U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB/A #1
General Form for Registration of Securities
of Small Business Issuers
Under Section 12(b) or (g) of
the Securities Exchange Act of 1934
CHATSWORTH ACQUISITION CORPORATION
-----------------------------
(Name of Small Business Issuer)
Delaware 52-2068322
- -------------------------------- -----------------------------------
(State or Other Jurisdiction of I.R.S. Employer Identification
Incorporation or Organization)Number
1504 R Street, N.W., Washington, D.C. 20009
------------------------------------------------------------
(Address of Principal Executive Offices including Zip Code)
202/387-5400
_____________
(Issuer's Telephone Number)
Securities to be Registered Under Section 12(b) of the Act: None
Securities to be Registered Under Section 12(g) of the Act: Common Stock,
$.0001 Par Value
(Title of Class)
<PAGE>
PART I
ITEM 1. BUSINESS.
Chatsworth Acquisition Corporation (the "Company"), was incorporated on
December 3, 1997 under the laws of the State of Delaware to engage in any
lawful corporate undertaking, including, but not limited to, selected mergers
and acquisitions. The Company has been in the developmental stage since
inception and has no operations to date. Other than issuing shares to its
original shareholders, the Company has not commenced any operational
activities.
The Company will attempt to locate and negotiate with a business entity
for the merger of that target company into the Company. In certain instances,
a target company may wish to become a subsidiary of the Company or may wish to
contribute assets to the Company rather than merge. No assurances can be
given that the Company will be successful in locating or negotiating with any
target company.
The Company has been formed to provide a method for a foreign or domestic
private company to become a reporting ("public") company whose securities are
qualified for trading in the United States secondary market.
PERCEIVED BENEFITS
There are certain perceived benefits to being a reporting company with a
class of publicly-traded securities. These are commonly thought to include
the following:
* the ability to use registered securities to make acquisition of
assets or businesses;
* increased visibility;
* the facilitation of borrowing from financial institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in subsequently raising capital;
* compensation of key employees through stock options;
* enhanced corporate image;
* a presence in the United States capital market.
POTENTIAL TARGET COMPANIES
A business entity, if any, which may be interested in a business
combination with the Company may include the following:
* A company for whom a primary purpose of becoming public is the use
of its securities for the acquisition of assets or businesses;
* A company which is unable to find an underwriter of its securities
or is unable to find an underwriter of securities on terms acceptable to it;
* A company which wishes to become public with less dilution of its
common stock than would occur upon an underwriting;
* A company which believes that it will be able obtain investment
capital on more favorable terms after it has become public;
* A foreign company which may wish an initial entry into the United
States securities market;
* A special situation company, such as a company seeking a public
market to satisfy redemption requirements under a qualified Employee Stock
Option Plan;
* A company seeking one or more of the other perceived benefits of
becoming a public company.
A business combination with a target company will normally involve the
transfer to the target company of the majority of the issued and outstanding
common stock of the Company, and the substitution by the target company of its
own management and board of directors.
No assurances can be given that the Company will be able to enter into a
business combination, as to the terms of a business combination, or as to the
nature of the target company.
The proposed business activities described herein classify the Company as
a blank check company. See "GLOSSARY". The Securities and Exchange
Commission and many states have enacted statutes, rules and regulations
limiting the sale of securities of blank check companies. Management does
not intend to undertake any efforts to cause a market to develop in the
Company's securities until such time as the Company has successfully
implemented its business plan described herein. Accordingly, the
shareholders of the Company have executed and delivered a "lock-up" letter
agreement affirming that such shareholders will not sell or otherwise transfer
their shares of the Company's common stock except in connection with or
following completion of a merger or acquisition and the Company is no longer
classified as a blank check company. The shareholders have deposited their
stock certificates with the Company's management, who will not release the
certificates except in connection with or following the completion of a merger
or acquisition.
The Company is voluntarily filing this Registration Statement with the
Securities and Exchange Commission and is under no obligation to do so under
the Securities Exchange Act of 1934.
RISK FACTORS
The Company's business is subject to numerous risk factors, including the
following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company has had
no operating history nor any revenues or earnings from operations. The
Company has no significant assets or financial resources. The Company will,
in all likelihood, sustain operating expenses without corresponding revenues,
at least until the consummation of a business combination. This may result in
the Company incurring a net operating loss which will increase continuously
until the Company can consummate a business combination with a target company.
There is no assurance that the Company can identify such a target company and
consummate such a business combination.
SPECULATIVE NATURE OF THE COMPANY'S PROPOSED OPERATIONS. The success of
the Company's proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the identified target
company. While management intends to seek business combinations with entities
having established operating histories, there can be no assurance that the
Company will be successful in locating candidates meeting such criteria. In
the event the Company completes a business combination, of which there can be
no assurance, the success of the Company's operations may be dependent upon
management of the target company and numerous other factors beyond the
Company's control.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND COMBINATIONS.
The Company is and will continue to be an insignificant participant in the
business of seeking mergers with and acquisitions of business entities. A
large number of established and well-financed entities, including venture
capital firms, are active in mergers and acquisitions of companies which may
be merger or acquisition target candidates for the Company. Nearly all such
entities have significantly greater financial resources, technical expertise
and managerial capabilities than the Company and, consequently, the Company
will be at a competitive disadvantage in identifying possible business
opportunities and successfully completing a business combination. Moreover,
the Company will also compete with numerous other small public companies in
seeking merger or acquisition candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION--NO STANDARDS
FOR BUSINESS COMBINATION. The Company has no current arrangement, agreement
or understanding with respect to engaging in a merger with or acquisition of a
specific business entity. There can be no assurance that the Company will be
successful in identifying and evaluating suitable business opportunities or in
concluding a business combination. Management has not identified any
particular industry or specific business within an industry for evaluation by
the Company. There is no assurance that the Company will be able to negotiate
a business combination on terms favorable to the Company. The Company has not
established a specific length of operating history or a specified level of
earnings, assets, net worth or other criteria which it will require a target
company opportunity to have achieved, or without which the Company would not
consider a business combination with such business entity. Accordingly, the
Company may enter into a business combination with a business entity having no
significant operating history, losses, limited or no potential for earnings,
limited assets, negative net worth or other negative characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While seeking a
business combination, management anticipates devoting up to ten hours per
month to the business of the Company. The Company's sole officer has not
entered into a written employment agreement with the Company and he is not
expected to do so in the foreseeable future. The Company has not obtained key
man life insurance on its officer and director. Notwithstanding the combined
limited experience and time commitment of management, loss of the services of
this individual would adversely affect development of the Company's business
and its likelihood of continuing operations.
