<PAGE>
<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB/A
AMENDMENT NO. 1
General Form for Registration of Securities
of Small Business Issuers
Under Section 12(b) or (g) of
the Securities Exchange Act of 1934
STUDIO CAPITAL CORP.
-----------------------------
(Name of Small Business Issuer)
Colorado 84-1455981
- ------------------------------ --------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
5770 South Beech Court, Greenwood Village, Colorado 80121
------------------------------------------------------------
(Address of Principal Executive Offices, Including Zip Code)
(303) 221-7376
--------------------------
(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, No Par Value
--------------------------
(Title of Class)
<PAGE>
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Studio Capital Corp. (the "Company"), was incorporated on December 9,
1996, under the laws of the State of Colorado, 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 never commenced any operational activities.
The Company was formed by Timothy J. Brasel, the initial director, for
the purpose of creating a corporation which could be used to consummate a
merger or acquisition. Mr. Brasel asked Joseph J. Peirce, a close friend who
has been an investor in a number of other companies managed by Mr. Brasel, to
serve as President and a director, and these two persons invited three friends
and relatives to participate as founding shareholders. No further action was
taken in connection with the organization of the Company until December 1997
when the management determined to proceed with filing a Form 10-SB.
Management then raised $10,000 from the founding shareholders and affiliated
entities to pay the expense of preparing the Form 10-SB.
The Board of Directors of the Company has elected to commence
implementation of the Company's principal business purpose, described below
under "Item 2, Plan of Operation". As such, the Company can be defined as a
"shell" company, whose sole purpose at this time is to locate and consummate a
merger or acquisition with a private entity.
The proposed business activities described herein classify the Company as
a "blank check" company. Many states have enacted statutes, rules and
regulations limiting the sale of securities of "blank check" companies in
their respective jurisdictions. 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, each shareholder of the Company has executed and
delivered a "lock-up" letter agreement, affirming that he/she will not sell
his/her respective shares of the Company's common stock until such time as the
Company has successfully consummated a merger or acquisition and the Company
is no longer classified as a "blank check" company. In order to provide
further assurances that no trading will occur in the Company's securities
until a merger or acquisition has been consummated, each shareholder has
agreed to place his/her respective stock certificate with the Company's legal
counsel, who will not release these respective certificates until such time as
legal counsel has confirmed that a merger or acquisition has been successfully
consummated. However, while management believes that the procedures
established to preclude any sale of the Company's securities prior to closing
of a merger or acquisition will be sufficient, there can be no assurances that
the procedures established herein will unequivocally limit any shareholder's
ability to sell their respective securities before such closing.
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
2
<PAGE>
<PAGE>
until the Company can consummate a business combination with a profitable
business opportunity. There is no assurance that the Company can identify
such a business opportunity and consummate such a business combination.
SPECULATIVE NATURE OF 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 business
opportunity. 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 successor firm or venture partner firm 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, joint ventures with and acquisitions of
small private 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 desirable 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 in seeking
merger or acquisition candidates with numerous other small public companies.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION - NO STANDARDS
FOR BUSINESS COMBINATION. The Company has no arrangement, agreement or
understanding with respect to engaging in a merger with, joint venture with or
acquisition of, a private entity. There can be no assurance 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 evaluations.
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 never commenced any operational activities. The Board of
Directors of the Company ha by the Company. There is no assurance 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 business opportunity to have achieved, and
without which the Company would not consider a business combination in any
form with such business opportunity. Accordingly, the Company may enter into
a business combination with a business opportunity 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 twenty hours per
month to the business of the Company. The Company's two officers have not
entered into written employment agreements with the Company and are not
expected to do so in the foreseeable future. The Company has not obtained key
man life insurance on either of its officers or directors. Notwithstanding
the combined limited experience and time commitment of management, loss of the
services of any of these individuals would adversely affect development of the
Company's business and its likelihood of continuing operations. See
"MANAGEMENT."
3
<PAGE>
<PAGE>
CONFLICTS OF INTEREST - GENERAL. The Company's officers and directors
participate in other business ventures which compete directly with the
Company. Additional conflicts of interest and non-arms length transactions
may also arise in the future in the event the Company's officers or directors
are involved in the management of any firm with which the Company transacts
business. The Company's Board of Directors has adopted a resolution which
prohibits the Company from completing a merger with, or acquisition of, any
entity in which management serve as officers, directors or partners, or in
which they or their family members own or hold any ownership interest.
Management is not aware of any circumstances under which this policy could be
changed while current management is in control of the Company. 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 entities to prepare
such 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 1934 Act are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company has
neither conducted, nor have others made available to it, results of market
research indicating that market demand exists for the transactions
contemplated by the Company. Moreover, the Company does not have, and does
not plan to establish, a marketing organization. Even in the event demand is
identified for a merger or acquisition 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. Although the Company will be subject to regulation under 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 and, consequently, any
violation of such Act would subject the Company to material adverse
consequences.
4
<PAGE>
<PAGE>
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 private company obtaining a controlling interest
in the Company. Any such business combination may require management of the
Company to sell or transfer all or a portion of the Company's common stock
held by them, or resign as members of the Board of Directors of the Company.
The resulting change in control of the Company could result in removal of one
or more present officers and directors of the Company and a corresponding
reduction in or elimination of their 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 private concern which, in all likelihood, would result in the Company
issuing securities to shareholders of such private company. The issuance of
previously authorized and unissued common stock of the Company would result in
reduction in percentage of shares owned by present and prospective
shareholders of the Company and would most likely result in a change in
control or management of the Company.
DISADVANTAGES OF BLANK CHECK OFFERING. The Company may enter into a
business combination with an entity that desires to establish a public trading
market for its shares. A business opportunity 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 and the inability or unwillingness to comply
with various federal and state securities laws enacted for the protection of
investors. These securities laws primarily relate to provisions regarding the
registration of securities which require full disclosure of the Company's
business, management and financial statements.
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 entity; 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 believes that any potential business
opportunity must provide audited financial statements for review, and for the
protection of all parties to the business combination. 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.
BLUE SKY CONSIDERATIONS. Because the securities registered hereunder
have not been registered for resale under the blue sky laws of any state, and
the Company has no current plans to register or qualify its shares in any
state, the holders of such shares and persons who desire to purchase them in
any trading market that might develop in the future, should be aware that
5
<PAGE>
<PAGE>
there may be significant state blue sky restrictions upon the ability of new
investors to purchase the securities which could reduce the size of the
potential market. As a result of recent changes in federal law, non-issuer
trading or resale of the Company's securities is exempt from state
registration or qualification requirements in most states. However, some
states may continue to attempt to restrict the trading or resale of blind-pool
or "blank-check" securities. Accordingly, investors should consider any
potential secondary market for the Company's securities to be a limited one.
ITEM 2. PLAN OF OPERATION
The Registrant intends to seek to acquire assets or shares of an entity
actively engaged in business which generates revenues, in exchange for its
securities. The Registrant has no particular acquisitions in mind and has not
entered into any negotiations regarding such an acquisition. None of the
Company's officers, directors, promoters or affiliates have engaged in any
preliminary contact or discussions with any representative of any other
company regarding the possibility of an acquisition or merger between the
Company and such other company as of the date of this registration statement.
While the Company will attempt to obtain audited financial statements of
a target entity, there is no assurance that such audited financial statements
will be available. The Board of Directors does intend to obtain certain
assurances of value of the target entity's assets prior to consummating such a
transaction, with further assurances that an audited statement would be
provided within seventy-five days after closing of such a transaction.
Closing documents relative thereto will include representations that the value
of the assets conveyed to or otherwise so transferred will not materially
differ from the representations included in such closing documents.
The Registrant has no full time employees. The Registrant's two officers
have agreed to allocate a portion of their time to the activities of the
Registrant, without compensation. Management anticipates that the business
plan of the Company can be implemented by each officer 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 officers. See "ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS."
