SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
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
NATIONAL VENTURE CAPITAL FUND, INC.
(Exact Name of Small Business Issuer as specified in its charter)
COLORADO 84-1432661
(State or other (IRS Employer File Number)
jurisdiction of
incorporation)
1977 S. Vivian Street
LAKEWOOD, COLORADO 80228
(Address of principal executive offices) (zip code)
(303) 763-5630
(Registrant's telephone number, including area code)
Securities to be Registered Pursuant to Section 12(b) of the Act:
None
Securities to be Registered Pursuant to Section 12(g) of the Act:
Common Stock, $0.0001 per share par value
DOCUMENTS INCORPORATED BY REFERENCE
Documents incorporated by reference are found in Item 15.
<PAGE>
ITEM 1. DESCRIPTION OF BUSINESS.
(a) GENERAL DEVELOPMENT OF BUSINESS
National Venture Capital Fund, Inc. (the "Company" or the
"Registrant"), is a Colorado corporation. The principal business address is
1977 S. Vivian Street, Lakewood, Colorado 80228.
The Company was incorporated under the laws of the State of Colorado on
June 12, 1997.
The Company was inactive until April, 1998, at which time the present
management of the Company became involved. Since the present management
became involved, the primary activity of the Company has been directed
towards organizational efforts. During this fiscal year, the Company plans
to implement a program to identify potential acquisition candidates.
As of the date of this Registration Statement, the Company has not
engaged in any preliminary efforts intended to identify possible business
opportunities and has neither conducted negotiations nor entered into a
letter of intent concerning any business opportunity. The Company is a shell
corporation whose principal purpose is to locate and consummate a merger or
acquisition with a private entity. The Company is filing this Form 10SB on a
voluntary basis to become a public, reporting company under the Securities
Act of 1934, as amended. (the "Exchange Act").
The Company has not been subject to any bankruptcy, receivership or
similar proceeding.
(b) NARRATIVE DESCRIPTION OF THE BUSINESS
GENERAL
From inception to the date of this Registration Statement, the Company
has had no operations. During this period, the Company has carried no
inventories or accounts receivable. No independent market surveys have ever
been conducted to determine demand for the Company's products and services,
since the Company has never had any products or services which it has
provided to anyone. During this period, the Company has generated no
revenues. The Company's fiscal year end is April 30th.
ORGANIZATION
The Company presently comprises one corporation with no subsidiaries or
parent entities and is in the developmental stage.
(c) OPERATIONS
GENERAL
The Company proposes to implement a business plan to investigate and,
if warranted, merge with or acquire the assets or common stock of an entity
actively engaged in business which generates revenues. The Company will
seek opportunities for long-term growth potential as opposed to short-term
earnings.
<PAGE>
As of the date hereof, the Company has no business opportunities under
investigation. 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. Further,
there is no present potential that the Company may acquire or merge with a
business or company in which the Company's promoters, management or their
affiliates or associates directly or indirectly have an ownership interest.
The Company's Board of Directors intends to provide the Company's
shareholders with complete disclosure documentation in the form of a proxy
statement concerning any potential business opportunity and the structure of
the proposed business combination prior to its consummation. While such
disclosure may include audited financial statements of such 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 sixty 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, or the
transaction will be voidable.
As a result of its filing of this Form 10SB, the Company has become
subject to the reporting obligations under the Exchange Act. These include
an annual report under cover of Form 10KSB, with audited financial
statements, unaudited quarterly reports, and the requirement proxy
statements in regard to annual shareholder meetings. Any potential
acquisition or merger candidates will be required to meet these same
requirements, including the necessity of audited financial statements. Such
requirements may have the effect of restricting the potential pool of
candidates for merger or acquisition. The Company will voluntarily file
periodic reports in the event that its obligation to file such reports is
suspended under the Exchange Act.
