SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d)
of the Securities and Exchange Act of 1934
For the fiscal year ended December 31, 1998.
Commission File Number 333-41389
FIRST SUNRISE, INC.
----------------------------------------------
(Name of Small Business Issuer in Its Charter)
Delaware 13-4020643
- ------------------------ --------------------------
(State of Incorporation) (IRS Identification Number)
200 East 89th Street, 44th Floor New York, NY 10128
- --------------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
(212) 876-8578
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(Issuer's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes No X
----- ----
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.
State issuer's revenues for its most recent fiscal year. 0
The aggregate market value of the voting stock held by non-affiliates
of the registrant is $1,000.
As of December 31, 1998 there were 700,000 shares of the issuer's
common stock, $.001 par value per share, issued and outstanding.
<PAGE>
FIRST SUNRISE, INC.
10-KSB
December 31, 1998
PART I
Item 1. DESCRIPTION OF BUSINESS
First Sunrise, Inc. was organized under the laws of the State of
Delaware on April 28, 1997. FSI was formed as a vehicle to pursue a Business
Combination. Since inception, the primary activity of FSI has been directed to
organizational efforts, obtaining initial financing, and efforts intended to
identify possible Business Combinations.
FSI's initial public offering comprised 100,000 shares of common stock
at a purchase price of $.50 per share.
FSI was organized for the purposes of creating a corporate vehicle to
seek, investigate and, if such investigation warrants, engaging in business
combinations presented to it by persons or firms who or which desire to employ
FSI's funds in their business or to seek the perceived advantages of
publicly-held corporation. FSI's principal business objective is to seek
long-term growth potential in a business combination venture rather than to seek
immediate, short-term earnings. FSI has not restricted its search to any
specific business, industry or geographical location.
FSI has 18 months from its date of effectiveness (December 9, 1999) to
consummate a business combination, including the filing of a post-effective
amendment and shareholder reconfirmation offering. If a consummated business
combination has not occurred by the date 18 months after the effective date of
the initial registration statement, the funds held in escrow shall be returned
by first class mail to the purchasers within five (5) business days following
that date.
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<PAGE>
FSI does not currently engage in any business activities which provide
any cash flow. The costs of identifying, investigating, and analyzing merger
candidates are being paid with money in FSI's treasury. Persons who purchased
shares in FSI's initial public offering and other shareholders have not had much
opportunity to participate in any of these decisions. FSI=s proposed business is
sometimes referred to as a "blank check" company because investors entrust their
investment monies to FSI's management before they have a chance to analyze any
ultimate use to which their money may be put. Substantially all of FSI's initial
public offering are intended to be utilized generally to effect a business
combination. Rule 419 states that prospective investors who invest in FSI will
have an opportunity to evaluate the specific merits or risks of only the
business combination management decides to enter into.
Although FSI is subject to regulation under the Securities Act of 1933
and the Securities Exchange Act of 1934, management believes FSI is not subject
to regulation under the Investment Company Act of 1940. The regulatory scope of
the Investment Company Act of 1940, as amended, was enacted principally for the
purpose of regulatory vehicles for pooled investments in securities, extends
generally to companies primarily in the business of investing, reinvesting,
owning, holding or trading securities. The Investment Company Act may, however,
also be deemed to be applicable to a Company which does not intend to be
characterized as an investment company but which, nevertheless, engages in
activities which may be deemed to be within the definition of the scope of
certain provisions of the Investment Company Act. FSI believes that its
principle activities will not subject it to regulation under the Investment
Company Act. Nevertheless, there can be no assurances that FSI will not be
deemed to be an Investment Company. In the event FSI is deemed to be an
Investment Company, FSI may be subject to certain restrictions relating to FSI's
activities, including restrictions on the nature of its investments and the
issuance of securities. FSI has obtained no formal determination from the
Securities and Exchange Commission as to the status of FSI under the Investment
Company Act of 1940.
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<PAGE>
FSI presently has no employees.
On July 21, 1999, FSI entered into an acquisition agreement with
Platinum Executive Search. Inc., a New York corporation incorporated in May
1999. Pursuant to this agreement, 100% of PES shall be merged into FSI on the
effective date of the merger with FSI as the surviving entity. Thus, all PES
shareholders shall become shareholders of FSI as a result of the merger.
