Company currently has no expectation with regard to the Company's plans in the
event a Business Combination is not consummated by a certain date. See
"--Redemption Rights" and "Use of Proceeds" below.

Shareholder Approval of Business Combination. The Company, prior to
the consummation of any Business Combination, will submit such transaction to
the Company's shareholders for their approval. In the event, however, that the
holders of 30% (510,000 shares of Common Stock or 586,500 shares of Common
Stock if the over-allotment option is exercised) or more of the shares of
Common Stock sold hereby in this

-7-
<PAGE> 11

Offering which are outstanding vote against approval of any Business
Combination, the Company will not consummate such Business Combination. The
shares of Common Stock sold hereby may sometimes be referred to as the "Public
Shares" and the holders (whether current or future) of the Public Shares are
referred to as the "Public Shareholders." All of the officers and directors of
the Company, who own in the aggregate approximately 75% of the Common Stock
outstanding prior to this Offering and will own approximately 35% of the
outstanding Common Stock following the Offering (33% if the over-allotment
option is exercised), have agreed as of the date of this Prospectus to vote
their respective shares of Common Stock in accordance with the vote of the
majority of the Public Shares with respect to any such Business Combination.

Redemption Rights. At the time the Company seeks shareholder approval
of any potential Business Combination, the Company will offer (the "Redemption
Offer"), to each of the Public Shareholders who vote against the proposed
Business Combination and affirmatively request redemption, for a twenty (20)
day period, to redeem all, but not a portion of, their Public Shares, at a per
share price equal to the Company's liquidation value (as described below) on
the record date for determination of shareholders entitled to vote upon the
proposal to approve such Business Combination (the "Record Date") divided by
the number of then outstanding Public Shares. The Redemption Offer will be
described in detail in the disclosure documentation relating to the proposed
Business Combination. The Company's liquidation value will be equal to the
Company's book value, as determined by the Company and audited by the Company's
independent public accountants (the "Company's Liquidation Value") (which
amount will be less than the initial public offering price per share of Common
Stock in the Offering in view of the expenses of the Offering, salaries and
expenses paid and the anticipated expenses which will be incurred in seeking a
Business Combination), calculated as of the Record Date. In no event, however,
will the Company's Liquidation Value be less than the Escrow Fund, inclusive of
any interest earned thereon. If the holders of less than 30% of the Public
Shares held by Public Shareholders elect to have their Public Shares redeemed,
the Company may, but will not be required to, proceed with such Business
Combination. If the Company elects to so proceed, it will redeem Public
Shares, based upon the Company's Liquidation Value, from those Public
Shareholders who affirmatively requested such redemption and who voted against
the Business Combination. The determination as to whether the Company proceeds
with a Business Combination ultimately rests with the Company. However, if the
holders of 30% or more of the Public Shares held by Public Shareholders vote
against approval of any potential Business Combination, the Company will not
proceed with such Business Combination and will not redeem such Public Shares.
If the Company determines not to pursue a Business Combination, even if the
Public Shareholders of less than 30% of the Public Shares vote against approval
of the potential Business Combination, no Public Shares will be redeemed.

Escrow of Principals' Shares. The shares of Common Stock owned as of
the date hereof by all of the officers and directors of the Company (an
aggregate of approximately 33% of the outstanding Common Stock immediately
subsequent to this Offering assuming the over-allotment option is exercised in
full) will be placed in escrow with American Stock Transfer & Trust Company, as
escrow agent, until the occurrence of a Business Combination. During such
escrow period, such persons will not be able to sell, or otherwise transfer,
their respective shares of Common Stock, but will retain all other rights as
shareholders of the Company, including, without limitation, the right to vote
such shares of Common Stock.

The Company was organized under the laws of the State of Florida on
February 2, 1996. The Company's office is located at 327 Plaza Real,
Suite 319, Boca Raton, Florida 33432, and its telephone number is (407)
367-1079.

-8-
<PAGE> 12
THE OFFERING

<TABLE>
<S> <C>
Common Stock being offered (1) . . . . . . . 1,700,000 shares

Common Stock to be outstanding
after the Offering (1) . . . . . . . . . . 3,192,000 shares

Proposed Bulletin Board Symbol(2) . . . . . . [FHCG]
</TABLE>

_________________
(1) Assumes no exercise of the over-allotment option. Does not include
170,000 shares of Common Stock reserved for issuance upon exercise of
the Underwriter Options. See "Underwriting."
(2) The inclusion of these securities on the Bulletin Board does not imply
that an established public trading market will develop therefor or, if
developed, that such market will be sustained. See "Risk Factors - No
Assurance of Public Market; Arbitrary Determination of Offering
Price."

USE OF PROCEEDS

Upon completion of this Offering, 80% of the Net Proceeds therefrom
will be held in the Escrow Fund and shall only be used, if at all, for the
implementation of a Business Combination or for purposes of the Redemption
Offer. The portion of Net Proceeds not placed in the Escrow Fund
(approximately $1,745,900, assuming an initial offering price of $6.00 per
share and no exercise of the over-allotment option) will be used to cover costs
and expenses incurred in attempting to effect a Business Combination, including
selecting and evaluating an Acquired Business, structuring and consummating a
Business Combination and paying $10,000 monthly for salary and $1,000 monthly
for non-accountable expense allowance (retroactive to November 1, 1996) to each
of Messrs. Frost and Hanna. See "Use of Proceeds," "Proposed Business" and
"Certain Transactions."

RISK FACTORS

The Common Stock offered hereby involves a high degree of risk and
immediate substantial dilution and should not be purchased by investors who
cannot afford the loss of their entire investment. Such risk factors include,
among others: the Offering is not being conducted in accordance with certain of
the Commission's blank check regulations, the Company was recently organized,
has no operating history, limited resources and no present source of revenues
and the Company's independent auditors have issued a qualified report. See "Risk
Factors," "Dilution" and "Use of Proceeds."

SUMMARY FINANCIAL INFORMATION

The following data have been derived from the financial statements of
the Company and should be read in conjunction with those statements, which are
included in this Prospectus. The as adjusted information gives effect to the
issuance of the securities in this Offering as if such Offering and such
issuance had occurred at December 31, 1996.

<TABLE>
<CAPTION>
December 31, 1996
--------------------------------
Actual As Adjusted(1)
---------- ---------------
<S> <C> <C>
Balance Sheet Data:
Total Assets . . . . . . . . . . . . . . . . . . . . . $224,571 $8,859,286
Working capital (deficit) . . . . . . . . . . . . . . . ( 61,085) 8,798,200
Total liabilities . . . . . . . . . . . . . . . . . . . 152,903 58,118
Shareholders' equity . . . . . . . . . . . . . . . . . 71,668 8,801,168
</TABLE>

_________________
(1) The as adjusted information does not give effect to the payment of
$10,000 monthly for salary and $1,000 monthly for non-accountable
expense allowance (retroactive to November 1, 1996) to each of Messrs.
Frost and Hanna.

-9-
<PAGE> 13

THE COMPANY

The Company was formed to seek to effect a Business Combination with
an Acquired Business which the Company believes has significant growth
potential. The Company will not engage in any substantive commercial business
immediately following this Offering and for an indefinite period of time
thereafter. The Company has no plan, proposal, agreement, understanding or
arrangement to acquire or merge with any specific business or company, and the
Company has not identified any specific business or company for investigation
and evaluation. The Company intends to utilize cash (to be derived from the
proceeds of this Offering), equity, debt or a combination thereof in effecting
a Business Combination. As a result of, among other things, management's broad
discretion with respect to the specific allocation of the Net Proceeds of this
Offering, this Offering may be characterized as a "blank check" offering.

The Company was organized under the laws of the State of Florida on
February 2, 1996. The Company's office is located at 327 Plaza Real,
Suite 319, Boca Raton, Florida, 33432, and its telephone number is (407)
367-1079.

-10-
<PAGE> 14
RISK FACTORS
THE COMMON STOCK OFFERED HEREBY IS SPECULATIVE, INVOLVES IMMEDIATE
SUBSTANTIAL DILUTION AND A HIGH DEGREE OF RISK, INCLUDING, BUT NOT NECESSARILY
LIMITED TO, THE SEVERAL FACTORS DESCRIBED BELOW. EACH PROSPECTIVE INVESTOR
SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS INHERENT IN AND AFFECTING
THE BUSINESS OF THE COMPANY AND THIS OFFERING BEFORE MAKING AN INVESTMENT
DECISION.

OFFERING NOT CONDUCTED IN ACCORDANCE WITH CERTAIN BLANK CHECK REGULATIONS

The Company's Offering is not being conducted in accordance with the
Commission's Rule 419, which was adopted to strengthen regulation of securities
offerings by "blank check" companies which the United States Congress has found
to have been common vehicles for fraud and manipulation in the penny stock
market. Pursuant to Rule 419, a "blank check" company is defined as (a) a
development stage company that has no specific business plan or has indicated
that its business plan is to engage in a merger or acquisition with an
unidentified company or companies; and (b) a company which issues a "penny
stock," meaning any equity securities that, among other things, (i) are not
quoted in the NASDAQ system; or (ii) in the case of a company which has been in
continuous operation for less than three years, has net tangible assets (i.e.,
total assets less intangible assets and liabilities) of less than $5,000,000,
as demonstrated by the company's most recent financial statements that have
been audited and reported on by an independent public accountant. Although the
Company is a "blank check" company, it is not subject to Rule 419 because the
Company's net tangible assets after this Offering will be greater than
$5,000,000. Accordingly, investors in this Offering will not receive the
substantive protections provided by Rule 419. There can be no assurances that
the Commission, the United States Congress or state legislatures will not enact
legislation which will prohibit or restrict the sale of securities of "blank
check" companies. See "Proposed Business -- Certain Securities Laws
Considerations."

RECENTLY ORGANIZED COMPANY; NO OPERATING HISTORY; ACCUMULATED DEFICIT; LIMITED
RESOURCES; NO PRESENT SOURCE OF REVENUES

The Company, which was incorporated on February 2, 1996, is a
development stage company and has not, as of the date hereof, attempted to seek
a Business Combination. The Company has experienced operating losses since its
inception. As of December 31, 1996, the Company had a deficit accumulated in the
development stage of $112,444 (see Financial Statements included herein). The
Company has no operating history and, accordingly, there is only a limited basis
upon which to evaluate the Company's prospects for achieving its intended
business objectives. Other than with respect to Frost Hanna Halpryn, Frost
Hanna Acquisition and Frost Hanna Mergers, the Company's officers and directors
have no prior experience relating to the identification, evaluation and
acquisition of an Acquired Business. Investors will be relying primarily on
their ability to attempt to select an Acquired Business which will be
profitable. To date, the Company's efforts have been limited primarily to
organizational activities. The Company has limited resources and has had no
revenues to date. In addition, the Company will not achieve any revenues (other
than interest income earned upon the Net Proceeds of this Offering) until the
consummation of a Business Combination, if at all. Moreover, there can be no
assurances that any Acquired Business, at the time of the Company's consummation
of a Business Combination, or at any time thereafter, will derive any material
revenues from its operations or operate on a profitable basis. See "Proposed
Business."

QUALIFIED REPORT OF INDEPENDENT AUDITORS

The Company's independent auditors' report on the Company's financial
statements includes an explanatory paragraph stating that the Company's ability
to commence operations is contingent upon obtaining adequate financial
resources through a contemplated public offering, or otherwise, which raises
substantial doubt about its ability to continue as a going concern.
Additionally, if unsuccessful, the Company may be unable to continue in its
present form. The financial statements do not include any adjustments relating
to the recoverability and classification of asset carrying amounts or the
amount and classification of liabilities that might result should the Company
be unable to continue as a going concern. See "Proposed Business,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operation," and the Financial Statements of the Company included elsewhere in
this Prospectus.

-11-
<PAGE> 15
80% OF NET PROCEEDS MAY BE ESCROWED FOR AN INDEFINITE PERIOD OF TIME

Investors' funds may be escrowed for an indefinite period of time
following the consummation of this Offering. Further, there can be no
assurances that the Company will ever consummate a Business Combination.
Although Messrs. Frost and Hanna have agreed to waive their salaries in the
event all of the Net Proceeds of this Offering other than the Escrow Fund are
expended and the Company has not consummated a Business Combination, the
Company currently has no plans or arrangements with respect to the possible
acquisition of additional financing which may be required to continue the
operations of the Company in the event all of the funds other than the Escrow
Fund are expended and the Company has not consummated a Business Combination.
In the event all of the funds other than the Escrow Fund are expended and the
Company has not consummated a Business Combination, Messrs. Frost, Hanna,
Baxter and Rosenberg may consider loaning to the Company funds for operations,
other than the payment of salaries to Messrs. Frost and Hanna. Although there
are no plans or arrangements with respect to such loans, Messrs. Frost, Hanna,
Baxter and Rosenberg do not currently anticipate such loans, if any, to be made
on other than market rate terms. There can be no assurances that Messrs.
Frost, Hanna, Baxter and Rosenberg will make such loans to the Company or, if
made, that such loans will be made on terms favorable to the Company.

INVESTORS RISK LOSS OF NON-ESCROWED PROCEEDS

Approximately twenty percent (20%) of investors proceeds will not be
placed in the Escrow Fund. Instead, such proceeds shall be used immediately by
the Company to commence operations relating to selection of a prospective
Acquired Business. Although Messrs. Frost and Hanna have agreed to waive their
salaries in the event all of the Net Proceeds of this Offering other than the
Escrow Fund are expended and the Company has not consummated a Business
Combination, the Company currently has no plans or arrangements with respect to
the possible acquisition of additional financing which may be required to
continue the operations of the Company. In the event the Company is unable to
raise additional financing and continue operations, it may have no other
alternative than liquidation. In the event of liquidation, the Company's only
assets will be the cash in the Escrow Fund (representing only approximately 80%
of the investors' initial investment) and the investors would receive only a
liquidation return of a portion of their initial investment.

INVOLVEMENT OF CERTAIN PRINCIPALS IN PRIOR BLANK CHECK COMPANIES INCLUDING A
COMPANY WHICH SUBSEQUENTLY FILED FOR BANKRUPTCY PROTECTION

The officers and directors of the Company have held similar positions
in three other "blank check" companies. The descriptions of such companies and
their respective results have been included elsewhere herein. Purchasers who
purchase Common Stock in the Offering will not acquire any ownership interest
whatsoever in any of the other "blank check" companies to which the officers and
directors of this Company have been involved. The inclusion of the information
regarding these companies does not imply that the Company will have similar
results with respect to the time period taken to consummate a Business
Combination or the relative success or failure of the Acquired Business
following such Business Combination. Investors in this Offering should not
assume that they will experience returns, if any, comparable to those
experienced by investors in such other "blank check" companies. Additionally,
at least one of such companies is experiencing severe financial problems and
filed for Chapter 11 bankruptcy protection on January 10, 1997 in the United
States Bankruptcy Court for the District of Delaware. There can be no
assurance as to the requirements (if any) that the bankruptcy or any litigation
relating thereto could have on the officers and directors of the Company who
held similar positions in such other blank check company. There also can be no
assurance that the Company will be able to effect a Business Combination or that
the type of business or the performance of the Acquired Business, if any, will
or will not be similar to that of other "blank check" companies to which the
officers and directors of the Company have been involved. See "Proposed
Business-- Involvement of Certain Principals in Prior 'Blank Check' Companies."