The Registrant has no full-time employees. The Registrant's President
and Secretary-Treasurer have agreed to allocate a portion of their time to
the activities of the Registrant, without compensation. These officers
anticipate that the business plan of the Company can be implemented by their
collectively devoting approximately twenty hours per month to the business
affairs of the Company and, consequently, conflicts of interest may arise
with respect to the limited time commitment of such officers.
The primary attraction of the Registrant as a merger partner or as an
acquisition vehicle will be its status as a public company. Any business
combination or transaction will likely result in a significant issuance of
shares and substantial dilution to present shareholders of the Registrant.
The Company has no present plans to hire a consultant to aid the
Company in any acquisition or merger.
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,
the assets of the Company could be used or attached to satisfy any
liabilities subject to such indemnification. See Part II, Item 5 below.
<PAGE>
GENERAL BUSINESS PLAN
The Company's purpose is to seek, investigate and, if such
investigation warrants, to acquire controlling 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. The Company may participate in a business venture of
virtually any kind or nature.
The Company will solicit prospective acquisitions based upon informal
contacts or relationships which management has a will develop in the future.
There are no plans to advertise for acquisitions or to hire third party
consultants to facilitate acquisitions. The Company has no way of knowing
how many individuals will be contacted before a potential acquisition may be
finalized. The Company has no plans to do any acquisition with any
associates or affiliates of management, or with management itself.
The Company may seek a business opportunity in the form of firms which
have recently commenced operations, are developing companies in need of
expansion into new products or markets, are seeking to develop a new product
or service or are established, mature businesses. The Company may also offer
a controlling interest to such business opportunity, if the situation
warrants.
In seeking business opportunities, the management decision of the
Company will be based upon the objective of seeking long-term appreciation
in the value of the Company. Current income will only be a minor factor in
such decisions.
It is not anticipated that the Company will be able to participate in
more than one business opportunity. However, Management may, in its sole
discretion, elect to enter into more than one acquisition if it believes
these transactions can be effectuated on terms favorable to the Company.
This lack of diversification will not permit the Company to offset potential
losses from one business opportunity against profits from another and should
be considered a substantial risk to shareholders of the Company.
The analysis of new business opportunities will be undertaken by or
under the supervision of the officers and directors. The Company will have
unrestricted flexibility in seeking, analyzing and participating in business
opportunities. In its efforts, the Company will consider the following,
among other, factors:
(a) potential for growth, as indicated by new technology, anticipated
market expansion or new products;
(b) competitive position compared to other firms of similar size and
experience within the industry segment, as well as within the
industry as a whole;
(c) strength and diversity of management, either in place or scheduled
for recruitment;
<PAGE>
(d) capital requirements and anticipated availability of required
funds to be provided by the target company from operations,
through the sale of additional securities, the formation of joint
ventures or similar arrangements, or from other sources;
(e) the cost of participation by the Company as compared to the
perceived tangible and intangible values and potential;
(f) the extent to which the business opportunity can be advanced;
(g) the accessibility of required management expertise, personnel, raw
materials, services, professional assistance and other required
items; and
(h) such other relevant factors as may arise from time to time,
including investor and market maker, if any, interest.
In applying the foregoing criteria, no one of which is now known to be
controlling, Management will attempt to analyze all relevant factors and
make a determination based upon reasonable investigative measures and
available data. Potentially available business opportunities may occur 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. Because of the
Company's lack of capital, the Company may not discover or adequately
evaluate adverse facts about the opportunity to be acquired.
The Company is unable to predict when it may participate in a business
opportunity. It expects, however, that the analysis of specific proposals
and the selection of a business opportunity may take a substantial amount of
time after the effective date of this Registration Statement.