PES is a holding company for entities engaged in the human resources
industry. In August 1999, PES acquired two human resources companies:
Renaissance Leadership, Inc.; and Strupp Investments, LLC, also known as
"Success." Both Renaissance and Success are operating companies. PES is seeking
to acquire additional human resources firms and experienced personnel.
FSI believes it has structured the merger in such a manner as to
minimize federal and state tax consequences to FSI and any target company.
Item 2. PROPERTIES
FSI is presently using the offices of Mr. Eng Chye Low, President of
FSI as its office. Mr. Low does not charge FSI for this service. Such
arrangement is expected to continue until a business combination is effected,
including effectiveness of a post-effective amendment and shareholder
reconfirmation.
FSI currently owns no equipment, and does not intend to own any prior
to engaging in a business combination.
Item 3. LEGAL PROCEEDINGS
FSI is not presently a party to any litigation, nor, to the knowledge
of management, is any litigation threatened against FSI which may materially
affect FSI.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no shareholders meetings in the fourth quarter of this
fiscal year.
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<PAGE>
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
There is no established public trading market for FSI's common shares.
As of December 31, 1998, there were 700,000 shares of common stock outstanding.
The par value per share is $.001. FSI has not paid any dividends on its common
stock in the past, nor does it foresee paying dividends in the near future.
Pursuant to its initial public offering, FSI offered 100,000 shares of common
stock at $.50 per share.
Item 6. PLAN OF OPERATION
FSI does not currently engage in any business activities which provide
any cash flow. The costs of identifying, investigating, and analyzing business
combinations are being paid with money in FSI's treasury, and not with proceeds
received from FSI's initial public offering.
FSI may seek a business combination in the form of firms which have
recently commenced operations, are developing companies in need of additional
funds for expansion into new products or markets, are seeking to develop a new
product or service, or are established businesses which may be experiencing
financial or operating difficulties and are in need of additional capital. A
business combination may involve the acquisition of, or merger with, a company
which does not need substantial additional capital but which desires to
establish a public trading market for its shares, while avoiding what it may
deem to be adverse consequences of undertaking a public offering itself, such as
time delays, significant expense, loss of voting control and compliance with
various Federal and State securities laws.
FSI will not acquire a target business unless the fair value of the
target business represents 80% of the maximum offering proceeds. To determine
the fair market value of a target business, FSI's management will examine the
certified financial statements (including balance sheets and statements of cash
flow and stockholders' equity) of any candidate and will participate in a
personal inspection of any potential target business.
-5-
<PAGE>
Based upon management's experience with and knowledge of blank check
companies, the probable desire on the part of the owners of target businesses to
assume voting control over FSI (to avoid tax consequences or to have complete
authority to manage the business) will almost assure that FSI will combine with
just one target business. Management also anticipates that upon consummation of
a business combination, there will be a change in control in FSI which will most
likely result in the resignation or removal of FSI's present officers and
directors.
On July 21, 1999, FSI entered into a merger agreement with Platinum
Executive Search, Inc. a New York corporation. Pursuant to this agreement, PES
shall be merged into FSI, with FSI as the surviving entity. Thus, all PES
shareholders shall become shareholders of FSI as a result of the merger.
PES was founded in May 1999 to enter the human resource industry
through the acquisition of existing firms, and hiring employees with experience
in this industry. Since August 1999, PES has acquired two such firms:
Renaissance Leadership, a leadership development firm specialized in the
financial services industry; and Strupp Investments, L.L.C. (known as
ASuccess:), a firm specializing in executive search. James J. Strupp, an
officer, director and shareholder of PES, is principal of success. Additionally,
as of August 30, 1999, PES has entered into employment agreements with three
individuals, each of whom brings with his/her years of experience in executive
search and an established client base.
Pursuant to the terms of the merger agreement between FSI and PES, upon
consummation of the merger PES shareholders shall hold 94% of FSI, and current
FSI shareholders and their assignees shall hold 6% of the issued and outstanding
common stock of FSI. Holders of FSI unregistered common stock shall have their
shares reverse split 1 for .3634383, and holders of FSI registered common stock
shall have their shares split 1 for 1.96648. FSI filed a post effective
amendment to its registration statement on Form SB-2 in September 1999. This
amendment contained information regarding PES including audited financial
statements of PES and its subsidiaries.