Mr. Brasel is involved with several other blank check companies, and both
officers are involved creating three other blank check companies similar to
this one. In addition, the Company's officers and directors may, in the
future, become involved with other companies which have a business purpose
similar to that of the Company. As a result, additional conflicts of interest
may arise in the future. If such a conflict does arise and an officer or
director of the Company is presented with a business opportunity under
circumstances where there may be a doubt as to whether the opportunity should
belong to the Company or another "blank check" company they are affiliated
with, they will disclose the opportunity to all such companies. If a
situation arises in which more than one company desires to merge with or
acquire that target company and the principals of the proposed target company
have no preference as to which company will merge or acquire such target
company, the company of which Mr. Brasel first became an officer and director
will be entitled to proceed with the transaction. As between the Company and
the three other companies formed on December 9, 1996, the company which first
filed a registration statement with the Securities and Exchange Commission
will be entitled to proceed with the proposed transaction. See "ITEM 5,
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS - PREVIOUS BLIND
POOL ACTIVITIES."
6
<PAGE>
<PAGE>
The Company is filing this registration statement on a voluntary basis
because the primary attraction of the Registrant as a merger partner or
acquisition vehicle will be its status as an SEC reporting company. Any
business combination or transaction will likely result in a significant
issuance of shares and substantial dilution to present stockholders of the
Registrant.
The Articles 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. See "ITEM 12, INDEMNIFICATION OF DIRECTORS AND
OFFICERS."
GENERAL BUSINESS PLAN
The Company's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in business opportunities presented to it by
persons or firms who or which desire to seek the perceived advantages of an
Exchange Act registered corporation. 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 purposefully general and 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 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 primary method the Company will use to find potential merger or
acquisition candidates will be to run classified ads in the Wall Street
Journal periodically seeking companies which are looking to merge with a
public shell.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Due to general
economic conditions, rapid technological advances being made in some
industries and shortages of available capital, management believes that there
are numerous firms 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, providing
liquidity (subject to restrictions of applicable statutes) for all
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 extremely difficult and complex.
7
<PAGE>
<PAGE>
The Company has, and will continue to have, no capital with which to
provide the owners of business opportunities with any significant 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. The owners of the
business opportunities will, however, incur significant legal and accounting
costs in connection with the acquisition of a business opportunity, including
the costs of preparing Form 8-K's, 10-K's or 10-KSB's, agreements and related
reports and documents. The Securities Exchange Act of 1934 (the "34 Act"),
specifically requires that any merger or acquisition candidate comply with all
applicable reporting requirements, which include providing audited financial
statements to be included within the numerous filings relevant to complying
with the 34 Act. Nevertheless, the officers and directors of the Company have
not conducted market research and are not aware of statistical data which
would 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 officers and directors of the Company, none of
whom is a professional business analyst. Management intends to concentrate on
identifying preliminary prospective business opportunities which may be
brought to its attention through present associations of the Company's two
officers, or by the Company's shareholders. 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. Management will meet personally with management and key
personnel of the business opportunity as part of their investigation. To the
extent possible, the Company intends to utilize written reports and personal
investigation to evaluate the above factors. The Company will not acquire or
merger with any company for which audited financial statements cannot be
obtained within a reasonable period of time after closing of the proposed
transaction.
Management of the Company, while not especially experienced in matters
relating to the new business of the Company, will rely upon their own efforts
and, to a much lesser extent, the efforts of the Company's shareholders, in
accomplishing the business purposes of the Company. It is not anticipated
that any outside consultants or advisors, other than the Company's legal
counsel and accountants, will be utilized by the Company to effectuate its
business purposes described herein. However, if the Company does retain such
an outside consultant or advisor, any cash fee earned by such party will need
to be paid by the prospective merger/acquisition candidate, as the Company has
no cash assets with which to pay such obligation. There have been no
discussions, understandings, contracts or agreements with any outside
consultants and none are anticipated in the future. In the past, the
Company's management has never used outside consultants or advisors in
connection with a merger or acquisition.
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,
8
<PAGE>
<PAGE>
which is already in operation, or in essentially any stage of its corporate
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. However, the Company
does not intend to obtain funds in one or more private placements to finance
the operation of any acquired business opportunity until such time as the
Company has successfully consummated such a merger or acquisition. The
Company also has no plans to conduct any offerings under Regulation S.
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, the
Company's directors may, as part of the terms of the acquisition transaction,
resign and be replaced by new directors without a vote of the Company's
shareholders.
It is anticipated that the Company's principal shareholders may actively
negotiate or otherwise consent to the purchase of a portion of their common
stock as a condition to, or in connection with, a proposed merger or
acquisition transaction. Any terms of sale of the shares presently held by
officers and/or directors of the Company will be also afforded to all other
shareholders of the Company on similar terms and conditions. The policy set
forth in the preceding sentence is based on an understanding between the two
members of management, and these two persons are not aware of any
circumstances under which this policy would change while they are still
officers and directors of the Company. Any and all such sales will only be
made in compliance with the securities laws of the United States and any
applicable state.
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 successfully consummated a merger or acquisition and the Company
is no longer considered a "shell" 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 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 so-called "tax-free" reorganization
under Sections 368a or 351 of the Internal Revenue Code (the "Code").
With respect to any merger or acquisition, negotiations with target
company management is expected to focus on the percentage of the Company which
target company shareholders would acquire in exchange for all of their
9
<PAGE>
<PAGE>
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 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 then-shareholders.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the
terms of such agreements cannot be predicted, generally such agreements will
require some specific representations and warranties by all of the parties
thereto, will specify certain events of default, will detail the terms of
closing and the conditions which must be satisfied by each of 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, will
set forth remedies on default and will include miscellaneous other terms.
As stated hereinabove, the Company will not acquire or merge with any
entity which cannot provide independent audited financial statements 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 34
Act. Included in these requirements is the affirmative duty of the Company to
file independent 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 34 Act, or if the audited financial statements provided do not conform
to the representations made by the candidate to be acquired in the closing
documents, the closing documents may provide that the proposed transaction
will be voidable, at the discretion of the present management of the Company.
The Company's officers and shareholders have verbally agreed that they
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. These persons have further agreed that such
advances will be made in proportion to each person's percentage ownership of
the Company. These persons have also agreed that such advances will be made
interest free 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 dollar cap on the amount of money which
such persons will advance to the Company. The Company will not borrow any
funds from anyone other than its current shareholders for the purpose of
repaying advances made by the shareholders, and 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 prohibits the
Company from completing an acquisition or merger with any entity in which any
of the Company's Officers, Directors, principal shareholders or their
affiliates or associates serve as officer or director or hold any ownership
interest. Management is not aware of any circumstances under which this
policy, through their own initiative may be changed.
There are no arrangements, agreements or understandings between
non-management shareholders and management under which non-management
10
<PAGE>
<PAGE>
shareholders may directly or indirectly participate in or influence the
management of the Company's affairs. There is no agreement that
non-management shareholders will exercise their voting rights to continue to
re-elect the current directors, however, it is expected that they will do so
based on the existing friendship among such persons.
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.
YEAR 2000 COMPLIANCE
The Company is aware of the issues associated with the programming code
in existing computer systems as the year 2000 approaches. The Company has
assessed these issues as they relate to the Company, and since the Company
currently has no operating business and does not use any computers, and since
it has no customers, suppliers or other constituents, it does not believe that
there are any material year 2000 issues to disclose in this Form 10-SB.
ITEM 3. DESCRIPTION OF PROPERTY
The Registrant has no properties and at this time has no agreements to
acquire any properties. The Company currently uses the offices of Timothy J.