CONFLICTS OF INTEREST--GENERAL. The Company's officer and director
participates in other business ventures which may compete directly with the
Company. Additional conflicts of interest and non-arms length transactions
may also arise in the future. Management has adopted a policy that the
Company will not seek a merger with, or acquisition of, any entity in which
any member of management serves as an officer, director or partner, or in
which they or their family members own or hold any ownership interest. See
"ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS--
Conflicts of Interest."
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION. Section 13 of
the Securities Exchange Act of 1934 (the "Exchange Act") requires companies
subject thereto to provide certain information about significant acquisitions
including certified financial statements for the company acquired covering one
or two years, depending on the relative size of the acquisition. The time and
additional costs that may be incurred by some target companies to prepare such
financial statements may significantly delay or essentially preclude
consummation of an otherwise desirable acquisition by the Company.
Acquisition prospects that do not have or are unable to obtain the required
audited statements may not be appropriate for acquisition so long as the
reporting requirements of the Exchange Act are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company has
neither conducted, nor have others made available to it, market research
indicating that demand exists for the transactions contemplated by the
Company. Even in the event demand exists for a merger or acquisition of the
type contemplated by the Company, there is no assurance the Company will be
successful in completing any such business combination.
LACK OF DIVERSIFICATION. The Company's proposed operations, even if
successful, will in all likelihood result in the Company engaging in a
business combination with only one business opportunity. Consequently, the
Company's activities will be limited to those engaged in by the business
opportunity which the Company merges with or acquires. The Company's
inability to diversify its activities into a number of areas may subject the
Company to economic fluctuations within a particular business or industry and
therefore increase the risks associated with the Company's operations.
REGULATION UNDER INVESTMENT COMPANY ACT. Although the Company will be
subject to regulation under the Exchange Act, management believes the Company
will not be subject to regulation under the Investment Company Act of 1940,
insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business
combinations which result in the Company holding passive investment interests
in a number of entities, the Company could be subject to regulation under the
Investment Company Act of 1940. In such event, the Company would be required
to register as an investment company and could be expected to incur
significant registration and compliance costs. The Company has obtained no
formal determination from the Securities and Exchange Commission as to the
status of the Company under the Investment Company Act of 1940 and,
consequently, any violation of such Act could subject the Company to material
adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination
involving the issuance of the Company's common stock will, in all likelihood,
result in shareholders of a target company obtaining a controlling interest in
the Company. Any such business combination may require shareholders of the
Company to sell or transfer all or a portion of the Company's common stock
held by them. The resulting change in control of the Company will likely
result in removal of the present officer and director of the Company and a
corresponding reduction in or elimination of his participation in the future
affairs of the Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS COMBINATION.
The Company's primary plan of operation is based upon a business combination
with a business entity which, in all likelihood, will result in the Company
issuing securities to shareholders of such business entity. The issuance of
previously authorized and unissued common stock of the Company would result in
reduction in percentage of shares owned by the present shareholders of the
Company and would most likely result in a change in control or management of
the Company.
ASPECTS OF BLANK CHECK OFFERING. The Company may enter into a business
combination with a business entity that desires to establish a public trading
market for its shares. A target company may attempt to avoid what it deems to
be adverse consequences of undertaking its own public offering by seeking a
business combination with the Company. Such consequences may include, but are
not limited to, time delays of the registration process, significant expenses
to be incurred in such an offering, loss of voting control to public
shareholders or the inability to obtain an underwriter or to obtain an
underwriter on terms satisfactory to the Company.
TAXATION. Federal and state tax consequences will, in all likelihood, be
major considerations in any business combination the Company may undertake.
Currently, such transactions may be structured so as to result in tax-free
treatment to both companies, pursuant to various federal and state tax
provisions. The Company intends to structure any business combination so as
to minimize the federal and state tax consequences to both the Company and the
target company; however, there can be no assurance that such business
combination will meet the statutory requirements of a tax-free reorganization
or that the parties will obtain the intended tax-free treatment upon a
transfer of stock or assets. A non-qualifying reorganization could result in
the imposition of both federal and state taxes which may have an adverse
effect on both parties to the transaction.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY BUSINESS
OPPORTUNITIES. Management of the Company will request that any potential
business opportunity provide audited financial statements. One or more
attractive business opportunities may choose to forego the possibility of a
business combination with the Company rather than incur the expenses
associated with preparing audited financial statements. In such case, the
Company may choose to obtain certain assurances as to the target company's
assets, liabilities, revenues and expenses prior to consummating a business
combination, with further assurances that an audited financial statement would
be provided after closing of such a transaction. Closing documents relative
thereto may include representations that the audited financial statements will
not materially differ from the representations included in such closing
documents.
ITEM 2. PLAN OF OPERATION
The Company intends to merge with or acquire a business entity in
exchange for the Company's securities. The Company has no particular
acquisitions in mind and has not entered into any negotiations regarding such
an acquisition. Neither the Company's officer and director nor any affiliates
has engaged in any negotiations with any representative of any company
regarding the possibility of an acquisition or merger between the Company and
such other company.
Pierce Mill Associates, the principal shareholder of the Company,
anticipates seeking out a target company through solicitation. Such
solicitation may include newspaper or magazine advertisements, mailings and
other distributions to law firms, accounting firms, investment bankers,
financial advisors and similar persons, the use of one or more World Wide Web
sites and similar methods. No estimate can be made as to the number of persons
who will be contacted or solicited. Any such solicitation will be at the
expense of Pierce Mill Associates. Pierce Mill Associates pays referral fees
to consultants and others who refer target businesses for mergers into blank
check companies in which Pierce Mill Associates has an interest. Payments are
made if a merger occurs, and may consist of cash or a portion of the stock in
the Company retained by Pierce Mill, or both.
The Company has no full time employees. The Company's president has
agreed to allocate a portion of his time to the activities of the Company,
without compensation. The president anticipates that the business plan of the
Company can be implemented by his devoting approximately 10 hours per month to
the business affairs of the Company and, consequently, conflicts of interest
may arise with respect to the limited time commitment by such officer.