DISCRETIONARY USE OF PROCEEDS; ABSENCE OF SUBSTANTIVE DISCLOSURE RELATING TO A
BLANK CHECK/BLIND POOL OFFERING

As a result of, among other things, management's broad discretion with
respect to the specific application of the Net Proceeds of this Offering, this
Offering may be characterized as a "blank check" offering. Although
substantially all of the Net Proceeds of this Offering are intended to be
generally applied toward effecting a Business Combination, such proceeds are
not otherwise being designated for any more specific purposes. Accordingly,
prospective investors will invest in the Company without an opportunity to
evaluate the specific merits or risks of any one or more Business Combinations.
"Blank check" offerings are inherently characterized by an absence of
substantive disclosure (other than general descriptions relating to the
intended application of the net proceeds of the offering). The Company has not
yet identified a prospective Acquired Business. Accordingly, investors in this
Offering will have virtually no substantive information available for advance
consideration of any specific Business Combination. The absence of disclosure
may be contrasted with the disclosure which would be necessary if the Company
had already identified an Acquired Business as a Business Combination candidate
or if the Acquired Business were to effect an offering of its securities
directly to the public. There can be no assurances that an investment in the
securities offered hereby will not ultimately prove to be less favorable to
investors in this Offering than a direct investment, if such opportunity were
available, in an Acquired Business. See "Proposed Business -- 'Blank Check'
Offering."

-12-
<PAGE> 16

INHERENT RISKIER BUSINESS COMBINATION; SEEKING TO ACHIEVE PUBLIC TRADING
MARKET THROUGH BUSINESS COMBINATION

It is possible that in seeking to effect a Business Combination, the
Company may consider a candidate base of potential Acquired Businesses that may
have inherent riskier businesses than those which may be able to secure
financing from more traditional sources. Such candidate base may well have
sought to secure financing from banks or financial institutions, venture
capitalists, or private or institutional investors, and may have been unable to
procure such financing. Such rejection may have resulted from the analysis by
such parties that the Acquired Business does not fall within parameters
established by such persons or entities for investment or financing including,
without limitation, substantial risk of failure. Additionally, a prospective
Acquired Business may be a company which does or does not need substantial
additional capital but which desires to establish a public trading market for
its shares and is unable to do so on its own or wishes to avoid 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 enacted for the protection of
investors. See "Proposed Business -- 'Blank Check' Offering."

UNSPECIFIED INDUSTRY AND ACQUIRED BUSINESS; UNASCERTAINABLE RISKS

To date, the Company has not selected any particular industry or any
Acquired Business in which to concentrate its Business Combination efforts.
Accordingly, there is no current basis for prospective investors in this
Offering to evaluate the possible merits or risks of the Acquired Business or
the particular industry in which the Company may ultimately operate. However,
in connection with seeking shareholder approval of a Business Combination, the
Company (as a result of its intention to register the Common Stock under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and thereby
become subject to the proxy solicitation rules contained therein) intends to
furnish its shareholders with proxy solicitation materials prepared in
accordance with the Exchange Act, which, among other matters, will include a
description of the operations of the prospective Acquired Business and audited
historical financial statements thereof. To the extent the Company effects a
Business Combination with 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 subject to numerous
risks inherent in the business operations of financially unstable and early
stage or potential emerging growth companies. In addition, to the extent that
the Company effects a Business Combination with an entity in an industry
characterized by a high level of risk, the Company will become subject to the
currently unascertainable risk of that industry. An extremely high level of
risk frequently characterizes certain industries which experience rapid growth.
Although management will endeavor to evaluate the risks inherent in a
particular industry or Acquired Business, there can be no assurances that the
Company will properly ascertain or assess all such significant risk factors.
Accordingly, management could identify and acquire an Acquired Business which
could fail, resulting in the loss of an investor's entire investment in the
shares of Common Stock offered hereby.

PROBABLE LACK OF BUSINESS DIVERSIFICATION

While the Company may, under certain circumstances, seek to effect
Business Combinations with more than one Acquired Business, it will not expend
less than the Threshold Amount (approximately $6,983,600, assuming an initial
offering price of $6.00 per share and no exercise of the over-allotment option)
upon its first Business Combination. Consequently, it is likely that the
Company will have the ability to effect only a single Business Combination.
Accordingly, the prospects for the Company's success will be entirely dependent
upon the future performance of a single business. Unlike certain entities
which have the resources to consummate several business combinations of
entities operating in multiple industries or multiple areas of a single
industry, it is highly likely that the Company will not have the resources to
diversify its operations or benefit from the possible spreading of risks or
offsetting of losses. In addition, by consummating a Business Combination with
only a single entity, the prospects for the Company's success may become
dependent upon the development or market acceptance of a single or limited
number of products, processes or services. Consequently, there can be no
assurances that the Acquired Business will prove to be commercially viable.
See "Proposed Business -- 'Blank Check' Offering."

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<PAGE> 17
UNCERTAIN STRUCTURE OF BUSINESS COMBINATION; PROBABLE CHANGE IN CONTROL AND
MANAGEMENT

The structure of a Business Combination with an Acquired Business,
which may take the form of, among other structures, a merger, exchange of
capital stock or asset acquisition, cannot be presently determined since
neither the Company's officers or directors nor any of their affiliates have
had any preliminary contracts, discussions or understandings with
representatives of any potential Acquired Business regarding the possibility of
a Business Combination. The Company will most likely issue additional shares
of Common Stock as part of the consideration for the Business Combination and
may incur debt, or, engage in a Business Combination involving any combination
thereof. The successful completion of such a transaction could result in a
change in control of the Company. This could result from the issuance of a
large percentage of the Company's authorized securities or the sale by the
present shareholders of all or a portion of their stock or a combination
thereof in connection with a Business Combination. Any change in control will
most likely also result in the resignation or removal of the Company's present
officers and directors. Accordingly, investors will be relying, in some
significant respects, on the abilities of the management and directors of the
Acquired Business who are unidentifiable as of the date hereof. If there is a
change in management in connection with a Business Combination, which is likely
to occur, no assurances can be given as to the experience or qualifications of
the persons who replace present management respecting either the operation of
the Company's activities or the operation of the business, assets or property
being acquired.

DEPENDENCE UPON KEY PERSONNEL

The ability of the Company to successfully effect a Business
Combination will be largely dependent upon the efforts of its executive
officers and directors. It is anticipated that the Company's executives,
officers and directors are the only persons whose activities will be material
to the operations of the Company pending the Company's identification and
consummation of a Business Combination and such individuals are the only
persons who have been instrumental in arranging the capitalization of the
Company to date. The Company has entered into employment agreements with
Richard B. Frost, the Company's Chief Executive Officer and Chairman of the
Board of Directors and Mark J. Hanna, a Director and President of the Company,
and has obtained "key man" life insurance on the lives of both individuals in
the amount of $1,000,000 each. Although the Company anticipates that it will
maintain this "key man" life insurance, no assurances can be given that such
insurance will be maintained at reasonable rates, if at all. The loss of the
services of such key personnel before suitable replacements are obtained could
have a material adverse effect on the Company's capacity to successfully
achieve its business objectives. None of the Company's key personnel are
required to commit their full time to the affairs of the Company and,
accordingly, such personnel may have conflicts of interest in allocating
management time among various business activities. It is anticipated that each
of Messrs. Frost and Hanna will devote approximately 50% of their working time
to the affairs of the Company and Donald H. Baxter and Marshal E. Rosenberg, a
Director and the Company's Vice President and Treasurer and a Director and the
Company's Vice President and Secretary, respectively, will devote approximately
10% of their time to the affairs of the Company. Additionally, the success of
the Company may be dependent upon its ability to retain additional personnel
with specific knowledge or skills necessary to assist the Company in evaluating
a potential Business Combination. There can be no assurances that the Company
will be able to retain such necessary additional personnel. See "Proposed
Business -- Employees" and "Management of the Company."

CONFLICTS OF INTEREST

None of the Company's key personnel are required to commit their full
time to the affairs of the Company and, accordingly, such personnel may have
conflicts of interest in allocating management time among various business
activities. Certain of these key personnel may in the future become affiliated
with entities, including other "blank check" companies, engaged in business
activities similar to those intended to be conducted by the Company. Messrs.
Frost and Hanna are each currently directors of Pan Am and Continucare
Corporation, a Florida corporation ("Continucare") engaged in the development
and management of mental and physical rehabilitation health care programs. Mr.
Rosenberg is an investor in numerous private enterprises, engaged in, among
other things, real estate development and retail sales, which business
interests may conflict

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<PAGE> 18
with those of an Acquired Business. Mr. Baxter is the President of Baxter
Financial Corporation, an investment advisory firm, and the President and
Chairman of the Philadelphia Fund and Eagle Growth Shares, mutual funds
registered under the Investment Company Act of 1940. Certain activities which
may be performed by such individuals in connection with their other business
affiliations may be deemed competitive with the business of the Company.

In the course of their other business activities, including private
investment activities, Messrs. Frost, Hanna, Baxter and Rosenberg may become
aware of investment and business opportunities which may be appropriate for
presentation to the Company as well as the other entities with which they are
affiliated. Such persons may have conflicts of interest in determining to
which entity a particular business opportunity should be presented. In
general, officers and directors of corporations incorporated under the laws of
the State of Florida are required to present certain business opportunities to
such corporations. Accordingly, as a result of multiple business affiliations,
Messrs. Frost, Hanna, Baxter and Rosenberg may have similar legal obligations
relating to presenting certain business opportunities to the various entities
upon which they serve as directors. In addition, conflicts of interest may
arise in connection with evaluations of a particular business opportunity by
the Board of Directors with respect to the foregoing criteria. There can be no
assurances that any of the foregoing conflicts will be resolved in favor of the
Company. In order to minimize potential conflicts of interest which may arise
from multiple corporate affiliations, each of Messrs. Frost, Hanna, Baxter and
Rosenberg have agreed to present to the Company for its consideration, prior to
presentation to any other entity, any prospective Acquired Business which is
appropriate for the Company to consider and which prospective Acquired Business
participates in an industry dissimilar to any of the industries to which such
individuals have corporate affiliations. It should be further noted, that the
Company shall not consider Business Combinations with entities owned or
controlled by officers, directors, greater than 10% shareholders of the Company
or any person who directly or indirectly controls, is controlled by or is under
common control with the Company. The Company may consider Business
Combinations with entities owned or controlled by persons other than those
persons described above. See "Proposed Business -- 'Blank Check' Offering" and
"Selection of an Acquired Business and Structuring of a Business Combination."

Pursuant to an agreement among each of Messrs. Frost, Hanna, Baxter
and Rosenberg and the Company, such persons will not (i) actively negotiate for
or otherwise consent to the disposition of any portion of their Common Stock at
a per share price different than that offered with respect to the Public Shares
as a condition to or in connection with a Business Combination or (ii) cause
any securities of the Company to be sold by any officers, directors, greater
than 10% shareholders or persons who may be deemed promoters of the Company
except as may otherwise be made in permitted market transactions without
affording all shareholders of the Company a similar opportunity. Further, the
Company shall not borrow funds to be used directly or indirectly to (i)
purchase any shares of the Company's Common Stock owned by management of the
Company; or (ii) make payments to the Company's promoters, management or their
affiliates or associates.

NO DISINTERESTED MEMBERS OF THE BOARD OF DIRECTORS

All members of the Company's current Board of Directors are
significant shareholders of the Company and will own, in the aggregate,
approximately 35% of the outstanding Common Stock following the Offering (33%
if the over-allotment option is exercised). Additionally, following the
Offering, the Representative will have the right to appoint one member to the
Company's Board of Directors until such time as the Company effects a Business
Combination utilizing a majority of its funds. Accordingly, there will be, at
most, only one disinterested or outside member of the Board of Directors, and
the Company may not benefit from the advice of a member of the Board of
Directors who is not also an officer or employee of the Company or otherwise
not involved in the offering of shares of Common Stock. The Board of Directors
currently has no formal committees, such as a compensation committee or an
audit committee, and most likely will not form such committees until some time
after the consummation of a Business Combination.

REIMBURSEMENT OF EXPENSES TO OFFICERS AND DIRECTORS; 20% OF NET PROCEEDS
IMMEDIATELY AVAILABLE

No funds will be disbursed from the Escrow Fund for salaries payable
to Messrs. Frost and Hanna or for the reimbursement of expenses incurred by the
Company's officers and directors on behalf of the Company.

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<PAGE> 19

Other than the foregoing, there is no limit on the amount of such reimbursable
expenses, and there will be no review of the reasonableness of such expenses by
anyone other than the Company's Board of Directors, all the members of which
are officers unless the Representative exercises his right to appoint one
member to the Company's Board of Directors. In no event will the Escrow Fund
be used for any purpose other than implementation of a Business Combination or
for purposes of implementing the Redemption Offer. In the event the Company
requires in excess of 20% of the Net Proceeds for operations, Messrs. Frost and
Hanna have undertaken to waive their salaries and non-accountable expense
allowance until the consummation of a Business Combination. See "Use of
Proceeds," "Proposed Business -- Payment of Salaries or Consulting Fees," and
"Management of the Company."

EXECUTIVE COMPENSATION; CERTAIN PROCEEDS TO BE USED TO PAY RETROACTIVE SALARY

Pursuant to employment agreements, Messrs. Frost and Hanna each receive
$10,000 monthly for salary and $1,000 monthly for non-accountable expense
allowance. Messrs. Frost and Hanna currently intend to devote approximately 50%
of their time to the affairs of the Company. The amounts due under such
employment agreements shall be payable retroactively to November 1, 1996, a
date at least four months prior to the date of this Offering. Other
than pursuant to the employment agreements and except for the Representative
who may designate a member of the Board of Directors, no officers or directors
will receive any other salaries or fees, unless received by all other
shareholders on a proportionate basis. See "Management of the Company."