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<PAGE>
Investors should note that any merger or acquisition effected by FSI,
including the merger with PES can be expected to have a significant dilutive
effect on the percentage of shares held by FSI's then-shareholders, including
purchasers in this offering. On the consummation of a business combination, the
target business will have significantly more assets than FSI; therefore,
management plans to offer a controlling interest in FSI to the target business.
FSI and PES have attempted to structure the acquisition in a so-called
"tax-free" reorganization under Sections 368(a)(1) or 351 of the Internal
Revenue Code of 1954, as amended (the "Code"). In order to obtain tax-free
treatment under the Code, it may be necessary for the owners of the acquired
business to own 80% or more of the voting stock of the surviving entity. In such
event, the shareholders of FSI, would retain less than 20% of the issued and
outstanding shares of the surviving entity, which would be likely to result in
significant dilution in the equity of such shareholders. Pursuant to the merger
agreement with PES, FSI shareholders and their assignees shall retain 6% of the
surviving entity. In addition, a majority of all of FSI's directors and officers
may, as part of the terms of the acquisition transaction, resign as directors
and officers.
Management anticipates that it may be able to effect only one potential
business combination, due primarily to FSI's limited financing. As a result, FSI
will not be able to offset potential losses from one venture against gains from
another.
The analysis of business combinations has been undertaken by the
officers and directors of FSI, none of whom is a professional business analyst.
In analyzing prospective business combinations, management considered such
matters as the available technical, financial, and managerial resources; working
capital and other financial requirements; prospects for the future; nature of
present and expected competition; the quality and experience of management
services which may be available and the depth of that management; the potential
for growth or expansion; the potential for profit; the perceived public
recognition or acceptance or products; name identification; and other relevant
factors.
Management has not actively negotiated or otherwise consented to the
purchase of any portion of their common stock as a condition to or in connection
with the proposed merger with PES.
-7-
<PAGE>
The securities to be issued in the merger with PES shall be issued in
reliance on exemptions from registration under applicable federal and state
securities laws.
The terms of the merger were based upon the respective needs and
desires of FSI and PES and the relative negotiating strength of FSI and such
other management.
FSI has adopted a policy that it will not pay a finder's fee to any
member of management for locating a merger or acquisition candidate. No member
of management intends to or may seek and negotiate for the payment of finder's
fees.
FSI does not intend to raise any additional capital prior to
consummation of a business combination within the next twelve months.
-8-
<PAGE>
FIRST SUNRISE, INC.
( A development stage company)
INDEX TO FINANCIAL STATEMENTS
Page
REPORT OF INDEPENDENT AUDITORS F-2
FINANCIAL STATEMENTS
Balance Sheets F-3
Statements of Operations F-4
Statement of Changes
in Stockholder=s Equity F-5
Statements of Cash Flows F-6
NOTES TO FINANCIAL STATEMENTS F-7 Through F-9
-9-
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Stockholders of
First Sunrise, Inc.
We have audited the accompanying balance sheet of First Sunrise, Inc. ("FSI"), a
development stage company, as of December 31, 1998, and the related statements
of operations, changes in stockholder's equity, and cash flow for the year then
ended. These financial statements are the responsibility of FSI's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted standards. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing he accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FSI as of December 31, 1998,
and the results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
/s/ AHEARN, JASCO + Company, P.A.
----------------------------------
AHEARN, JASCO + COMPANY, P.A.
Certified Public Accountants
Pompano Beach, Florida
August 25, 1999
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<PAGE>
FIRST SUNRISE, INC.
(A development stage company)
BALANCE SHEET
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
12/31/98
--------
ASSETS
------
CURRENT ASSET-Cash and
<S> <C>
cash equivalents $ 5.668
RESTRICTED CASH 50,000
TOTAL 55,668
========
LIABILITIES AND STOCKHOLDER' EQUITY
-----------------------------------
ACCOUNTS PAYABLE $ 7,250
--------
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value;
20,000,000 shares authorized;
700,000 issued and outstanding
at December 31, 1998 700
Additional paid-in-capital 54,300
Deficit accumulated during
the development stage (6,582)
STOCKHOLDERS' EQUITY, NET 48,418
TOTAL $ 55,668
========
</TABLE>
See notes to financial statements
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<PAGE>
FIRST SUNRISE, INC.