Prior to making a decision to participate in a business opportunity,
the Company will generally request that it be provided with written
materials regarding the business opportunity and containing such items as:
(i) a description of product, service and company history; (ii) management
resumes; (iii) financial information (including projections and audited
financial statements, if available); (iv) available projections with
related assumptions upon which they are based; (v) an explanation of
proprietary products and services; (vi) evidence of existing patents,
trademarks or service marks or rights thereto; (vii) present and proposed
forms of compensation to management; (viii) a description of transactions
between the target and its affiliates during relevant periods; (ix) a
description of present and required facilities; (x) an analysis of risks and
competitive conditions; (xi) a financial plan of operation and estimated
capital requirements; and (xii) other information deemed relevant under the
circumstances, including investor and market makers, but only after the
release of public information on the target.
As part of the Company's investigation, officers and directors will
meet personally with management and key personnel, visit and inspect
material facilities, obtain independent analysis or verification of certain
information provided, check references of management and key personnel and
take other reasonable investigative measures to the extent of the Company's
limited financial resources.
<PAGE>
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Because of 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. Potentially available
business opportunities may occur 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. The Company has no present plans to raise any
necessary capital through private placements or public offerings prior to
the location of an acquisition or merger candidate.
(d) MARKETS
The Company's initial marketing plan will be focused completely on
finding an acquisition candidate as discussed above. No efforts toward this
marketing plan have been made as of the date of this Registration Statement.
(e) RAW MATERIALS
The use of raw materials is not now material factor in the Company's
operations at the present time.
(f) CUSTOMERS AND COMPETITION
At the present time, the Company is expected to be an insignificant
participant among the firms which engage in the acquisition of business
opportunities. There are a number of established companies, such as venture
capital and financial concerns, many of which are larger and better
capitalized than the Company and/or have greater personnel resources and
technical expertise. 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.
(g) BACKLOG
At April 30, 1998, the Company had no backlogs.
(h) EMPLOYEES
At as of the date hereof, the Company has no employees. The Company
does not plan to hire employees in the future.
(i) PROPRIETARY INFORMATION
<PAGE>
The Company has no proprietary information.
(j) GOVERNMENT REGULATION
The Company is not subject to any material governmental regulation or
approvals.
(k) RESEARCH AND DEVELOPMENT
The Company has never spent any amount in research and development
activities.
(l) ENVIRONMENTAL COMPLIANCE
At the present time, the Company is not subject to any costs for
compliance with any environmental laws.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Results of Operations
The Company has generated no revenues from its operations since
inception. Since the Company has not generated revenues and has never been
in a profitable position, it operates with minimal overhead. The Company's
primary activity will be to seek an acquisition candidate. As of the end of
the reporting period, the Company has concluded no acquisitions and has
spoken with no potential candidates. The attempt to seek an acquisition
candidate or candidates will be the primary focus of the Company's
activities in the coming fiscal year.
Liquidity and Capital Resources
As of the end of the reporting period, the Company had $22,000 in
cash. There was no significant change in working capital during this
fiscal year.
Management feels that the Company has inadequate working capital to
pursue any business opportunities other than seeking an acquisition
candidate. The Company will have minimal capital requirements prior to the
consummation of any acquisition but can pursue an acquisition candidate.
Until a suitable candidate is identified, Mr. Howard C. Cadwell and Ms.
Laurie L. Quam will personally provide the necessary funds for the operation
of the Company, which are expected to be minimal. There is no plan to
reimburse either Mr.Cadwell or Ms. Quam for any advances. The Company does
not intend to pay dividends in the foreseeable future.
ITEM 3. DESCRIPTION OF PROPERTIES
As of April 30, 1998, the Company's business office was located at 1977
S. Vivian Street, Lakewood, Colorado 80228. The Company pays no rent for
this office space, which is occupied by
<PAGE>
Ms. Laurie L. Quam, an Officer and Director of the Company. There are no
plans to charge the Company for office space. The Company has no
properties.
Item 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following sets forth the number of shares of the Registrant's
$0.0001 par value common stock beneficially owned by (i) each person who, as
of September 30, 1998, was known by the Company to own beneficially more
than five percent (5%) of its common stock; (ii) the individual Directors of
the Registrant and (iii) the Officers and Directors of the Registrant as a
group.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1)(2) CLASS
<S> <C> <C>
Howard C. Cadwell(3) 8,001,000 39.8%
1977 S. Vivian Street
Lakewood, Colorado 80228.