Brasel at no cost to the Company and the Company expects this arrangement to
continue until the Company completes an acquisition or merger. This
arrangement is a verbal understanding between Mr. Brasel and the Company's
Board of Directors.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of May 31, 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.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT OF BENEFICIAL
OF BENEFICIAL OWNER OWNERSHIP PERCENTAGE OF CLASS
- ------------------------ -------------------- -------------------
<S> <C> <C>
Timothy J. Brasel 800,000<FN1> 40.0%
5770 South Beech Court
Greenwood Village, CO 80121
James R. Sjoerdsma 200,000 10.0%
529 Seastorm Drive
Redwood City, CA 94065
Peirce Enterprises 100,000 5.0%
5125 West Lake Avenue
Littleton, CO 80123
11
<PAGE>
<PAGE>
Joseph J. Peirce 300,000<FN2> 15.0%
5125 West Lake Avenue
Littleton, CO 80123
Paul H. Dragul IRA 400,000 20.0%
950 E. Harvard, No. 500
Denver, CO 80210
Paul H. Dragul 600,000<FN3> 10.0%
950 E. Harvard, No. 500
Denver, CO 80210
Brasel Family Partners, Ltd. 400,000 20.0%
5770 South Beech Court
Greenwood Village, CO 80121
Charitable Remainder Trust 150,000 7.5%
of Timothy J. Brasel
5770 South Beech Court
Greenwood Village, CO 80121
Nasus Lesarb, Ltd. <FN4> 100,000 5.0%
16198 East Prentice Place
Aurora, CO 80015
Bleu Ridge Consultants Profit
Sharing Plan & Trust 100,000 5.0%
5770 South Beech Court
Greenwood Village, CO 80121
All Executive Officers and 1,100,000<FN1><FN2> 55.0%
Directors as a Group
(2 Persons)
__________________
<FN>
<FN1>
Includes 150,000 shares held by the Charitable Remainder Trust of Timothy J.
Brasel; 400,000 shares held by Brasel Family Partners; 100,000 shares held by
Bleu Ridge Consultants Profit Sharing Plan & Trust; 100,000 shares held by the
Charitable Remainder Trust of Susan A. Brasel; and 50,000 shares held by the
Charitable Remainder Trust of Mary J. Brasel. Mr. Brasel is a trustee for the
Charitable Remainder Trusts of Timothy J. Brasel, Susan A. Brasel and Mary J.
Brsael; the General Partner of Brasel Family Partners, Ltd. and the owner of
Bleu Ridge Consultants.
<FN2>
Includes 200,000 shares owned of record by Mr. Peirce and 100,000 shares owned
by Peirce Enterprises, a company owned by Mr. Peirce.
<FN3>
Includes 200,000 shares owned of record by Mr. Dragul and 400,000 shares owned
by Mr. Dragul's IRA.
<FN4>
The general partner of Nasus Lesarb, Ltd. is Susan Brasel, the sister of
Timothy J. Brasel.
</FN>
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The Directors and Officers of the Company are as follows:
12
<PAGE>
<PAGE>
NAME AGE POSITIONS AND OFFICES HELD
----------------- --- ---------------------------------
Joseph J. Peirce 54 President and Director
Timothy J. Brasel 38 Secretary, Treasurer and Director
There are no agreements or understandings for any officer or director to
resign at the request of another person and none of the above named officers
and directors are acting on behalf of or will act at the direction of any
other person.
The directors and officers will devote their time to the Company's
business on an "as needed" basis which is expected to be between five to ten
hours per month on average.
In addition to the two officers and directors listed above, the following
persons could also be deemed to be promoters and/or control persons of the
Company, as those terms are defined in the Rules and Regulations promulgated
under the Securities Act of 1933, as amended. There are no other persons who
could be deemed to be promoters of the Company.
Dr. Paul H. Dragul -- Shareholder
James R. Sjoerdsma -- Shareholder
Mr. Sjoerdsma and Dr. Dragul are expected to help management review possible
acquisition or merger candidates. Other than management and the two promoters
listed above, there are no other persons whose activities will be material to
the operations of the Company.
DR. PAUL H. DRAGUL - SHAREHOLDER - For over the last 30 years Dr. Dragul
has served as President of Associates of Otolaryngology P.C., a professional
corporation of ear, nose and throat doctors with 5 offices in the Denver
metropolitan area. Dr. Dragul is also a principal shareholder in four other
publicly-held shells for which Timothy Brasel serves as President: Beechport
Capital Corp., High Hopes, Inc., Aspen Capital, Inc., and Cypress Capital,
Inc. He is also a principal shareholder in three other companies which were
formed at the same time and for the same purpose as the Company. These
companies are: Calneva Capital Corp., Westlake Capital Corp. and Zirconium
Capital Corp.
JAMES R. SJOERDSMA - SHAREHOLDER - M. Sjoerdsma has been employed by
Genencor International, Inc., Palo Alto, California, since 1990. He currently
serves as Director, Worldwide Human Resources, Research and Development for
Genencor. From 1982 until 1990, he was employed by Rockwell International as
Manager of Human Resources. He is also a principal shareholder in three other
companies which were formed at the same time and for the same purpose as the
Company. These companies are: Calneva Capital Corp., Westlake Capital Corp.
and Zirconium Capital Corp.
In addition, he has served as a director for four other shell companies
since July 1996. These companies were Aspen Capital, Inc., Mahogany Capital,
Inc. (resigned in December 1997), Cypress Capital, Inc., and Walnut Capital,
Inc. (resigned in May 1998).
Mr. Sjoerdsma served as a director of Grason Industries, Inc., a
blank-check company, from January 1988 until March 1989, when it completed an
acquisition; he served as a director of Emerald Eagle Corp., a blank-check
company, from September 1987 until May 1992; and he served as President and a
director of Tipton Industries, Inc., a blank-check company, from April 1987
until December 1987, when it completed an acquisition.
13
<PAGE>
<PAGE>
There is no family relationship between any Director or Executive Officer
of the Company.
The Company presently has no committees.
Set forth below are the names of all Directors and Executive Officers of
the Company, all positions and offices with the Company held by each such
person, the period during which he has served as such, and the business
experience of such persons during at least the last five years:
J.J. PEIRCE. Mr. Peirce has served as the President and a Director of
the Company since December 1996. He also serves as the President and a
director of three other companies which were formed at the same time and for
the same purpose as the Company. These companies are Calneva Capital Corp.,
Westlake Capital Corp., and Zirconium Capital Corp. For approximately the
last 21 years Mr. Peirce has served as President and owner of Peirce
Enterprises, Inc., which has been engaged in commercial real estate sales and
which has provided consulting services in various areas including patents,
product development and mergers and acquisitions.
TIMOTHY J. BRASEL. Mr. Brasel has served as Secretary, Treasurer and a
director of the Company since December 1996. He also serves as President and
a Director of four other publicly-held "shells": Beechport Capital Corp., High
Hopes, Inc., Aspen Capital, Inc., and Cypress Capital, Inc. He also serves as
a director of three other companies which were formed at the same time and for
the same purpose as the Company. These companies are Calneva Capital Corp.,
Westlake Capital Corp. and Zirconium Capital Corp. From May 1995 until
August 1997, Mr. Brasel served as President and a director of Universal
Capital Corp., which completed an acquisition of Remarc International Inc.
during August 1997. From February 1996 until February 1997, Mr. Brasel served
as President and a director of Capital 2000, Inc. which completed an
acquisition of United Shields Corporation in February 1997. From July 1996
until December 1997, Mr. Brasel served as President and a director of Mahogany
Capital, Inc. which completed an acquisition of Pontotoc Production Company,
Inc. during December 1997. From July 1996 until May 1998, Mr. Brasel served
as President and a director of Walnut Capital, Inc., which completed a merger
with Links Ltd. during May 1998. From March 1990 until September 1994, Mr.
Brasel served as President, Secretary, Treasurer and a Director of Prentice
Capital, Inc., a publicly-held blank-check company which completed an
acquisition of Universal Footcare, Inc. From March 1990 until August 1993,
Mr. Brasel was President, Secretary and a Director of Brasel Ventures, Inc., a
publicly-held blank-check company, which completed an acquisition of American
Pharmaceutical Company. Since January 1987, Mr. Brasel has been President and
a Director of Bleu Ridge Consultants, Inc., a business and management
consulting firm located in Denver, Colorado. Mr. Brasel received a Bachelor
of Science Degree in Business Administration from Morningside College, Sioux
City, Iowa in 1980.