(A development stage company)
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
12/31/98
--------
<S> <C>
REVENUE $ --
GENERAL AND ADMINISTRATIVE
EXPENSES 4,832
LOSS BEFORE INCOME
TAX PROVISION --
NET LOSS (4,832)
=========
PER SHARE AMOUNTS (Basic and
diluted):
Net loss per common share
outstanding $ (0.0081)
=========
COMMON SHARES OUTSTANDING AT
DECEMBER 31, 1998
600,000
=========
</TABLE>
See notes to financial statements
-12-
<PAGE>
FIRST SUNRISE, INC.
(A development stage company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional during the
Common paid-in Development
Stock Capital Stage Total
----- ------- ----- -----
STOCKHOLDERS' EQUITY,
<S> <C> <C> <C> <C>
December 31, 1997 $ 600 $ 26,400 $ (1,750) $ 25,250
Sale of 100,000
share of stock, net
of deferred offering
costs of $22,000 100 27,900 -- 28,000
Net loss for the year
ended December 31, 1998 -- -- (4,832) (4,832)
-------- -------- -------- --------
STOCKHOLDERS' EQUITY,
December 31, 1998 700 54,300 (6,582) 48,418
</TABLE>
See notes to financial statements
-13-
<PAGE>
FIRST SUNRISE, INC.
(A development stage company)
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
12/31/98
--------
CASH FLOWS FROM OPERATING
ACTIVITIES
<S> <C>
Net loss $ (4,832)
Item not affecting cash flow
from operations:
Accounts payable 3,000
NET CASH USED IN OPERATING
ACTIVITIES (1,832)
CASH FLOWS FROM INVESTING ACTIVITY:
Increase in restricted cash (50,000)
CASH FLOWS FROM FINANCING ACTIVITY:
Sales of common stock 50,000
NET DECREASE IN CASH AND
CASH EQUIVALENTS (1,832)
CASH AND CASH EQUIVALENTS,
beginning of period 7,500
CASH AND CASH EQUIVALENTS,
end of period $ 5,668
========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid for interest $ --
========
Cash paid for income taxes $ --
========
</TABLE>
See notes to financial statements
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<PAGE>
FIRST SUNRISE, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
NOTE 1-ORGANIZATION AND BASIS OF PRESENTATION
- ---------------------------------------------
First Sunrise, Inc. ("FSI"), a development stage company,
was organized on April 28, 1997 as a "blank check" company, under Rule 419 of
the Securities Act of 1933, which plans to look for a suitable business to merge
with or acquire. Operations since incorporation have consisted primarily of
obtaining the first capital contribution by the insiders, coordinating
activities regarding the SEC registration of the company, and selling stock
pursuant to Rule 419.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual result could differ from those estimates.
NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- -------------------------------------------------
DEFERRED OFFERING COSTS
-----------------------
Deferred offering costs, which were incurred in
anticipation of FSI completing a Rule 419 registration statement, were deferred
until the registration was completed in December 1998.
INCOME TAXES
------------
FSI accounts for income taxes in accordance with the Statement
of Financial Accounting Standards No. 109. "Accounting for Income Taxes," which
requires the recognition of deferred tax liabilities and assets at currently
enacted tax rates for the expected future tax consequences of events that have
been included in the financial statements or tax returns. A valuation allowance
is recognized to reduce the net deferred tax asset to an amount that is more
likely than not to be realized. The tax provision shown on the accompanying
statement of operations is zero since the deferred tax asset generated from the
net operating loss is offset in its entirety by a valuation allowance.
-15-
<PAGE>
FIRST SUNRISE, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
-------------------------
Cash and cash equivalents, if any, include all highly liquid
debt instruments with an original maturity of three months or less at the date
of purchase.
FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
Cash, accounts payable and other current liabilities
are recorded in the financial statements at cost, which approximates fair market
value because of the short-term maturity of those instruments.
NOTE 3-STOCKHOLDER'S EQUITY
- ---------------------------
FSI was duly organized under the laws of the State of Delaware. The
Company has authorized 20,000,000 shares of common stock at $.001 par value.
Through December 31, 1997, FSI had raised $27,000 through a subscription
agreement.
During the period which ended in December 1998, FSI completed its
public offering of common stock. FSI sold 100,000 shares at $0.50 per share,
raising $50,000 of funds which are restricted under Rule 419 (see Note 4).