Laurie L. Quam 8,000,000 39.8%
1977 S. Vivian Street
Lakewood, Colorado 80228.
All Officers and Directors
as a Group 16,001,000 79.6%
(two persons)
(1) All ownership is beneficial and on record, unless indicated otherwise.
(2) Beneficial owners listed above have sole voting and investment power
with respect to the shares shown, unless otherwise indicated.
(3) Does not include 1,000 shares owned by Laurie Q. Cadwell, for which Mr.
Cadwell disclaims beneficial ownership.
All of the shareholders of the Company have signed lock up agreements which
will prevent all of the common shares from being sold or transferred, either
in the open market or in a private transaction, until the Company has
consummated a merger or acquisition and is no longer classified as a shell
corporation under applicable federal or state law. The share certificates
will be held by the Company's counsel until such merger or acquisition has
been consummated. Any liquidation of the current shareholders after the
release of the shares from the lock up may have a depressive effect upon the
trading prices of the Company's securities in any future market which may
develop.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The Directors and Executive Officers of the Company, their ages and
present positions held in the Company are as follows:
<PAGE>
NAME AGE POSITION HELD
Howard C. Cadwell 56 President and Director
Laurie L. Quam 37 Secretary, Treasurer and Director
The Company's Directors will serve in such capacity until the next
annual meeting of the Company's shareholders and until their successors have
been elected and qualified. The officers serve at the discretion of the
Company's Directors. There are no family relationships among the Company's
officers and directors, nor are there any arrangements or understandings
between any of the directors or officers of the Company or any other person
pursuant to which any officer or director was or is to be selected as an
officer or director.
Mr. Cadwell and Ms. Quam should be considered the "parents" or
"promoters" of the Company because of the shareholdings and control
positions held by them in the Company and the fact that each has taken
significant initiative in founding and organizing the business of the
Company. These individuals are the only "parents" or "promoters" of the
Company.
HOWARD C. CADWELL. Mr. Cadwell has been the President and a Director of
the Company since inception in 1997. He is the founder and owner of Big City
Burrito, a Mexican restaurant in Fort Collins, Colorado. He has been
involved with the Mexican restaurant from 1994 to the present. From 1982
until 1993, he was the owner of Pottery World, a retail pottery store in San
Jose, California. Mr. Cadwell attended the University of Wyoming and
majored in Electrical Engineering.
LAURIE L. QUAM . Ms. Quam has been Secretary-Treasurer and a Director
of the Company since inception in 1997. She is also the Secretary and a
Director of New World Publishing, Inc., a public company. From 1990 to
1994. she was the owner of Budget Framer, a private business. She attended
Miami Dade Community College in Miami, Florida.
PREVIOUS BLANK CHECK OFFERINGS
Neither Mr. Cadwell nor Ms. Quam have previously participated in any
Blank Check Offerings within the past five years and have no current
plans to participate in other Blank Check Offerings.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's business office is located at 1977 S. Vivian Street,
Lakewood, Colorado 80228. The Company pays no rent for this office space,
which is occupied by Ms. Quam. There are no plans to charge the Company for
office space. Otherwise, there have been no related party transactions, or
any other transactions or relationships required to be disclosed pursuant to
Item 404 of Regulation S-B.
<PAGE>
ITEM 8. LEGAL PROCEEDINGS.
No legal proceedings of a material nature to which the Company is a
party were pending during the reporting period, and the Company knows of no
legal proceedings of a material nature pending or threatened or judgments
entered against any director or officer of the Company in his capacity as
such.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(a) PRINCIPAL MARKET OR MARKETS
The Company's securities have never been listed for trading on any
market and are not quoted at the present time. At the present time, the
Company does not know where secondary trading will eventually be conducted.