LIMITED ABILITY TO EVALUATE ACQUIRED BUSINESS' MANAGEMENT; NO INDEPENDENT
ANALYSIS OR AUDITS TO BE PERFORMED

While the Company's ability to successfully effect a Business
Combination will be dependent upon certain of its key personnel, the future
role of such personnel in the Acquired Business cannot presently be stated with
any certainty. It is unlikely that any of the Company's key personnel will
remain associated in any operational capacity with the Company following a
Business Combination. Moreover, there can be no assurances that such personnel
will have significant experience or knowledge relating to the operations of the
particular Acquired Business. Furthermore, although the Company intends to
closely scrutinize the management of a prospective Acquired Business in
connection with evaluating the desirability of effecting a Business
Combination, there can be no assurances that the Company's assessment of such
management will prove to be correct, especially in light of the possible
inexperience of current key personnel of the Company in evaluating certain
types of businesses. In addition, there can be no assurances that such future
management will have the necessary skills, qualifications or abilities to
manage a public company. The Company may also seek to recruit additional
managers to supplement the incumbent management of the Acquired Business.
There can be no assurances that the Company will have the ability to recruit
such additional managers, or that such additional managers will have the
requisite skills, knowledge or experience necessary to enhance the incumbent
management. Additionally, there can be no assurances that the Company will hire
an independent company to perform any analysis or audit of a potential
Acquired Business or perform any type of background check on any of the
management of such Acquired Business. See "Proposed Business -- 'Blank Check'
Offering."

COMPETITION

The Company expects to encounter intense competition from other
entities having a business objective similar to that of the Company. Many of
these entities, including venture capital partnerships and corporations, blind
pool companies, large industrial and financial institutions, small business
investment companies and wealthy individuals, are well-established and have
extensive experience in connection with identifying and effecting business
combinations directly or through affiliates. Many of these competitors possess
greater financial, marketing, technical, personnel and other resources than the
Company and there can be no assurances that the Company will have the ability
to compete successfully. The Company's financial resources will be relatively
limited when contrasted with those of many of its competitors. This inherent
competitive limitation may compel the Company to select certain less attractive
Business Combination prospects. Further, the Company's obligation to redeem
shares of Common Stock held by certain Public Shareholders, discussed under
"Proposed Business -- Redemption Rights" and elsewhere herein, may place the
Company at a competitive disadvantage in successfully negotiating a Business
Combination. There can be no assurances that such

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<PAGE> 20
prospects will permit the Company to meet its stated business objective. See
"Proposed Business -- Competition."

UNCERTAINTY OF COMPETITIVE ENVIRONMENT OF ACQUIRED BUSINESS

In the event that the Company succeeds in effecting a Business
Combination, the Company will, in all likelihood, become subject to intense
competition from competitors of the Acquired Business. In particular, certain
industries which experience rapid growth frequently attract an increasingly
larger number of competitors, including competitors with increasingly greater
financial, marketing, technical and other resources than the initial
competitors in the industry. The degree of competition characterizing the
industry of any prospective Acquired Business cannot presently be ascertained.
There can be no assurances that, subsequent to a Business Combination, the
Company will have the resources to compete effectively, especially to the
extent that the Acquired Business is in a high-growth industry. See "Proposed
Business --Competition."

POSSIBLE NEED FOR ADDITIONAL FINANCING

The Company has had no revenues to date and is entirely dependent upon
the proceeds of this Offering to commence operations relating to selection of a
prospective Acquired Business. The Company will not receive any revenues
(other than interest income) until, at the earliest, the consummation of a
Business Combination. Although the Company believes that the proceeds of this
Offering will be sufficient to effect a Business Combination, inasmuch as the
Company has not yet identified any prospective Acquired Business candidates,
the Company cannot ascertain with any degree of certainty the capital
requirements for any particular transaction. In the event that the Net
Proceeds of this Offering prove to be insufficient for purposes of effecting a
Business Combination (because of the size of the Business Combination or the
depletion of 20% of the portion of the Net Proceeds available to the Company
from the search of an Acquired Business), the Company will be required to seek
additional financing. There can be no assurances that such financing would be
available on acceptable terms, if at all. In the event no Business Combination
is identified, negotiations are incomplete or no Business Combination has been
consummated, and all of the Net Proceeds other than the Escrow Fund have been
expended, the Company currently has no plans or arrangements with respect to
the possible acquisition of additional financing which may be required to
continue the operations of the Company. In such event, Messrs. Frost, Hanna,
Baxter and Rosenberg may consider lending to the Company funds for operations
other than the payment of salaries to Messrs. Frost and Hanna. Although there
are no plans or arrangements with respect to such loans, such individuals do
not currently anticipate such loans, if any, to be made on terms other than
upon market interest rates. To the extent that such additional financing
proves to be unavailable when needed to consummate a particular Business
Combination, the Company would, in all likelihood, be compelled to restructure
the transaction or abandon that particular Business Combination and seek an
alternative Acquired Business candidate.

In the event of a consummation of a Business Combination, the Company
cannot ascertain with any degree of certainty the capital requirements for any
particular Acquired Business inasmuch as the Company has not yet identified any
prospective Acquired Business candidates. To the extent the Business
Combination results in the Acquired Business requiring additional financing,
such additional financing (which, among other forms, could be derived from the
public or private offering of securities or from the acquisition of debt
through conventional bank financing), may not be available, due to, among other
things, the Acquired Business not having sufficient (i) credit or operating
history; (ii) income stream; (iii) profit level; (iv) asset base eligible to be
collateralized; or (v) market for its securities.

As no specific Business Combination or industry has been targeted, it
is not possible to predict the specific reasons why conventional private or
public financing or conventional bank financing might not become available.
There can be no assurances that, in the event of a consummation of a Business
Combination, sufficient financing to fund the operations or growth of the
Acquired Business will be available upon terms satisfactory to the Company, nor
can there be any assurances that financing would be available at all. See

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<PAGE> 21
"Proposed Business -- 'Blank Check' Offering -- Selection of an Acquired
Business and Structuring of a Business Combination."

POSSIBLE USE OF DEBT FINANCING; DEBT OF AN ACQUIRED BUSINESS

There are currently no limitations relating to the Company's ability
to borrow funds to increase the amount of capital available to the Company to
effect a Business Combination or otherwise finance the operations of the
Acquired Business. The amount and nature of any borrowings by the Company will
depend on numerous considerations, including the Company's capital
requirements, the Company's perceived ability to meet debt service on any such
borrowings and then prevailing conditions in the financial markets, as well as
general economic conditions. There can be no assurances that debt financing,
if required or otherwise sought, would be available on terms deemed to be
commercially acceptable and in the best interests of the Company. The
inability of the Company to borrow funds required to effect or facilitate a
Business Combination, or to provide funds for an additional infusion of capital
into an Acquired Business, may have a material adverse effect on the Company's
financial condition and future prospects. Additionally, to the extent that
debt funding ultimately proves to be available, any borrowings may subject the
Company to various risks traditionally associated with incurring of
indebtedness, including the risks of interest rate fluctuations and
insufficiency of cash flow to pay principal and interest. Furthermore, an
Acquired Business may have already incurred debt financing and, therefore, all
the risks inherent thereto. See "Use of Proceeds" and "Proposed Business --
'Blank Check' Offering" and "-- Selection of an Acquired Business and
Structuring of a Business Combination."

AUTHORIZATION OF ADDITIONAL SECURITIES

The Company's Articles of Incorporation authorizes the issuance of
100,000,000 shares of Common Stock, par value $.0001 per share. Upon
completion of this Offering, assuming all of the shares of Common Stock offered
hereby are sold, there will be 96,383,000 authorized but unissued shares of
Common Stock available for issuance (after appropriate reservation for the
issuance of shares upon full exercise of the over-allotment option and the
Underwriter Options). Although the Company has no commitments as of the date
of this Prospectus to issue any shares of Common Stock other than as described
in this Prospectus, the Company will, in all likelihood, issue a substantial
number of additional shares of Common Stock in connection with a Business
Combination. To the extent that additional shares of Common Stock are issued,
dilution to the interests of the Company's shareholders will occur.
Additionally, if a substantial number of shares of Common Stock are issued in
connection with a Business Combination, a change in control of the Company may
occur which may impact, among other things, the utilization of net operating
losses, if any. Furthermore, the issuance of a substantial number of shares of
Common Stock may cause dilution and adversely affect prevailing market prices,
if any, for the Common Stock, and could impair the Company's ability to raise
additional capital through the sale of its equity securities. The Company has
no plans, proposals, arrangements or understandings with respect to the
creation of a subsidiary entity with a view to distribution to the Company's
shareholders the securities of the subsidiary entity. See "Proposed Business
- -- 'Blank Check' Offering;" "-- Selection of an Acquired Business and
Structuring of a Business Combination" and "Description of Securities."

INVESTMENT COMPANY ACT CONSIDERATIONS

After the Offering, substantially all of the Company's assets will be
invested in interest-bearing securities, which could subject the Company to the
registration requirements of the Investment Company Act of 1940, as amended
(the "Investment Company Act"). Registration under the Investment Company Act
would subject the Company to substantive regulations which could have a
material adverse effect on its business. The Company intends to conduct its
business in a manner designed to avoid being subject to the registration
requirements of the Investment Company Act and management believes that the
Company can avoid being subject to the registration requirements of such Act;
however, there can be no assurance that the Company can avoid becoming subject
to these registration requirements.

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<PAGE> 22
TAX CONSIDERATIONS

As a general rule, federal and state tax laws and regulations have a
significant impact upon the structuring of business combinations. The Company
will evaluate the possible tax consequences of any prospective Business
Combination and will endeavor to structure the Business Combination so as to
achieve the most favorable tax treatment to the Company, the Acquired Business
and their respective shareholders. There can be no assurances, however, that
the Internal Revenue Service (the "IRS") or appropriate state tax authorities
will ultimately assent to the Company's tax treatment of a consummated Business
Combination. To the extent the IRS or state tax authorities ultimately prevail
in recharacterizing the tax treatment of a Business Combination, there may be
adverse tax consequences to the Company, the Acquired Business and their
respective shareholders. See "Proposed Business -- 'Blank Check' Offering;"
"-- Selection of an Acquired Business and Structuring of a Business
Combination."

POSSIBLE PAYMENT OF FINDER'S FEES

In the event that a person or entity assists the Company in connection
with the introduction to a prospective Acquired Business with which a Business
Combination is ultimately consummated, such person or entity may be entitled to
receive a finder's fee in consideration for such introduction. Such finder's
fees may take the form of the issuance of securities or cash. Such person may
be required to be registered as, among other things, an agent or broker-dealer
under the laws of certain jurisdictions. The Company is not presently
obligated to pay any finder's fees other than to the Representative in the
event it assists the Company within a five-year period in connection with the
introduction to a prospective Acquired Business with which a Business
Combination is ultimately consummated. It should be noted, however, that the
Company has no obligation to engage in a Business Combination with any
prospective Acquired Business introduced to it by the Representative. The
executive officers and directors of the Company have agreed that neither they
nor any entity with which they are affiliated will be entitled to receive a
finder's fee in the event they originate a Business Combination. See "Proposed
Business -- 'Blank Check' Offering;" "-- Selection of an Acquired Business and
Structuring of a Business Combination;" "Management of the Company -- Conflicts
of Interest" and "Underwriting."

DIVIDENDS UNLIKELY

The Company has not paid any dividends on its Common Stock to date and
does not presently intend to pay cash dividends prior to the consummation of a
Business Combination. The payment of dividends after any such Business
Combination, if any, will be contingent upon the Company's revenues and
earnings, if any, capital requirements and general financial condition
subsequent to consummation of a Business Combination. The payment of any
dividends subsequent to a Business Combination will be within the discretion of
the Company's then Board of Directors. It is the present intention of the
Board of Directors to retain all earnings, if any, for use in the Company's
business operations and, accordingly, the Board does not anticipate paying any
cash dividends in the foreseeable future. See "Description of Securities
- --Dividends."

CONTROL BY PRESENT SHAREHOLDERS

Upon consummation of the Offering, present shareholders, including the
present management of the Company, will collectively own approximately 47% of
the then issued and outstanding shares of Common Stock (assuming no exercise of
the Underwriter Options or over-allotment option), approximately 35% of which
will be owned by the current officers and directors. In the election of
directors, shareholders are not entitled to cumulate their votes for nominees.
Accordingly, the current shareholders will essentially be able to elect all of
the Company's Directors and thereafter have a substantial impact upon the
operations of the Company. See "Principal Shareholders," "Certain
Transactions," "Proposed Business -- 'Blank Check' Offering" and "Description
of Securities."

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<PAGE> 23
NO ASSURANCE OF PUBLIC MARKET; ARBITRARY DETERMINATION OF OFFERING PRICE

Prior to this Offering, there has been no public trading market for
the Common Stock. The initial public offering price of the shares of Common
Stock have been arbitrarily determined by negotiation between the Company and
the Representative and does not bear any relationship to such established
valuation criteria as assets, book value or prospective earnings. There can be
no assurances that a regular trading market will develop for the shares of
Common Stock after this Offering or that, if developed, any such market will be
sustained. Trading of the Common Stock will likely be conducted through what
is customarily known as the "pink sheets" and on the Bulletin Board. Any
market for the Common Stock which may result will likely be less well developed
than if the Common Stock were traded in NASDAQ or an exchange.

The Representative has advised the Company that although the
Representative anticipates it will act as a market maker of the Company's
shares of Common Stock after the closing of the Offering, there can be no
assurances that the Representative will in fact act in such capacity. As of
the date hereof, other than with the Representative, the Company has had no
discussions and there are no understandings with any firm regarding the
participation of such firm as a market maker in the shares of the Company's
Common Stock. See "Underwriting."

RISK OF LOW PRICE ("PENNY STOCK") SECURITIES

If the Company, at any time, has net tangible assets of $2,000,000 or
less, transactions in the Common Stock would be subject to certain rules
promulgated under the Exchange Act. Under such rules, broker-dealers who
recommend such securities to persons other than institutional accredited
investors (generally institutions with assets in excess of $5,000,000) must
make a special written suitability determination for the purchaser, receive the
purchaser's written agreement to a transaction prior to sale and provide the
purchaser with risk disclosure documents which identify certain risks
associated with investing in "penny stocks" and which describes the market
therefor as well as a purchaser's legal remedies. Further, the broker-dealer
must also obtain a signed and dated acknowledgment from the purchaser
demonstrating that the purchaser has actually received the required risk
disclosure document before a transaction in a "penny stock" can be consummated.
If the Common Stock becomes subject to such rules, broker-dealers may find it
difficult to effectuate customer transactions and the trading activity in the
Common Stock; thus, the market price, if any, may be depressed, and an investor
may find it more difficult to dispose of the Common Stock.

IMMEDIATE SUBSTANTIAL DILUTION; DISPARITY OF CONSIDERATION

The difference between the public offering price per share of Common
Stock and the pro forma net tangible book value per share of Common Stock of the
Company after this Offering constitutes the dilution to investors in this
Offering. The pro forma net tangible book value per share is determined by
dividing the net tangible book value of the Company (total tangible assets less
total liabilities) by the number of outstanding shares of Common Stock. New
investors will incur an immediate and substantial dilution of approximately
$3.24 per share (i.e., the difference between the pro forma net tangible book
value per share after the Offering of $2.76 and the public offering price of
$6.00 per share) allocable to each Share (assuming no exercise of the
Underwriter Options or the over-allotment option). The existing shareholders of
the Company acquired their shares of Common Stock at a nominal price (an average
of $.12 per share) and, accordingly, new investors will bear virtually all of
the risks inherent in an investment in the Company. See "Dilution."