NOTE 4-RULE 419 REQUIREMENTS
- ----------------------------
Rule 419 requires that offering proceeds after deduction for
underwriting commissions, underwriting expenses and deal allowances issued be
deposited into escrow or trust account (the "Deposited Funds" and provisions
specified by the Rule. Under Rule 419, the Deposited Funds and deposited
securities will be released to the company and to the investors, respectively,
only after the company has met the following three basic conditions. First, FSI
must execute an agreement(s) for an acquisition(s) meeting certain prescribed
criteria. Second, FSI must file a post-effective amendment to the registration
statement which includes the terms of a reconfirmation offer that must contain
conditions prescribed by the rules. The post-effective amendment must also
contain information regarding the acquisition candidate)s) and its business(es),
including audited financial statements. The agreement(s) must include, as a
condition precedent to their consummation, a requirement that the number of
investors representing 80% of the maximum proceeds must elect to reconfirm their
investments. Third, FSI must conduct the reconfirmation offer and satisfy all of
the prescribed conditions, including the condition that investors representing
80% of the Deposited Funds must elect to remain investors. The post-effective
amendment must also include the terms of the reconfirmation offer mandated by
Rule 419. The reconfirmation offer must include certain prescribed conditions
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<PAGE>
FIRST SUNRISE, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
which must be satisfied before the Deposited Funds and Deposited Securities can
be released from escrow. After FSI submits a signed representation to the escrow
agent that the requirements of Rule 419 have been met and after the
acquisition(s) is consummated, the escrow agent can release the Deposited Funds
and Deposited Securities. Investors who do not confirm their investments will
receive the return of a pro-rata portion thereof; and in the event investors
representing less than 80% of the Deposited Funds reconfirm their investments,
the Deposited Funds will be returned to the investors on a pro-rata basis.
NOTES 5-LOSS PER COMMON SHARE
- -----------------------------
Net loss per common share outstanding, as shown on the
statement of operations, is based on the number of common shares outstanding at
each balance she date. Weight average shares outstanding was not computed since
it would not be meaningful in the circumstances, as all shares issued during the
periods were for initial capital or were issued pursuant to Rule 419. Therefore,
the total shares outstanding at the end of each period was deemed to be the most
relevant number of shares to use for purposes of this disclosure.
For future periods, FSI will utilize the treasury stock method for
computing earnings per share, and will compute a weighted average number of
shares outstanding once additional shares of stock are issued to new
shareholders. Under the treasury stock method, the dilutive effect of
outstanding stock options and other convertible securities for determining
primary earnings per share of outstanding stock options and convertible
securities for determining fully diluted earning per share is computed using the
market price as of the end of the fiscal period, if greater than the average
market price.
NOTE 6-RELATED PARTY TRANSACTIONS
- ---------------------------------
TRANSACTIONS WITH SHAREHOLDERS
------------------------------
During 1998, FSI advanced $1,832 for legal fees to the law
firm of Schonfeld & Weinstein, L.L.P. who is also a shareholder of FSI.
<PAGE>
FIRST SUNRISE, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
OFFICE FACILITIES
-----------------
A shareholder of FSI provides office facilities to FSI at no charge.
NOTE 7-MERGER AGREEMENT WITH PLATINUM EXECUTIVE SEARCH
- ------------------------------------------------------
On July 21, 1999, the First Sunrise, Inc. and Platinum
Executive Search, Inc, (PES) entered into a merger agreement, pursuant to which
PES will be merged into FSI,, with FSI as the surviving entity (reverse merger
for accounting purposes). Consummation of the merger is conditioned upon, among
other things, reconfirmation by holders of at least 80% of the shares owned by
the Rule 419 investors. Upon consummation of the merger, FSI shall institute a 1
for .3634383 reverse stock split of its restricted common stock and a 1 for
1.96648 forward stock split of shares issued in its initial public offering and
currently held in escrow, after which 5,555,475 shares of common stock and
740,000 shares of convertible preferred stock shall be issued to former PES
shareholders in the same proportion said shareholders held shares of common and
convertible preferred stock of PES, and 325,000 options to acquire 325,000
shares of common stock shall be issued to former option holders of PES in the
same proportion said option holders held options to acquire PES stock. Each
shareholder who hold shares of FSI's common stock registered pursuant to a
registration statement declared effective by the Securities and Exchange
Commission on June 8, 1998 prior to the merger and who accepts the
reconfirmation offer shall, after consummation of the merger and subsequent
stock split, hold 1.96648 shares for every 1 share held prior to the merger and
subsequent stock split. The merger is intended to be consummated in such a
manner as to be tax-free to all parties involved under Internal Revenue Code
Section 368(a)(1)(A). Each Rule 419 investor who rejects the reconfirmation
offer will be paid his or her pro rata share of the amount in the escrow account
of approximately $.45 per share. Consummation of the merger is not subject to
any governmental approval.