The place of trading, to a large extent, will depend upon the size of the
Company's eventual acquisition. To the extent, however, that trading will be
conducted in the over-the-counter market in the so-called "pink sheets" or
the NASD's "Electronic Bulletin Board," a shareholder may find it more
difficult to dispose of or obtain accurate quotations as to price of the
Company's securities. In addition, The Securities Enforcement and Penny
Stock Reform Act of 1990 requires additional disclosure related to the
market for penny stock and for trades in any stock defined as a penny stock.
(b) APPROXIMATE NUMBER OF HOLDERS OF COMMON STOCK
As of the date hereof, a total of 20,101,000 of shares of the
Company's Common Stock were outstanding and the number of holders of record
of the Company's common stock at that date was forty.
(c) DIVIDENDS
Holders of common stock are entitled to receive such dividends as
may be declared by the Company's Board of Directors. No dividends on the
common stock were paid by the Company during the periods reported herein nor
does the Company anticipate paying dividends in the foreseeable future.
(d) THE SECURITIES ENFORCEMENT AND PENNY STOCK REFORM ACT OF 1990
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure and documentation related to the market for penny
stock and for trades in any stock defined as a penny stock. Unless the
Company can acquire substantial assets and trade at over $5.00 per share on
the bid, it is more likely than not that the Company's securities, for some
period of time, would be defined under that Act as a "penny stock." As a
result, those who trade in the Company's securities may be required to
provide additional information related to their fitness to
<PAGE>
trade the Company's shares. These requirements present a substantial burden
on any person or brokerage firm who plans to trade the Company's securities
and would thereby make it unlikely that any liquid trading market would ever
result in the Company's securities while the provisions of this Act might be
applicable to those securities.
(e) BLUE SKY COMPLIANCE
The trading of blank check companies may be restricted by the
securities laws ("Blue Sky" laws) of the several states. Management is aware
that a number of states currently prohibit the unrestricted trading of blank
check companies absent the availability of exemptions, which are in the
discretion of the states' securities administrators. The effect of these
states' laws would be to limit the trading market, if any, for the shares of
the Company and to make resale of shares acquired by investors more
difficult.
The impact of these Blue Sky laws is considered to be minimal since the
Company does not intend to qualify the Company's outstanding securities for
secondary trading in any state until such time as an acquisition or merger
has been consummated.
(f) INVESTMENT COMPANY ACT OF 1940
The Company does not intend to engage in any activities which would
cause it to be classified as an "investment company" under the Investment
Company Act of 1940, as amended. However, to the extent that the Company
would inadvertently become an investment company because of its activities,
the Company would be subjected to additional, costly and restrictive
regulation.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
The following shareholders acquired their respective shares in the
Company during the Company's initial capitalization in 1997 at par value:
NAME NUMBER OF SHARES
Howard C.Cadwell 8,000,000
Laurie L. Quam 8,000,000
George Lee 1,000,000
John C. Lee 1,000,000
Mel Kupetz 750,000
Patricia L. Lorie 250,000
Richard H. Steinberg 600,000
Daniel C. Steinberg 400,000
David M. Summers 1,000
The following shareholder acquired his shares in the Company in
April, 1998 at a price of $0.10 per share:
<PAGE>
NAME NUMBER OF SHARES
Mark Lawrence 50,000
The following shareholders acquired their shares in the Company in
April, 1998 at a price of $0.50 per share:
NAME NUMBER OF SHARES
Walter T. Grandy, Jr. 4,000
Gang Bong Lee 4,000
Stacy L. Rogers 3,000
Mary S. Grandy 2,000
Douglas W. Gappa 2,000
Alisa M. Levy 2,000
David W. Romek 2,000
Donald B. Fox 2,000
Philip J. Davis 2,000
Pamela S. Davis 2,000
Marc Levy 2,000
Todd Levy 2,000
Megan Lawrence 2,000
Angie O. Lee 1,500
Jeanne M. Lee 1,500
Howard C. Cadwell 1,000
Laurie Q. Cadwell 1,000
Michael Brunschwig 1,000
Geegee Brunschwig 1,000
Deborah Connelly 1,000
Michael A. Connelly 1,000
Judith Harayda 1,000
Darius Bozorgpour 1,000
Virginia L. Young 1,000
Michael E. Connelly 1,000
Nicole Connelly 1,000
Steven Walker 1,000
Carol L. Lawrence 1,000
Courtney S. Lawrence 1,000
Lynn C. Gelfenbaum 1,000
Linda Jew 600
Wawa C. Jew 200
Carolyn Kuhl 200
Total 50,000
<PAGE>
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, as amended, in that these
were private offerings to individuals who were sophisticated investors
and had access to or received all pertinent information relative to
this investment.