SHARES ELIGIBLE FOR FUTURE SALE

All of the 1,492,000 shares of Common Stock issued and outstanding
prior to this Offering are "restricted securities," as that term is defined
under Rule 144 ("Rule 144"), promulgated under the Securities Act. None of such
shares will be eligible for sale under Rule 144, as currently in effect, prior
to September 13, 1997. The shares of Common Stock owned as of the date hereof
by Messrs. Frost, Hanna, Baxter and Rosenberg (an aggregate of approximately 75%
of the outstanding Common Stock prior to this Offering) will be placed in escrow
with American Stock Transfer & Trust Company, as escrow agent, until the
occurrence of a Business Combination. During such escrow period, such persons
will not be able to sell,

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<PAGE> 24
or otherwise transfer, their respective shares of Common Stock, but will retain
all other rights as shareholders of the Company, including, without limitation,
the right to vote such shares of Common Stock.

In general, under Rule 144, as currently in effect, subject to the
satisfaction of certain other conditions, a person, including an affiliate of
the Company (or persons whose shares are aggregated), who has beneficially
owned restricted shares of Common Stock for at least one year is entitled to
sell, within any three-month period, a number of shares that does not exceed
the greater of 1% of the total number of outstanding shares of the same class
or, if the Common Stock is quoted on NASDAQ or an exchange, the average weekly
trading volume during the four calendar weeks preceding the sale. A person who
has not been an affiliate of the Company for at least the three months
immediately preceding the sale and who has beneficially owned restricted shares
of Common Stock for at least two years is entitled to sell such shares under
Rule 144 without regard to any of the limitations described above. No
prediction can be made as to the effect, if any, that sales of "restricted"
shares of Common Stock or the availability of such shares for sale will have on
the market prices prevailing from time to time. Nevertheless, the possibility
that substantial amounts of Common Stock may be sold in the public market may
adversely affect prevailing market prices for the Common Stock and could impair
the Company's ability to raise capital through the sale of its equity
securities. See "Principal Shareholders" and "Shares Eligible for Future
Sale."

REGULATIONS CONCERNING "BLANK CHECK" ISSUERS

The ability to register or qualify the shares of Common Stock for both
initial sale and secondary trading is limited because a number of states have
enacted regulations pursuant to their securities or "blue sky" laws restricting
or, in some instances, prohibiting, the sale of securities of "blank check"
issuers, such as the Company, within that state. In addition, many states,
while not specifically prohibiting or restricting "blank check" companies,
would not permit registration or qualification of the Common Stock for sale in
their states. Because of such regulations and other restrictions, the
Company's selling efforts, and any secondary market which may develop, may only
be conducted in certain States (as described below) or in those jurisdictions
where an applicable exemption is available or a blue sky application has been
filed and accepted. See "State Blue Sky Registration; Restricted Resales of
the Common Stock," below. In addition, the Commission has enacted rules under
the Securities Act which, among other things, afford shareholders of "blank
check" companies a right to rescind their purchases of such securities for a
limited period subsequent to the consummation of a Business Combination. Such
rules, however, are not applicable to, among other things, offerings where the
net worth of the company is greater than $5,000,000 and consequently, it is the
Company's belief that such rules are not applicable to this Offering. There
can be no assurances that the Commission, the United States Congress, or state
legislatures will not enact legislation which will prohibit or restrict the
sale of securities of "blank check" companies.

-21-
<PAGE> 25
STATE BLUE SKY REGISTRATION; RESTRICTED RESALES OF THE COMMON STOCK

The Company has made application to register or has or will seek to
obtain an exemption from registration to offer the Common Stock, and intends to
conduct its selling efforts in Colorado, Delaware, Florida, Illinois, Maryland,
New York, Oregon, Rhode Island, South Carolina and Utah. Purchasers of the
Common Stock in the Offering must be residents of such jurisdictions. In order
to prevent resale transactions in violation of states' securities laws,
shareholders may only engage in resale transactions in the states listed above
and such other jurisdictions in which an applicable exemption is available or a
blue sky application has been filed and accepted. As a matter of notice to the
holders thereof, the Common Stock certificates shall contain information with
respect to resale of the Common Stock. Further, the Company will advise its
market maker, if any, of such restriction on resale. Such restriction on resale
may limit the ability of investors to resell the shares of Common Stock
purchased in this Offering.

Several additional states may permit secondary market sales of the
shares of Common Stock (i) once or after certain financial and other
information with respect to the Company is published in a recognized securities
manual such as Standard & Poor's Corporation Records; (ii) after a certain
period has elapsed from the date hereof; or (iii) pursuant to exemptions
applicable to certain investors. However, since the Company is a "blank check"
company, it may not be able to be listed in any recognized securities manual
until after the consummation of the first Business Combination.

UNDERWRITER OPTIONS

In connection with this Offering, the Company has agreed to sell to
the Representative, at an aggregate price of $170, warrants to purchase up to
170,000 shares of Common Stock (the "Stock Purchase Option" or "Underwriter
Options"). The Underwriter Options are exercisable at a price of $9.30 per
share (155% of offering price) for a period commencing one year after, and
ending five years after, the date of this Prospectus. In addition, the holders
of the Underwriter Options will have certain registration rights with respect
to the shares of Common Stock underlying the Underwriter Options (the
"Underlying Shares"). See "Underwriting--Underwriter Options." In addition,
the sale, or even the possibility of sale, of the Underlying Shares could have
an adverse effect on the market price for the Company's securities or on the
Company's ability to obtain future public financing. If and to the extent the
Underwriter Options are exercised, shareholders may experience dilution in the
book value of their holdings. See "Dilution."

LACK OF BUSINESS OPERATIONS

Although the Company will use efforts to attempt to locate potential
Business Combinations, there can be no assurances that any business or assets
worthy of even preliminary investigation will come to the Company's attention,
or that any significant amount of funds will be expended in actual acquisition
of assets. See "Management of the Company -- Conflicts of Interest."

LOSS FROM ANALYSIS AND INVESTIGATION OF BUSINESS PROSPECTS

The Company will be required, in all probability, to expend funds in
the preliminary internal investigation or examination of assets, business or
properties, whether or not an investment occurs. Additionally, the Company may
expend additional funds if it hires an independent company to perform an
analysis or audit of a potential Acquired Business or perform background checks
on the management of such Acquired Business. To the extent management
determines that the potential investment has little or no value, the monies
spent on internal investigations and independent company consultation services
will be a total loss. In no event will the funds placed in the Escrow Fund,
including any interest earned thereon, be used for expenses associated with the
evaluation and structuring of a contemplated Business Combination.

CERTAIN PROVISIONS OF THE COMPANY'S ARTICLES OF INCORPORATION; INDEMNIFICATION
OF OFFICERS AND DIRECTORS AND ELECTION OUT OF ANTI-TAKEOVER STATUTES

-22-
<PAGE> 26
elected not to be governed by Sections 607.0901 and 607.0902 of the Florida
Business Corporation Act and other laws relating thereto (the "Anti-Takeover
Sections").

Because of the Company's election not to be governed by the
Anti-Takeover Sections, the Company will not be subject to the provisions of
Florida law which provide that certain transactions between the Company and an
"interested shareholder" or any affiliate of the "interested shareholder" be
approved by two-thirds of the Company's outstanding shares. An "interested
shareholder" as defined in Section 607.0901 of the Florida Business Corporation
Act is any person who is the beneficial owner of more than 10% of the
outstanding shares of the company who is entitled to vote generally in the
election of directors. In addition, because of the Company's election not to
be governed by the Anti-Takeover Sections, the Company will not have the
alleged assistance against unfriendly take-over attempts purportedly provided
by that statute.

USE OF PROCEEDS

The Net Proceeds to the Company from the sale of the shares of Common
Stock offered hereby, after the Offering Costs and Underwriting Discount of
approximately $1,470,500, are estimated to be $8,729,500 and $10,060,600, if the
over-allotment option is exercised in its entirety. Eighty percent (80%) of the
Net Proceeds of this Offering (approximately $6,983,600 if the over-allotment
option is not exercised), after such costs and discounts, will be placed in the
Escrow Fund which is an interest-bearing escrow account, with Fiduciary Trust
International of the South, as escrow agent, subject to release upon the earlier
of (i) written notification by the Company of its need for all, or substantially
all, of such Net Proceeds for the purpose of implementing a Business
Combination; or (ii) the exercise by certain shareholders of the Redemption
Offer. See "Proposed Business -- Redemption Rights." Any interest earned on
the Escrow Fund will accrue in the Escrow Fund. In no event will the funds
placed in the Escrow Fund, including any interest earned thereon, be used for
expenses associated with the evaluation and structuring of a contemplated
Business Combination. The Escrow Agent has advised the Company that the Escrow
Agent is under no prohibitions with respect to the length of time that the
Escrow Agent may act as escrow agent in connection with the holding of the
Escrow Fund.

The Company estimates that the remaining twenty percent (20%) of such
Net Proceeds may be required to evaluate potential Acquired Businesses, to
select an Acquired Business and to structure and consummate a Business
Combination with such Acquired Business (including possible payment of finder's
fees or other compensation to persons or entities which provide assistance or
services to the Company in these regards), as well as to pay the Company's
accounting fees, legal fees, rent, telephone, mailing, travel related to a
potential Business Combination, filing fees, occupational license fees, escrow
agent fees, transfer agent fees, the fees, if any, to hire any independent
appraisers in connection with a potential Business Combination, consulting fees
and salary and non-accountable expense allowance for each of Messrs. Frost and
Hanna (the "General and Administrative Expenses"), until consummation of a
Business Combination. The Company believes that it can satisfy its cash
requirements until a Business Combination is consummated with 20% of the Net
Proceeds derived from this Offering, including interest earned thereon.
Meanwhile, due to the possible indefinite period of time to consummate a
Business Combination and the nature and cost of the Company's expenses related
to the Company's search and analysis of a Business Combination, there can be no
assurances that the Company's cash requirements until a Business Combination is
consummated will be satisfied with 20% of the Net Proceeds of this Offering
(including interest income earned thereon). In the event the Company requires
in excess of 20% of the Net Proceeds for operations, Messrs. Frost and Hanna
have undertaken to waive their salaries and non-accountable expense allowance
until the consummation by the Company of a Business Combination. In the event
that the Company elects to effect more than one Business Combination, it will
expend at least the Threshold Amount on the first Business Combination. To the
extent that securities of the Company are used in whole or in part as
consideration to effect a Business Combination, the balance of the Net Proceeds
of this Offering not theretofore expended will be used to finance the operations
of the Acquired Business.

The Company has agreed to pay to each of Messrs. Frost and Hanna, upon
consummation of this Offering, $10,000 monthly for salary and $1,000 monthly
for non-accountable expense allowance (retroactive to November 1, 1996). No
other officers, directors or current shareholders, except for the
Representative who

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<PAGE> 27
may designate a member of the Board of Directors, shall be paid any consulting
fees or salaries for services delivered by such persons in connection with a
Business Combination. The Company shall reimburse its officers and directors
for any accountable reasonable expenses incurred in connection with activities
on behalf of the Company. The proceeds placed in the Escrow Fund (including
any interest earned thereon) will not be used by the Company for salaries or
expenses payable to Messrs. Frost or Hanna or to reimburse the Company's
officers and directors for expenses incurred in connection with activities on
behalf of the Company. Other than the foregoing, there is no limit on the
amount of such reimbursable expenses and there will be no review of the
reasonableness of such expenses by anyone other than the Board of Directors,
all of the current members of which are officers of the Company. In no event
will the Escrow Fund be used for any purpose other than the implementation of a
Business Combination or for purposes of the Redemption Offer.

Further, no Net Proceeds of this Offering shall be loaned to any of
the Company's officers, directors, greater than 10% shareholders of the Company
or any person who directly or indirectly controls, is controlled by or is under
common control with the Company. No proceeds of this Offering will be paid to
officers, directors, greater than 10% shareholders of the Company or any person
who directly or indirectly controls, is controlled by or is under common
control with the Company, in consideration for professional services rendered
by such persons prior to the consummation of a Business Combination. The Net
Proceeds of this Offering not immediately required for the purposes set forth
above will be invested in United States Government securities or other minimum
risk, short-term interest bearing investments; provided, however, that the
Company will attempt to not invest the Net Proceeds in a manner which may
result in the Company being deemed to be an investment company under the
Investment Company Act.

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<PAGE> 28
DILUTION

At December 31, 1996, the net tangible book value of the Company was
($58,117) or ($0.04) per share of Common Stock. After giving effect to the sale
of 1,700,000 shares of Common Stock offered hereby and the application of the
estimated Net Proceeds therefrom, the pro forma net tangible book value of the
Company at December 31, 1996 would have been $8,801,168 or $2.76 per share,
representing an immediate increase in net tangible book value of $8,859,285 or
$2.80 per share to existing shareholders and an immediate dilution of $3.24 per
share to new investors. As of the date hereof, there are currently no plans,
proposals, arrangements or understandings with respect to the sale of additional
securities to any persons for the period commencing with the closing of this
Offering and the Company's identification of a Business Combination, other than
the Company's issuance of shares of Common Stock upon the exercise of the
over-allotment option and the Underwriter Options. See "Underwriting."

The following table illustrates the foregoing information with respect
to dilution to new investors on a per-share basis after the Offering.

<TABLE>
<S> <C> <C>
Public offering price per share . . . . . . . . . . . . . $ 6.00

Net tangible book value per
share, before this Offering . . . . . . . . . . 0.04

Increase per share attributable to
payment by new investors . . . . . . . . . . . . 2.80
------

Pro forma net tangible book value per share,
after this Offering . . . . . . . . . . . . . . . . . . . 2.76
------

Dilution to new investors per share . . . . . . . . . . . 3.24
======
</TABLE>

The following table sets forth as of the date of this Prospectus, with respect
to existing shareholders and new investors, a comparison of the number of
shares of Common Stock acquired from the Company, their percentage ownership of
such shares, the total consideration paid, the percentage of total
consideration paid and the average price per share:

<TABLE>
<CAPTION>
Shares Purchased(1) Total Consideration PRICE PER
------------------- ------------------- ---------
Amount Percentage PAID PERCENTAGE SHARE
------ ---------- ---- ---------- -----
<S> <C> <C> <C> <C> <C>
Existing Shareholders 1,492,000 47% $ 184,112 2% $ .12
New Investors 1,700,000 53% 10,200,000 98% $6.00
--------- ---- ---------- ----- -----
3,192,000 100% $ 10,384,112 100%
========= ==== ============ =====
</TABLE>

_________

(1) The above table assumes no exercise of the over-allotment option. If
the over-allotment option is exercised in full, the new investors will
have paid $11,730,000 for 1,955,000 shares of Common Stock,
representing virtually 100% of the total consideration for
approximately 57% of the total number of shares of Common Stock
outstanding. The above table also assumes no exercise of the
Underwriter Options. See "Underwriting."