Management is currently involved with other blank check companies, and is
involved in creating additional blank check companies similar to this one. A
conflict may arise in the event that another blank check company with which
management is affiliated is formed and actively seeks a target company.
Management anticipates that target companies will be located for the Company
and other blank check companies in chronological order of the date of
formation of such blank check companies. However, other blank check companies
that may be formed may differ from the Company in certain items such as place
of incorporation, number of shares and shareholders, working capital, types of
authorized securities, or other items. It may be that a target company may be
more suitable for or may prefer a certain blank check company formed after the
Company. In such case, a business combination might be negotiated on behalf
of the more suitable or preferred blank check company regardless of date of
formation. See "ITEM 5, DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS--Current Blank Check Companies"
The Certificate of Incorporation of the Company provides that the Company
may indemnify officers and/or directors of the Company for liabilities, which
can include liabilities arising under the securities laws. Therefore, assets
of the Company could be used or attached to satisfy any liabilities subject to
such indemnification.
GENERAL BUSINESS PLAN
The Company's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in a business entity presented to it by persons
or firms who or which desire to seek the perceived advantages of a corporation
which has a class of securities registered under the Exchange Act. The
Company will not restrict its search to any specific business, industry, or
geographical location and the Company may participate in a business venture of
virtually any kind or nature. This discussion of the proposed business is not
meant to be restrictive of the Company's virtually unlimited discretion to
search for and enter into potential business opportunities. Management
anticipates that it will be able to participate in only one potential business
venture because the Company has nominal assets and limited financial
resources. See ITEM F/S, "FINANCIAL STATEMENTS." This lack of
diversification should be considered a substantial risk to the shareholders of
the Company because it will not permit the Company to offset potential losses
from one venture against gains from another.
The Company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
The Company may acquire assets and establish wholly-owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Management believes
(but has not conducted any research to confirm) that there are business
entities seeking the perceived benefits of a publicly registered corporation.
Such perceived benefits may include facilitating or improving the terms on
which additional equity financing may be sought, providing liquidity for
incentive stock options or similar benefits to key employees, increasing the
opportunity to use securities for acquisitions, providing liquidity for
shareholders and other factors. Business opportunities may be available in
many different industries and at various stages of development, all of which
will make the task of comparative investigation and analysis of such business
opportunities difficult and complex.
The Company has, and will continue to have, no capital with which to
provide the owners of business opportunities with any cash or other assets.
However, management believes the Company will be able to offer owners of
acquisition candidates the opportunity to acquire a controlling ownership
interest in a publicly registered company without incurring the cost and time
required to conduct an initial public offering. Management has not conducted
market research and is not aware of statistical data to support the perceived
benefits of a merger or acquisition transaction for the owners of a business
opportunity.
The analysis of new business opportunities will be undertaken by, or
under the supervision of, the officer and director of the Company, who is not
a professional business analyst. In analyzing prospective business
opportunities, management will consider such matters as the available
technical, financial and managerial resources; working capital and other
financial requirements; history of operations, if any; prospects for the
future; nature of present and expected competition; the quality and experience
of management services which may be available and the depth of that
management; the potential for further research, development, or exploration;
specific risk factors not now foreseeable but which then may be anticipated to
impact the proposed activities of the Company; the potential for growth or
expansion; the potential for profit; the perceived public recognition or
acceptance of products, services, or trades; name identification; and other
relevant factors. To the extent possible, management intends to utilize
written reports and personal investigation to evaluate the above factors. The
Exchange Act requires that any merger or acquisition candidate comply with
certain reporting requirements, which include providing audited financial
statements to be included in the reporting filings made under the Exchange
Act. The Company will not acquire or merge with any company for which audited
financial statements cannot be obtained at or within a reasonable period of
time after closing of the proposed transaction.
The Company will not restrict its search for any specific kind of firms,
but may acquire a venture which is in its preliminary or development stage,
which is already in operation, or in essentially any stage of its business
life. It is impossible to predict at this time the status of any business in
which the Company may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded, or may seek
other perceived advantages which the Company may offer.
Management of the Company, which in all likelihood will not be
experienced in matters relating to the business of a target company, will rely
upon its own efforts in accomplishing the business purposes of the Company.
Outside consultants or advisors may be utilized by the Company to assist in
the search for qualified target companies. If the Company does retain such an
outside consultant or advisor, any cash fee earned by such person will need to
be assumed by the target company, as the Company has limited cash assets with
which to pay such obligation.
If management did determine to utilize the services of a consultant in
the selection of a target company, such consultant would likely be used to
supplement the business experience of Management, such as accountants,
technical experts, appraisers, attorneys or others. Management would select a
consultant based on the type of target company sought, the form and amount of
compensation required by the consultant, the years such consultant had been in
business and rate of success in matching target companies with acquiring
companies. If a consultant were used, management would expect that any such
consultant would provide the Company with a selection of target companies,
would provide due diligence assistance for study of the target company, would
assist in negotiating the terms of a business combination, and would serve to
facilitate the negotiation process. More than one consultant could be used in
locating a target company.
The Company has no agreements or understandings currently with any
consultant to provide services and does not intend to have any such
relationship prior to acquisition of a target company. If requested by a
target company, management may recommend one or more underwriters, financial
advisors, accountants, public relations firms or other consultants.
A potential target company may have an agreement with a consultant or
advisor providing that services of the consultant or advisor be continued
after any business combination. Additionally, a target company may be
presented to the Company only on the condition that the services of a
consultant or advisor be continued after a merger or acquisition. Such
preexisting agreements of target companies for the continuation of the
services of attorneys, accountants, advisors or consultants could be a factor
in the Company's selection of a target company.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may
also acquire stock or assets of an existing business. On the consummation of
a transaction, it is probable that the present management and shareholders of
the Company will no longer be in control of the Company. In addition, it is
likely that the Company's officer and director will, as part of the terms of
the acquisition transaction, resign and be replaced by one or more new
officers and directors.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all
or a part of such securities immediately after the transaction is consummated
or at specified times thereafter. If such registration occurs, of which there
can be no assurance, it will be undertaken by the surviving entity after the
Company has entered into an agreement for a business combination or has
consummated a business combination and the Company is no longer considered a
blank check company. Until such time as this occurs, the Company will not
attempt to register any additional securities. The issuance of substantial
additional securities and their potential sale into any trading market which
may develop in the Company's securities may have a depressive effect on the
market value of the Company's securities in the future if such a market
develops, of which there is no assurance.