All of the shares of common stock of the Registrant are restricted
securities as defined under the Securities Act of 1933, as amended. These
shares may not be offered for public sale except if registered or pursuant
to an exemption from registration, such as Rule 144. The Company has issued
stop transfer orders concerning the transfer of certificates representing
all the common stock issued and outstanding.
All of the shareholders of the Company have signed lock up agreements
which will prevent all of the common shares from being sold or transferred,
either in the open market or in a private transaction, until the Company has
consummated a merger or acquisition and is no longer classified as a shell
corporation under applicable federal or state law. The share certificates
will be held by the Company's counsel until such merger or acquisition has
been consummated. Any liquidation of the current shareholders after the
release of the shares from the lock up may have a depressive effect upon the
trading prices of the Company's securities in any future market which may
develop.
ITEM 11. DESCRIPTION OF SECURITIES.
The Company is authorized to issue 100,000,000 shares of Common Stock,
par value $0.0001 per share, and 10,000,000 shares of non-voting Preferred
Stock, par value $0.0001 per share. As of September 30, 1998, 20,101,000
shares of Common Stock were outstanding. As of the same date, no Preferred
Stock was issued or outstanding. The Company has no specific plans at this
time or in the future to issue any additional securities to management,
promoters or their affiliates or associates. It is the specific intention
of the Company to issue its securities only in connection with an
acquisition as described in this Registration Statement.
COMMON STOCK
The holders of Common Stock have one vote per share on all matters
(including election of Directors) without provision for cumulative voting.
Thus, holders of more than 50% of the shares voting for the election of
directors can elect all of the directors, if they choose to do so. The
Common Stock is not redeemable and has no conversion or preemptive rights.
The Common Stock currently outstanding is validly issued, fully paid
and non-assessable. In the event of liquidation of the Company, the holders
of Common Stock will share equally in any balance of the Company's assets
available for distribution to them after satisfaction of creditors and the
holders of the Company's senior securities, whatever they may be. The
Company may pay dividends, in cash or in securities or other property when
and as declared by the Board of Directors from funds legally available
therefor, but has paid no cash dividends on its Common Stock.
<PAGE>
PREFERRED STOCK
Under the Articles of Incorporation, the Board of Directors has the
authority to issue non-voting Preferred Stock and to fix and determine its
series, relative rights and preferences to the fullest extent permitted by
the laws of the State of Colorado and such Articles of Incorporation. As of
the date of this Registration Statement, no shares of Preferred Stock are
issued or outstanding. The Board of Directors has no plan to issue any
Preferred Stock in the foreseeable future.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles of Incorporation authorize the Board of
Directors, on behalf of the Company and without shareholder action, to
exercise all of the Company's powers of indemnification to the maximum
extent permitted under the applicable statute. Title 7 of the Colorado
Revised Statutes, 1986 Replacement Volume ("CRS"), as amended, permits the
Company to indemnify its directors, officers, employees, fiduciaries, and
agents as follows:
Section 7-109-102 of CRS permits a corporation to indemnify such
persons for reasonable expenses in defending against liability incurred in
any legal proceeding if:
(a) The person conducted himself or herself in good faith;
(b) The person reasonably believed:
(1) In the case of conduct in an official capacity with the
corporation, that his or her conduct was in the corporation's best
interests; and
(2) In all other cases, that his or her conduct was at least not
opposed to the corporation's best interests; and
(c) In the case of any criminal proceeding, the person had no
reasonable cause to believe that his or her conduct was unlawful.