PREVIOUS BLANK-CHECK EXPERIENCE
Mr. Timothy J. Brasel, Secretary, Treasurer and a Director of the
Company, has been involved either as an officer or director, or both, with
fourteen other blank-check companies which have completed some form of
corporate reorganization. These companies are Cambridge Ventures, Inc., Fox
Ridge Capital, Inc., Crystal Gold, Ltd., Extare Corporation, L.I. Inc., Ivory
Coast, Inc., Brasel Ventures, Inc., Eagle Vision, Inc., Eagle Eye
Enterprises, Inc., Prentice Capital, Inc., Coalmont, Inc., Universal Capital
Corporation, Capital 2000, Inc. and Mahogany Capital, Inc.
14
<PAGE>
<PAGE>
Mr. Sjoerdsma, a shareholder of the Company, has been involved either as
an officer or a director, or both, with five other blank-check or shell
companies which have completed some form of corporate reorganization. These
companies are Emerald Eagle Corp., Grason Industries, Inc., Tipton Industries,
Inc., Mahogany Capital, Inc., and Walnut Capital, Inc.
Following is a summary of the previous blank-check companies which have
completed their public offerings. Each of these companies initially conducted
a public offering for the purpose of completing a merger with or an
acquisition of a private company.
In each of the companies listed below, unless otherwise indicated, Mr.
Brasel was a director and major shareholder of the Company before the
reorganization, and on the closing of each reorganization he resigned all
officer and director positions. In addition, after each resignation, his
equity position in the Company was less than 5% of the shares outstanding.
Cambridge Ventures, Inc. ("Cambridge") closed its public offering on
March 14, 1986, and raised a total of $200,000 gross proceeds by selling
10,000,000 units at $.02 per unit. During July, 1986, Cambridge completed a
reverse acquisition of Elkins Institute in Atlanta, Inc. ("Elkins"). Elkins
owned and operated a private school in Atlanta, Georgia, which provides
technical training in the field of electronics, computer technology, and
radio/TV broadcasting. Cambridge is no longer an SEC reporting company and
its stock is no longer publicly traded. In connection with the acquisition of
Cambridge, Timothy J. Brasel sold 3,000,000 shares to principals of Elkins for
a total consideration of $9,859.
Fox Ridge Capital, Inc. ("Fox Ridge") closed its public offering in
October, 1988, and raised a total of $600,000 in gross proceeds by selling
60,000,000 shares at $.01 per share. During March, 1989, Fox Ridge completed
a reverse acquisition of R. V. Seahawk, Inc., an oceanographic services
company which is involved in deep water search, survey and recovery
operations. Fox Ridge changed its name to Seahawk Deep Ocean Technology, Inc.
which currently trades on the NASD's Bulletin Board. In connection with the
acquisition of Seahawk, Timothy J. Brasel sold 25,000,000 shares to principals
of Seahawk for a price of $.0008 per share or $20,000 for Mr. Brasel. In
addition, subsequent to the acquisition of Seahawk, Tim Brasel sold 15,000,000
warrants to principals of Seahawk for a price of $.0015 per warrant or
$22,500.
Crystal Gold, Ltd. ("Crystal Gold") closed its public offering in
October, 1988, and raised a total of $322,500 in gross proceeds by selling
64,500,000 shares at $.005 per share. During June, 1989, Crystal Gold
completed a reverse acquisition of Morgan Medical Corp. ("Morgan"). Morgan is
engaged in the business of serving as consultant and project manager for
physicians interested in developing and operating magnetic resonance imaging,
lithography and ambulatory surgery centers. In connection with the
acquisition of Morgan, Tim Brasel sold 16,000,000 shares and 18,000,000
warrants to principals of Morgan for a total consideration of $21,334.
Crystal Gold subsequently changed its name to Morgan Medical Holdings, Inc.,
and during 1995 it was merged into NMR of America, Inc., which trades on
NASDAQ.
Extare Corporation ("Extare") closed its public offering during June,
1988, and raised a total of $595,000 gross proceeds by selling 11,900,000
shares at $.05 per share. During October, 1989, Extare completed an
acquisition of NCS Acquisitions Corp. ("NCS"), a company which had a P.C.
15
<PAGE>
<PAGE>
based software system which allows credit union members to shop for
automobiles and other consumer goods at discounted prices. In connection with
the acquisition of NCS, Timothy J. Brasel sold an option to buy his B warrants
to the principal shareholder of NCS. In consideration for the option, Mr.
Brasel received $3,937.50. The option granted the holder the right to
purchase B warrants at a price of $.01 per Warrant. The option was never
exercised.
During September 1996, NCS (which had no assets and liabilities of
approximately $68,560) was sold to Eric Schedeler, a former
officer/shareholder and a director of Extare, for approximately $500. During
July 1995, Extare completed an acquisition of Infi-Shield Corporation, a
Minnesota corporation which had developed a line of products used as external
protective shielding for water/sewer lines, manholes and catch basins.
Extare's name has been changed to Infi-Shield International, Inc., and it is
no longer an SEC reporting company.
L. I. Inc. closed its public offering in May, 1989, and raised a total of
$50,000 in gross proceeds by selling 2,500,000 shares at $.02 per share.
During June, 1990, L. I. Inc. completed a reverse acquisition of Imaging
Management Associates, Inc. ("IMA"), and changed its name to Imaging
Management Associates, Inc., which trades on NASDAQ. IMA operates nine
outpatient centers that provide diagnostic imaging services. Generally, these
centers provide magnetic resonance imaging, and, in some centers, CAT Scan,
mammography and general diagnostic x-ray services. In connection with this
transaction, Timothy J. Brasel sold an option to purchase up to 966,000 units
(each unit consisting of one share of common stock and two warrants) of L. I.
Inc. held by him to two outside investors. Mr. Brasel received $4,830 for
this option, and he received an additional $4,830 on the exercise of the
option.
Ivory Coast, Inc. closed its public offering in September, 1989, and
raised a total of $600,000 in gross proceeds by selling 6,000,000 Units at
$.10 per Unit. During November, 1989, Ivory Coast completed an acquisition of
Continental Management Group, Inc. ("Continental"), a Florida corporation,
which had an option to acquire Musselman Steel Corporation of Tampa, Florida.
In connection with the acquisition of Continental, Mr. Brasel sold a total of
16,875,000 warrants to the principal of Continental at a price of $.001 per
warrant or a total of $16,875. Ivory Coast is no longer an SEC reporting
company and no longer trades as a public company.
Brasel Ventures, Inc. closed its public offering in November, 1990, and
raised a total of $75,000 in gross proceeds by selling 7,500,000 Units at $.01
per Unit. During July 1993, Brasel Ventures completed a reverse acquisition
of American Pharmaceutical Company, a New Jersey corporation engaged in the
business of packaging and distributing non-prescription OTC pharmaceutical and
vitamin products. Brasel Ventures changed its name to American Pharmaceutical
Company. This company is no longer an SEC reporting company and its stock no
longer trades publicly.
Eagle Vision, Inc. ("Eagle Vision") closed its public offering in
January, 1990, and raised a total of $299,040 by selling 49,840 Units at $6.00
per Unit. During April, 1990, Eagle Vision completed an acquisition of UMA
Management Associates, Inc. ("UMA"), a Tampa, Florida, based company which had
an option to acquire Novadyne Corporation. UMA and Novadyne were engaged in
the environmental remediation business. Eagle Vision currently trades on the
NASD's Bulletin Board. In connection with the acquisition of UMA, Mr. Brasel
sold a total of 35,621,250 warrants to the principals of UMA at an average
price of $.00056 per warrant or a total of $20,000.
16
<PAGE>
<PAGE>
Eagle Eye Enterprises, Inc. ("Eagle Eye") closed its public offering in
August 1990, and raised a total of $200,000 in gross proceeds by selling
20,000,000 shares at $.01 per share. Eagle Eye completed a reverse
acquisition of Atlas Environmental, Inc. during November 1994, and changed its
name to Atlas Environmental, Inc. which currently trades on the NASD's
Bulletin Board. During February 1997, Atlas Environmental, Inc. filed
bankruptcy under Chapter XI of the Federal Bankruptcy laws.