While the actual terms of a transaction to which the Company may be a
party cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event
and thereby structure the acquisition in a "tax-free" reorganization under
Sections 351 or 368 of the Internal Revenue Code of 1986, as amended (the
"Code").
With respect to any merger or acquisition negotiations with a target
company, management expects to focus on the percentage of the Company which
target company shareholders would acquire in exchange for their shareholdings
in the target company. Depending upon, among other things, the target
company's assets and liabilities, the Company's shareholders will in all
likelihood hold a substantially lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage of ownership may
be subject to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the
percentage of shares held by the Company's shareholders at such time.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate agreements. Although the terms of
such agreements cannot be predicted, generally such agreements will require
certain representations and warranties of the parties thereto, will specify
certain events of default, will detail the terms of closing and the conditions
which must be satisfied by the parties prior to and after such closing, will
outline the manner of bearing costs, including costs associated with the
Company's attorneys and accountants, and will include miscellaneous other
terms.
The Company will not acquire or merge with any entity which cannot
provide audited financial statements at or within a reasonable period of time
after closing of the proposed transaction. The Company is subject to all of
the reporting requirements included in the Exchange Act. Included in these
requirements is the duty of the Company to file audited financial statements
as part of its Form 8-K to be filed with the Securities and Exchange
Commission upon consummation of a merger or acquisition, as well as the
Company's audited financial statements included in its annual report on Form
10-K (or 10-KSB, as applicable). If such audited financial statements are not
available at closing, or within time parameters necessary to insure the
Company's compliance with the requirements of the Exchange Act, or if the
audited financial statements provided do not conform to the representations
made by the target company, the closing documents may provide that the
proposed transaction will be voidable at the discretion of the present
management of the Company.
Management has agreed that it will advance to the Company any additional
funds which the Company needs for operating capital and for costs in
connection with searching for or completing an acquisition or merger. Such
advances will be made without expectation of repayment unless the owners of
the business which the Company acquires or merges with agree to repay all or a
portion of such advances. There is no minimum or maximum amount management
will advance to the Company. The Company will not borrow any funds to make
any payments to the Company's promoters, management or their affiliates or
associates.
The Board of Directors has passed a resolution which contains a policy
that the Company will not seek an acquisition or merger with any entity in
which the Company's officer, director, and shareholders or any affiliate or
associate serves as an officer or director or holds any ownership interest.
COMPETITION
The Company will remain an insignificant participant among the firms
which engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns which have significantly
greater financial and personnel resources and technical expertise than the
Company. In view of the Company's combined extremely limited financial
resources and limited management availability, the Company will continue to be
at a significant competitive disadvantage compared to the Company's
competitors.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no agreements to
acquire any properties. The Company currently uses the offices of Pierce Mill
Associates at no cost to the Company. Pierce Mill Associates has agreed to
continue this arrangement until the Company completes an acquisition or
merger.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of February 6, 1998, each person known
by the Company to be the beneficial owner of five percent or more of the
Company's Common Stock, all directors individually and all directors and
officers of the Company as a group. Except as noted, each person has sole
voting and investment power with respect to the shares shown.
Name and Address Amount of Beneficial Percentage
of Beneficial Owner Ownership of Class
Pierce Mill Associates, Inc.(1)(2) 4,750,000 95%
1504 R Street, N.W.
Washington, D.C. 20009
Cassidy & Associates (2) 250,000 5%
1504 R Street, N.W.
Washington, D.C. 20009
James M. Cassidy (2) 5,000,000 100%
President, Director
1504 R Street, N.W.
Washington, D.C. 20009
All Executive Officers and
Directors as a Group (1 Person) 5,000,000 100%
(1) Pierce Mill Associates, Inc. is an affiliate of Cassidy &
Associates, the law firm which prepared this registration statement and of
which James M. Cassidy is a principal. James Cassidy is the sole shareholder
of Pierce Mill Associates. Pierce Mill Associates provides marketing services
for Cassidy & Associates, particularly in regard to locating private companies
which may wish to go public, and acts as an initial shareholder in certain
companies formed by Cassidy & Associates. Since Pierce Mill Associates has
fewer than 100 shareholders and is not making and does not intend to make a
public offering of its securities, management believes that it is not deemed
to be an investment company by virtue of an exemption provided under the
Investment Company Act of 1940, as amended.
(2) Mr. Cassidy owns 100% of Pierce Mill Associates and is a principal
of Cassidy & Associates, a Washington, D.C. securities law firm, and is
considered the beneficial owner of the shares of common stock of the Company
issued to them.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The Company has one Director and Officer as follows:
Name Age Positions and Offices Held
- ----------------- --- -------------------------------
James M. Cassidy 62 President, Secretary,
Director
There are no agreements or understandings for the officer or director to
resign at the request of another person and the above-named officer and
director is not acting on behalf of nor will act at the direction of any other
person.
Set forth below is the name of the director and officer of the Company,
all positions and offices with the Company held, the period during which he
has served as such, and the business experience during at least the last five
years:
James Michael Cassidy, Esq., J.D., LL.M., received a Bachelor of Science
in Languages and Linguistics from Georgetown University in 1960, a Bachelor of
Laws from The Catholic University School of Law in 1963, and a Master of Laws
in Taxation from The Georgetown University School of Law in 1968. From
1963-1964, Mr. Cassidy was law clerk to the Honorable Inzer B. Wyatt of the
United States District Court for the Southern District of New York. From
1964-1965, Mr. Cassidy was law clerk to the Honorable Wilbur K. Miller of the
United States Court of Appeals for the District of Columbia. From 1969-1975,
Mr. Cassidy was an associate of the law firm of Kieffer & Moroney and a
principal in the law firm of Kieffer & Cassidy, Washington, D.C. From 1975 to
date, Mr. Cassidy has been a principal in the law firm of Cassidy &
Associates, Washington, D.C. and its predecessors, specializing in securities
law and related corporate and federal taxation matters. Mr. Cassidy is a
member of the bar of the District of Columbia and is admitted to practice
before the United States Tax Court and the United States Supreme Court.