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<PAGE> 29
CAPITALIZATION

The following table sets forth the actual capitalization of the
Company as of December 31, 1996, and the as adjusted to give effect to
the sale of 1,700,000 shares of Common Stock being offered hereby and the
application of the estimated Net Proceeds therefrom:

<TABLE>
<CAPTION>
Actual As Adjusted
<S> <C> <C>
Shareholder's Equity(1)

Common Stock, $.0001 par value,
100,000,000 shares authorized:
1,492,000 shares issued actual,
1,492,000 issued pro forma, and
3,192,000 as adjusted $ 149 $ 319

Capital in excess of par value 183,963 8,913,293

Deficit accumulated during
development stage (112,444) (112,444)
-------- ----------

Total shareholders' equity $(71,668) $8,801,168
======== ==========
</TABLE>

__________________________________

(1) Assumes no exercise of the Underwriter Options or the over-allotment
option. See "Underwriting."

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<PAGE> 30
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company, a development stage entity, was formed in February 1996
to serve as a vehicle to effect a Business Combination with an Acquired
Business which the Company believes has significant growth potential. The
Company intends to utilize cash (to be derived from the proceeds of this
Offering), equity, debt or a combination thereof in effecting a Business
Combination. The Company has neither engaged in any operations nor generated
any revenues to date. Its entire activity since its inception has been to
prepare for its proposed fundraising through an offering of equity securities
as contemplated herein.

The Company's expenses to date, all of which are attributable to its
formation, proposed fundraising and accrued General and Administrative
Expenses, are approximately $113,309, of which $55,191 has been paid to date,
with the remainder amount contemplated to be paid out of the proceeds of the
Offering.

Substantially all of the Company's working capital needs subsequent to
the Offering will be attributable to the identification of a suitable Acquired
Business, and thereafter to effectuate a Business Combination with such
Acquired Business. Such working capital needs are expected to be satisfied
from the Net Proceeds of the proposed Offering. Although no assurances can be
made, the Company believes it can satisfy its cash requirements until a
Business Combination is consummated with 20% of the Net Proceeds derived
hereby. Due to the possible indefinite period of time to consummate a Business
Combination and the nature and cost of the Company's expenses related to the
Company's search and analysis of a Business Combination, there can be no
assurances that the Company's cash requirements until a Business Combination is
consummated will be satisfied with 20% of the Net Proceeds of this Offering
(including interest income earned thereon). The Company believes, however,
that the Company's cash requirements for the next twelve months will be
satisfied with 20% of the Net Proceeds of this Offering. See "Risk Factors"
and "Use of Proceeds."

The report of independent public accountants on the Company's
financial statements includes an explanatory paragraph concerning the Company's
ability to commence operations being dependent on the success of this Offering,
which raises substantial doubt about its ability to continue as a growing
concern.

FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

This Prospectus contains forward-looking statements. These
forward-looking statements are based largely on the Company's expectations and
are subject to a number of risks and uncertainties, many of which are beyond
the Company's control. Actual results could differ from these forward-looking
statements as a result of, among other things, the factors described in "Risk
Factors." In light of these risks and uncertainties, there can be no assurance
that the forward-looking information contained in this Prospectus will in fact
occur.

-27-
<PAGE> 31
PROPOSED BUSINESS

INTRODUCTION

The Company was formed in February 1996 to seek to effect a Business
Combination with an Acquired Business which the Company believes has
significant growth potential. The Company will not engage in any substantive
commercial business immediately following this Offering and for an indefinite
period of time following this Offering. The Company has no plan, proposal,
agreement, understanding or arrangement to acquire or merge with any specific
business or company, and the Company has not identified any specific business
or company for investigation and evaluation. The Company intends to utilize
cash (to be derived from the proceeds of this Offering), equity, debt or a
combination thereof in effecting a Business Combination. While the Company
may, under certain circumstances, seek to effect Business Combinations with
more than one Acquired Business, it will not expend less than the Threshold
Amount (approximately $6,983,600, assuming an initial offering price of $6.00
per share and no exercise of the over-allotment option) upon its first Business
Combination. Consequently, it is likely that the Company will have the ability
to effect only a single Business Combination. The Company may effect a
Business Combination with a prospective Acquired Business which may be
financially unstable or in its early stages of development or growth.

"BLANK CHECK" OFFERING

Background. As a result of, among other things, management's broad
discretion with respect to the specific application of the Net Proceeds of this
Offering, this Offering may be characterized as a "blank check" offering.
Although substantially all of the Net Proceeds of this Offering are intended to
be generally applied toward effecting a Business Combination, such proceeds are
not otherwise being designated for any more specific purposes. Accordingly,
prospective investors will invest in the Company without an opportunity to
evaluate the specific merits or risks of any one or more Business Combinations.
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 offering itself, 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. In the event that management identifies and
effectuates a Business Combination with an Acquired Business which proves to be
not successful for any of a myriad of reasons, some of which may not at this
time be identifiable because of the "blank check" nature of the Offering,
investors in the Company could lose their entire investment in the Company.

Unspecified Industry and Acquired Business. To date, the Company has
not selected any particular industry or any Acquired Business in which to
concentrate its Business Combination efforts. Accordingly, there is no current
basis for prospective investors in this Offering to evaluate the possible
merits or risks of the Acquired Business or the particular industry in which
the Company may ultimately operate. However, in connection with seeking
shareholder approval of a Business Combination, the Company (as a result of its
intention to register its Common Stock under the Exchange Act and thereby
become subject to the proxy solicitation rules contained therein) intends to
furnish its shareholders with proxy solicitation materials prepared in
accordance with the Exchange Act which, among other matters, will include a
description of the operations of the Acquired Business candidate and audited
historical financial statements thereof. To the extent the Company effects a
Business Combination with 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 subject to numerous
risks inherent in the business and operations of financially unstable and early
stage or potential emerging growth companies. In addition, to the extent that
the Company effects a Business Combination with an entity in an industry
characterized by a high level of risk, the Company will become subject to the
currently unascertainable risks of that industry. An extremely high level of
risk frequently characterizes certain industries which experience rapid growth.
Although management will endeavor to evaluate the risks inherent in a
particular industry or Acquired Business, there can be no assurances that the
Company will properly ascertain or assess all significant risk factors.
Additionally, a prospective Acquired Business may be a company which does not
need substantial additional capital but which desires to establish a public
trading

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<PAGE> 32
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 enacted for the protection of investors.
Accordingly, management could identify and acquire an Acquired Business which
could fail, resulting in the loss of an investor's entire investment in the
shares of Common Stock offered hereby. See "Risk Factors."

Probable Lack of Business Diversification. While the Company may,
under certain circumstances, seek to effect Business Combinations with more
than one Acquired Business, it will not expend less than the Threshold Amount
(approximately $6,983,600) upon its first Business Combination. Consequently,
it is likely that the Company will have the ability to effect only a single
Business Combination. Accordingly, the prospects for the Company's success
will be entirely dependent upon the future performance of a single business.
Unlike certain entities which have the resources to consummate several business
combinations of entities operating in multiple industries or multiple areas of
a single industry, it is highly likely that the Company will not have the
resources to diversify its operations or benefit from the possible spreading of
risks or offsetting of losses. The Company's probable lack of diversification
may subject the Company to numerous economic, competitive and regulatory
developments, any or all of which may have a substantial adverse impact upon
the particular industry in which the Company may operate subsequent to a
Business Combination. In addition, by consummating a Business Combination with
only a single entity, the prospects for the Company's success may become
dependent upon the development or market acceptance of a single or limited
number of products, processes or services. Accordingly, notwithstanding the
possibility of capital investment in and management assistance to the Acquired
Business by the Company, there can be no assurances that the Acquired Business
will prove to be commercially viable. Prior to the consummation of a Business
Combination, the Company has no intention to purchase or acquire a minority
interest in any company.

Opportunity for Shareholder Evaluation or Approval of Business
Combinations. The investors in this Offering will, in all likelihood, neither
receive nor otherwise have the opportunity to evaluate any financial or other
information which will be made available to the Company in connection with
selecting a potential Business Combination until after the Company has entered
into an agreement to effectuate a Business Combination. Such agreement to
effectuate a Business Combination, however, will be subject to shareholder
approval as discussed elsewhere herein. As a result, investors in this
Offering will be almost entirely dependent on the judgment of management in
connection with the selection and ultimate consummation of a Business
Combination. In connection with seeking shareholder approval of a Business
Combination, the Company intends to furnish its shareholders with proxy
solicitation materials prepared in accordance with the Exchange Act which,
among other matters, will include a description of the operations of the
Acquired Business candidate and audited historical financial statements
thereof.

Under the Florida Business Corporation Act, certain forms of Business
Combinations may be effected without shareholder approval. In addition, the
form of Business Combination may have an impact upon the availability of
dissenters' rights (i.e., the right to receive fair payment with respect to the
Company's Common Stock) to shareholders disapproving the proposed Business
Combination. The Company will afford to investors in this Offering the right
to approve any Business Combination, irrespective of whether or not such
approval would be required under applicable Florida law. IN THE EVENT,
HOWEVER, THAT THE HOLDERS OF 30% OR MORE OF THE PUBLIC SHARES HELD BY PUBLIC
SHAREHOLDERS VOTE AGAINST APPROVAL OF ANY BUSINESS COMBINATION, THE COMPANY
WILL NOT CONSUMMATE SUCH BUSINESS COMBINATION. All of the officers and
directors of the Company, who own in the aggregate approximately 75% of the
Common Stock outstanding prior to this Offering, have agreed as of the date of
this Prospectus to vote their respective shares of Common Stock in accordance
with the vote of the majority of the Public Shares held by the Public
Shareholders with respect to any Business Combination. See "Redemption
Rights," below.

Limited Ability to Evaluate Acquired Business' Management. While the
Company's ability to successfully effect a Business Combination will be
dependent upon certain key personnel, the future role of such personnel in the
Acquired Business cannot presently be stated with any certainty. It is
unlikely that any of the Company's key personnel will remain associated in any
operational capacity with the Company following a

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<PAGE> 33
Business Combination. Moreover, there can be no assurances that such personnel
will have any experience or knowledge relating to the operations of the
particular Acquired Business. Furthermore, although the Company intends to
closely scrutinize the management of a prospective Acquired Business in
connection with evaluating the desirability of effecting a Business
Combination, there can be no assurances that the Company's assessment of such
management will prove to be correct, especially in light of the inexperience of
current key personnel of the Company in evaluating businesses. Accordingly,
investors will be relying in some significant respects, on the ability of the
management of the Acquired Business who are unidentifiable as of the date
hereof. In addition, there can be no assurances that such future management
will have the necessary skills, qualifications or abilities to manage a public
company. The Company may also seek to recruit additional managers to
supplement the incumbent management of the Acquired Business. There can be no
assurances that the Company will have the ability to recruit such additional
managers, or that such additional managers will have the requisite skill,
knowledge or experience necessary or desirable to enhance the incumbent
management.

Selection of an Acquired Business and Structuring of a Business
Combination. Management anticipates that the selection of an Acquired Business
will be complex and risky because of competition for such business
opportunities among all segments of the financial community. The nature of the
Company's search for the acquisition of an Acquired Business requires maximum
flexibility inasmuch as the Company will be required to consider various
factors and circumstances which may preclude meaningful direct comparison among
the various business enterprises, products or services investigated. Investors
should recognize that the possible lack of diversification among the Company's
acquisitions may not permit the Company to offset potential losses from one
venture against profits from another. Management of the Company will have
virtually unrestricted flexibility in identifying and selecting a prospective
Acquired Business. In addition, in evaluating a prospective Acquired Business,
management will consider, among other factors, the following:

o financial condition and results of operation of the Acquired
Business;

o growth potential and projected financial performance of the
Acquired Business and the industry in which it operates;

o equity interest in and possible management participation in
the Acquired Business;

o experience and skill of management and availability of
additional personnel of the Acquired Business;

o capital requirements of the Acquired Business;

o competitive position of the Acquired Business;

o stage of development of the product, process or service of the
Acquired Business;

o degree of current or potential market acceptance of the
product, process or service of the Acquired Business;

o possible proprietary features and possible other protection of
the product, process or service of the Acquired Business;

o regulatory environment of the industry in which the Acquired
Business operates; and

o costs associated with effecting the Business Combination.

The foregoing criteria are not intended to be exhaustive; any
evaluation relating to the merits of a particular Business Combination will be
based, to the extent relevant, on the above factors as well as other
considerations deemed relevant by management in connection with effecting a
Business Combination consistent

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<PAGE> 34
with the Company's business objective. In connection with its evaluation of a
prospective Acquired Business, management anticipates that it will conduct a
due diligence review which will encompass, among other things, meetings with
incumbent management and inspection of facilities, as well as review of
financial or other information which will be made available to the Company.

The time and costs required to select and evaluate an Acquired
Business candidate (including conducting a due diligence review) and to
structure and consummate the Business Combination (including negotiating
relevant agreements and preparing requisite documents for filing pursuant to
applicable securities laws and state corporation laws) cannot presently be
ascertained with any degree of certainty. Messrs. Frost and Hanna currently
intend to devote approximately 50% of their time to the affairs of the Company
and Messrs. Baxter and Rosenberg intend to devote approximately 10% of their
time to the affairs of the Company and, accordingly, consummation of a Business
Combination may require a greater period of time than if the Company's
executive officers devoted their full time to the Company's affairs. Any costs
incurred in connection with the identification and evaluation of a prospective
Acquired Business with which a Business Combination is not ultimately
consummated will result in a loss to the Company and reduce the amount of
capital available to otherwise complete a Business Combination.

The Company may utilize cash (derived from the proceeds of this
Offering), equity, debt or a combination of these as consideration in effecting
a Business Combination. Although the Company has no commitments as of the date
of this Prospectus to issue any shares of Common Stock other than as described
in this Prospectus, the Company will, in all likelihood, issue a substantial
number of additional shares in connection with a Business Combination. To the
extent that such additional shares are issued or other securities convertible
or exchangeable into common stock, dilution to the interest of the Company's
shareholders will occur. Additionally, if a substantial number of shares of
Common Stock are issued in connection with a Business Combination, a change in
control of the Company may occur.