Prentice Capital, Inc. ("Prentice") closed its public offering during
August 1991, and raised a total of $75,000 in gross proceeds by selling
7,500,000 units at $.01 per unit. During September 1994, Prentice completed a
reverse acquisition of Universal Footcare, Inc., a company which is engaged in
the business of acquiring and operating podiatry clinics in Florida. Prentice
currently trades on the NASD's Bulletin Board. In connection with the closing
of this transaction, Prentice issued 130,000 shares (after a 1 for 25 reverse
split) to La Mirage Trust as consideration for its agreement to not sell its
200,000 shares for one year from the closing. Tim Brasel, Susan Brasel (Tim's
sister) and Mary Jane Brasel (Tim's mother) are the three beneficiaries of
LaMirage Trust and Susan Brasel is the trustee.
Coalmont, Inc. ("Coalmont") closed its public offering during March 1991,
and raised a total of $100,000 in gross proceeds by selling 10,000 units at
$10.00 per unit. During August 1992, Coalmont completed a reverse acquisition
of Machinery Credit Corporation, a company engaged in the business of
financing manufacturing equipment and distribution systems for manufacturing
companies and distributors. On December 31, 1993, the agreement with
Machinery Credit Corporation was rescinded because the management which was
installed in August 1992 spent all of Coalmont's money and quit filing
periodic reports with the SEC. All of the shares issued in the acquisition
were returned and canceled and the original officers and directors of Coalmont
were installed. Coalmont has since changed its name to Beechport Capital
Corp. and is currently looking for an acquisition. Timothy Brasel currently
serves as President of Beechport Capital Corp.
Universal Capital Corporation ("Universal") closed its public offering in
January 1987, and raised a total of $200,000 in gross proceeds by selling
10,000,000 shares at $.02 per share. In May 1995, Timothy J. Brasel acquired
a controlling interest (approximately 60% of the shares outstanding) in
Universal from its principal shareholders for approximately $27,000, and
became the President and sole director. During August 1997, Universal
completed a reverse acquisition of Remarc International, Inc., a company
which specialized in shipwreck research and project development. Universal
changed its name to Odyssey Marine Exploration, Inc. which currently trades on
the OTC Bulletin board. In connection with the closing of this transaction
Remarc contributed $60,000 to Universal to pay outstanding liabilities
including $12,700 of outstanding loans from Timothy J. Brasel and his
affiliates. In addition, Universal issued 500,000 shares of its common stock
to Timothy J. Brasel pursuant to a consulting agreement and 400,000 shares of
common stock to Bleu Ridge Consultants, Inc., an entity owned by Mr. Brasel,
as a finders fee for the transaction.
Capital 2000, Inc. ("Capital") closed its public offering in 1987 and
raised a total of $150,700 in gross proceeds by selling 15,070,000 shares at
$.01. Capital's name at the time of the offering was O.T.C. Capital
Corporation. In February 1996 Timothy J. Brasel acquired a controlling
interest (45% of the shares outstanding) in Capital from its principal
shareholders for $25,000 and became the President and sole director. During
February 1997 Capital completed a reverse acquisition of United Shields
Corporation ("USC") which holds the worldwide marketing rights for a
17
<PAGE>
<PAGE>
collapsible plastic drink bottle. After the closing Capital changed its name
to United Shields Capital and currently trades on the OTC Bulletin Board. In
connection with the closing of the transaction, USC contributed $50,000 to
Capital to pay outstanding liabilities including a $13,350 loan from Brasel
Family Partners. In addition, Capital entered into a 12 month consulting
agreement with Bleu Ridge Consultants, Inc. at the rate of $3,500 per month.
Mahogany Capital, Inc. ("Mahogany") had its Form 10-SB declared effective
on November 4, 1996. During December 1997 Mahogany completed a reverse
acquisition of Pontotoc Production Company, Inc., an oil and gas exploration
and development company located in Ada, Oklahoma. After the closing Mahogany
changed its name to Pontotoc Production, Inc. This company recently had its
common stock approved for trading on the OTC Bulletin Board.
Emerald Eagle Corp. closed its public offering in September 1988, and
raised a total of $50,000 in gross proceeds by selling 2,500,000 Units at $.02
per Unit. Emerald Eagle did not complete an acquisition while Mr. Sjoerdsma
was a director. During May 1992, Mr. Sjoerdsma and Mr. Brasel (a principal
shareholder) and the other major shareholders sold approximately 80% of their
shares in Emerald Eagle to an outside third party who then took control of the
company. Mr. Sjoerdsma received $1,000 for his shares and Brasel Family
Partners, Ltd. received $10,200 for its shares. Emerald Eagle subsequently
acquired Nortech Forest Products and changed its name to Nortech Forest
Technologies, Inc. which currently trades on the NASD's Bulletin Board.
Grason Industries, Inc. ("Grason") closed its public offering in May
1988, and raised a total of $407,500 in gross proceeds by selling 4,075,000
shares at $.10 per share. During March 1989, Grason completed a reverse
acquisition of Jan & Craig's Window Factory, Ltd. ("Jan & Craig's"), a company
in the business of selling replacement windows in the New York metropolitan
area. During the period from March 1989 through August 1989, all of the funds
in Grason were expended. On August 30, 1989, an agreement unwinding the
acquisition was entered into between Grason and Jan & Craig's. Pursuant
thereto all of the shares issued in connection with the acquisition were
canceled and Jan & Craig's signed a note payable to Grason for $265,000. On
September 8, 1989, Jan & Craig's filed a petition under Chapter 11 of the U.S.
Bankruptcy Code. The original management of Grason was reinstated. The
transaction with Jan & Craig's was unwound because the management of Jan &
Craig's anticipated the bankruptcy filing and after discussions with prior
management of Grason, both sides agreed that it would be in the best interests
of the shareholders of Grason to unwind the transaction and attempt to find a
new merger candidate.
In connection with the acquisition of Jan & Craig's, Tim Brasel sold
450,000 shares to an associate of Jan & Craig's for a price of $.04 per share
or $18,000.
During April 1994, Grason completed a reverse acquisition of Electronic
Technology Group, Inc., a Minnesota-based computer manufacturer. Grason
changed its name to ETG International, Inc. During 1995, ETG filed for
bankruptcy, and it is no longer an SEC reporting company and its common stock
is no longer publicly traded.
Tipton Industries, Inc. closed its public offering during October 1987
and completed a reverse acquisition of FiberChem, Inc. during December 1987.
Tipton was later acquired by Agri-Biotech, Inc. which currently trades on
NASDAQ.
18
<PAGE>
<PAGE>
Walnut Capital, Inc. ("Walnut") had its Form 10-SB declared effective on
October 22, 1996. During May 1998, Walnut completed a merger with Links Ltd.,
a company engaged in the business of marketing and sales of multimedia kiosks.
After the closing Walnut changed its name to Enter Tech Corp. This company
has not yet applied to have its shares listed for trading on the OTC Bulletin
Board.
CONFLICTS OF INTEREST
The Company's two officers and directors have organized three other
companies of a similar nature and with a similar purpose as the Company. In
addition, Mr. Brasel serves as President and a director of five publicly-held
shell companies which are in the same business as the Company. Consequently,
there are potential inherent conflicts of interest in Mr. Peirce and Mr.
Brasel acting as officers and directors of the Company. Insofar as the
officers and directors are engaged in other business activities, management
anticipates it will devote only a minor amount of time to the Company's
affairs. The officers and directors of the Company may in the future become
shareholders, officers or directors of other companies which may be formed for
the purpose of engaging in business activities similar to those conducted by
the Company. The Company does not currently 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.