PREVIOUS BLANK CHECK COMPANIES
In 1988, management was involved in two blank check offerings. Mr.
Cassidy was vice president, a director and a shareholder of First Agate
Capital Corporation and Consolidated Financial Corporation. In August, 1988,
First Agate Capital Corporation offered 50,000 units at $10.00 for an
aggregate of $500,000 in an underwritten offering of its common stock and
warrants. First Agate Capital is no longer a public company and has had no
activity since 1991. In November, 1988, Consolidated Financial Corporation
offered 50,000 units at $10.00 for an aggregate of $500,000 in an underwritten
offering of its common stock and warrants. Consolidated Financial Corporation
was transferred to new management in 1990. As part of such transaction, Mr.
Cassidy transferred his shares and did not continue as an officer or director.
New management effected the merger of Consolidated Financial Corporation with
A.B.E Industrial Holdings in June, 1991.
CURRENT BLANK CHECK COMPANIES
Mr. Cassidy is the president, sole director and a beneficial shareholder
of Sheffield Acquisitions, Inc., Tunlaw International Corporation, and
Aberdeen Acquisitions Corporation. Until December 30, 1997, Mr. Cassidy was
the sole director and beneficial shareholder of Corcoran Technologies
Corporation. Sheffield Acquisitions, Inc. has filed a registration statement
on Form S-1 under the Securities Act and Tunlaw International Corporation,
Corcoran Technologies Corporation and Aberdeen Acquisitions Corporation filed
registration statements on Forms 10-SB under the Exchange Act. The initial
business purpose of each of these companies was to engage in a merger or
acquisition with an unidentified company or companies and each will be
classified as a blank check company until completion of a business
acquisition.
Mr. Cassidy anticipates being involved with additional blank check
companies filed under the Securities Act or under the Exchange Act.
RECENT TRANSACTIONS BY BLANK CHECK COMPANIES
On December 30, 1997, Prime Management, Inc., a California corporation,
merged with and into Corcoran Technologies Corporation. Prime Management,
Inc. is an operating transportation company with 1997 gross revenues as
reported on its Form 10-KSB of $15,958,229 and which has two wholly-owned
subsidiaries, Mid-Cal Express, a long-haul trucking company hauling shipments
of general commodities, including temperature-sensitive goods, in both
intrastate and interstate commerce and Mid-Cal Logistics, a freight brokerage
company. Pursuant to the merger, Corcoran Technologies Corporation changed
its name to Prime Companies, Inc. Corcoran Technologies Corporation has filed
a Form 8-K with the Securities and Exchange Commission describing the merger
in greater detail.
CONFLICTS OF INTEREST
The Company's officer and director has organized and expects to organize
other companies of a similar nature and with a similar purpose as the Company.
Consequently, there are potential inherent conflicts of interest in acting as
an officer and director of the Company. Insofar as the officer and director
is engaged in other business activities, management anticipates that it will
devote only a minor amount of time to the Company's affairs. The Company does
not have a right of first refusal pertaining to opportunities that come to
management's attention insofar as such opportunities may relate to the
Company's proposed business operations.
A conflict may arise in the event that another blank check company with
which management is affiliated is formed and actively seeks a target company.
It is anticipated that target companies will be located for the Company and
other blank check companies in chronological order of the date of formation of
such blank check companies. However, any blank check companies that may be
formed may differ from the Company in certain items such as place of
incorporation, number of shares and shareholders, working capital, types of
authorized securities, or other items. It may be that a target company may be
more suitable for or may prefer a certain blank check company formed after the
Company. In such case, a business combination might be negotiated on behalf
of the more suitable or preferred blank check company regardless of date of
formation. Mr. Cassidy will be responsible for seeking, evaluating,
negotiating and consummating a business combination with a target company
which may result in terms providing benefits to Mr. Cassidy.
Mr. Cassidy is the principal of Cassidy & Associates, a securities law
firm located in Washington, D.C. As such, demands may be placed on the time
of Mr. Cassidy which will detract from the amount of time he is able to devote
to the Company. Mr. Cassidy intends to devote as much time to the activities
of the Company as required. However, should such a conflict arise, there is
no assurance that Mr. Cassidy would not attend to other matters prior to those
of the Company. Mr. Cassidy projects that initially approximately ten hours
per month of his time may be spent locating a target company which amount of
time would increase when the analysis of, and negotiations and consummation
with, a target company are conducted.
Mr. Cassidy owns 100% of Pierce Mill Associates which, in turn, owns
4,750,000 shares of common stock of the Company and is a principal of Cassidy
& Associates, a securities law firm, which owns 250,000 shares of the
Company's common stock. No other securities, or rights to securities, of the
Company will be issued to management or promoters, or their affiliates or
associates, prior to the completion of a business combination. At the time of
a business combination, management expects that some or all of the 4,750,000
shares of Common Stock owned by Pierce Mill Associates will be purchased by
the target company. The amount of Common Stock sold or continued to be owned
by Pierce Mill Associates cannot be determined at this time.
The terms of business combination may include such terms as Mr. Cassidy
remaining a director or officer of the Company and/or the continuing
securities or other legal work of the Company being handled by the law firm of
which Mr. Cassidy is the principal. The terms of a business combination may
provide for a payment by cash or otherwise to Pierce Mill Associates for the
purchase of all or part of its common stock of the Company by a target
company. Mr. Cassidy would directly benefit from such employment or payment.
Such benefits may influence Mr. Cassidy's choice of a target company.
The Company may agree to pay finder's fees, as appropriate and allowed,
to unaffiliated persons who may bring a target company to the Company where
that reference results in a business combination. The amount of any finder's
will be subject to negotiation, and cannot be estimated at this time. No
finder's fee of any kind will be paid to management or promoters of the
Company or to their associates or affiliates. No loans of any type have, or
will be, made to management or promoters of the Company or to any of their
associates or affiliates.
The Company's officer and director, its promoter and their affiliates or
associates have not had any negotiations with and there are no present
arrangements or understandings with any representatives of the owners of any
business or company regarding the possibility of a business combination with
the Company.
The Company will not enter into a business combination, or acquire any
assets of any kind for its securities, in which management or promoters of the
Company or any affiliates or associates have any interest, direct or indirect.