As a result of the stock splits, the 100,000 shares currently held in
escrow shall become 196,648 share of FSI's registered common stock and the
600,000 shares of restricted common stock shall become 218,063 shares.
-17-
<PAGE>
The result of the merger, assuming that 80% of FSI's Rule 419
stockholders reconfirm their investments, is that former PES shareholders shall
own 94% of the surviving entity while FSI's current shareholders and their
designees shall own 6% of the surviving entity.
ITEM 8.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The information included in FSI's report on Form 8-K filed August 12, 1999 are
included herein by reference.
PART III
Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The officers and directors of FSI, and further information concerning
them are as follows:
Name(1) Age Position
------- --- --------
Eng Chye Low (1) 61 President, Director
200 East 89th Street
New York, New York 10128
Steven Wainick (1) 41 Secretary, Director
64 Tamarack Street
Islip, New York 11751
Rene Kunz 38 Director
Hochwachtrsrasse 31
8400 Winterthur
Switzerland
- --------------------
(1) May be deemed "Promoters" of the FSI, as that term is defined under the
Securities Act of 1933.
BIOGRAPHY
Eng Chye Low, President and a director of FSI, has been president of Seacom,
Inc., a New York based real estate management company, since 1980. Mr. Low is a
graduate of the University of Malaya. He has been president and a director of
the Company since May 1997. Mr. Low is the former president of Jackson Holding
Corp., a blank check company which merged with China energy Resources
Corporation in June 1996. (See "Other Blank Check Companies.")
-18-
<PAGE>
Steven Wainick, Vice President, Secretary and a director of FSI, was Vice-
President of Metro Tag and Label company, a manufacturer of tags and labels,
from 1978 to 1994. Since 1994, Mr. Wainick has been President of Metro Tag and
Label Company. He attended Nassau Community College and University of Miami. He
has been secretary and a director of the Company since May 1997. Mr. Wainick is
the former vice president of Mandi of Essex, Ltd., a blank check company which
merged with CityScape Financial Corp. On April 27, 1994. (See "Other Blank Check
Offering.")
Rene Kunz, director of FSI, has been assistant vice president of Winterthur
Insurance, Located in Winterthur, Switzerland, since 1991. He has been a
director of the Company since May 1997.
Item 10. EXECUTIVE COMPENSATION
No officer or director of FSI has received any cash remuneration since
FSI's inception, and none received or accrued any remuneration from FSI at the
completion of the initial public offering. No remuneration of any nature has
been paid for or on account of services rendered by a director in such capacity.
None of the officers and directors intends to devote more than twenty hours per
month to FSI's affairs.
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Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of FSI's Common Stock as of December 31, 1998 by (i) each
person who is known by FSI to own beneficially more than 5% of FSI's outstanding
Common Stock; (ii) each of FSI's officers and directors; and (iii) all directors
and officers of FSI as a group. It also show the amount and nature of beneficial
ownership of FSI after the proposed negotiation with PES.
Amount and Nature of Amount and Nature of
Beneficial Ownership Beneficial Ownership
Prior to the Merger(1) After the Proposed
Merger with PES (2)
Number Percent Number Percent
Saul Gelernter (5) 100,000 14.29% 36,343.83 .523%
76-23 168th Street
Flushing, NY 11366
Steven Wainick (1) (4) (5) 100,000 14.29% 36,343.83 .523%
64 Tamarack Street
Islip, NY 11571
Sanford Lurie (5) 100,000 14.29% 36,343.83 .523%
201 West 89th Street
New York, NY 10024
Rene Kunz (1) (4) (5) 100,000 14.29% 36,343.83 .523%
Hochwachtrsrasse 31
8400 Winterthur
Switzerland
Gary L. Heller (5) 50,000 7.14% 18,171.915 .263%
7641 66TH Street
Penellas Park, FL 33781
Victor Weinstein,
L.L.P. 50,000 (3) (5) 50,000 7.14% 18,171.915 .263%
280 Carol Close
Tarrytown, NY 10591
Schonfeld &Weinstein,
L.L.P. 50,000 (3) (5) 50,000 7.14% 18,171.915 .263%
63 Wall Street, Ste.1801
New York, NY 10005
Eng Chye Low (1) (4) (5) 50,000 7.14% 18,171.915 .263%
200 East 89th Street
New York, NY 10128
Total Officers
and Directors
(3 Persons) 250,000 35.71% 90,859.575 1.315%
Total 600,000 85.71% 218,062.98 3.155%
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(1) May be deemed "Promoters" of the Company, as that term is defined under
the Securities Act of 1933.