If securities of the Company are issued as part of an acquisition, it
cannot be predicted whether such securities will be issued in reliance upon
exemptions from registration under applicable federal or state securities laws
or will be registered for public distribution. When registration of securities
is required, substantial cost may be incurred and time delays encountered. In
addition, the issuance of additional securities and their potential sale in any
trading market which may develop in the Company's Common Stock, of which there
is no assurances, may depress the price of the Company's Common Stock in any
market which may develop in the Company's Common Stock. Additionally, such
issuance of additional securities of the Company would result in a decrease in
the percentage ownership of the Company of purchasers of the Common Stock being
offered hereby.

The Company's operations may be limited by the Investment Company Act.
Unless the Company registers with the Commission as an investment company, it
will not, among other things, be permitted to own or propose to acquire
investment securities, exclusive of government securities and cash items, which
have a value exceeding 40% of the value of the Company's total assets on an
unconsolidated basis. It is not anticipated that the Company will have a policy
restricting the type of investments it may make. While the Company will attempt
to conduct its operations so as not to require registration under the Investment
Company Act and management believes that the Company can avoid being subject to
the registration requirements under such Act, there can be no assurances that
the Company will not be deemed to be subject to the Investment Company Act.

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<PAGE> 35
Company to borrow funds for an additional infusion of capital into an Acquired
Business may have material adverse effects on the Company's financial condition
and future prospects. To the extent that debt financing ultimately proves to
be available, any borrowings may subject the Company to various risks
traditionally associated with incurring indebtedness, including the risks of
interest rate fluctuations and insufficiency of cash flow to pay principal and
interest. Furthermore, an Acquired Business may have already incurred debt
financing and, therefore, all the risks inherent thereto.

Because of the Company's small size, investors in the Company should
carefully consider the business constraints on its ability to raise additional
capital when needed. Until such time as any enterprise, product or service
which the Company acquires generates revenues sufficient to cover operating
costs, it is conceivable that the Company could find itself in a situation
where it needs additional funds in order to continue its operations. This need
could arise at a time when the Company is unable to borrow funds and when
market acceptance for the sale of additional shares of the Company's Common
Stock does not exist.

PAYMENT OF SALARIES

In connection with the consummation of a Business Combination, the
Company may become obligated to pay to certain persons consulting fees or
salaries. The Company has agreed to pay, to each of Messrs. Frost and Hanna,
upon consummation of the Offering, $10,000 monthly for salary and $1,000
monthly for non-accountable expense allowance (retroactive to November 1,
1996). No other current officers, directors or shareholders shall be paid any
consulting fees or salaries for services delivered by such persons in
connection with a Business Combination. The Company shall reimburse its
officers and directors for any accountable reasonable expenses incurred in
connection with activities on behalf of the Company. The proceeds placed in
the Escrow Fund (including any interest earned thereon) will not be used by the
Company for salaries or expenses payable to Messrs. Frost or Hanna or for
consulting fees. No funds (including any interest earned thereon) will be
disbursed from the Escrow Fund for reimbursement of expenses. Other than the
foregoing, there is no limit on the amount of such reimbursable expenses and
there will be no review of the reasonableness of such expenses by anyone other
than the Board of Directors, all of the members of which are present officers
of the Company. In the event the Company requires in excess of 20% of the Net
Proceeds for operations, Messrs. Frost and Hanna have undertaken to defer their
salaries and non-accountable expense allowance until the consummation by the
Company of a Business Combination. Subsequent to the consummation of a
Business Combination, to the extent the current officers, directors or
shareholders of the Company provide services to the Company, such persons may
receive from the Company consulting fees or salaries. The Company is not aware
of any plans, proposals, understandings or arrangements with respect to the
sale of any shares of Common Stock of the Company by any current shareholders.
Further, there are no plans, proposals, understandings or arrangements with
respect to the transfer by the Company to any of the current shareholders, any
funds, securities or other assets of the Company.

INVOLVEMENT OF CERTAIN PRINCIPALS IN PRIOR "BLANK CHECK" COMPANIES

The officers and directors of the Company have held similar positions
in three other "blank check" companies (i.e., a development stage company that
has no specific business plan or has indicated that its business plan is to
engage in a merger or acquisition with an unidentified company), each of which
has consummated a Business Combination as of the date of this Prospectus.
There can be no assurance that the Company will ever be able to effect a
Business Combination or that the type of business or the performance of the
Acquired Business, if any, will be similar to that of these other "blank check"
companies. Further, the results of such "blank check" companies are not
indicative in any manner of the possible future results of the Company.
Certain information with respect to each such prior Business Combination that
the officers and directors of the Company have been involved, as obtained from
each such company's respective filings with the Commission, is set forth below:

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<PAGE> 36
<TABLE>
<CAPTION>
Date of
Initial Trading Market
Name of Public Date of Business and
Acquired Business Offering Combination Nature of Business Ticker Symbol
------------------------------- ------------------- ------------------ ---------------------------- ---------------------
<S> <C> <C> <C> <C>
Sterling Health Care Group, February 9, 1993 May 31, 1994 Providing physician NASDAQ National Market
Inc. and Sterling Healthcare, contract management (FPAM)
Inc. (currently operating services for hospital
subsequent to a merger as, emergency departments
"FPA Medical Management,
Inc.")

LFS Acquisition Corp. September 26, 1993 January 3, 1996 Operating children's Bulletin Board (KIDM)
(currently operating as, "Kids apparel stores
Mart, Inc.")

Pan American World Airways, March 21, 1994 September 23, 1996 Airline industry AMEX (PAA)
Inc. (currently operating as,
"Pan Am Corporation")
</TABLE>

Messrs. Richard B. Frost, Mark J. Hanna and Marshal E. Rosenberg,
executive officers and directors of the Company, were also officers and
directors of Frost Hanna Halpryn a "blank check" company whose initial public
offering of securities closed in February 1993. Frost Hanna Halpryn raised net
proceeds of approximately $6,100,000 through the issuance of 1,175,500 shares
of Common Stock at $6.00 per share in such initial public offering. Frost
Hanna Halpryn consummated a Business Combination with Sterling Healthcare on
May 31, 1994 in which both such entities merged with and into a wholly-owned
subsidiary of Frost Hanna Halpryn. In connection with such merger, Frost Hanna
Halpryn changed its name to "Sterling Healthcare, Inc." The principal business
activity of Sterling is providing physician contract management services for
hospital emergency departments. Upon consummation of the Sterling Business
Combination, (i) the former Sterling Healthcare shareholders were issued
Sterling common stock which constituted approximately 52% of the outstanding
shares of Sterling common stock (assuming full exercise of all outstanding
options and warrants to purchase Sterling common stock) and (ii) Messrs. Frost
and Hanna resigned from their officer and director positions of Sterling and
Mr. Rosenberg resigned from his position of Vice President and Treasurer and
remained as a member of the Sterling Board of Directors until December 1994.
In October, 1996, Sterling consummated a business combination with FPA Medical
Management Inc. ("FPAM") pursuant to which, among other things, each share of
Sterling common stock was exchanged for .951 shares of FPAM common stock. FPAM
provides regional healthcare management services. FPAM currently trades under
the symbol "FPAM" in the NASDAQ National Market. The closing price of FPAM
common stock on February 18, 1997 was $23.75 per share.

Messrs. Frost, Hanna, and Rosenberg and Mr. Donald H. Baxter, also an
executive officer and director of the Company, were also officers and directors
of Frost Hanna Acquisition, a "blank check" company whose initial public
offering of securities closed in September 1993. Frost Hanna Acquisition
raised net proceeds of approximately $6,519,800 through the issuance of
1,265,000 shares of Common Stock at $6.00 per share in such initial public
offering. To minimize any potential conflicts of interest which may have
arisen as a result of the relationship between such persons' positions with
Frost Hanna Halpryn, Frost Hanna Acquisition was prohibited from analyzing or
considering any possible Business Combination opportunities until Frost Hanna
Halpryn became a party to a letter of intent to consummate a Business
Combination. Frost Hanna Acquisition entered into a letter of intent in May
1995 with LFS and on January 3, 1996, consummated a Business Combination
with LFS in which LFS merged with and into a wholly-owned subsidiary of Frost
Hanna Acquisition. In connection with such merger, Frost Hanna Acquisition
changed its name to "Kids Mart, Inc." Upon consummation of the Kids Mart
Business Combination (i) the former LFS shareholders were issued Kids Mart

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<PAGE> 37

common stock which constituted approximately 62% of the outstanding shares of
Kids Mart common stock (assuming full exercise of all outstanding options and
warrants to purchase Kids Mart common stock) and (ii) Messrs. Frost, Hanna,
Baxter and Rosenberg resigned from their positions as officers and directors of
Kids Mart. Kids Mart operates a chain of [200] infant's and children's apparel
stores in 20 states under the names of "Kids Mart" and "Little Folks." In
September 1996, Kids Mart closed 97 stores and fired 600 workers, which resulted
in a $5.4 million charge in its third quarter. Kids Mart's Quarterly Report on
Form 10-Q for the period ending October 31, 1996 included a going concern
qualification from Kids Mart's independent auditors, and reported, among other
things, an accumulated deficit of $28,713,000, that Kids Mart's current
liabilities exceeded its current assets by $20,613,000 and that it had a
stockholders' deficiency of $15,930,000, all as of October 26, 1996.
Additionally, the Form 10-Q reported that Kids Mart remained in violation of
covenants under its credit facility with Foothill Capital Corporation, its
largest secured creditor. All loans made pursuant to Kids Mart's credit
facility with Foothill Capital Corporation are secured by substantially all of
Kids Mart's assets. On January 10, 1997, Kids Mart filed for Chapter 11
bankruptcy protection in the United States Bankruptcy Court for the District of
Delaware (97-42(PJW) In Re LFS Acquisition Corporation, Kidsmart, Inc.,
Holtzman's Little Folk Shop, Inc.) The closing price of Kids Mart common stock
on February 18, 1997 was $0.015 per share.

Messrs. Frost, Hanna, Baxter and Rosenberg, were also officers and
directors of Frost Hanna Mergers Group, a "blank check" company whose initial
public offering of securities closed in March 1994. Frost Hanna Mergers raised
net proceeds of approximately $10.1 million through the issuance of 1,955,000
shares of Common Stock at $6.00 per share in such initial public offering. To
minimize any potential conflicts of interest which may have arisen as a result
of the relationship between such persons' positions with Frost Hanna Halpryn
and Frost Hanna Acquisition, Frost Hanna Mergers was prohibited from analyzing
or considering any possible Business Combination opportunities until Frost
Hanna Halpryn and Frost Hanna Acquisition each became parties to a letter of
intent to consummate a Business Combination. Frost Hanna Mergers entered into
a letter of intent on January 29, 1996 with PAWA and on September 23, 1996,
consummated a Business Combination with PAWA in which PAWA merged with and into
a wholly-owned subsidiary of Frost Hanna Mergers. In connection with such
merger, Frost Hanna Mergers changed its name to "Pan Am Corporation." Upon
consummation of the Pan Am Business Combination, (i) the former PAWA
shareholders were issued shares of Pan Am common stock which constituted
approximately 72% of the outstanding shares of Pan Am common stock (assuming
full exercise of all outstanding warrants and options to purchase shares of Pan
Am common stock) and (ii) Messrs. Frost and Hanna resigned from their executive
officer positions with Pan Am but currently remain as members of the Pan Am
Board of Directors and Messrs. Baxter and Rosenberg resigned from their
executive officer and director positions with Pan Am. PAWA was a newly
organized corporation established to operate a new low-fare full service
airline under the "Pan Am" name, serving selected long-haul routes between
major United States cities. Pan Am initiated flight service on September 26,
1996. Pan Am common stock began trading on the American Stock Exchange on
September 24, 1996 and trades under the symbol PAA. The closing price of Pan
Am common stock on February 18, 1997 was $8.063 per share.

Purchasers who purchase Common Stock in the Offering will not acquire
any ownership interest whatsoever in any of the other "blank check" companies
to which the officers and directors of this Company have been involved. The
inclusion of the information regarding these companies does not imply that the
Company will have similar results with respect to the time period taken to
consummate a Business Combination or the relative success or failure of the
Acquired Business following such Business Combination. Investors in this
Offering should not assume that they will experience returns, if any,
comparable to those experienced by investors in such other "blank check"
companies. There can be no assurance that the Company will be able to effect a
Business Combination or that the type of business or the performance of the
Acquired Business, if any, will be similar to that of other "blank check"
companies to which the officers and directors of the Company have been
involved.

SOURCES OF ACQUIRED BUSINESSES

The Company anticipates that it will make contact with business
prospects primarily through the efforts of its officers, who will meet
personally with existing management and key personnel, visit and inspect
material facilities, assets, products and services belonging to such prospects,
and undertake such further reasonable investigation as management deems
appropriate. The Company anticipates that certain Acquired Business candidates
may be brought to its attention from various unaffiliated sources, including
securities broker-dealers, investment bankers, venture capitalists, bankers,
other members of the financial community, and affiliated sources. While the
Company does not presently anticipate engaging the services of professional
firms that specialize in business acquisitions on any formal basis, the Company
may engage such firms in the future, in

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<PAGE> 38
which event the Company may pay a finder's fee or other compensation. Such
finder may be required to be registered as, among other things, an agent or
broker-dealer under the laws of certain jurisdictions. In no event, however,
will the Company pay a finder's fee or commission to officers or directors of
the Company or any entity with which they are affiliated for such services
except, the Representative in the event it assists the Company during the
five-year period commencing on the date hereof in connection with the
introduction of a prospective Acquired Business with which a Business
Combination is ultimately consummated. See "Management of the Company --
Conflicts of Interest."

COMPETITION

The Company expects to encounter intense competition from other
entities having a business objective similar to that of the Company. Many of
these entities are well-established and have extensive experience in connection
with identifying and effecting business combinations directly or through
affiliates. Many of these competitors possess greater financial, marketing,
technical, personnel and other resources than the Company and there can be no
assurances that the Company will have the ability to compete successfully.
Inasmuch as the Company may not have the ability to compete effectively with
its competitors in selecting a prospective Acquired Business, the Company may
be compelled to evaluate certain less attractive prospects. There can be no
assurances that such prospects will permit the Company to meet its stated
business objective. Further, the Company's obligation to seek shareholder
approval of a Business Combination may delay the consummation of a transaction;
and the Company's obligation in certain circumstances to convert into cash,
shares of Common Stock held by Public Shareholders (as a result of a Redemption
Offer) may reduce the resources available to the Company for a Business
Combination or for other corporate purposes. Either of these obligations may
place the Company at a competitive disadvantage in successfully negotiating a
Business Combination. Management believes, however, that the Company's status
as a public entity and its potential access to the United States public equity
markets may give the Company a competitive advantage over privately-held
entities having a similar business objective to that of the Company in
acquiring an Acquired Business with significant growth potential on favorable
terms. See "Risk Factors."