Management has adopted certain policies involving possible conflicts of
interest, including prohibiting any of the following transactions involving
management, promoters, shareholders or their affiliates or associates:
(i) Any lending by the Company to such persons;
(ii) The issuance of any additional securities to such persons prior
to a business combination;
(iii) The entering into any business combination or acquisition of
assets in which such persons have any interest, direct or
indirect; or
(iv) The payment of any finder's fees to such persons.
These policies have been adopted by the Board of Directors of the
Company, and any changes in these provisions require the approval of the Board
of Directors. Management does not intend to propose any such action and does
not anticipate that any such action will occur.
There are no binding guidelines or procedures for resolving potential
conflicts of interest. Failure by management to resolve conflicts of interest
in favor of the Company could result in liability of management to the
Company. However, any attempt by shareholders to enforce a liability of
management to the Company would most likely be prohibitively expensive and
time consuming.
COMPANY ACT OF 1940
Although the Company will be subject to regulation under the Securities
Act of 1933 and the Securities Exchange Act of 1934, management believes the
Company will not be subject to regulation under the Investment Company Act of
1940 insofar as the Company will not be engaged in the business of investing
or trading in securities. In the event the Company engages in business
combinations which result in the Company holding passive investment interests
in a number of entities the Company could be subject to regulation under the
Investment Company Act of 1940. In such event, the Company would be required
to register as an investment company and could be expected to incur
significant registration and compliance costs. The Company has obtained no
formal determination from the Securities and Exchange Commission as to the
status of the Company under the Investment Company Act of 1940. Any violation
of such Act would subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION.
The Company's officer and director does not receive any compensation for
his services rendered to the Company, has not received such compensation in
the past, and is not accruing any compensation pursuant to any agreement with
the Company.
The officer and director of the Company will not receive any finder's
fee, either directly or indirectly, as a result of his efforts to implement
the Company's business plan outlined herein. However, the officer and
director of the Company anticipates receiving benefits as a beneficial
shareholder of the Company. See "ITEM 4. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT."
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the Company for the
benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On December 15, 1997, the Company issued a total of 5,000,000 shares of
Common Stock to the following persons for a total of $1,000 in cash:
Name Number of Total Shares Consideration
Pierce Mill Associates, Inc. 4,750,000 $950
Cassidy & Associates 250,000 $50
The Board of Directors has passed a resolution which contains a policy
that the Company will not seek an acquisition or merger with any entity in
which the Company's officer, director, or shareholder or their affiliates or
associates serve as an officer or director or hold any ownership interest.
Management is not aware of any circumstances under which this policy may be
changed.
The proposed business activities described herein classify the Company as
a blank check company. See "GLOSSARY". The Securities and Exchange
Commission and many states have enacted statutes, rules and regulations
limiting the sale of securities of blank check companies. Management does not
intend to undertake any efforts to cause a market to develop in the Company's
securities until such time as the Company has successfully implemented its
business plan described herein. Accordingly, the shareholders of the Company
have executed and delivered a "lock-up" letter agreement, affirming that such
shareholders shall not sell their shares of the Company's common stock except
in connection with or following completion of a merger or acquisition and the
Company is no longer classified as a blank check company. The shareholders
have deposited their stock certificates with the Company's management, who
will not release the certificates except in connection with or following the
completion of a merger or acquisition.
ITEM 8. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company consists of 100,000,000
shares of Common Stock, par value $.0001 per share, and 20,000,000 shares of
Preferred Stock, par value $.0001 per share. The following statements
relating to the capital stock are summaries and do not purport to be complete.
Reference is made to the more detailed provisions of, and such statements are
qualified in their entirety by reference to, the Certificate of Incorporation
and the By-laws, copies of which are filed as exhibits to this registration
statement.
COMMON STOCK
Holders of shares of common stock are entitled to one vote for each share
on all matters to be voted on by the stockholders. Holders of common stock do
not have cumulative voting rights. Holders of common stock are entitled to
share ratably in dividends, if any, as may be declared from time to time by
the Board of Directors in its discretion from funds legally available
therefor. In the event of a liquidation, dissolution or winding up of the
Company, the holders of common stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. All of the outstanding
shares of common stock are, and the shares of common stock offered by the
Company pursuant to this offering will be, when issued and delivered, fully
paid and non-assessable.
Holders of common stock have no preemptive rights to purchase the
Company's common stock. There are no conversion or redemption rights or
sinking fund provisions with respect to the common stock.
PREFERRED STOCK
The Company's Certificate of Incorporation authorizes the issuance of
20,000,000 shares of preferred stock, $.0001 par value per share, of which no
shares have been issued. The Board of Directors is authorized to provide for
the issuance of shares of preferred stock in series and, by filing a
certificate pursuant to the applicable law of Delaware, to establish from time
to time the number of shares to be included in each such series, and to fix
the designation, powers, preferences and rights of the shares of each such
series and the qualifications, limitations or restrictions thereof without any
further vote or action by the shareholders. Any shares of preferred stock so
issued would have priority over the common stock with respect to dividend or
liquidation rights. Any future issuance of preferred stock may have the
effect of delaying, deferring or preventing a change in control of the Company
without further action by the shareholders and may adversely affect the voting
and other rights of the holders of common stock. At present, the Company has
no plans to issue any preferred stock nor adopt any series, preferences or
other classification of preferred stock.
The issuance of shares of Preferred Stock, or the issuance of rights to
purchase such shares, could be used to discourage an unsolicited acquisition
proposal. For instance, the issuance of a series of Preferred Stock might
impede a business combination by including class voting rights that would
enable the holder to block such a transaction, or facilitate a business
combination by including voting rights that would provide a required
percentage vote of the stockholders. In addition, under certain
circumstances, the issuance of Preferred Stock could adversely affect the
voting power of the holders of the Common Stock. Although the Board of
Directors is required to make any determination to issue such stock based on
its judgment as to the best interests of the stockholders of the Company, the
Board of Directors could act in a manner that would discourage an acquisition
attempt or other transaction that some, or a majority, of the stockholders
might believe to be in their best interests or in which stockholders might
receive a premium for their stock over the then market price of such stock.
The Board of Directors does not at present intend to seek stockholder approval
prior to any issuance of currently authorized stock, unless otherwise required
by law or stock exchange rules. The Company has no present plans to issue any
Preferred Stock.