The officers and directors are, so long as they are officers or directors
of the Company, subject to the restriction that all opportunities contemplated
by the Company's plan of operation which come to their attention, either in
the performance of their duties or in any other manner, will be considered
opportunities of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this requirement will
be a breach of the fiduciary duties of the officer or director. If a
situation arises in which more than one company desires to merge with or
acquire that target company and the principals of the proposed target company
have no preference as to which company will merge or acquire such target
company, the company of which Mr. Brasel first became an officer and director
will be entitled to proceed with the transaction. The five existing
publicly-held shell companies referred to in the preceding paragraph all filed
their registration statements before the Company did and therefore they will
have the first preference to proceed with a proposed merger with a target
business. As between the Company and the three other companies formed in
December 1996, the Company filed its registration statement with the
Securities and Exchange Commission third and therefore it will be entitled to
proceed with the proposed transaction after Westlake Capital Corp. and
Zirconium Capital Corp. have completed transactions. Except as set forth
above, the Company has not adopted any other conflict of interest policy with
respect to such transactions.
INVESTMENT 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
19
<PAGE>
<PAGE>
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 would subject the Company to material
adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION.
None of the Company's officers and/or directors receive any compensation
for their respective services rendered to the Company, nor have they received
such compensation in the past. They both have agreed to act without
compensation until authorized by the Board of Directors, which is not expected
to occur until the Registrant has generated revenues from operations after
consummation of a merger or acquisition. As of the date of this registration
statement, the Company has no funds available to pay directors. Further, none
of the directors are accruing any compensation pursuant to any agreement with
the Company.
It is possible that, after the Company successfully consummates a merger
or acquisition with an unaffiliated entity, that entity may desire to employ
or retain one or more members of the Company's management for the purposes of
providing services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a policy
whereby the offer of any post-transaction remuneration to members of
management will not be a consideration in the Company's decision to undertake
any proposed transaction. Each member of management has agreed to disclose to
the Company's Board of Directors any discussions concerning possible
compensation to be paid to them by any entity which proposes to undertake a
transaction with the Company and further, to abstain from voting on such
transaction. Therefore, as a practical matter, if each member of the
Company's Board of Directors is offered compensation in any form from any
prospective merger or acquisition candidate, the proposed transaction will not
be approved by the Company's Board of Directors as a result of the inability
of the Board to affirmatively approve such a transaction.
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. In the event the
Company consummates a transaction with any entity referred by associates of
management, it is possible that such an associate will be compensated for
their referral in the form of a finder's fee. It is anticipated that this fee
will be either in the form of restricted common stock issued by the Company as
part of the terms of the proposed transaction, or will be in the form of cash
consideration. However, if such compensation is in the form of cash, such
payment will be tendered by the acquisition or merger candidate, because the
Company has insufficient cash available. The amount of such finder's fee
cannot be determined as of the date of this registration statement, but is
expected to be comparable to consideration normally paid in like transactions.
No member of management of the Company will receive any finders fee, either
directly or indirectly, as a result of their respective efforts to implement
the Company's business plan outlined herein. Persons "associated" with
management is meant to refer to persons with whom management may have had
other business dealings, but who are not affiliated with or relatives of
management.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the Registrant for the
benefit of its employees.
20
<PAGE>
<PAGE>
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On December 10, 1996, the Company issued a total of 1,000,000 shares of
Common Stock to the following persons for a total of $50 in cash:
NAME NUMBER OF SHARES TOTAL CONSIDERATION
- --------------------------- ---------------- -------------------
Joseph J. Peirce 200,000 $ 10
Brasel Family Partners Ltd. 400,000 20
Paul H. Dragul 200,000 10
Nasus Lesarb, Ltd. 100,000 5
James R. Sjoerdsma 100,000 5
On December 22, 1997, the Company issued a total of 1,000,000 shares of
Common Stock to the following persons for a total of $10,000 in cash:
NAME NUMBER OF SHARES TOTAL CONSIDERATION
- --------------------------- ---------------- -------------------
James R. Sjoerdsma 100,000 $ 1,000
Peirce Enterprises 100,000 $ 1,000
Charitable Remainder Trust
of Timothy J. Brasel 150,000 $ 1,500
Bleu Ridge Consultants
Profit Sharing Plan &
Trust 100,000 $ 1,000
Charitable Remainder Trust
of Susan A. Brasel 100,000 $ 1,000
Charitable Remainder Trust
of Mary J. Brasel 50,000 $ 500
Paul H. Dragul IRA 400,000 $ 4,000
--------- -------
Total 1,000,000 $10,000
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 any of the Company's Officers, Directors, principal shareholders or
their affiliates or associates serve as officer or director or hold any
ownership interest. Management is not aware of any circumstances under which
this policy, through their own initiative may be changed.
The proposed business activities described herein classify the Company as
a "blank check" company. Many states have enacted statutes, rules and
regulations limiting the sale of securities of "blank check" companies in
their respective jurisdictions. 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, each shareholder of the Company has executed and
delivered a "lock-up" letter agreement, affirming that he/she shall not sell
his/her respective shares of the Company's common stock until such time as the
Company has successfully consummated a merger or acquisition and the Company
is no longer classified as a "blank check" company. In order to provide
further assurances that no trading will occur in the Company's securities
until a merger or acquisition has been consummated, each shareholder has
agreed to place his/her respective stock certificate with the Company's legal
counsel, who will not release these respective certificates until such time as
legal counsel has confirmed that a merger or acquisition has been successfully
consummated. The Company's legal counsel is Krys Boyle Freedman & Sawyer,
P.C., Suite 2700 South Tower, 600 17th Street, Denver, Colorado 80202.
However, while management believes that the procedures established to preclude
any sale of the Company's securities prior to closing of a merger or
acquisition will be sufficient, there can be no assurances that the procedures
21
<PAGE>
<PAGE>
established herein will unequivocally limit any shareholder's ability to sell
their respective securities before such closing.
ITEM 8. DESCRIPTION OF SECURITIES.
COMMON STOCK
The Company's Articles of Incorporation authorize the issuance of
100,000,000 shares of Common Stock, no par value. Each record holder of
Common Stock is entitled to one vote for each share held on all matters
promptly submitted to the stockholders for their vote. Cumulative voting for
the election of directors is not permitted by the Articles of Incorporation.
Holders of outstanding shares of Common Stock are entitled to such
dividends as may be declared from time to time by the Board of Directors out
of legally available funds; and, in the event of liquidation, dissolution or
winding up of the affairs of the Company, holders are entitled to receive,
ratably, the net assets of the Company available to stockholders after
distribution is made to the preferred stockholders, if any, who are given
preferred rights upon liquidation. Holders of outstanding shares of Common
Stock are, and all unissued shares when offered and sold will be, duly
authorized, validly issued, fully paid, and nonassessable. To the extent that
additional shares of the Company's Common Stock are issued, the relative
interests of the existing stockholders may be diluted.
Management is not aware of any circumstances under which any additional
shares of the Company's Common or Preferred Stock would be issued to
management, promoters or their affiliates or associates.
PREFERRED STOCK
The Company's Articles of Incorporation authorize the issuance of
5,000,000 shares of Preferred Stock, no par value. The Board of Directors of
the Company is authorized to issue the Preferred Stock from time to time in
series and is further authorized to establish such series, to fix and
determine the variations in the relative rights and preferences as between
series, to fix voting rights, if any, for each series, and to allow for the
conversion of Preferred Stock into Common Stock. The issuance of Preferred
Stock may have the effect of delaying or preventing a change in control of the
Company without any further action by shareholders. At present, no Preferred
Stock is issued or outstanding or contemplated to be issued.
DIVIDENDS
No dividends have been paid by the Company on any of its securities in
the past and such dividends are not contemplated in the foreseeable future.
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
There is no trading market for the Registrant' s Common Stock at present
and there has been no trading market to date. Management has not undertaken
any discussions, preliminary or otherwise, with any prospective market maker
concerning the participation of such market maker in the aftermarket for the
Company's securities and management does not intend to initiate any such
discussions until such time as the Company has consummated a merger or
22
<PAGE>
<PAGE>
acquisition. There is no assurance that a trading market will ever develop
or, if such a market does develop, that it will continue.