A corporation may not indemnify such person under this Section 7-109-102 of
CRS:
(a) In connection with a proceeding by or in the right of the
corporation in which such person was adjudged liable to the corporation; or
(b) In connection with any other proceeding charging that such person
derived an improper benefit, whether or not involving action in an official
capacity, in which proceeding such person was adjudged liable on the basis
that he or she derived an improper personal benefit.
Unless limited by the Articles of Incorporation, and there are not such
limitations with respect to the Company, Section 7-109-103 of CRS requires
that the corporation shall indemnify such a person against reasonable
expenses who was wholly successful, on the merits or otherwise,
<PAGE>
in the defense of any proceeding to which the person was a party because of
his status with the corporation.
Under Section 7-109-104 of CRS, the corporation may pay reasonable fees
in advance of final disposition of the proceeding if:
(a) Such person furnishes to the corporation a written affirmation of
the such person's good faith belief that he or she has met the Standard of
Conduct described in Section 7-109-102 of CRS;
(b) Such person furnishes the corporation a written undertaking,
executed personally or on person's behalf, to repay the advance if it is
ultimately determined that he or she did not meet the Standard of Conduct in
Section 7-109-102 of CRS; and
(c) A determination is made that the facts then known to those making
the determination would not preclude indemnification.
Under Section 7-109-106 of CRS, a corporation may not indemnify such
person, including advanced payments, unless authorized in the specific case
after a determination has been made that indemnification of such person is
permissible in the circumstances because he met the Standard of Conduct
under Section 7-109-102 of CRS and such person has made the specific
affirmation and undertaking required under the statute. The required
determinations are to be made by a majority vote of a quorum of the Board of
Directors, utilizing only directors who are not parties to the proceeding.
If a quorum cannot be obtained, the determination can be made by a majority
vote of a committee of the Board, which consists of at least two directors
who are not parties to the proceeding. If neither a quorum of the Board nor
a committee of the Board can be established, then the determination can be
made either by the Shareholders or by independent legal counsel selected by
majority vote of the Board of Directors.
The corporation is required by Section 7-109-110 of CRS to notify the
shareholders in writing of any indemnification of a director with or before
notice of the next shareholders' meeting.
Under Section 7-109-105 of CRS, such person may apply to any court of
competent jurisdiction for a determination that such person is entitled
under the statute to be indemnified from reasonable expenses.
Under Section 7-107(1)(c) of CRS, a corporation may also indemnify and
advance expenses to an officer, employee, fiduciary, or agent who is not a
director to a greater extent than the foregoing indemnification provisions,
if not inconsistent with public policy, and if provided for in the
corporation's bylaw, general or specific action of the Board of Directors,
or shareholders, or contract.
Section 7-109-108 of CRS permits the corporation to purchase and
maintain insurance to pay for any indemnification of reasonable expenses as
discussed herein.
<PAGE>
The indemnification discussed herein shall not be deemed exclusive of
any other rights to which those indemnified may be entitled under the
Articles of Incorporation, any Bylaw, agreement, vote of shareholders, or
disinterested directors, or otherwise, and any procedure provided for by any
of the foregoing, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as
to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of heirs, executors, and administrators of such a
person.
Insofar as indemnification for liabilities under the Securities Act of
1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expense incurred or paid by a director, officer, or
controlling person of the registrant in the successful defense of any
action, suit, or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
ITEM 13. FINANCIAL STATEMENTS.
For financial information, please see the financial statements included
at Item 15 and hereby incorporated by this reference and made a part hereof.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The Company did not have any disagreements on accounting and financial
disclosures with its accounting firm during the reporting period.