DIVIDENDS
Dividends, if any, will be contingent upon the Company's revenues and
earnings, if any, capital requirements and financial conditions. The payment
of dividends, if any, will be within the discretion of the Company's Board of
Directors. The Company presently intends to retain all earnings, if any, for
use in its business operations and accordingly, the Board of Directors does
not anticipate declaring any dividends prior to a business combination.
GLOSSARY
"BLANK CHECK" COMPANY. As defined in Section 7(b)(3) of the Securities Act, a
"blank check" company is a development stage company that has no specific
business plan or purpose or has indicated that its business plan is to engage
in a merger or acquisition with an unidentified company or companies and is
issuing "penny stock" securities as defined in Rule 3a51-1 of the Exchange
Act.
THE COMPANY. Chatsworth Acquisition Corporation, the company whose common
stock is the subject of this registration statement.
EXCHANGE ACT. The Securities Exchange Act of 1934, as amended.
"PENNY STOCK" SECURITY. As defined in Rule 3a51-1 of the Exchange Act, a
"penny stock" security is any equity security other than a security (i) that
is a reported security (ii) that is issued by an investment company (iii) that
is a put or call issued by the Option Clearing Corporation (iv) that has a
price of $5.00 or more (except for purposes of Rule 419 of the Securities Act)
(v) that is registered on a national securities exchange (vi) that is
authorized for quotation on the Nasdaq Stock Market, unless other provisions
of Rule 3a51-1 are not satisfied, or (vii) that is issued by an issuer with
(a) net tangible assets in excess of $2,000,000, if in continuous operation
for more than three years or $5,000,000 if in operation for less than three
years or (b) average revenue of at least $6,000,000 for the last three years.
PIERCE MILL ASSOCIATES. Pierce Mill Associates, Inc., a private company owned
by management of the Company. Pierce Mill Associates provides marketing
services for Cassidy & Associates, particularly in regard to locating private
companies which may wish to go public, and acts as an initial shareholder in
certain companies formed by Cassidy & Associates.
SECURITIES ACT. The Securities Act of 1933, as amended.
SMALL BUSINESS ISSUER. As defined in Rule 12b-2 of the Exchange Act, a "Small
Business Issuer" is an entity (i) which has revenues of less than $25,000,000
(ii) whose public float (the outstanding securities not held by affiliates)
has a value of less than $25,000,000 (iii) which is a United States or
Canadian issuer (iv) which is not an Investment Company and (v) if a
majority-owned subsidiary, whose parent corporation is also a small business
issuer.
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(a) MARKET PRICE. There is no trading market for the Company's Common
Stock at present and there has been no trading market to date. There is no
assurance that a trading market will ever develop or, if such a market does
develop, that it will continue.
The Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock, unless
exempt, the rules require: (i) that a broker or dealer approve a person's
account for transactions in penny stocks and (ii) the broker or dealer receive
from the investor a written agreement to the transaction, setting forth the
identity and quantity of the penny stock to be purchased. In order to approve
a person's account for transactions in penny stocks, the broker or dealer must
(i) obtain financial information and investment experience and objectives of
the person; and (ii) make a reasonable determination that the transactions in
penny stocks are suitable for that person and that person has sufficient
knowledge and experience in financial matters to be capable of evaluating the
risks of transactions in penny stocks. The broker or dealer must also
deliver, prior to any transaction in a penny stock, a disclosure schedule
prepared by the Commission relating to the penny stock market, which, in
highlight form, (i) sets forth the basis on which the broker or dealer made
the suitability determination and (ii) that the broker or dealer received a
signed, written agreement from the investor prior to the transaction.
Disclosure also has to be made about the risks of investing in penny stocks in
both public offerings and in secondary trading, and about commissions payable
to both the broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies available to an
investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny
stocks.
In order to qualify for listing on the Nasdaq SmallCap Market, a company
must have at least (i) net tangible assets of $4,000,000 or market
capitalization of $50,000,000 or net income for two of the last three years of
$750,000; (ii) public float of 1,000,000 shares with a market value of
$5,000,000; (iii) a bid price of $4.00; (iv) three market makers; (v) 300
shareholders and (vi) an operating history of one year or, if less than one
year, $50,000,000 in market capitalization. For continued listing on the
Nasdaq SmallCap Market, a company must have at least (i) net tangible assets
of $2,000,000 or market capitalization of $35,000,000 or net income for two of
the last three years of $500,000; (ii) a public float of 500,000 shares with a
market value of $1,000,000; (iii) a bid price of $1.00; (iv) two market
makers; and (v) 300 shareholders.
If, after a merger or acquisition, the Company does not meet the
qualifications for listing on the Nasdaq SmallCap Market, the Company's
securities may be traded in the over-the-counter ("OTC") market. The OTC
market differs from national and regional stock exchanges in that it (1) is
not cited in a single location but operates through communication of bids,
offers and confirmations between broker-dealers and (2) securities admitted to
quotation are offered by one or more broker-dealers rather than the
"specialist" common to stock exchanges. The Company may apply for listing on
the NASD OTC Bulletin Board or may offer its securities in what are commonly
referred to as the "pink sheets" of the National Quotation Bureau, Inc. To
qualify for listing on the NASD OTC Bulletin Board, an equity security must
have one registered broker-dealer, known as the market maker, willing to list
bid or sale quotations and to sponsor the company for listing on the Bulletin
Board.
If the Company is unable initially to satisfy the requirements for
quotation on the Nasdaq SmallCap Market or becomes unable to satisfy the
requirements for continued quotation thereon, and trading, if any, is
conducted in the OTC market, a shareholder may find it more difficult to
dispose of, or to obtain accurate quotations as to the market value of, the
Company's securities.
(b) HOLDERS. There are two holders of the Company's Common Stock. On
December 15, 1997, the Company issued 5,000,000 of its Common Shares to these
shareholders for cash at $.0001 per share for a total price of $500. The
issued and outstanding shares of the Company's Common Stock were issued in
accordance with the exemptions from registration afforded by Sections 3(b) and
4(2) of the Securities Act of 1933 and Rules 506 and 701 promulgated
thereunder.
(c) DIVIDENDS. The Company has not paid any dividends to date, and has
no plans to do so in the immediate future.