UNCERTAINTY OF COMPETITIVE ENVIRONMENT OF ACQUIRED BUSINESS

REDEMPTION RIGHTS

At the time the Company seeks shareholder approval of any potential
Business Combination, the Company will offer each of the Public Shareholders
who vote against the proposed Business Combination and affirmatively request
redemption, for a specified period of time of not less than 20 days, to redeem
all, but not a portion of, their Public Shares, at a per share price equal to
the Company's liquidation value on the Record Date divided by the number of
Public Shares held by all of the Public Shareholders. The Redemption Offer
will be described in detail in the disclosure documentation relating to the
proposed Business Combination. The Company's liquidation value will be equal
to the Company's Liquidation Value (the Company's book value, as determined by
the Company and audited by the Company's independent public accountants) (which
amount will be less than the initial public offering price per share of Common
Stock in this Offering in view of the expenses of this Offering, salaries and
expenses paid and the anticipated expenses which will be incurred in seeking a
Business Combination), calculated as of the Record Date. In no event, however,
will the Company's Liquidation Value be less than the Escrow Fund, inclusive of
any net interest income thereon. If the holders

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<PAGE> 39
of less than 30% of the Public Shares held by the Public Shareholders elect to
have their shares of Common Stock redeemed, the Company may, but will not be
required to, proceed with such Business Combination. If the Company elects to
so proceed, it will redeem Public Shares, based upon the Company's Liquidation
Value, from those Public Shareholders who affirmatively requested such
redemption and who voted against the Business Combination. The determination
as to whether the Company proceeds with a Business Combination ultimately rests
with the Company. HOWEVER, IF THE HOLDERS OF 30% OR MORE OF THE PUBLIC SHARES
HELD BY PUBLIC SHAREHOLDERS VOTE AGAINST APPROVAL OF ANY POTENTIAL BUSINESS
COMBINATION, THE COMPANY WILL NOT PROCEED WITH SUCH BUSINESS COMBINATION AND
WILL NOT REDEEM SUCH SHARES OF COMMON STOCK. If the Company determines not to
pursue a Business Combination, even if the holders of less than 30% of the
Public Shares held by Public Shareholders vote against approval of the
potential Business Combination, no Public Shares will be redeemed.

FACILITIES

The Company maintains its executive offices in approximately 1,445
square feet of office space located at 327 Plaza Real, Suite 319, Boca Raton,
Florida, 33432, pursuant to a two-year lease agreement with Crocker Downtown
Development Associates, at an approximate cost per month of $2,000. The
Company considers its current office space adequate for its current operations.

EMPLOYEES

As of the date of this Prospectus, the Company's employees consist of
its executive officers, of whom each of Messrs. Frost and Hanna intend to
devote approximately 50% of their working time to the affairs of the Company
and Messrs. Baxter and Rosenberg intend to devote approximately 10% of their
working time to the affairs of the Company. Additionally, the Company has
hired one employee in an administrative capacity.

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<PAGE> 40
MANAGEMENT OF THE COMPANY

EXECUTIVE OFFICERS AND DIRECTORS

The current executive officers and directors of the Company are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Richard B. Frost 48 Chief Executive Officer,
Chairman of the Board of Directors

Mark J. Hanna 49 President, Director

Donald H. Baxter 53 Vice President, Secretary, Director

Marshal E. Rosenberg, Ph.D. 60 Vice-President, Treasurer, Director
</TABLE>
___________________

Richard B. Frost has been the Chief Executive Officer and Chairman of
the Board of Directors of the Company since its inception. Mr. Frost was the
Chief Executive Officer and Chairman of the Board of Directors of Frost Hanna
Mergers from October 1993 until the Pan Am Business Combination in September
1996. Mr. Frost remains a member of the Pan Am Board of Directors. Mr. Frost
was the Chief Executive Officer and Chairman of the Board of Directors of Frost
Hanna Acquisition from April 1993 until the Kids Mart Business Combination in
January 1996, at which time Mr. Frost resigned from such positions. From June
1992 to May 1994, Mr. Frost held similar positions at Frost Hanna Halpryn until
the Sterling Business Combination. From February 1992 through May 1992, Mr.
Frost was Regional Director of GKN Securities Corp., a broker- dealer ("GKN"),
where his responsibilities included the recruitment and training of GKN
brokerage personnel located or to be located in Florida. From May, 1982
through February, 1992, Mr. Frost was a Vice President and Branch Manager of
Dean Witter Reynolds, a broker-dealer, where his responsibilities included the
management and day-to-day operations of the West Boca Raton and Lighthouse
Point, Florida, branch offices of such brokerage firm. Mr. Frost is currently
a member of the Board of Directors of Continucare, a Florida corporation
engaged in the development and management of mental and physical rehabilitation
health care programs.

Mark J. Hanna has been the President and a member of the Board of
Directors of the Company since its inception. Mr. Hanna was the President and
a member of the Board of Directors of Frost Hanna Mergers from October 1993
until the Pan Am Business Combination in September 1996. Mr. Hanna remains a
member of the Pan Am Board of Directors. Mr. Hanna was the President and a
member of the Board of Directors of Frost Hanna Acquisition from April 1993
until January 1996, whereupon Mr. Hanna resigned from such positions following
the Kids Mart Business Combination. Mr. Hanna held similar positions at Frost
Hanna Halpryn from June 1992 until the Sterling Business Combination in May
1994. From February, 1992 through May, 1992, Mr. Hanna was a registered
representative with GKN. From January, 1992 through February, 1992, Mr. Hanna
was a registered representative with Barron Chase Securities, Inc. From
September 1990, through January, 1992, Mr. Hanna was a registered
representative with Prudential Bache Securities, Inc. From August, 1982
through June, 1985, Mr. Hanna was First Vice President, Investments, at the
Fort Lauderdale office of Drexel Burnham Lambert Incorporated. From July, 1985
through September, 1990, Mr. Hanna was Chief Executive Officer and principal
shareholder of GGH Consulting, Inc., a firm engaged in providing financial
consulting services. From September, 1985 through December, 1988, Mr. Hanna
was a director of Biocontrol, Technology, Inc. (f/k/a Coratomic, Inc.), a
public company engaged at that time in the manufacture and sale of cardiac
pacemakers and heart valves ("Biocontrol"). From September, 1986 through
March, 1987, Mr. Hanna was the Chief Operating Officer of Biocontrol. Mr.
Hanna is currently a member of the Board of Directors of Continucare.

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<PAGE> 41
Donald H. Baxter has been Vice-President, Secretary and a member of
the Board of Directors of the Company since its inception. Mr. Baxter was the
Vice-President, Secretary and a member of the Board of Directors of Frost Hanna
Mergers from October 1993 until the Pan Am Business Combination in September
1996. Mr. Baxter was the Vice President, Secretary and a member of the Board
of Directors of Frost Hanna Acquisition from April 1993 until the Kids Mart
Business Combination in January 1996. During the past five years, Mr. Baxter
has been the President of Baxter Financial Corporation, an investment advisory
firm, and President and Chairman of the Board of Directors of the Philadelphia
Fund and Eagle Growth, mutual funds which are registered under the Investment
Company Act of 1940.

Marshal E. Rosenberg, Ph.D. has been a member of the Board of
Directors of the Company since its inception. Mr. Rosenberg was the Vice
President, Treasurer and a member of the Board of Directors of Frost Hanna
Mergers from October 1993 until the Pan Am Business Combination in September
1996. Mr. Rosenberg was the Vice President, Secretary and a member of the
Board of Directors of Frost Hanna Acquisition from April 1993 until the Kids
Mart Business Combination in January 1996. Mr. Rosenberg was a director of
Frost Hanna Halpryn from June 1992 until shortly following the Sterling
Business Combination when he resigned in December 1994. During the past five
years, Mr. Rosenberg has been the President, Chairman and sole shareholder of
The Marshal E. Rosenberg Organization, Inc., Coral Gables, Florida, a firm
engaged in the sale of life, health and disability insurance. Mr. Rosenberg is
an investor in numerous private enterprises, engaged in, among other things,
real estate development and retail sales. He served as a member of the Board
of Directors and member of the Executive Committee of the former
Intercontinental Bank, Miami, Florida. In addition, Mr. Rosenberg is a member
of the faculty at the University of Miami School of Business.

EXECUTIVE COMPENSATION

The Company was incorporated in February 1996. Pursuant to employment
agreements, Messrs. Frost and Hanna each receive $10,000 monthly for salary and
$1,000 monthly for non-accountable expense allowance. Further, all officers
and directors of the Company shall receive accountable reimbursement for any
reasonable business expenses incurred in connection with activities on behalf
of the Company. The proceeds placed in the Escrow Fund (including any interest
earned thereon) shall not be used by the Company to pay salaries to Messrs.
Frost or Hanna or to reimburse the Company's officers and directors for
expenses incurred by such persons on behalf of the Company. No funds
(including any interest earned thereon) will be disbursed from the Escrow Fund
for reimbursement of expenses. Other than the foregoing, there is no limit on
the amount of such reimbursable expenses, and there will be no review of the
reasonableness of such expenses by anyone other than the Board of Directors,
all of the members of which are officers. In the event the Company requires in
excess of 20% of the Net Proceeds for operations, Messrs. Frost and Hanna have
undertaken to defer their salaries and non-accountable expense allowance until
the consummation of a Business Combination. None of the Company's current
executive officers or directors or their respective affiliates will receive any
consulting or finder's fees in connection with a Business Combination.
Further, other than pursuant to the employment agreements, none of such persons
will receive any other payments or assets, tangible or intangible, unless
received by all other shareholders on a proportionate basis. See "Use of
Proceeds" and "Certain Transactions."

REIMBURSEMENT OF EXPENSES

No funds (including any interest earned thereon) will be disbursed
from the Escrow Fund for the reimbursement of expenses incurred by the
Company's officers and directors on behalf of the Company. Other than the
foregoing, there is no limit on the amount of such reimbursable expenses, and
there will be no review of the reasonableness of such expenses by anyone other
than the Company's Board of Directors, all of the members of which are
presently officers of the Company. See "Use of Proceeds" and "Certain
Transactions."

KEY MAN INSURANCE

The Company has obtained $1,000,000 "key man" policies insuring each
of the lives of Messrs. Frost and Hanna. There can be no assurances that such
"key man" insurance will be maintained at reasonable rates,

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<PAGE> 42
if at all. Nevertheless, the Representative has required the Company to
maintain life insurance on the lives of Messrs. Frost and Hanna for a period of
three years or until an earlier Business Combination is effected. The loss,
incapacity or unavailability of any of Messrs. Frost and Hanna at the present
time or in the foreseeable future, before a qualified replacement was obtained,
could have a material adverse effect on the Company's operations. See "Risk
Factors" and "Certain Transactions." This adverse effect would be enhanced if
a death of either Messrs. Frost or Hanna occurs at a time when no life
insurance on such person's life was being maintained.

CONFLICTS OF INTEREST

None of the Company's key personnel are required to commit their full
time to the affairs of the Company and, accordingly, such personnel may have
conflicts of interest in allocating management time among various business
activities. Certain of these key personnel may in the future become affiliated
with entities, including other "blank check" companies, engaged in business
activities similar to those intended to be conducted by the Company. Messrs.
Frost and Hanna are each currently directors of Pan Am and Continucare. Mr.
Rosenberg is an investor in numerous private enterprises, engaged in, among
other things, real estate development and retail sales, which business
interests may conflict with those of an Acquired Business. Mr. Baxter is the
President of Baxter Financial Corporation, an investment advisory firm, and the
President and Chairman of the Philadelphia Fund and Eagle Growth Shares, mutual
funds registered under the Investment Company Act of 1940. Certain activities
which may be performed by such individuals in connection with their other
business affiliations may be deemed competitive with the business of the
Company.

In the course of their other business activities, including private
investment activities, Messrs. Frost, Hanna, Baxter and Rosenberg may become
aware of investment and business opportunities which may be appropriate for
presentation to the Company as well as the other entities with which they are
affiliated. Such persons may have conflicts of interest in determining to
which entity a particular business opportunity should be presented. In
general, officers and directors of corporations are required to present certain
business opportunities to such corporations. Accordingly, as a result of
multiple business affiliations, Messrs. Frost, Hanna, Baxter and Rosenberg may
have similar legal obligations relating to presenting certain business
opportunities to multiple entities. In addition, conflicts of interest may
arise in connection with evaluations of a particular business opportunity by
the Board of Directors with respect to the foregoing criteria. There can be no
assurances that any of the foregoing conflicts will be resolved in favor of the
Company. In order to minimize potential conflicts of interest which may arise
from multiple corporate affiliations, each of Messrs. Frost, Hanna, Baxter and
Rosenberg have agreed to present to the Company for its consideration, prior to
presentation to any other entity, any prospective Acquired Business which is
appropriate for the Company to consider and which prospective Acquired Business
participates in an industry dissimilar to any of the industries to which such
individuals have corporate affiliations. It should be further noted, that the
Company shall not consider Business Combinations with entities owned or
controlled by officers, directors, greater than 10% shareholders of the Company
or any person who directly or indirectly controls, is controlled by or is under
common control with the Company. The Company may consider Business
Combinations with entities owned or controlled by persons other than those
persons described above. There can be no assurances that any of the foregoing
conflicts will be resolved in favor of the Company. See "Proposed Business --
'Blank Check' Offering" and "-- Selection of an Acquired Business and
Structuring of a Business Combination."

Pursuant to an agreement among each of Messrs. Frost, Hanna, Baxter
and Rosenberg and the Company, such persons will not actively negotiate for or
otherwise consent to the disposition of any portion of their Common Stock as a
condition to or in connection with a Business Combination. Further, the
Company shall not borrow funds to be used directly or indirectly to (i)
purchase any shares of the Company's Common Stock owned by management of the
Company; or (ii) make payments to the Company's promoters, management or their
affiliates or associates.

In connection with a Business Combination, the Company shall not cause
any securities of the Company to be sold by any officers, directors, greater
than 10% shareholders or persons who may be deemed promoters

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<PAGE> 43
of the Company except as may otherwise be made in permitted market transactions
without affording all shareholders of the Company a similar opportunity.

Kenneth Orr, Chairman of the Board, Chief Executive Officer and the
principal shareholder of the Representative, is indirectly related to Richard
Frost, the Chairman of the Board, Chief Executive Officer and a principal
shareholder of the Company.