(2) Mr. Weinstein is the father of Andrea I. Weinstein of Schonfeld &
Weinstein, L.L.P., special counsel to FSI.
(3) Mr. Schonfeld and Ms. Weinstein are the principals of Schonfeld &
Weinstein, L.L.P., special counsel to FSI. Ms. Weinstein's father,
Vic Weinstein, is a shareholder of the FSI.
(4) Mr. Low is President and a director of FSI. Mr. Wainick is Treasurer,
Secretary and a director of FSI. Mr. Kunz is a director of FSI.
(5) Beneficial owner has sole voting power and sole investment power as to
shares owned in FSI.
(1) Based on 6,911,853 shares to be outstanding after the merger; after the
stock splits and conversion of preferred stock.
PES
The following table sets forth certain information regarding the beneficial
ownership of the PES's Common Stock as of the date of this Prospectus by (i)
each person known to PES to beneficially own 5% or more
of PES's Common Stock, (ii) each director of PES and (iii) all directors and
executive officers of PES as a group. All information with respect to beneficial
ownership has been furnished to PES by the respective director, executive
officer or 5% shareholder, as the case may be.
Amount and Nature of Amount and Nature of
Beneficial Ownership Beneficial Ownership
Prior to the Merger After the Proposed
Merger with FSI 1(2)
Number Percent Number Percent
Name/Address
Beneficial
Owner
James J. Strupp
63 Ashland Road
Summit, NJ 07901 2,170,000 39.1% 2,170,000 31.40%
<PAGE>
John D. Mazzuto
54 First Neck Lane
Southampton, NY 11968 2,170,000 39.1% 2,170,000 31.40%
Robert Casper 25,000(3) .45% 25,000(3) .36%
407 Pine Street
Red Bank, NJ 07701
Total Officers
and Directors(3 Persons) 4,365,000 78.57% 4,365,000 63.15%
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(1) Based on 6,911,853 shares to be outstanding after the merger, after the
stock splits and conversion of preferred stock.
(2) The 5,555,475 post-stock split shares of FSI and 740,000 shares of
preferred stock (each share of preferred stock convertible into .83333 shares of
common stock)to be issued upon consummation of the Merger shall be distributed
to current PES shareholders on a pro-rata basis.
(3)Includes 15,000 options to purchase 15,000 shares of common stock.
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no relationships or transactions required to be disclosed
under this Item.
Item 13. EXHIBITS AND REPORTS ON FORM 8-K
(A) The following exhibits filed with FSI's post-Effective Amendment No. 1 on
Form SB-2 are incorporated by reference:
2.0 Merger Agreement
24.0 Accountants' Consent to Use Opinion.
(B) Report on Form 8-K dated April 12, 1999 (reporting the resignation of FSI's
auditor and the appointment of new auditors) is incorporated herein by
reference.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRST SUNRISE, INC.
By /s/ Eng Chye Low
----------------
ENG CHYE LOW, President
Date October 20, 1999
In accordance with the Securities Exchange Act of 1934 this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
By /s/ Eng Chye Low
----------------
ENG CHYE LOW, President, Director
Date October 20, 1999
* * *
By /s/ Steven Wainick
------------------
STEVEN WAINICK, Secretary, Director
Date October 20, 1999
* * *
By
RENE KUNZ, DIRECTOR
Date
* * *
Supplemental Information to be Furnished with Reports Filed Pursuant to
Section 15(d) of the Act by Registrants Which Have Not Registered Securities
Pursuant to Section 12 of the Act.
No annual report or proxy material has been sent to security holders.