After a merger or acquisition has been completed, one or both of the
Company's two officers and directors will most likely be the persons to
contact prospective market makers. It is also possible that persons
associated with the entity that merges with or is acquired by the Company will
contact prospective market makers. The Company does not intend to use
consultants to contact market makers.
(a) MARKET PRICE. The Registrant's Common Stock is not quoted at the
present time.
Effective August 11, 1993, the Securities and Exchange Commission adopted
Rule 15g-9, which established 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.
The National Association of Securities Dealers, Inc. (the "NASD"), which
administers NASDAQ, has recently made changes in the criteria for initial
listing on the NASDAQ Small Cap market and for continued listing. For initial
listing, a company must have net tangible assets of $4 million, market
capitalization of $50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years. For initial
listing, the common stock must also have a minimum bid price of $4 per share.
In order to continue to be included on NASDAQ, a company must maintain
$2,000,000 in net tangible assets and a $1,000,000 market value of its
publicly-traded securities. In addition, continued inclusion requires two
market-makers and a minimum bid price of $1.00 per share.
Management intends to strongly consider undertaking a transaction with
any merger or acquisition candidate which will allow the Company's securities
to be traded without the aforesaid limitations. However, there can be no
assurances that, upon a successful merger or acquisition, the Company will
qualify its securities for listing on NASDAQ or some other national exchange,
23
<PAGE>
<PAGE>
or be able to maintain the maintenance criteria necessary to insure continued
listing. The failure of the Company to qualify its securities or to meet the
relevant maintenance criteria after such qualification in the future may
result in the discontinuance of the inclusion of the Company's securities on a
national exchange. In such events, trading, if any, in the Company's
securities may then continue in the non-NASDAQ over-the-counter market. As a
result, 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 twelve (12) holders of the Company's Common
Stock. In December 1996 and December 1997, the Company issued a total of
2,000,000 of its Common Shares to these persons for a total $10,050 in cash.
All of the issued and outstanding shares of the Company's Common Stock were
issued in accordance with the exemption from registration afforded by Section
4(2) of the Securities Act of 1933.
(c) DIVIDENDS. The Registrant 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 Registrant has not changed accountants since its formation and there
are no disagreements with the findings of said accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Registrant has sold securities which
were not registered as follows:
NUMBER OF
DATE NAME SHARES CONSIDERATION
- ----------------- ------------------------ --------- -------------
December 10, 1996 Joseph J. Peirce 200,000 $ 10.00
December 10, 1996 Brasel Family Partners
Ltd. 400,000 $ 20.00
December 10, 1996 Paul H. Dragul 200,000 $ 10.00
December 10, 1996 Nasus Lesarb, Ltd. 100,000 $ 5.00
December 10, 1996 James R. Sjoerdsma 100,000 $ 5.00
December 22, 1997 James R. Sjoerdsma 100,000 $ 1,000.00
December 22, 1997 Peirce Enterprises 100,000 $ 1,000.00
December 22, 1997 Charitable Remainder
Trust of Timothy J.
Brasel 150,000 $ 1,500.00
December 22, 1997 Bleu Ridge Consultants
Profit Sharing Plan &
Trust 100,000 $ 1,000.00
December 22, 1997 Charitable Remainder Trust
of Susan A. Brasel 100,000 $ 1,000.00
December 22, 1997 Charitable Remainder Trust
of Mary J. Brasel 50,000 $ 500.00
December 22, 1997 Paul H. Dragul, IRA 400,000 $ 4,000.00
--------- ----------
Total 2,000,000 $10,050.00
24
<PAGE>
<PAGE>
With respect to the sales made, the Registrant relied on Section 4(2) of
the Securities Act of 1933, as amended. No advertising or general
solicitation was employed in offering the shares. The securities were offered
for investment only and not for the purpose of resale or distribution, and the
transfer thereof was appropriately restricted. With the exception of Nasus
Lesarb, Ltd. and James Sjoerdsma, all of the above investors were accredited
investors. Nasus Lesarb, Ltd. and Mr. Sjoerdsma are both sophisticated
investors and they both had access to information on the Company necessary to
make an informal investment decision.
All of the shareholders of the Company have executed and delivered a
"lock-up" letter agreement which provides that each such shareholder shall not
sell his/her respective securities until such time as the Company has
successfully consummated a merger or acquisition. Further, each shareholder
has placed his/her respective stock certificate with the Company's legal
counsel, who has been instructed not to release any of the certificates until
the Company has closed a merger or acquisition. 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.
In general, under Rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one year holding period, under certain
circumstances, may sell within any three-month period a number of shares which
does not exceed the greater of one percent of the then outstanding Common
Stock or the average weekly trading volume during the four calendar weeks
prior to such sale. Rule 144 also permits, under certain circumstances, the
sale of shares without any quantity limitation by a person who has satisfied a
two-year holding period and who is not, and has not been for the preceding
three months, an affiliate of the Company.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The only statute, charter provision, bylaw, contract, or other
arrangement under which any controlling person, Director or Officer of the
Registrant is insured or indemnified in any manner against any liability which
he may incur in his capacity as such, is as follows:
(a) The Company has the power under the Colorado Business Corporation
Act to indemnify any person who was or is a party or is threatened to be made
a party to any action, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a Director,
Officer, employee, fiduciary, or agent of the Company or was serving at its
request in a similar capacity for another entity, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection therewith if he acted in good faith
and in a manner he reasonably believed to be in the best interest of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. In case of an action
brought by or in the right of the Company such persons are similarly entitled
to indemnification if they acted in good faith and in a manner reasonably
believed to be in the best interests of the Company but no indemnification
shall be made if such person was adjudged to be liable to the Company for
negligence or misconduct in the performance of his duty to the Company unless
and to the extent the court in which such action or suit was brought
determines upon application that despite the adjudication of liability, in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnification. In such event, indemnification is limited to
25
<PAGE>
<PAGE>
reasonable expenses. Such indemnification is not deemed exclusive of any
other rights to which those indemnified may be entitled under the Articles of
Incorporation, Bylaws, agreement, vote of shareholders or disinterested
directors, or otherwise.
(b) Article V of the Registrant's Articles of Incorporation provides in
general that the Registrant is authorized to indemnify its Officers and
Directors to the fullest extent permitted by the Colorado Business Corporation
Act as in effect at the time of the conduct by such persons.
PART F/S
FINANCIAL STATEMENTS.
Attached are audited financial statements for the Company for the period
ended December 31, 1997. The following financial statements are attached to
this report and filed as a part thereof. See pages F-1 through F-8.
1) Table of Contents - Financial Statements
2) Report of Independent Certified Public Accountants
3) Balance Sheet
4) Statement of Operations
5) Statement of Changes in Stockholders' Equity
6) Statement of Cash Flows
7) Notes to Financial Statements
PART IV
ITEM 1. EXHIBIT INDEX.
EXHIBIT
NUMBER DESCRIPTION LOCATION
- ------- ------------------------------ ----------------------------
(2) Articles of Incorporation
and Bylaws:
2.1 Articles of Incorporation Filed electronically with
initial filing
2.2 Bylaws Filed electronically with
initial filing
(3) Instruments Defining the
Rights of Holders:
3.1 Copies of All Lock-up Agree- Filed electronically with
ments by the Twelve Company initial filing
Shareholders
(10)(a) Consents - Experts:
10.1 Consent of Schumacher & Filed electronically herewith
Associates, Inc.
26
<PAGE>
<PAGE>
INDEX TO FINANCIAL STATEMENTS
STUDIO CAPITAL CORP.
(A Development Stage Company)
FINANCIAL STATEMENTS
with
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Report of Independent Certified Public Accountants F-2
Financial Statements:
Balance Sheets F-3
Statements of Operations F-4
Statement of Changes in Stockholders'
Equity F-5
Statements of Cash Flows F-6
Notes to Financial Statements F-7
F-1
<PAGE>
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Studio Capital Corp.