PRINCIPAL SHAREHOLDERS

The following table sets forth information as of the date hereof and
as adjusted to reflect the sale of the Common Stock offered hereby, based on
information obtained from the persons named below, with respect to the
beneficial ownership of shares of Common Stock by (i) each person known by the
Company to be the owner of more than 5% of the outstanding shares of Common
Stock; (ii) each director; and (iii) all officers and directors as a group:

<TABLE>
<CAPTION>
Approximate Percentage
Amount and of Outstanding Common Stock
Nature of ---------------------------
Beneficial Before After
Ownership (1) Offering Offering (2)
------------- -------- ------------
<S> <C> <C> <C>
Richard B. Frost 362,000 24% 11%
327 Plaza Real
Suite 319
Boca Raton, FL 33432

Mark J. Hanna 362,000 24% 11%
327 Plaza Real
Suite 319
Boca Raton, FL 33432

Marshal E. Rosenberg, Ph.D.(3) 300,000 20% 9%
2333 Ponce de Leon Blvd.
Suite 314
Coral Gables, FL 33134

Donald H. Baxter 100,000 7% 3%
327 Plaza Real
Suite 319
Boca Raton, FL 33432

</TABLE>

-40-
<PAGE> 44
<TABLE>
<CAPTION>
<S> <C> <C> <C>
All Officers and Directors 1,124,000 75% 35%
as a Group (4 persons)
</TABLE>

__________________________________

(1) Unless otherwise noted, all persons named in the table have sole
voting and investment power with respect to all shares of Common Stock
beneficially owned by them. No persons named in the table are acting
as nominees for any persons or are otherwise under the control of any
person or group of persons.

(2) Assumes no exercise of the (i) over-allotment option; or (ii)
Underwriter Options. See "Underwriting."

(3) Does not include 20,000 shares of Common Stock owned by Donald
Rosenberg, Mr. Rosenberg's brother, of which Mr. Rosenberg disclaims
beneficial ownership.

The shares of the Company's Common Stock owned as of the date hereof
by all of the executive officers and directors of the Company will be placed in
escrow with American Stock Transfer & Trust Company, as escrow agent, until the
occurrence of a Business Combination. During such escrow period, such
executive officers and directors will not be able to sell, or otherwise
transfer, their respective shares of Common Stock, but will retain all other
rights as shareholders of the Company, including, without limitation, the right
to vote such shares of Common Stock.

Messrs. Frost, Hanna, Baxter and Rosenberg may be deemed to be
"promoters" and "parents" of the Company, as such terms are defined under the
federal securities laws.

CERTAIN TRANSACTIONS

As of the date of this Prospectus, the Company has issued an aggregate
of 1,492,000 shares of Common Stock as follows: 362,000 shares to Richard B.
Frost, the Company's Chief Executive Officer and Chairman of the Board of
Directors; 362,000 shares to Mark J. Hanna, the Company's President and a
member of the Board of Directors; 300,000 shares to Marshal E. Rosenberg,
Ph.D., the Company's Vice President, Treasurer and a member of the Board of
Directors; 100,000 shares to Donald H. Baxter, the Company's Vice President,
Secretary and a member of the Board of Directors, for an aggregate purchase
price of $112.40; and 368,000 shares to 13 other persons for an aggregate
purchase price of $184,000 or $.50 per share.

The Company has obtained $1,000,000 "key man" policies insuring each
of the lives of Messrs. Frost and Hanna. Such policies were purchased by the
Company from The Marshal E. Rosenberg Organization, Inc. (the "Rosenberg
Organization"), a firm in which Mr. Rosenberg is an officer, director and sole
shareholder. In connection with the purchase by the Company of such policies,
the Rosenberg Organization received a payment of approximately $2,700. No
further commissions are contemplated to be earned in connection with the
purchase of such key man life insurance policies.

The Company shall not make any loans to any officers or directors
following this Offering. Further, the Company shall not borrow funds for the
purpose of making payments to the Company's officers, directors, promoters,
management or their affiliates or associates.

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<PAGE> 45
DESCRIPTION OF SECURITIES

GENERAL

The Company is authorized to issue 100,000,000 shares of Common Stock,
par value $.0001 per share. Prior to this Offering, 1,492,000 shares of Common
Stock were outstanding, held of record by 18 persons.

COMMON STOCK

The holders of Common Stock are entitled to one vote for each share
held of record on all matters to be voted on by shareholders. There is no
cumulative voting with respect to the election of directors, with the result
that the holders of more than 50% of the shares voted for the election of
directors can elect all of the directors. The holders of Common Stock are
entitled to receive dividends when, as and if declared by the Board of
Directors out of funds legally available therefor. In the event of
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to share ratably in all assets remaining available for
distribution to them after payment of liabilities and after provision has been
made for each class of stock, if any, having preference over the Common Stock.
Holders of shares of Common Stock, as such, have no conversion, preemptive or
other subscription rights, and, except as noted herein, there are no redemption
provisions applicable to the Common Stock. All of the outstanding shares of
Common Stock are, and the shares of Common Stock offered hereunder, when issued
and paid for as set forth in this Prospectus, will be, fully paid and
nonassessable.

DIVIDENDS

The Company has not paid any dividends on its Common Stock to date and
does not presently intend to pay cash dividends prior to the consummation of a
Business Combination. The payment of cash dividends in the future, if any,
will be contingent upon the Company's revenues and earnings, if any, capital
requirements and general financial condition subsequent to consummation of a
Business Combination. The payment of any dividends subsequent to a Business
Combination will be within the discretion of the Company's then Board of
Directors. It is the present intention of the Board of Directors to retain all
earnings, if any, for use in the Company's business operations and,
accordingly, the Board does not anticipate paying any cash dividends in the
foreseeable future.

UNDERWRITER WARRANTS

SECURITIES EXCHANGE ACT OF 1934

The Company has agreed, contemporaneous with the sale of the shares of
Common Stock, that it will file an application with the Commission to register
its Common Stock under the provisions of Section 12(g) of the Exchange Act, and
that it will use it best efforts to continue to maintain such registration for a
minimum of five years from the date of this Prospectus. Such registration will
require the Company to comply with periodic reporting, proxy solicitations and
certain other requirements of the Exchange Act. If the Company seeks
shareholder approval of a Business Combination at such time as the Company's
securities are registered pursuant to Section 12(g) of the Exchange Act, the
Company's proxy solicitation materials required to be transmitted to
shareholders may be subject to prior review by the Securities and Exchange
Commission. Under the federal securities laws, public companies must furnish
certain information

-42-
<PAGE> 46
about significant acquisitions, which information may require audited financial
statements of an acquired company with respect to one or more fiscal years,
depending upon the relative size of the acquisition. Consequently, if a
prospective Acquired Business did not have available and was unable to
reasonably obtain the requisite audited financial statements, the Company
could, in the event of consummation of a Business Combination with such
company, be precluded from (i) any public financing of its own securities for a
period of as long as three years, as such financial statements would be
required to undertake registration of such securities for sale to the public;
and (ii) registration of its securities under the Exchange Act. Consequently,
it is unlikely that the Company would seek to consummate a Business Combination
with such an Acquired Business. See "Risk Factors."

CERTAIN PROVISIONS OF THE COMPANY'S ARTICLES OF INCORPORATION

The Company's Articles of Incorporation provide, among other things,
that (i) officers and directors of the Company will be indemnified to the
fullest extent permitted under Florida law; and (ii) the Company has elected
not to be governed by the Anti-Takeover Sections, namely Sections 607.0901 and
607.0902 of the Florida Business Corporation Act and other laws relating
thereto.

TRANSFER AGENT

The transfer agent for the Company's Common Stock is American Stock
Transfer & Trust Company, 40 Wall Street, New York, New York 10005.

SHARES ELIGIBLE FOR FUTURE SALE

Upon the consummation of this Offering, (without giving effect to the
exercise of the over-allotment option or the Underwriter Options), the Company
will have 3,192,000 shares of Common Stock outstanding. Of these shares, the
1,700,000 shares sold in this Offering will be freely tradeable without
restriction or further registration under the Securities Act, except for any
shares purchased by an "affiliate" of the Company (in general, a person who has
a control relationship with the Company) which will be subject to limitations
of Rule 144 promulgated by the Commission under the Securities Act. All of the
remaining 1,492,000 shares are deemed to be "restricted securities," as that
term is defined under Rule 144 promulgated under the Securities Act, in that
such shares were issued in private transactions not involving a public
offering. None of such shares will be eligible for sale under Rule 144, as
currently in effect, prior to September 13, 1997. In addition, the shares of
Common Stock owned as of the date hereof by Messrs. Frost, Hanna, Baxter and
Rosenberg (an aggregate of approximately 75% of the outstanding Common Stock
prior to this Offering) will be placed in escrow with American Stock Transfer &
Trust Company, as escrow agent, until the occurrence of a Business Combination.
During such escrow period, such persons will not be able to sell, or otherwise
transfer, their respective shares of Common Stock, but will retain all other
rights as shareholders of the Company, including, without limitation, the right
to vote such shares of Common Stock. Additionally, the Underwriting Agreement
entered into in connection with this Offering provides, among other things,
that for a period of thirteen months after the consummation of the Offering or
such earlier time that a Business Combination is consummated, neither the
Company, nor any officer, director, affiliate or 2% (or greater) shareholder of
restricted stock of

-43-
<PAGE> 47
the Company shall offer, issue, sell, contract to sell, grant any option for
the sale of or otherwise dispose of any securities of the Company, without the
Representative's prior written consent.

Prior to this Offering, there has been no market for the Common Stock,
and no prediction can be made as to the effect, if any, that market sales of
restricted shares of Common Stock or the availability of such shares for sale
will have on the market prices prevailing from time to time. Nevertheless, the
possibility that substantial amounts of Common Stock may be sold in the public
market may adversely affect the price for the sale of the Company's equity
securities in any trading market which may develop.

UNDERWRITING

The Underwriters named below, represented by First Cambridge
Securities Corporation, have severally agreed, subject to the terms and
conditions of the Underwriting Agreement, to purchase from the Company, and the
Company has agreed to sell, the number of shares of Common Stock indicated
below opposite their respective names at the initial public offering price less
the underwriting discount set forth on the cover page of this Prospectus.

<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
----------- ----------------
<S> <C>
First Cambridge Securities Corporation . . . . . . . . . . . . . .
-----------------

Total . . . . . . . . . . . . . . . . . . . . . . . . . .
=================

</TABLE>

The Underwriters initially propose to offer the Common Stock offered
hereby to the public at the public offering price set forth on the cover of
this Prospectus, and the Underwriters may allow certain dealers, who are
members of the National Association of Securities Dealers, Inc. ("NASD"),
concessions of not in excess of $___ per share of Common Stock.

The Underwriters are committed on a "firm commitment" basis to
purchase all 1,700,000 of Common Stock offered hereby, if any, are purchased.
The Underwriters will not sell the shares of Common Stock to any accounts for
which they exercise discretionary authority.

The Company has granted an option to the Underwriters, exercisable
during the 45 day period after the date of this Prospectus, to purchase up to
an aggregate of 255,000 additional shares of Common Stock at the public
offering price, less the underwriting discounts and commissions. The
Underwriters may purchase such shares of Common Stock only to cover
over-allotments made in connection with the sale of the shares of Common Stock
offered hereby.

-44-
<PAGE> 48
The Underwriting Agreement provides for reciprocal indemnification
between the Company and the Underwriters against certain liabilities in
connection with the Registration Statement, including liabilities under the
Securities Act.

The Company has agreed to pay the Underwriters a non-accountable
expense allowance of 3% of the aggregate offering price of the shares of Common
Stock offered hereby (including any shares purchased pursuant to the
Underwriters' over-allotment option), of which $35,000 has been paid to date.

The Company has also agreed to sell to the Underwriters or their
designees, the Underwriters' Options to purchase 170,000 shares of Common Stock
at a price of $.001 per option. The Underwriters' Options will be exercisable
for a period of four years, commencing one year after the date this Offering is
consummated. The exercise price of the Underwriters' Options is equal to 155%
of the initial public offering price per share of Common Stock.

The Company has agreed that it will, on any one occasion during the
four-year period commencing one year from the date hereof, register the
Underwriters' Options and the underlying securities, at the Company's expense,
at the request of holders of a majority of the shares of Common Stock issuable
upon exercise of the shares of Common Stock underlying the Underwriters'
Options. The Company has also agreed, during the six year period commencing
one year from the date hereof, to certain "piggy-back" registration rights for
holders of the Underwriters' Options and the underlying securities.

For the life of the Underwriters' Options, the holders are given, at
nominal cost, the opportunity to profit upon exercise from a rise in the market
price for the Common Stock of the Company without assuming the risk of
ownership, with a resulting dilution in the interest of other security holders
upon exercise of such options. As long as the Underwriters' Options remain
outstanding and unexercised, the terms under which the Company could obtain
additional capital may be adversely affected. Moreover, the holders of the
Underwriters' Options might be expected to exercise them at a time when the
Company would, in all likelihood, be able to obtain needed capital by a new
offering of its securities on terms more favorable than those provided by the
Underwriters' Options. Additionally, if the Underwriters should exercise their
registration rights to effect a distribution of the Underwriters' Options or
underlying securities, the Underwriters, prior to and during such distribution,
may be unable to make a market in the Company's securities. If the
Underwriters must cease making a market in the Company's securities, the market
and market price for the securities may be adversely affected and holders of
the securities may be unable to sell the securities.

The Company has also agreed pursuant to the Underwriting Agreement that
for a period of time from the date hereof until such time as the Company
consummates a Business Combination, the Company shall use its best efforts to
cause one individual selected by the Representative to be elected to the Board
of Directors of the Company, provided that such person is reasonably acceptable
to the Company. Alternatively, the Representative shall be entitled to
designate a senior advisor to the Company who shall be invited to and be
entitled to attend, all meetings of the Board of Directors. Pursuant to the
Underwriting Agreement, the Company and the Representative have further agreed
to enter into an agreement that provides that if the Representative, during the
five-year period commencing on the date hereof, originates a financial
transaction such as a merger, acquisition or joint venture to which the Company
is a party, the Representative shall be entitled to receive 5% of the first
$5,000,000 and 2 1/2% of the amount of the excess, if any, over $5,000,000 of
the consideration paid in connection with business transactions between the
Company and the entity introduced to the Company by the Representative.

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<PAGE> 49
The foregoing does not purport to be a complete statement of the terms
and conditions of the Underwriting Agreement and related documents, copies of
which are on file at the offices of the Underwriters, the Company and the
Commission.

The public offering price of the Common Stock has been determined by
arms' length negotiation between the Company and the Representative and is not
necessarily related to the Company's value, net worth, or any other established
criteria of value. Officers and directors of the Company may introduce the
Representative to persons to consider this Offering either through the
Representative, other Underwriters or through participating broker-dealers. In
this connection, officers and directors will not receive any commissions or any
other compensation.

The Representative was incorporated on November 20, 1987. Since its
incorporation, the Representative has participated in only five initial public
offerings of equity securities as an underwriter and has acted as lead manager
once and as co-manager for four of the offerings. These initial public
offerings were conducted between May 1995 and November 1996. The Offering is
the second public offering in which the Representative has acted as lead
manager. Prospective purchasers of Common Stock should consider the limited
experience of the Representative in evaluating an investment in the Company.