ITEM 15. FINANCIAL STATEMENT AND EXHIBITS.
The following financial information is filed as part of this
report:
(1) FINANCIAL STATEMENTS
(2) SCHEDULES
The financial statements schedules listed in the
accompanying index to financial statements are filed as
a part of this annual report.
(3) EXHIBITS
The exhibits listed on the accompanying index to
financial statements are filed as part of this annual
report.
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
National Venture Capital Fund, Inc.
Dated: 10/14/98 By: //S// HOWARD C. CADWELL
Howard C. Cadwell
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
CHIEF FINANCIAL OFFICER
Dated: 10/14/98 By: //S// LAURIE L. QUAM
Laurie L. Quam
Treasurer and Director
Dated: 10/14/98 By: //S// HOWARD C. CADWELL
Howard C. Cadwell
Director
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
EXHIBITS
TO
National Venture Capital Fund, Inc.
<PAGE>
INDEX TO EXHIBITS
Exhibit Page or
NUMBER DESCRIPTION CROSS REFERENCE
3A * Articles of Incorporation
3B * Bylaws
10A * Form of Subscription Agreement
with Lock Up Provisions
* Previously filed
<PAGE>
DAVID WAGNER & ASSOCIATES, P.C.
Attorneys and Counsellors at Law
8400 East Prentice Avenue
Penthouse Suite
Englewood, Colorado 80111
Telephone (303) 793-0304
Facsimile (303) 771-4562
October 9, 1998
Richard Wulff, Esq.
Chief
Office of Small Business Review
U.S. Securities and
Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: National Venture Capital Fund, Inc.(The Company)
Form 10-SB
File No. 0-24211
Dear Mr. Wulff;
This is in response to your comment letter of July 8, 1998 concerning
the Company's Form 10-SB filing.
The format herein corresponds to the paragraphs of your comment letter.
GENERALCOMMENT
The comment is noted.
YEAR 2000 DISCLOSURE
Please be advised that the Company, to the best of its knowledge,
information, and belief, has no disclosure to make with respect to Year 2000
issues.
MANAGEMENT
The appropriate changes have been made in the disclosure concerning
potential issuance of securities to management, promoters or their
affiliates and associates.
The current intent of management with respect to promoting other blank
check offerings has been expanded. A discussion of potential conflicts has
also been expanded.
<PAGE>
DIRECTORS AND OFFICERS OF REGISTRANT
I have been informed that there are no agreements or understandings for
any officer or director to resign at the request of another person and that
none of the officers and directors are acting on behalf of will act at the
direction of another person.
The requested change has been made.
The requested change has been made.
I am informed that Mr. Cadwell has no current association with Diablo,
Inc. At one time, he was the President of the Company but ceased all
association in 1987.
The typo has been changed. Ms. Cadwell has no involvement with the
Company as a promoter. Ms. Cadwell owns 1,000 shares of the Company.
ARTICLES OF INCORPORATION OF NATIONAL VENTURE CAPITAL FUND, INC.
ARTICLE VI
I have been informed that Mr. Steinberg was the initial director but
took no part in the affairs of the Company. He resigned as a director
shortly after the incorporation and was replaced by Mr. Cadwell and Ms.
Quam. Mr. Steinberg remains as the registered agent, but has never exercised
any control over the affairs of the corporation and is not involved in day-
to-day activities. He, therefore, does not meet the definition of a founder
or promoter of the Company.
The address of the principal office of the Company is currently 1977 S.
Vivian Street, Lakewood, Colorado.
SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The supplemental information has been provided and has been updated to
the most recent possible date.
ITEM 10 RECENT SALE OF UNREGISTERED SECURITIES
The required additional disclosure has been made.
<PAGE>
Mr. Wulff
October 9, 1998
Page 23
If you have any additional questions, do not hesitate to contact the
undersigned.
DAVID WAGNER & ASSOCIATES, P.C.
David J. Wagner
w/enclosure
</TABLE>