Aurora, CO
We have audited the accompanying balance sheet of Studio Capital Corp. (a
development-stage company) as of December 31, 1997, and the related statements
of operations, stockholders' equity and cash flows for the period from
December 5, 1996 (date of inception) through December 31, 1997. These
financial statements are the responsibility of the company'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 auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. 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 Studio Capital Corp. (a
development-stage company) as of December 31, 1997, and the results of its
operations, changes in its stockholders' equity and its cash flows for the
period from December 5, 1996 (date of inception) through December 31, 1997 in
conformity with generally accepted accounting principles.
/s/ Schumacher & Associates, Inc.
Schumacher & Associates, Inc.
Certified Public Accountants
12835 E. Arapahoe Road
Tower II, Suite 110
Englewood, CO 80112
February 20, 1998
F-2
<PAGE>
<PAGE>
STUDIO CAPITAL CORP.
(A Development Stage Company)
BALANCE SHEETS
ASSETS
March 31,
December 31, 1998
1997 (Unaudited)
------------ -----------
CURRENT ASSETS:
Cash $ - $ 3,397
-------- ---------
Total Current Assets - 3,397
Organization costs 50 522
Stock Subscriptions Receivable 10,000 -
Deferred offering costs - 7,500
-------- --------
TOTAL ASSETS $ 10,050 $ 11,419
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ - $ 3,000
-------- --------
Total Current Liabilities - 3,000
-------- --------
TOTAL LIABILITIES - 3,000
Commitments (Note 4) - -
Stockholders' Equity:
Preferred stock, no par value
5,000,000 shares authorized,
none issued and outstanding - -
Common stock, no par value
100,000,000 shares authorized,
2,000,000 issued and outstanding 10,050 10,050
Additional Paid In Capital - 900
Accumulated (Deficit) - (2,531)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 10,050 8,419
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 10,050 $ 11,419
======== ========
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
<PAGE>
STUDIO CAPITAL CORP.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For the Period For the Three
From December 5, Months Ended
1996 through March 31, 1998
December 31, 1997 (Unaudited)
----------------- --------------
Revenue $ - $ -
---------- ----------
Expense:
Amortization - 28
Legal and audit fees - 1,000
Other - 1,503
---------- ----------
Total expenses - 2,531
---------- ----------
Net (Loss) $ - $ (2,531)
---------- ----------
Per Share $ - $ Nil
========== ==========
Weighted Average Shares Outstanding 2,000,000 2,000,000
========== ==========
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
<PAGE>
STUDIO CAPITAL CORP.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period from December 5, 1996 (date of inception) through
March 31, 1998 (Unaudited)
Addit-
ional Accumu-
Preferred Stock Common Stock Paid-in lated
No./Shares Amount No./Shares Amount Capital (Deficit) Total
---------- ------ ---------- ------ ------- --------- -------
Balance at
December 5,
1996 - - - $ - $ - $ - $ -
Common stock
issued for
cash, at in-
ception, at
$.00005 per
share - - 1,000,000 $ 50 $ - $ - $ 50
--- --- --------- ------- ---- ------ -------
Balance at
December 31,
1996 - - 1,000,000 50 - - 50
Common stock
issued for
cash, at $.01
per share - - 1,000,000 10,000 - - 10,000
Net loss-year
ended December
31, 1997 - - - - - - -
--- --- --------- ------- ---- ------ -------
Balance at
December 31,
1997 - - 2,000,000 $10,050 $ - $ - $10,050
Contributed
capital -
services and
facilities
provided by
related
parties - - - - 900 - 900
Net loss -
3 months
ended March
31, 1998
(unaudited) - - - - - (2,531) $(2,531)
--- --- --------- ------- ---- ------ -------
Balance at
March 31,
1998 (un-
audited) - - 2,000,000 $10,050 $900 $(2,531) $ 8,419
=== === ========= ======= ==== ======= =======
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
<PAGE>
STUDIO CAPITAL CORP.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Period For the Three
From December 5, Months Ended
1996 through March 31, 1998
December 31, 1997 (Unaudited)
----------------- --------------
Operating Activities:
Net (Loss) $ - $ (2,531)
Adjustments to reconcile Net Cash
(Used in) Operating Activities:
Amortization - 28
Increase in accounts payable - 3,000
-------- --------
Net Cash Provided by Operating
Activities - 497
-------- --------
Cash Flows from Investing Activities - -
-------- --------
Cash Flows from Financing Activities:
Organization costs incurred (50) (500)
Deferred offering costs incurred - (7,500)
Increase in additional paid-in capital - 900
Issuance of common stock 10,050 -
(Increase) Decrease in stock sub-
scriptions receivable (10,000) 10,000
-------- --------
Net Cash Provided by Financing Activities - 2,900
-------- --------
Increase in Cash - 3,397
Cash, Beginning of Period - -
-------- --------
Cash, End of Period $ - $ 3,397
======== ========
Interest Paid $ - $ -
======== ========
Income Taxes Paid $ - $ -
======== ========
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
<PAGE>
STUDIO CAPITAL CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(1) SUMMARY OF ACCOUNTING POLICIES
This summary of significant accounting policies of Studio Capital Corp.
(Company) is presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of the
Company's management who is responsible for their integrity and objectivity.
These accounting policies conform to generally accepted accounting principles
and have been consistently applied in the preparation of the financial
statements.
(a) DESCRIPTION OF BUSINESS
The Company was organized on December 5, 1996 for the purpose of engaging in
any lawful business but it is management's plan to seek a business
combination. The Company is a development-stage company since planned
principal operations have not commenced. The Company has selected December 31
as its year end.
(b) USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
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 revenue and expenses during the reporting period.
Actual results could differ from those estimates.
(c) ORGANIZATION COSTS
Costs incurred to organize the Company is being amortized on a straight-line
basis over a sixty month period.
(2) COMMON STOCK ISSUED
During the period ended December 31, 1996 the Company issued 1,000,000
restricted shares of common stock for $50 cash. During the period ended
December 31, 1997 the Company issued 1,000,000 restricted shares of common
stock for $10,000 of stock subscriptions. The $10,000 was received during
February 1998.
(3) RELATED PARTY TRANSACTION
The Company uses the office of a shareholder at no cost. The Company expects
this arrangement to continue until the Company commences planned operations.
The Company considered the value of this office facility to be $100 per month
and has accounted for this amount as additional paid-in capital. In
addition, two officers of the Company provided services at no cost to the
Company. The value of these services was determined to be $100 per month
per officer which has been accounted for as additional paid-in capital.
F-7
<PAGE>
<PAGE>
(4) SUBSEQUENT EVENT
The Company has agreed to pay $7,500 for registration of the Company with the
Securities and Exchange Commission and $500 for organization of the Company.
Of this amount, $6,000 has been paid and the balance of $2,000 is payable
upon approval of the registration statement.
F-8
<PAGE>
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this Amendment No. 1 to its Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized.
STUDIO CAPITAL CORP.
By /s/ J. J. Peirce
Date: June 19, 1998 J. J. Peirce, President and Director
By /s/ Timothy J. Brasel
Timothy J. Brasel, Secretary,
Treasurer and Director
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
Board of Directors
Studio Capital Corp.
Aurora, Colorado
We have issued our report dated February 20, 1998, accompanying the financial
statements of Studio Capital Corp. in the Registration Statement. We consent
to the use of the aforementioned report in the Registration Statement.
/s/ Schumacher & Associates, Inc.
SCHUMACHER & ASSOCIATES, INC.
Certified Public Accountants
12835 E. Arapahoe Road
Tower II, Suite 110
Englewood, Colorado 80112
June 19, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheets and statements of operations found on pages F-3 and F-4 of the
Company's Form 10-SB for the period ended March 31, 1998, and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1998
<CASH> 3,397
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,397
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 11,419
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 10,050
0
0
<OTHER-SE> (1,631)
<TOTAL-LIABILITY-AND-EQUITY> 11,419
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,531
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,531)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,531)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