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The Company has not changed accountants since its formation and there are
no disagreements with the findings of its accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Company has sold securities which were
not registered as follows:
Date Name Number of Shares Consideration
December 15, 1997 Pierce Mill 4,750,000 $950
Associates, Inc.(1)
December 15, 1997 Cassidy & Associates(2) 250,000 $25
________
(1) Mr. Cassidy, the president and sole director of the Company, is the
sole director and shareholder of Pierce Mill Associates, Inc. and is therefore
considered to be the beneficial owner of the common stock of the Company
issued to Pierce Mill Associates, Inc. With respect to the sales made to
Pierce Mill Associates, Inc., the Company relied on Section 4(2) of the
Securities Act of 1933, as amended and Rule 506 promulgated thereunder.
(2) Mr. Cassidy is a principal of Cassidy & Associates, a Washington,
D.C. securities law firm, and is therefore considered to be the beneficial
owner of the common stock of the Company issued to Cassidy & Associates. With
respect to the sales made to Cassidy & Associates, the Company relied upon
Section 3(b) of the Securities Act of 1933, as amended and Rule 701
promulgated thereunder.
The shareholders of the Company have executed and delivered a "lock-up"
letter agreement which provides that such shareholders shall not sell the
securities except in connection with or following the consummation of a merger
or acquisition. Further, each shareholder has placed its stock certificates
with the Company until such time. Any liquidation by the current shareholders
after the release from the "lock-up" selling limitation period may have a
depressive effect upon the trading price of the Company's securities in any
future market which may develop.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
provides that a Delaware corporation has the power, under specified
circumstances, to indemnify its directors, officers, employees and agents,
against expenses incurred in any action, suit or proceeding. The Certificate
of Incorporation and the by-laws of the Company provide for indemnification of
directors and officers to the fullest extent permitted by the General
Corporation Law of the State of Delaware.
The General Corporation Law of the State of Delaware provides that a
certificate of incorporation may contain a provision eliminating the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director provided that such
provision shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
(relating to liability for unauthorized acquisitions or redemptions of, or
dividends on, capital stock) of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the director derived an
improper personal benefit. The Company's Certificate of Incorporation
contains such a provision.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF
1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS
CONTROLLING THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, IT IS THE
OPINION OF THE SECURITIES AND EXCHANGE COMMISSION THAT SUCH INDEMNIFICATION IS
AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.
<PAGE>
PART F/S
FINANCIAL STATEMENTS.
Attached are audited financial statements for the Company for the period
ended December 16, 1997. The following financial statements are attached to
this report and filed as a part thereof.
1) Table of Contents - Financial Statements
2) Report of Independent Certified Public Accountants
3) Balance Sheet
4) Stockholders' Equity <PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS.
EXHIBIT NUMBER DESCRIPTION LOCATION
(2) Articles of Incorporation and By-laws:
2.1 ** Articles of Incorporation
2.2 ** By-laws
(3) Instruments Defining the Rights of Holders:
3.1 ** Lock-Up Agreement with Pierce Mill
Associates, Inc.
3.2 ** Lock-Up Agreement with Cassidy &
Associates
(10)(a) Consents - Experts:
10.1* Consent of Accountants
____
* Previously filed
** Filed herewith
<PAGE>
INDEX TO FINANCIAL STATEMENTS
CHATSWORTH ACQUISITION CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
Report of Independent Certified Public Accountants F-2
Financial Statements:
Assets F-3
Stockholders' Equity F-3
Notes to Financial Statement F-4
<PAGE>
JOHN P. MACLEAN
CERTIFIED PUBLIC ACCOUNTANT
15701 Alameda Drive
Bowie, Maryland 20716
301/249-4900 Fax 301/249-9296
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
CHATSWORTH ACQUISITION CORPORATION
I have audited the accompanying Balance Sheet of Chatsworth Acquisition
Corporation as of December 16, 1997. This financial statement is the
responsibility of Chatsworth Acquisition Corporation's management. My
responsibility is to express an opinion on this financial statement based on
my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis
for my opinion.
In my opinion, the financial statement referred to above presents fairly,
in all materials respects, the financial position of Chatsworth Acquisition
Corporation as of December 16, 1997, in conformity with generally accepted
accounting principles.
/s/ John P. MacLean, CPA, CFP
December 21, 1997
F-2
<PAGE>
CHATSWORTH ACQUISITION CORPORATION
Balance Sheet
December 16, 1997
ASSETS
Cash $1,000
Total assets $1,000
Shareholder Equity
Common Stock (10,000,000 $.0001
par value shares authorized,
5,000,000 outstanding)
$.0001 par value) $500
Additional paid in capital $500
Total Equity $1,000
See Auditor's Report
F-3
<PAGE>
NOTES TO FINANCIAL STATEMENT
A summary of the significant accounting policies consistently applied in
the preparation of the financial statement follows:
(A) DESCRIPTION OF BUSINESS. The Company was organized on December 3,
1997 for the purpose of engaging in any lawful business. The Company is in
the development stage. Other than issuing shares to its original shareholders
and filing the registration statement of which this prospectus is a part, the
Company has not commenced any operational activities. The Company intends to
locate and negotiate with a business entity to merge into the Company. In
certain instances, such a company may wish to become a subsidiary of the
Company or may wish to contribute assets to the Company rather than merge.
The Company has selected the calendar year as its fiscal year.
(B) COMMON STOCK ISSUED. The Company has authorized 100,000,000 shares
of Common Stock having a par value of $.0001 per share and 20,000,000 shares
of preferred stock having a par value $.0001 per share. As of December 16,
1997, 5,000,000 shares of Common Stock had been issued and were outstanding.
(C) As of December 16, 1997, no shareholders, officers, directors or
other related parties had incurred costs on behalf of the Company to be repaid
or refunded by the Company.
F-4
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this Amendment #1 to the registration statement to be signed
on its behalf by the undersigned thereunto duly authorized.
CHATSWORTH ACQUISITION CORPORATION
By: /s/ James M. Cassidy
James M. Cassidy
Director and President
April 22, 1998
JOHN P. MACLEAN
CERTIFIED PUBLIC ACCOUNTANT
15701 Alameda Drive
Bowie, Maryland 20716
301/249-4900
FAX 301/249-9296
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
I hereby consent to the use in Amendment #1 to the Registration Statement on
Form 10-SB of my report dated December 21, 1997 relating to the audited
financial statements of Chatsworth Acquisition Corporation.
John P. MacLean
Certified Public Accountants
April 22, 1998
